FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
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For the fiscal year ended DECEMBER 31, 1994
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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For the transition period from to
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Commission file number 1-5599
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GREAT DANE HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 54-0698116
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(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
2016 North Pitcher Street, Kalamazoo, Michigan 49007
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (616) 343-6121
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Securities Registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Subordinated Discount Debentures American Stock Exchange, Inc.
Due January 1, 2006
12-3/4% Senior Subordinated Debentures American Stock Exchange, Inc.
Due 2001
Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark whether Registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy of information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. X
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There were 1,000 shares of Registrant's only class of common stock
outstanding as of February 15, 1995.
There are no shares of voting stock held by non-affiliates of the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE: None
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PART I
ITEM 1. BUSINESS
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A. OVERVIEW. Great Dane Holdings Inc. ("Holdings" or the "Company")
is a holding company and its business is conducted by its operating
subsidiaries. Through Great Dane Trailers, Inc. ("Great Dane"), the Company
is one of the largest manufacturer of truck trailers and intermodal
containers and chassis in the United States. In addition, through Checker
Motors Corporation ("Motors"), the Company is one of the leading independent
manufacturers of sheet metal stampings for automotive components and
subassemblies for sale to North American original equipment manufacturers
("OEMs"). The Company's other operations consist of its vehicular
operations, primarily its subsidiary, Yellow Cab Company ("Yellow Cab"),
which is currently the largest owner of taxicabs and provider of taxi-related
services in Chicago, Illinois, and its insurance operation, American Country
Insurance Company ("Country"), which underwrites property and casualty
insurance.
The Company was incorporated in 1959 under the laws of the State of
Florida and subsequently changed its name to International Controls Corp. On
January 1, 1989, the Company's continuing operations consisted solely of
Great Dane's truck trailer manufacturing operations. On January 11, 1989,
the Company acquired all of the outstanding capital stock of Motors.
Immediately following the acquisition of Motors by the Company, Checker
Holding Corp. ("Holding"), a privately-held company owned by substantially
all of the former shareholders of Motors, acquired all of the outstanding
capital stock of the Company (the "Holding Buyout"). Subsequently, Holding
was merged into the Company. The Holding Buyout has been accounted for as if
Motors acquired the Company (a "reverse acquisition"), since there was no
significant change in control of Motors. On October 19, 1994, the Company
changed its name to Great Dane Holdings Inc. and reincorporated in the State
of Delaware through a merger into a newly incorporated wholly-owned
subsidiary.
As of January 17, 1995, pursuant to a Plan of Reorganization (the
"Plan"), all of the assets (subject to the liabilities) of Checker Motors
Co., L.P. ("Checker L.P." or "the Partnership"), a Delaware limited
partnership in which Motors was the general partner, were distributed to
Motors, which contributed substantially all of such assets (subject to the
liabilities), except for the stock of Country, to three newly formed, wholly-
owned subsidiaries, Yellow Cab, Chicago AutoWerks Inc. ("Chicago AutoWerks")
and CMC Kalamazoo Inc. ("CMC Kalamazoo). In accordance with the Plan, Motors
was simultaneously reincorporated in Delaware through a merger with its
wholly-owned subsidiary organized solely for that purpose.
B. INFORMATION CONCERNING INDUSTRY SEGMENTS. Certain financial data
with respect to Registrant's industry segments appear in Note L of Notes to
Consolidated Financial Statements and are incorporated herein by reference.
As of December 31, 1994, the Company employed a total of 5,784 people.
The chart below details the number of persons employed as of that date in
each of the Company's industry segments:
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<TABLE>
<CAPTION>
Administrative
Hourly and Executive
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<S> <C> <C>
Truck Trailer Manufacturing 3,756 571
Automotive Products Operations 888 163
Vehicular Operations 220 28
Insurance Operations 11 147
</TABLE>
C. NARRATIVE DESCRIPTION OF BUSINESS.
TRUCK TRAILER MANUFACTURING.
Great Dane designs, manufactures and distributes a full line of truck
trailers and containers and chassis. In 1994, Great Dane, one of the largest
manufacturers of truck trailers and intermodal containers and chassis in the
United States, accounted for approximately 13% of the new truck trailer
market, 11.5% of the new van market, 11.5% of the new platform trailer
market, 38.4% of the new refrigerated van ("reefer") market and 18.8% of the
market for intermodal containers and chassis.
The national truck trailer market is fragmented and competitive due to
the relative ease of entrance (with the exception of the higher technology
refrigerated trailers). There are approximately 180 companies in the truck
trailer manufacturing industry. In 1994, the two largest companies, Great
Dane and Wabash National Corporation, accounted for approximately 24% of the
market and the ten largest companies accounted for approximately 66% of
sales. The basis of competition in the truck trailer industry is quality,
durability, price, warranties, service and relationships.
PRODUCTS
GENERAL. Great Dane's principal products include vans, reefers,
platform trailers and intermodal containers and chassis. Great Dane's
trailers and intermodal containers are manufactured in sizes ranging from 28
to 57 feet. In addition to this standard line of products, its flexible
assembly operations enable Great Dane to customize products for its customers
at premium prices.
VANS. Vans are used primarily for the transportation of dry
freight. Great Dane manufactures four primary types: sheet and post,
aluminum plate, ThermaCube and Fiberglass Reinforced Plastic Plywood. Great
Dane sells vans primarily to for-hire truckload carriers, private carriers
and leasing companies.
REEFERS. Great Dane's reefers are specialized products. The
Company believes that it is the only company to offer more than one type of
reefer. Great Dane currently manufactures three types of reefers.
PLATFORM TRAILERS. Platform trailers are flatbeds or open deck
trailers. Great Dane offers a full line of platform trailers, consisting of
drop frame, extendible, curtainside and straight frame trailers. Drop frame
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flatbeds are designed for heavy duty hauling where low deck heights are
required. Extendible flatbeds are used for self-supporting loads (e.g., pre-
stressed concrete). Curtainside flatbeds are used where side loading and
cover is required. The primary customers for Great Dane's platform trailers
are for-hire material haulers, which would include steel haulers, pre-
stressed concrete carriers and builders.
INTERMODAL CONTAINERS AND CHASSIS. In conjunction with the growth
of intermodal container transportation, Great Dane's engineers developed a
specialized container (which can be double stacked during rail transport) and
chassis that allow a trucking company to haul containerized loads which are
similar in size and weight to those carried on conventional over-the-road
trailers. These containers use either aluminum plate or the ThermaCube
technology, which is Great Dane's composite wall construction, to offer
greater inside width, higher cubic capacity and greater strength than can be
obtained by conventional sheet and post construction. Further, these
containers are 500 to 1,000 pounds lighter and the chassis are 1,000 to 1,500
pounds lighter than products now in use with similar carrying capacities.
The Company believes that it is one of the two largest U. S. manufacturers of
intermodal containers and chassis and the only domestic producer of reefer
containers.
MARKETING, DISTRIBUTION AND SALES
GENERAL. Great Dane's business includes aftermarket parts and
accessories sales, used trailer sales and retail services (including repair
and maintenance) which enable it to be a full-service provider. The parts
and service operations have historically been a stable source of higher
margin business.
Great Dane sells replacement parts and accessories through 51 full-
line dealers, 17 parts-only dealers and 17 Great Dane-owned branch
operations. Dealers and branches sell parts either over-the-counter or
through their respective retail services.
To be competitive in the sale of new trailers, it is often
necessary to accept used trailers in trade. Great Dane's larger retail
branches employ individuals who are responsible for trade-in appraisals and
selling used trailers. Great Dane believes that its nationwide distribution
system provides it with superior used trailer marketing capabilities.
Great Dane owns and operates 17 full-service retail branches, which
provide repair and maintenance services. These retail branches also provide
warranty support to Great Dane's customers.
MANUFACTURING AND OPERATIONS
MANUFACTURING. Great Dane has four manufacturing facilities,
located in Savannah, Georgia; Memphis, Tennessee; Wayne, Nebraska; and Brazil,
Indiana, and, in December 1994, acquired property and buildings in Terre
Haute, Indiana, for an additional manufacturing facility which is expected to
commence manufacturing in April 1995. Certain of Great Dane's
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manufacturing operations include flexible assembly lines that allow Great
Dane to customize its products in a cost-efficient manner.
RESEARCH AND DEVELOPMENT. Great Dane makes extensive use of
computer-aided design ("CAD") technology to support production engineering.
Great Dane's use of CAD technology accelerates the development of product
innovations and manufacturing efficiencies. Great Dane's new products must
meet strict quality and durability standards and must pass strenuous road
test procedures. Great Dane believes that it is the only trailer
manufacturer with on-site road simulation testing capability.
Great Dane has developed a new proprietary floor for its ThermaCube and
certain Classic reefers which will eliminate wood components, thereby
increasing the life of the floor, increasing the capacity of the reefer,
simplifying the manufacturing process and reducing the cost to manufacture
the reefer. Great Dane is also developing and testing a new line of ultra-
lightweight flatbeds intended to increase its market share.
SUPPLIES AND RAW MATERIALS. Purchased materials represent approximately
80% of direct cost of goods sold and are purchased on a centralized basis in
order to achieve economies of scale. Great Dane purchases a variety of raw
materials and sub-assemblies from various vendors with short-term contracts.
Aluminum, wood, tires, steel and refrigeration units account for a
significant portion of material costs. Great Dane has not experienced major
shortages in these materials, but prices may fluctuate. However, Great Dane
attempts to minimize purchased material price fluctuations by utilizing just-
in-time inventory systems, thereby coordinating the purchase of certain
materials with customer orders.
PATENTS, LICENSES AND TRADEMARKS
The Company believes its "Great Dane" trademark, which identifies all of
its products, to be of value and to contribute significantly to the wide
acceptance of its products.
BACKLOG
Truck trailer and container backlog was approximately $515 million at
December 31, 1994, and $365 million at December 31, 1993. The increase in
backlog is principally attributed to increased orders for truck trailers.
AUTOMOTIVE PRODUCTS OPERATIONS.
Through South Charleston Stamping & Manufacturing Company ("SCSM") and
CMC Kalamazoo, Motors develops, designs, engineers and manufactures a broad
range of sheet metal automotive components and subassemblies, including
tailgates, fenders, doors, roofs and hoods for sale to North American OEMs.
The majority of Automotive Products' Operations revenues are derived from
complex, value-added products, primarily assemblies containing multiple
stamped parts and various welded or fastened components.
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MANUFACTURING
Unlike certain of its smaller competitors, the Automotive Products
Operations have the equipment and versatility to produce a wide variety of
automotive stamping products, carrying out substantially all phases of a
project. Their principal products include tailgate and liftgate assemblies,
door assemblies, hood assemblies, fender assemblies, wheelhouses, pillars,
back panels, floor panels, deck lids, body side panels, roof outer panels and
related parts.
The major portion of tooling design, build and prototype for the
Automotive Products Operations is performed by selected suppliers under close
supervision.
MARKETING AND CUSTOMERS
The Automotive Products Operations focuses on the higher-growth light
truck, sport utility vehicle and van segments of the market and currently
supplies products primarily for GM which has, historically, accounted for
more than 95% of this segment's revenues. At the present time, Motors is
supplying parts on the following light truck/sport utility and minivan
vehicles: Suburban, Crew Cab, M Van (Astro and Safari), CK Pickup Truck, CK
Sport Side Pickup and Tahoe/Yukon. The automotive segment also supplies
parts for GM's service organization. Motors is also currently supplying
parts to Freightliner Corp. (Class 6 and 7 Truck), Saturn Corporation
(station wagon), Ford Motor Co. (Cougar) and Toyota (Camry and Avalon). In
addition, SCSM was awarded an eight-year contract with Mercedes-Benz to
produce the majority of the stamped parts for its new sports utility vehicle.
Mercedes-Benz is providing the funding necessary for the tooling to produce
these parts.
Shipments of customer orders from both SCSM and CMC Kalamazoo are made
on a daily or weekly basis as required by the customer. GM provides an
estimated 13-week shipping forecast which is used for material and
fabrication planning purposes. Nevertheless, changes in production by the
customer may be reflected in increases or decreases of these forecasts.
CMC Kalamazoo and SCSM are committed to customer satisfaction by
producing parts and providing the necessary support systems to assure
conformity to customer requirements. As evidence of success in these areas,
SCSM has been awarded GM's "Mark of Excellence" Award, and the GM Q.S.P.
(quality, service, price) award for being GM's worldwide Supplier of the Year
1993 for major sheet metal stampings. In addition, SCSM has been awarded ISO
9000 Certification by the International Standards Organization (ISO 9002).
The fabrication business is highly competitive and Motors competes with
numerous other industrial manufacturers, as well as with the in-house
capabilities of its customers (i.e., GM). The failure to obtain future
orders from GM could have a material adverse impact on the Automotive
Products operations despite the fact that the Company is expanding its
customer base. The automotive products industry is experiencing increased
pricing pressure from GM which is continuing its aggressive measures to
reduce its operating costs, including obtaining significant price reductions
from suppliers. Although opportunities for new business may arise as a
result of GM's pressure on other suppliers and, while the Company believes
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that it has adequately provided for any price reductions which may result
from discussions with GM in near-term financial plans, future earnings of the
automotive products operations may be materially adversely affected by
additional price reductions requested or required by GM.
VEHICULAR OPERATIONS.
Yellow Cab is the largest taxicab fleet owner in the City of Chicago
("Chicago") and, as of January 1, 1995, owned 2,271 or 41% of the 5,500
taxicab licenses ("licenses" or "medallions") available in Chicago. Yellow
Cab's primary business is the leasing of its medallions and vehicles to
independent taxi operators. Through its subsidiary, Chicago AutoWerks, the
Company also provides a variety of other services to taxi drivers and non-
affiliated medallion holders, including insurance coverage through Country
and repair and maintenance services.
THE OWNER-OPERATOR AND DAILY LEASE PROGRAMS
Pursuant to Yellow Cab's owner-operator program, an independent, non-
employee taxi operator leases from Yellow Cab a license and vehicle, with an
option to purchase the vehicle beginning at the end of the second year.
During the lease term (generally five years), Yellow Cab receives a weekly
lease payment for the vehicle as well as a weekly fee to cover the use of
Yellow Cab's license and other services provided by Yellow Cab and its
affiliates, including use of its colors and trade name, liability insurance
coverage, radio dispatch, repair and maintenance. Most operators also
purchase the required collision insurance from Country. See "Business--
Insurance Operations." The daily lease program, which allows drivers to
lease a medallion and a vehicle for 12 hours, 24 hours, or for a weekend, has
been used largely as a source and training operation for new owner-operators.
MAINTENANCE, REPAIR AND PARTS SALES
Chicago AutoWerks provides preventive and other maintenance services,
primarily to Yellow Cab and non-affiliated taxi drivers, and also, as a
licensed full-line auto repair shop, to the public. Chicago AutoWerks
maintains a body shop at which major repairs can be made. As an authorized
Chevrolet and Ford warrantor, Chicago AutoWerks also repairs those
manufacturers' vehicles that are under warranty and invoices the
manufacturers directly.
Chicago AutoWerks serves the dispatching needs of Yellow Cab and non-
affiliated drivers, maintains the radio in their taxicabs and supplies the
emergency radio services they required. Chicago AutoWerks also sells
automotive parts.
THE MEDALLIONS
In order to retain its licenses, the Company must comply with the
regulations of Chapter 9-112 of the Municipal Code of Chicago (governing
public passenger vehicles), including the payment of annual taxicab license
fees, currently $500 per vehicle.
Pursuant to a 1988 agreement with the City of Chicago to settle various
lawsuits, Yellow Cab is required to relinquish to the City of Chicago and not
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renew 100 taxicab licenses on January 1 of each year through 1997 (the
"Agreement"). In addition, the Agreement limits to 100 per year the number
of new licenses that the City of Chicago may add to the total medallions
outstanding through 1997, bringing the total number of available licenses to
a maximum of 5,700 on December 31, 1997. At the required surrender rates,
assuming no additional medallions are sold by Yellow Cab, Yellow Cab would
hold approximately 2,070 medallions after January 1, 1997, or approximately
36% of the maximum total then-to-be outstanding. There is no limit on the
number of medallions Chicago may issue after December 31, 1997.
The scheduled decline in the number of licenses allowed to be held by
Yellow Cab pursuant to the Agreement has had, and will continue to have, a
negative effect on the revenue-generating capability of the taxi leasing
operations. Yellow Cab has been able to offset these declines to some extent
through increases in the average lease rates charged to its customers, as
well as through increases in other services provided by Chicago AutoWerks.
At the same time, as the number of medallions held by Yellow Cab declines,
Yellow Cab will require fewer new vehicles to support its taxi leasing
operations and, consequently, a lower level of capital spending.
The Agreement has also had the effect of allowing the Company to
purchase and sell licenses in the open market for the first time since 1982.
Recent sales of these licenses have been recorded at prices of approximately
$37,500 per medallion, and the prices realized by Yellow Cab have been
consistent with the prices realized in license sales by other, non-
affiliated, medallion holders. Although the value of Yellow Cab's fleet of
vehicles is reflected on the Company's balance sheet, the significant value
of its medallions is not.
Although Yellow Cab is the largest provider of taxicab related services
in Chicago, it faces competition from a number of other medallion owners who
lease medallions and vehicles to independent operators. Yellow Cab
management believes that even the most significant of these competitors owns
only approximately 150 to 200 medallions, although each competitor operates
under a variety of individual cab service names and logos. There are also
many associations in the City, the largest of which is the Checker Taxi
Association, an unaffiliated association, which compete with Yellow Cab in
the delivery of taxicab related services to medallion owners and their
agents.
LIABILITY INSURANCE
Yellow Cab currently maintains liability insurance coverage for losses
of up to $350,000 per occurrence, as well as an "excess layer" of coverage
for losses over $600,000 and up to $29,000,000. The initial $350,000 layer
of insurance is issued by Country. See "Business--Insurance Operations."
During several periods in the past, Yellow Cab did not maintain the level of
coverage that Yellow Cab currently maintains for any losses over $350,000 per
occurrence. As a result, there are currently outstanding claims against
Yellow Cab for which it is not fully covered by third-party insurance.
Yellow Cab maintains balance sheet reserves totalling $2.2 million at
December 31, 1994, for these claims. Management believes that these reserves
will be sufficient to cover its outstanding claims.
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REGULATORY
Yellow Cab's operations are regulated extensively by the Department of
Consumer Services of the City of Chicago which regulates Chicago taxicab
operations with regard to certain requirements including vehicle maintenance,
insurance and inspections, among others. The City Council of Chicago has
authority for setting taxicab rates of fare. Effective December 1, 1993,
lessors had the right to increase, until May 1, 1994, the rates paid by
lessee drivers by not more than 2.8% of the lease rate in effect on December
1, 1993. After May 1, 1994, lessors may not charge more than the rates
prescribed by the Commissioner (which, in certain categories, are less than
the rates currently charged by Yellow Cab) without the consent of the City of
Chicago. The rates in effect on May 1, 1994, including the 2.8% increase,
may remain in effect pending a petition and appeal for a higher rate. Yellow
Cab increased its rates by the maximum allowed 2.8% prior to May 1, 1994, and
has filed, in a timely manner, a petition to increase its rates still
further. Yellow Cab intends to pursue that proposal to final hearing.
INSURANCE OPERATIONS. Country underwrites property and casualty
insurance, including taxicab insurance, workers' compensation and other
commercial and personal lines. During 1994, 75% of Country's total premium
revenue was attributable to non-affiliated property/casualty lines, primarily
workers' compensation, commercial automobile and commercial multiple peril.
The remainder of Country's premium revenues was attributable to affiliated
taxi liability and collision insurance in the State of Illinois and workers'
compensation insurance in the States of Illinois and Michigan. Country is
currently rated "A" by A. M. Best.
Country is one of the few voluntary providers of taxi liability
insurance in the industry. Most insurers which have previously written taxi
insurance coverage on a voluntary basis experienced poor underwriting results
and have withdrawn from the business. Management believes that Country's
longstanding relationship with Yellow has provided it with a stable market
for this type of coverage and has enabled it to develop a comprehensive
understanding of the business and to assess more properly the associated
risk.
The taxicab liability coverage which Country writes carries a $350,000
limit of liability for each driver. In addition, Country makes collision
insurance available to licensees and owner-operators at premium rates which
are favorable relative to the rates charged by competitors for equivalent
coverage. Country also writes full lines of commercial and personal property
and casualty insurance for risks located in the City of Chicago and the
surrounding metropolitan area. With the exception of a specialty public
transportation program (excluding limousines), which program policies are
reinsured for amounts above $350,000, all non-affiliate policies are
reinsured for amounts above $150,000.
Country is domiciled in the State of Illinois and is a licensed carrier
in Michigan, as well as being admitted as an excess and surplus lines carrier
in 33 other states. Country is also applying for licenses in other states,
such as Wisconsin, Indiana and Iowa. To the best of management's knowledge,
Country is in compliance with all applicable statutory requirements and
regulations.
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LABOR RELATIONS. Approximately 322 employees in the Company's
automotive products operations, 315 in the Company's truck trailer
manufacturing operations and 60 in the Company's vehicular operations are
covered by collective bargaining agreements. During 1993, Motors entered
into a new contract with the Allied Industrial Workers of America, AFL-CIO,
Local 682 in Kalamazoo--currently known as Local Union No. 7682 of the
United Paperworkers International Union, AFL-CIO--which expires in May 1996.
Motors is party to a contract with D.U.O.C. Local 777, a division of National
Production Workers of Chicago and Vicinity, Local 777 which expires in
November 1995. During February 1993, Great Dane Trailers, Tennessee, Inc.,
a subsidiary of Great Dane, negotiated a new contract (expiring in January
1996) with Talbot Lodge No. 61 of the International Association of Machinists
and Aerospace Workers. In general, the Company believes its relationship
with its employees to be satisfactory. Although there have been attempts to
unionize various of the Company's divisions in the past few years, including
SCSM and the Great Dane plant in Brazil, Indiana, such attempts have, to
date, been unsuccessful.
COMPLIANCE WITH ENVIRONMENTAL PROTECTION PROVISIONS. The Company
believes that future compliance with federal, state and local provisions
which have been enacted or adopted regulating the discharge of materials into
the environment, or otherwise relating to the protection of the environment,
will have no material effect upon the capital expenditures, earnings and
competitive position of the Company.
ITEM 2. PROPERTIES
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The Company currently maintains its principal executive offices at
Motors' facility in Kalamazoo, Michigan.
The location and general description of the principal properties owned
or leased by the Company are as follows:
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<TABLE>
<CAPTION>
Owned or Leased;
Area/Facility If Leased,
Location Type of Facility Square Footage Expiration Year
-------- ---------------- -------------- ---------------
<S> <C> <C> <C>
TRUCK TRAILERS MANUFACTURING OPERATIONS:
Savannah, Manufacturing Plant 61 acres/ Owned
Georgia and Office 471,000 sq. ft.
Brazil, Manufacturing Plant 80 acres/ Owned
Indiana and Office 564,000 sq. ft.
Memphis, Manufacturing Plant 8 acres/ Leased;
Tennessee 107,000 sq. ft. 2003
3.5 acres/ Owned
13,000 sq. ft.
Wayne, Manufacturing Plant 35 acres/ Owned
Nebraska and Office 197,000 sq. ft. mfg.
Terre Haute, Manufacturing Plant 113 acres/ Owned
Indiana under development 250,000 sq.ft.
14 Locations Sales and Service 98 acres/ Owned
in 10 States Branches 303,000 sq. ft.
18 Locations Sales and Service 36 acres/ Leased; 1995
in 12 states Branches 238,000 sq. ft. to 2015
AUTOMOTIVE PRODUCTS OPERATIONS:
Kalamazoo, Manufacturing Plant 71 acres/ Owned
Michigan and Office 750,000 sq. ft.
South Manufacturing Plant 922,000 sq. ft. Leased;
Charleston, and Office 2028
West Virginia
VEHICULAR OPERATIONS:
Chicago, Garages, Parking 735,000 sq. ft. 14 Owned;
Illinois Lots and Offices 1 Leased - 2012
(15 Loca-
tions)
INSURANCE OPERATIONS:
Chicago, Offices/Storage 39,332 sq. ft. Leased; 1995
Illinois Facility to 2002
(3 Loca-
tions)
</TABLE>
The principal facilities owned by the Company and its subsidiaries are
considered by the Company to be well maintained, in good condition and
suitable for their intended use.
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ITEM 3. LEGAL PROCEEDINGS
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EXECUTIVE LIFE LITIGATION. By order of the Superior Court of Los
Angeles County (the "California Court"), on April 11, 1991, Case No. B5-006-
912 (the "California Order"), the California State Insurance Commissioner was
appointed Conservator for Executive Life Insurance Company ("ELIC"), a
limited partner in the Partnership. By letter dated May 20, 1991, Motors and
the Partnership advised ELIC and the Conservator that the appointment of the
Conservator pursuant to the California Order constituted an "Event of
Default" under the Partnership Agreement, and that, therefore, ELIC's rights
under the Partnership Agreement and interest in the Partnership were altered.
More specifically, Motors and the Partnership asserted that ELIC's rights, as
of April 11, 1991, were limited to the right to receive a payout of its
capital account, calculated as of that date, in quarterly installments over
approximately a 23-year period. On June 28, 1991, the Conservator notified
Motors and the Partnership that he did not accept that position set forth in
the May 20 letter and that, in his view, ELIC's status as a limited partner
had not been altered. In March 1992, Motors and the Partnership were added
as parties to the Order which sought damages from them in an unspecified
amount for, among other things, their alleged "forfeiture" of ELIC's
interest, breach of fiduciary duties, interference with the conservatorship
proceedings and waste of conservatorship assets. In this litigation, each of
Motors, the Partnership and the Conservator was also seeking, among other
things, a declaration of its rights under the Partnership Agreement.
On May 26, 1994, the California Court approved a settlement of this
litigation. Pursuant to the Settlement Agreement, on December 22, 1994,
Motors redeemed ELIC's interest in the Partnership for $37.0 million (the
"Minority Interest Redemption") and the litigation was thereafter dismissed
with prejudice. Under certain circumstances, if all or substantially all of
the assets of the Partnership are sold within five years of the consummation
of the Minority Interest Redemption, ELIC may be entitled to receive a
payment equal to the positive difference between (x) the distribution ELIC
would have received upon liquidation of the Partnership as a result of such
transaction, calculated in accordance with the provisions of the Partnership
Agreement as if it had continued to hold its partnership interest, and (y)
the future value of $37.0 million calculated at 15% per annum from the date
of the Minority Interest Redemption to the date of such transaction. The
Company has guaranteed the obligations of its subsidiaries under the
Settlement Agreement.
CERTAIN ENVIRONMENTAL MATTERS. Within the past five years, Great Dane
and Motors have entered into certain decrees with federal and state
governments relating to the cleanup of waste materials. The aggregate
obligations of Great Dane and Motors pursuant to these consent decrees are
not material.
In May 1988, Holdings sold all of the stock of its subsidiaries,
Datron Systems, Inc., and All American Industries, Inc., and in connection
therewith agreed to indemnify the purchasers for, among other things, certain
potential environmental liabilities. The purchaser has put Holdings on notice
of certain alleged environmental and other matters for which it intends to seek
indemnification as costs are incurred. Holdings does not believe that its
bligations, if any, to pay these claims will be material.
<PAGE>
<PAGE> 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
<PAGE>
<PAGE> 13
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
There is no market for Registrant's common stock; all issued and
outstanding common stock is owned of record by David R. Markin, Martin L.
Solomon, Allan R. Tessler and Wilmer J. Thomas, Jr.
ITEM 6. SELECTED FINANCIAL DATA
Summarized below is selected financial data for the years 1990 through
1994. The extraordinary items in all years relate to the gain or loss on the
repurchase of indebtedness. The accounting changes represent the cumulative
effect of changes in accounting principles as a result of adopting, as of
January 1, 1993, the provisions of Statement of Financial Accounting Standard
("SFAS") No. 106, "Employers Accounting for Postretirement Benefits Other
Than Pensions," and SFAS No. 109, "Accounting for Income Taxes" (see Notes H
and J of the Notes to Consolidated Financial Statements). Per share amounts
for all of the years are based on 1,000 shares.
<TABLE>
<CAPTION>
Selected Financial Data
(in thousands, except per share amounts)
Year Ended December 31,
1990 1991 1992 1993 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues $ 693,211 $ 555,266 $ 716,733 $ 909,326 $1,096,477
========== ========== ========== ========== ===========
Income (loss) before
extraordinary items
and accounting
changes $ (20,274) $ (27,006) $ (7,555) $ 3,364 $ 24,348
Extraordinary items 27,749 31,188 --- --- ---
Accounting changes --- --- --- (46,626) ---
---------- ---------- ---------- ---------- -----------
Net income (loss) $ 7,475 $ 4,182 $ (7,555) $ (43,262) $ 24,348
========== ========== ========== ========== ===========
Income (loss) per share:
Income (loss) before
extraordinary items
and accounting
changes $ (20,274) $ (27,006) $ (7,555) $ 3,364 $ 24,348
Extraordinary items 27,749 31,188 --- --- ---
Accounting changes --- --- --- (46,626) ---
---------- ---------- ---------- ---------- -----------
Net income (loss) $ 7,475 $ 4,182 $ (7,555) $ (43,262) $ 24,348
========== ========== ========== ========== ===========
Total assets $ 537,677 $ 481,305 $ 493,763 $ 517,336 $ 522,051
========== ========== ========== ========== ===========
Long-term debt, less
debt discount $ 376,692 $ 312,324 $ 305,368 $ 291,273 $ 288,265
========== ========== ========== ========== ===========
Cash dividend
declared per
common share $ --- $ --- $ --- $ --- $ ---
========== ========== ========== ========== ===========
</TABLE>
<PAGE>
<PAGE> 14
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES.
Available cash and cash equivalents, cash flow generated from operations
($25.2 million, $30.7 million and $56.4 million for the years ended December
31, 1992, 1993 and 1994, respectively), proceeds from borrowings and proceeds
from disposal of assets have provided sufficient liquidity and capital
resources for the Company to conduct its operations during each of these
years.
From the time that present management assumed control of the Company in
January 1989, it has been continually reassessing the Company's financial
condition and prospects. The Company was hampered in its efforts to achieve
a refinancing of its debt in recent years, in part because of litigation with
the Boeing Company which was settled in December 1993 and in part because of
litigation with the Conservator of ELIC, a limited partner in the
Partnership. A settlement with ELIC, agreed to in principle in early 1994,
was consummated in December 1994 (see "Item 3--LEGAL PROCEEDINGS").
In February 1994, the Company filed a Registration Statement on Form S-1
with the Securities and Exchange Commission in connection with an overall
refinancing of the Company's outstanding indebtedness. On August 10, 1994,
the Company announced that, due to market conditions, it had postponed the
proposed refinancing and would not complete the transaction on the terms
described in its registration statement.
Certain costs were incurred in connection with the refinancing efforts
which would have been capitalized and amortized over the life of the new
loans. Because this refinancing was not completed, those costs, which
totaled approximately $3.5 million (pre-tax), were expensed against income in
the quarter ended September 30, 1994.
On November 23, 1994, the Company filed a Registration Statement on Form
S-1 with the Securities and Exchange Commission in connection with an initial
public offering ("IPO") of the Company's common stock. The Company is
registering 6,555,000 shares of common stock (including 855,000 shares which
the underwriters have the right to purchase to cover over-allotments) (in
each case, giving effect to a 16,800 to 1 split of the common stock to be
effected prior to consummation of the IPO). It is currently estimated that
the initial public offering price will be between $13 and $15 per share. All
of the net proceeds are intended to be used to redeem approximately $72
million of the Company's 12-3/4% Senior Subordinated Debentures, due 2001,
which will be sufficient to satisfy all remaining sinking fund payments on
this indebtedness. If successfully completed, the principal effect of the
IPO will be to reduce the cash flow necessary from its subsidiaries to meet
the Company's obligations. Any excess proceeds from the IPO as a result of
sale of the over-allotment will be utilized to retire additional debentures
or for working capital.
The Company is a holding company and is, therefore, dependent on cash
flow from its subsidiaries in order to meet its obligations. The Company's
operating subsidiaries are required, pursuant to financing agreements with
third parties, to meet certain covenants, which may have the effect of
<PAGE>
<PAGE> 15
limiting cash available to the Company. The operating subsidiaries' plans
indicate that sufficient funds are anticipated to be available to the Company
to meet its short-term obligations.
In December 1994, the Company purchased ELIC's interest in the
Partnership for $37 million. $30 million of this payment was provided by a
subsidiary through borrowings on its revolving credit facility and the
balance was paid from available cash.
In January 1995, Motors and its subsidiaries finalized a refinancing
with a bank whereby Motors entered into a loan agreement providing for a $45
million term loan and a $20 million revolving credit facility. The funds
from the term loan were used to repay approximately $27 million of bank debt
including the Partnership term loan, the equipment term loan and the notes
payable to the bank, provide $15 million to the Company to retire a portion
of certain notes outstanding to the Company's shareholders and pay fees and
expenses. Availability under the revolving credit facility is based on the
amount of eligible trade accounts receivable and inventory, and may be used
for working capital needs, as well as for general corporate purposes.
The new term loan requires twenty quarterly principal payments of
approximately $2.3 million, commencing June 30, 1995, plus interest at either
the bank's prime rate plus 1.25% (subject to reductions of up to 0.5% upon
the occurrence of certain events) or a selected Eurodollar contract rate plus
300 basis points (subject to reductions of up to 50 basis points upon the
occurrence of certain events). The new term loan is secured by substantially
all of Motors's assets including the stock of the Insurance Subsidiary. The
new term loan agreement requires Motors to, among other things, comply with
certain financial covenants, limits additions to and sales of Motors' fixed
assets and limits additional borrowings by Motors.
In February 1995, Great Dane Trailers amended its loan and security
agreement. Pursuant to the amended agreement, the Lenders have loaned $28
million as a term loan and have agreed to provide, at any given time, up to
$150 million (less amounts then outstanding as a term loan) as a revolving
credit facility (subject to availability based on the amount of eligible
trade accounts receivable and inventory) to be used as working capital by
Great Dane and for general corporate purposes. The term loan is subject to
further increases as final collateral appraisals are completed and as
equipment for the new facility in Terre Haute is purchased. The Company
believes that the term loan will be increased to between $33 million and $38
million. The initial term loan proceeds, which were drawn immediately upon
closing, were used, together with drawings under the revolver, to repay
approximately $17 million of bank debt, provide $15 million to the Company to
retire the balance of the shareholder notes and pay fees and expenses. The
term loan requires monthly principal payments of $0.3 million plus interest
on the unpaid principal amount of the loan in arrears at a rate equal to 1%
above the prime rate of interest charged from time to time by Bank of America
or a rate equal to 2.5% above a selected Eurodollar contract rate with the
unpaid principal balance due five years after the closing date. The loans
are secured by substantially all of the assets of Great Dane and its
subsidiaries. The Agreement requires Great Dane to, among other things,
comply with certain financial covenants, and limits the amount of loans and
transfers to the Company, limits additions to and sales of Great Dane's fixed
assets and limits additional Great Dane borrowings.
<PAGE>
<PAGE> 16
The refinancing of the Motors and Great Dane bank debt, as well as the
expansion of each of these entities' availabilities under their respective
credit facilities, improves the Company's liquidity.
Effective January 1, 1994, the Company adopted the provisions of SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity Securities."
In accordance with this statement, prior period financial statements have not
been restated to reflect the change in accounting principle. The opening
balance of shareholders' deficit was decreased by $1.4 million (net of $0.8
million in deferred income taxes) to reflect the net unrealized holding gains
on securities classified as available-for-sale previously carried at
amortized cost or lower of cost of market. The adoption of this SFAS has not
adversely affected liquidity and capital resources.
Purchases of property, plant and equipment have averaged approximately
$18.6 million per year over the past three years and have been funded
principally by cash flow generated from operations, as well as proceeds from
disposal of assets. Purchases of property, plant and equipment for 1995 are
anticipated to be approximately $38.3 million and are expected to be funded
principally by cash flow generated from operations and borrowings.
General Motors Corporation ("GM"), a major customer of the Company's
automotive products segment, is resorting to many measures, including
obtaining significant price reductions from its suppliers, in an effort to
reduce its operating costs. Automotive products segment management believes
that it has adequately provided in its financial plans for any price
reductions which may result from its current discussions with GM. However,
price reductions in excess of those anticipated could have a material adverse
effect on the automotive products operations.
RESULTS OF OPERATIONS.
1994 COMPARED TO 1993:
Revenues increased $187.2 million and gross profit increased $36.7
million during the year ended December 31, 1994, as compared to the same
period of 1993. The higher revenues are principally attributed to higher
Trailer Manufacturing revenues ($147.2 million), primarily associated with a
higher volume of sales within the segment. Automotive Products revenues
increased $29.6 million during the year ended December 31, 1994, as compared
to the same period in 1993. General increases in volumes to accommodate
automotive customers' demands and additional jobs were the principal reasons
for the revenue increases.
The Company's operating profit (gross profit less selling, general and
administrative expenses) increased $28.3 million in 1994 compared to 1993.
This increase is attributed to an increase of Trailer Manufacturing operating
profits ($26.2 million) which is principally due to higher volumes of sales
and higher margins, and an increase of Automotive Products operating profits
($4.3 million) principally due to higher sales and higher margins. These
increases in operating profits were offset by higher corporate costs due
principally to the refinancing which was not completed ($3.5 million).
<PAGE>
<PAGE> 17
Sales, general and administrative ("SG&A") expenses were $8.4 million
higher in 1994 as compared to 1993, but as a percentage of sales, SG&A was
0.8 percentage points lower in 1994 as compared to 1993.
During the year ended December 31, 1994, a $0.6 million charge was
recorded to reflect a minority equity in SCSM.
Income tax expense is higher for financial statement purposes than would
be computed if the statutory rate were used because of state income taxes, as
well as the impact of the reporting of certain income and expense items in
the financial statements which are not taxable or deductible for income tax
purposes.
Net income was $24.3 million for the year ended December 31, 1994, as
compared to a $43.3 million net loss for the prior year. The improvement in
net income is attributed to the reasons mentioned above, as well as a one-
time charge ($46.6 million) incurred for the implementation of SFAS Nos. 106
and 109 which was recorded in the first quarter of 1993.
1993 COMPARED TO 1992:
During 1993, revenues increased $192.6 million and gross profit
increased $24.7 million as compared to 1992. The Truck Trailer Manufacturing
and the Automotive Products segment operations benefited from increased
demand for their products. Truck Trailer Manufacturing revenues increased by
$175.5 million as compared to 1992, primarily due to the sale of containers
and chassis which were introduced in late 1992 and sold principally to one
customer, and a higher volume of truck trailer sales. Automotive Products
revenues increased $15.3 million as compared to 1992. Increased production
of the General Motors Blazer and Suburban models and crew cab products and
other general increases in volumes to accommodate automotive customers'
demands are the principle reasons for the increase. Vehicular Operations
revenues increased $1.5 million in 1993 as compared to 1992. The increase
was attributed to lease rate increases obtained in 1993 to cover certain
Vehicular Operations cost increases. The revenue increase was somewhat
offset by the impact of tendering medallions to the City of Chicago.
The factors impacting sales, as discussed previously, had the effect of
increasing the Company's 1993 operating profit by $18.4 million as compared
to 1992. Truck Trailer Manufacturing operating profit increased by $14.8
million as compared to 1992. This increase is principally due to higher
volumes, partly offset by SG&A expenses. Higher volumes were also the
principal reason for an increase of $3.7 million of Automotive Products
operating profits as compared to 1992.
S G & A expenses were $6.3 million higher in 1993 as compared to 1992,
but as a percentage of sales, S G & A expense is 1.7 percentage points lower
in 1993 as compared to 1992.
Other expenses decreased $5.5 million in 1993 as compared to 1992. The
decrease in expense resulted primarily from $1.4 million income from the
settlement of a dispute in 1993 and $2.8 million income from sales of taxi
medallions in 1993.
<PAGE>
<PAGE> 18
On February 8, 1989, the Boeing Company ("Boeing") filed a lawsuit
naming the Company, together with three prior subsidiaries of the Company, as
defendants in Case No. CV89-199MA, United States District Court for the
District of Oregon. In that lawsuit, Boeing sought damages and declaratory
relief for past and future costs resulting from alleged groundwater
contamination at a location in Gresham, Oregon, where the three prior
subsidiaries of the Company formerly conducted business operations. On
December 22, 1993, the Company entered into a settlement with Boeing,
settling all claims asserted by Boeing in the lawsuit. Pursuant to the
settlement terms, the Company will pay Boeing $12.5 million over the course
of five years, at least $5 million of which has been committed by certain
insurance carriers in the form of cash or irrevocable letters of credit.
Accordingly, the Company recorded a $7.5 million special charge during 1993
to provide for the cost associated with this legal proceeding. In accordance
with the settlement agreement, Boeing's claims against the Company and the
three former subsidiaries have been dismissed and Boeing has released and
indemnified the Company with respect to certain claims.
Net loss was $43.3 million for the year ended December 31, 1993, as
compared to a $7.6 million net loss for the year ended December 31, 1992.
The fluctuations in net loss between the years are attributed to the reasons
discussed above, as well as the one-time charge ($46.6 million) incurred for
the implementation of SFAS Nos. 106 and 109 which was recorded in 1993.
IMPACT OF INFLATION
Recently, due to competitive market conditions, the Company has been
unable to factor all cost increases into selling prices for its products and
services. The Company does not believe that the impact of inflation affects
the Company any more than it affects the Company's competitors.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Registrant's response to this item is incorporated herein by reference
to the consolidated financial statements and consolidated financial statement
schedules, and the report thereon of independent auditors, listed in Item
14(a)1 and 2 and appearing after the signature page to this Annual Report on
Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
<PAGE>
<PAGE> 19
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
David R. Markin, age 64, President and Chief Executive Officer of the
Company since January 11, 1989, has been President and Chief Executive
Officer of Motors since 1970. Mr. Markin serves on the Boards of Directors
of Jackpot Enterprises, Inc., an operator of gaming machines, Enhance
Financial Services Group Inc., a reinsurance company, and Data Broadcasting
Corporation, a provider of market data services to the investment community.
Allan R. Tessler, age 58, Chairman of the Board of Holdings since
January 11, 1989, is also Chairman of the Boards of Directors of
International Financial Group, Inc., a merchant banking firm ("IFG"), Enhance
Financial Services Group Inc., a reinsurance company, Allis-Chalmers
Corporation, a manufacturer of miscellaneous fabricated textile products
("Allis-Chalmers"), and Jackpot Enterprises, Inc., an operator of gaming
machines, and has been Chief Executive Officer of IFG since 1987 and of
Allis-Chalmers since 1994. Mr. Tessler serves on the Board of Directors of
The Limited, Inc., a manufacturer and retailer of apparel. Mr. Tessler is
also an attorney and from 1976 through 1988, he was a member of the Executive
Committee of the law firm of Shea & Gould; from 1989 through March 1, 1993,
he was of counsel to that firm. Beginning in 1990, Mr. Tessler and another
person were retained by Infotechnology, Inc. and Financial News Network Inc.
as a restructuring team and to serve as Co-Chief Executive Officers during
the restructuring of those companies. As part of the plan implemented by the
restructuring team, those companies were placed in bankruptcy, from which
they emerged in 1992 as Data Broadcasting Corporation, a provider of market
data services to the investment community. Mr. Tessler continues to serve as
Co-Chairman of the Board and Co-Chief Executive Officer of the restructured
company.
Martin L. Solomon, age 58, Vice Chairman and Secretary of the Company
since January 11, 1989, is a private investor. Mr. Solomon was employed as
a securities and portfolio analyst at Steinhardt Partners, an investment
firm, from 1985 through 1987. From 1988 through September 1990, he was the
Managing Partner and Director at Value Equity Associates I, Limited
Partnership, an investment firm. Mr. Solomon serves on the Board of
Directors of XTRA Corporation, a truck leasing company.
Wilmer J. Thomas, Jr., age 68, Vice Chairman of the Company since
January 11, 1989, is a private investor. Mr. Thomas served as Treasurer of
the Company from January 1989 to January 1994. Mr. Thomas serves on the
Boards of Directors of Moore Medical Corp., a pharmaceutical and surgical
supply company, and Oak Hills Sportswear Corp., a clothing company.
The executive officers of the Registrant, in addition to Messrs. Markin,
Tessler, Solomon and Thomas, are:
Jay H. Harris, age 58, has been Executive Vice President and Chief
Operating Officer of the Company for more than the past five years and a Vice
President of Motors since 1991. Mr. Harris was a director of the Company
from 1978 until January 11, 1989.
<PAGE>
<PAGE> 20
Marlan R. Smith, age 51, has been Treasurer of the Company since January
1994 and Vice President and Treasurer of Motors since March 1988. Prior to
being elected Treasurer of the Company, he served as Assistant Treasurer
since January 1989.
Kevin J. Hanley, age 39, has been Controller of the Company since
January 1994 and Secretary and Controller of Motors since December 1989.
Willard R. Hildebrand, age 55, was elected as President and Chief
Executive Officer of Great Dane effective January 1, 1992. Mr. Hildebrand
had served as President and Chief Operating Officer of Fiatallis North
America, Inc., a manufacturer of heavy construction and agricultural
equipment, for more than five years prior thereto.
Larry D. Temple, age 48, has been Group Vice President of Motors since
September 1989. Mr. Temple served as Vice President of Manufacturing from
1988 to 1989.
John T. Wise, age 49, has been President of SCSM since July 1992. He
was Vice President - General Manager from 1989 to 1992.
Jeffrey M. Feldman, age 44, has been President of Yellow Cab since 1983.
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION
The following table sets forth the 1994 annual compensation for the
Company's Chief Executive Officer and the five highest paid executive
officers, as well as the total compensation paid to each individual for the
Company's two previous fiscal years:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation Compensation
------------------ ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
David R. Markin 1994 $1,230,000 $300,000 $247,007<F1> $1,500<F5>
President, Chief 1993 1,230,000 250,000 246,519<F1> 2,249<F5>
Executive Officer 1992 1,230,000 150,000 239,594<F1> 2,182<F5>
and Director
Jay H. Harris 1994 431,250 250,000 0 1,500<F5>
Executive Vice 1993 350,000 250,000 0 2,249<F5>
President and Chief 1992 326,016 125,000 0 2,182<F5>
Operating Officer
Willard R. Hildebrand 1994 287,725 225,000 15,463<F2> 0
President and Chief 1993 203,500 150,000 7,304<F2> 0
Executive Officer 1992 190,175 105,000 4,133<F2> 106,368<F6>
of Great Dane
</TABLE>
<PAGE>
<PAGE> 21
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE--Continued
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation Compensation
------------------ ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Jeffrey M. Feldman 1994 $ 220,500 $150,000 86,263<F3> 1,500<F5>
President of 1993 210,000 150,000 85,008<F3> 2,249<F5>
Yellow Cab 1992 186,667 150,000 77,755<F3> 2,182<F5>
Martin L. Solomon 1994 0 0 400,000<F4> 0
Vice Chairman and 1993 0 0 400,000<F4> 0
Secretary 1992 0 0 400,000<F4> 0
Allan R. Tessler 1994 0 0 400,000<F4> 0
Chairman of the 1993 0 0 400,000<F4> 0
Board 1992 0 0 400,000<F4> 0
Wilmer J. Thomas, Jr. 1994 0 0 400,000<F4> 0
Vice Chairman 1993 0 0 400,000<F4> 0
1992 0 0 400,000<F4> 0
- ---------------
<FN>
<F1>Other compensation for Mr. Markin includes:
1992 1993 1994
------ ------ ------
Consulting fees $190,000 $190,000 $190,000
Life insurance 37,023 41,027 41,710
Automobile 5,100 8,125 9,750
Club dues 7,471 7,367 5,547
-------- -------- --------
$239,594 $246,519 $247,007
======== ======== ========
<F2>Other compensation for Mr. Hildebrand includes:
1992 1993 1994
------ ------ ------
Life insurance $ 806 $ 1,560 $ 3,474
Automobile 927 2,324 3,316
Club dues 2,400 3,420 5,887
Other 0 0 2,786
-------- -------- --------
$ 4,133 $ 7,304 $ 15,463
======== ======== ========
<F3>Other compensation for Mr. Feldman includes:
1992 1993 1994
------ ------ ------
Consulting fees $ 57,000 $ 57,000 $ 59,000
Life insurance 10,739 11,253 11,973
Automobile 1,537 1,748 4,335
Club dues 8,479 15,007 10,955
-------- -------- --------
$ 77,755 $ 85,008 $ 86,263
======== ======== ========
<F4>Consulting fees.
<F5>Matching contributions under Motors 401(k) plan.
<F6>Relocation expenses.
</TABLE>
<PAGE>
<PAGE> 22
COMPENSATION PURSUANT TO PLANS
GREAT DANE PENSION AND EXCESS BENEFIT PLANS
Great Dane has in effect a defined benefit employee pension plan
entitled Retirement Plan For Great Dane Trailers, Inc. (the "Retirement
Plan") covering substantially all of its employees. Pension benefits are
subject to limitations imposed by the Internal Revenue Code of 1986, as
amended (the "Code"), and the Employee Retirement Income Security Act of
1974, as amended, with respect to the annual amount of benefits provided by
employer contributions. Effective January 1, 1994, Great Dane adopted the
Supplemental Retirement Income Plan (the "Great Dane Excess Benefit Plan")
for officers of Holdings who are participants in the Checker Motors Pension
Plan and officers of Great Dane, in each case whose annual compensation
exceeds $150,000. The Great Dane Excess Benefit Plan provides benefits which
cannot be provided under the Retirement Plan because of the $150,000
compensation limit under the Code. Considered compensation under the Great
Dane Excess Benefit Plan is limited to $235,840 (adjusted for inflation) per
year. The benefits under the Great Dane Excess Benefit Plan are not funded
and will be paid from Great Dane's general assets.
Effective as of July 1, 1988, the assets and the liabilities
attributable to active and former employees under the Amended and Restated
International Controls Corp. Pension Plan as of June 30, 1988 were
transferred to the Retirement Plan and Holdings adopted the Retirement Plan
for the benefit of its employees. With respect to benefits accruing after
June 30, 1984, to a participant who was a participant under the Amended and
Restated International Controls Corp. Pension Plan as of June 30, 1988, the
following table shows the estimated annual benefits payable upon retirement
at age 65 under the plan to specified average annual compensation and years
of benefit service classifications. The following amounts would be reduced
by a Social Security offset:
<TABLE>
<CAPTION>
Years of Benefit Service
--------------------------------------------------------
Average
Annual
Compensation 1 5 10 15 20
- ------------ --- --- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$100,000 $2,000 $10,000 $ 20,000 $ 30,000 $ 40,000
150,000 3,000 15,000 30,000 45,000 60,000
200,000 4,000 20,000 40,000 60,000 80,000
250,000 5,000 25,000 50,000 75,000 100,000
300,000 5,000 25,000 60,000 90,000 118,800*
400,000 5,000 25,000 80,000 118,800* 118,800*
500,000 5,000 25,000 100,000 118,800* 118,800*
- --------------------
<FN>
*Maximum permitted in 1994
</TABLE>
For Mr. Hildebrand, the following are credited years of service under
the Retirement Plan and 1994 salary covered by the Retirement Plan:
<PAGE>
<PAGE> 23
Expected 1994 Salary
Credited Credited Covered by
Years of Years of Retirement
Service Service at 65 Plan
--------- ------------- ----------
Willard R. Hildebrand 4 14 $150,000
Mr. Harris has an aggregate of 24 years of benefit service under the
Retirement Plan (8 years) and the Amended and Restated International Controls
Corp. Pension Plan (16 years) and will receive benefits of approximately
$74,000 per year at age 65.
MOTORS PENSION AND EXCESS BENEFIT PLANS
Motors maintains a defined benefit employee pension plan entitled
Checker Motors Pension Plan (the "Pension Plan") covering substantially all
of its non-union employees of Motors and its subsidiaries other than SCSM,
and, effective January 1, 1992, the employees of the Company.
Motors, as the successor in interest to the Partnership, also maintains
the Checker Motors Co., L.P. Excess Benefit Retirement Plan (the "Partnership
Excess Benefit Plan"). The Partnership Excess Benefit Plan provides benefits
which cannot be provided under the Retirement Plan because of the $150,000
compensation limit under the Code. At the present time, David R. Markin and
Jeffrey M. Feldman are the only individuals named above who would receive
benefits under the Partnership Excess Benefit Plan. Considered compensation
under the Partnership Excess Benefit Plan is limited to $300,000. The
benefits under the Partnership Excess Benefit Plan are not funded and will be
paid from Motors' general assets.
Set forth below are the estimated annual benefits for participants in
the Pension Plan (including benefits payable under the Partnership Excess
Benefit Plan) who have been employed by Motors for the indicated number of
years prior to retirement, assuming retirement at age 65 in 1994:
<TABLE>
<CAPTION>
Average
Compensation Estimated Annual Benefits for Years of Service Indicated
(as defined in --------------------------------------------------------
plan) 10 20 30 40 50
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$100,000 $ 13,864 $ 28,670 $ 46,938 $ 66,073 $ 75,784
150,000 21,364 46,170 74,438 103,573 118,284
200,000 28,864 63,670 101,938 141,073 160,784
250,000 36,364 81,170 129,438 178,573 203,284
300,000 43,864 98,670 156,938 216,073 245,784
400,000 43,864 98,670 156,938 216,073 245,784
500,000 43,864 98,670 156,938 216,073 245,784
</TABLE>
The above benefit projections were prepared on the assumption that the
participant made participant contributions to the Pension Plan for all years
in which he was eligible to contribute, and that Social Security covered
compensation is $1,893.
<PAGE>
<PAGE> 24
For those executive officers named above, the following are credited
years of service under the Pension Plan and Excess Benefit Plans and 1994
salary covered by the Pension Plan:
<TABLE>
<CAPTION>
Expected 1994 Salary
Credited Credited Covered
Years Year of by
of Service Pension
Service at 65 Plan
------- ------- -------
<S> <C> <C> <C>
David R. Markin 40 41 $150,000
Jay H. Harris 3 10 150,000
Jeffrey M. Feldman 16 37 150,000
</TABLE>
SALARY CONTINUATION PLAN
Motors entered into Stated Benefit Salary Continuation Agreements (the
"Agreements") with certain officers and employees (the "Salary Plan")
pursuant to which such participants will receive benefits upon attaining age
65 (or their beneficiaries will receive benefits upon their death prior to or
within 120 months after such executives or employees attain age 65).
For those executive officers named above, the following table sets forth
the benefits payable pursuant to the Salary Plan:
<TABLE>
<CAPTION>
Annual
Survivorship
Benefit
Annual Payable Total
Benefit Total Upon Survivorship
Payable Benefit Death Benefit
Upon Payable Prior to Payable
Attaining Over Attaining Over Three
Age 65 Ten Years Age 65 Years
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
David R. Markin $240,000 $2,400,000 $368,000 $1,104,000
Jeffrey M. Feldman 19,950 199,500 79,800 239,400
</TABLE>
1994 OPTION PLAN
On November 16, 1994, the Board of Directors adopted the 1994 Option
Plan, subject to approval by the Compensation Committee (the composition of
which committee is described below) and by the stockholders at the first
annual meeting of stockholders after the consummation of the IPO. The 1994
Option Plan provides for the granting of incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") to employees of the Company and for the granting of nonstatutory
<PAGE>
<PAGE> 25
stock options and stock appreciation rights ("Rights") to employees,
consultants, non-employee directors and other persons providing goods or
services to the Company. Under the 1994 Option Plan, a total of 1,680,000
shares of Common Stock (after giving effect to a 16,800 to 1 stock split to
be effectuated prior to the consummation of the IPO) have been reserved for
issuance. The maximum number of shares of Common Stock with respect to which
options or Rights may be granted during the life of the 1994 Option Plan to
any employee cannot exceed 400,000. On January 25, 1995, the Board of
Directors granted nonstatutory options under the 1994 Option Plan to certain
employees to purchase 174,500 shares of Common Stock at 50% of the IPO price.
The grants are subject to the consummation of the IPO, approval of the 1994
Option Plan by the Compensation Committee and the stockholders and
ratification of the grants by the Compensation Committee. The options will
be exercisable for five years commencing one year from the date on which the
IPO is consummated.
The 1994 Option Plan will be administered by the Compensation Committee
which, when constituted, will consist of persons who are "disinterested
persons" within the meaning of Rule 16(b) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Compensation
Committee will have the power, subject to the terms of the 1994 Option Plan,
to determine the recipients and terms of any options or Rights granted,
including the exercise price, number of shares subject to the option or
Rights and the exercisability thereof. Options and Rights granted under the
1994 Option Plan may not be transferred except by will or the laws of descent
and distribution and, during the lifetime of the optionee, may be exercised
only by such optionee or such optionee's guardian or legal representative.
If an optionee's employment or other relationship with the Company terminates
for any reason, the employee's options and Rights shall immediately
terminate, except that: (i) upon termination of employment due to disability
or retirement, an optionee may generally exercise options or Rights that have
not expired on such date for a period of two years after the date of
termination of employment; and (ii) upon termination of employment as a
result of death, or in the event of the employee's death within the periods
described in (i), above, an optionee's legal representative may generally
exercise options or Rights that have not expired on such date for a period of
12 months after the date of death. Options granted to non-employee
directors, consultants and other persons providing goods and services to the
Company will be subject to such terms as the Compensation Committee shall
determine.
The exercise price of all incentive stock options granted under the 1994
Option Plan must be at least equal to the fair market value of the shares of
Common Stock subject to the option on the date the option is granted. The
exercise price of all nonstatutory stock options granted under the 1994
Option Plan is to be determined by the Compensation Committee but cannot be
less than the minimum required to comply with any applicable law, rule or
regulation. The term of options granted under the 1994 Option Plan may not
exceed 10 years. Notwithstanding the above, incentive stock options granted
to an employee that owns more than 10% of the voting power of all classes of
stock of the Company must have an exercise price at least equal to 110% of
the fair market value of the stock subject to the option on the date the
option is granted and must have a term that does not exceed five years.
<PAGE>
<PAGE> 26
Options may be exercised either in cash or with Common Stock having a
fair market value equal to the exercise price of the option on the date the
option is exercised.
Each option and Right granted under the 1994 Option Plan is exercisable
in whole or in part at any time, or from time to time, as determined by the
Compensation Committee, provided that the election to exercise an option or
a Right is made in accordance with applicable federal and state laws and
regulations, and, unless the optionee dies or becomes disabled, the option or
Right cannot be exercised during the first six months of the option period.
An option is vested and becomes immediately exercisable if: any person within
the meaning of Sections 13(d) and 14(d) of the Exchange Act, other than the
Company or the current stockholders of the Company, becomes the beneficial
owner, within the meaning of Rule 13d-3 of the Exchange Act, of 75% or more
of the Company's outstanding voting securities, unless such ownership has
been approved by the Board of Directors of the Company; the first day on
which shares of Common Stock are purchased pursuant to a tender offer or
exchange offer, unless the offer is made by the Company or approved by its
Board of Directors; the stockholders of the Company have approved an
agreement to merge or consolidate with or into another corporation (and the
Company is not the survivor of the merger or consolidation), or an agreement
to sell or otherwise dispose of all or substantially all of the Company's
assets (which includes a plan of liquidation), unless the Board of Directors
has resolved that options do not automatically vest; or during any period of
two consecutive years, individuals who at the beginning of the period
constituted a majority of the Board of Directors cease to constitute a
majority thereof, unless the election or the nomination for the election by
the Company's stockholders of each new director was approved by a vote of at
least a majority of the directors then still in office who were directors at
the beginning of the period. In addition, the Compensation Committee has the
authority at any time or from time to time to accelerate the vesting of any
individual option and to permit any option not yet exercisable to become
immediately exercisable.
Unless terminated sooner, the 1994 Option Plan will terminate 10 years
from the Effective Date. The Board of Directors has authority to amend or
terminate the 1994 Option Plan, provided no such action may impair the rights
of the holder of any outstanding option or Rights.
No Right can be exercised by an optionee unless the Company has been
subject to the reporting requirements of Section 12 of the Exchange Act for
at least one year prior to the date of exercise and has filed all reports and
statements required to be filed during that period, and the Company on a
regular basis releases for publication quarterly and annual summary
statements of sales and earnings. No Common Stock can be delivered by the
Company pursuant to the exercise of an option or a Right until qualified for
delivery under applicable securities laws and regulations, as determined by
the Compensation Committee, until the Common Stock is listed on each
securities exchange on which the Common Stock may then be listed, and until
the exercise price of the option is received by the Company either in cash or
in Common Stock.
<PAGE>
<PAGE> 27
COMPENSATION OF DIRECTORS
The directors did not receive any fees for their services as directors
in 1994. See "Compensation Committee Interlocks and Insider Participation."
EMPLOYMENT AGREEMENTS
Motors, as a successor to the Partnership, is party to an Amended and
Restated Employment Agreement dated as of November 1, 1985, as further
amended, with David R. Markin pursuant to which Mr. Markin is to serve as
President, Chief Executive Officer and Chief Operating Officer of the
Partnership until April 30, 1996, subject to extension (the "Termination
Date"), at a minimum salary of $600,000 per annum, together with the payment
of certain insurance premiums, the value of which have been included in the
Summary Compensation Table above. The beneficiaries of these insurance
policies are designated by Mr. Markin. Mr. Markin continues to be eligible
to participate in profit sharing, pension or other bonus plans of the Motors.
Pursuant to the Amended and Restated Employment Agreement, in the event of
Mr. Markin's death, the Company shall pay Mr. Markin's estate the
compensation which would otherwise be payable to him for the period ending on
the last day of the month in which death occurs. In addition, Motors shall
pay to Mr. Markin's beneficiaries deferred compensation from the date of his
death through the Termination Date in an annual amount equal to one-third of
his base salary at the date of his death. In the event of termination of the
Amended and Restated Employment Agreement for any reason other than cause,
disability or death, Mr. Markin shall continue to serve as a consultant to
Motors for a period of five years, for which he shall receive additional
compensation in the amount of $50,000 per annum. Motors has agreed to
indemnify Mr. Markin from certain liabilities arising out of his service to
Motors, except for liabilities resulting from his gross negligence or willful
misconduct. Effective January 1, 1994, Mr. Markin and the Company
memorialized in writing their agreement, pursuant to which Mr. Markin has
been compensated by the Company since January 11, 1989, on substantially the
same terms as are set forth above.
The Company entered into an employment agreement as of July 1, 1992,
with Jay H. Harris pursuant to which Mr. Harris serves as Executive Vice
President and Chief Operating Officer of the Company until June 30, 1995,
subject to extension or earlier termination, at a minimum salary of $350,000
per annum, an incentive bonus to be determined by the Board of Directors, and
such other fringe benefits and plans as are available to other executives of
the Company. Upon the happening of certain events, including a change in
control (as defined therein) of the Company or retirement after June 30,
1994, Mr. Harris is entitled to compensation in an amount equal to the
greater of (a) five percent of the increase in the Company's retained
earnings, subject to certain adjustments, during the period commencing on
March 31, 1992, and ending on the last day of the month preceding the event
which triggers the payment (the "Termination Payment") and (b) 2.99 times his
then base salary. If Mr. Harris were to die or become disabled, he or his
estate would receive the greater of (a) one year's base compensation or (b)
the Termination Payment. Payments in either case would be made over a period
of time, the length of which would be dependent on the amount due to Mr.
Harris. Mr. Harris has agreed to serve as a consultant to the Company during
the first year after termination for no compensation beyond his expenses
incurred in connection with rendering such services. The Company has agreed
<PAGE>
<PAGE> 28
to indemnify Mr. Harris to the full extent allowed by law. Motors has
guaranteed the Company's obligations. Mr. Harris' current salary is
$500,000.
Yellow Cab is party to an Amended and Restated Employment Agreement
dated as of June 1, 1992, with Jeffrey Feldman pursuant to which Mr. Feldman
serves as President of Yellow Cab until February 1, 1996, subject to
extension (the "Termination Date"), at a minimum salary of $200,000 per
annum, together with certain insurance premiums, the value of which have been
included in the Summary Compensation Table above. The beneficiaries of
these insurance policies are designated by Mr. Feldman. Mr. Feldman is
eligible to participate in profit sharing, pension or other bonus plans
implemented by Yellow Cab or Motors. Pursuant to the Amended and Restated
Employment Agreement, in the event of Mr. Feldman's death, Yellow Cab shall
pay Mr. Feldman's estate the amount of compensation which would otherwise be
payable to him for the period ending on the last day of the month in which
death occurs. In addition, Yellow Cab shall pay to Mr. Feldman's estate
deferred compensation from the date of his death to the Termination Date in
an annual amount equal to one-third of his base salary at the date of his
death. In the event of the termination of the Amended and Restated
Employment Agreement for any reason other than cause, disability or death,
Mr. Feldman shall continue to serve as a consultant to Yellow Cab for a
period of five years (if terminated by Mr. Feldman) or seven years if
terminated by Yellow Cab, for which he shall receive compensation in the
amount of $75,000 per annum. Yellow Cab has agreed to indemnify Mr. Feldman
from certain liabilities arising out of his service to Yellow Cab, except for
liabilities resulting from his gross negligence or willful misconduct.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has had no separate compensation committee or other
committee providing equivalent functions. Each of Messrs. Markin, Solomon,
Tessler and Thomas is an executive officer of Holdings and participates, as
a director, in the deliberations concerning executive officer compensation.
During 1994, Mr. Markin served on the compensation committee of Enhance
Financial Services Group Inc. and Data Broadcasting Corporation and Mr.
Tessler served as an executive officer of each of these companies.
As of December 31, 1994, Country holds $0.6 million principal amount of
7% Notes due December 1, 1996, issued by Enhance Financial Services Group
Inc. Mr. Markin is a director of and served on the compensation committee of
that company.
During 1994, the Company used, on a month-to-month basis, an airplane
owned by a corporation of which Mr. Tessler is the sole shareholder. The
Company paid $90,000 per month for such use.
Each of Messrs. Markin, Solomon, Tessler and Thomas provides consulting
services to Yellow Cab and each received for such services $10,000 per month
<PAGE>
<PAGE> 29
in 1994. Messrs. Solomon, Tessler and Thomas also provide consulting
services (a) to Motors for which they each received monthly fees
of $5,000 and (b) to Country for which they each received monthly fees of
approximately $18,300 in 1994. Mr. Markin serves as a consultant to Chicago
AutoWerks for which he received monthly fees of approximately $1,200, and to
Country, for which he received monthly fees of approximately $4,600 in 1994.
Upon consummation of the IPO, these fees will be reduced to a fee of $50,000
per year for each of Messrs. Markin, Solomon, Tessler and Thomas, in payment
for consulting services to Country.
On September 24, 1992, American Country Financial Services Corp.
("AFSC"), a subsidiary of Country, purchased from The Mid City National Bank
of Chicago the promissory note dated July 30, 1992, made by Checker Services,
Inc., formerly King Cars, Inc. ("Services"), in the principal amount of
$381,500 plus accrued interest in the amount of $3,560. The note, which was
renewed several times, had outstanding principal and accrued interest as of
September 30, 1994, of approximately $430,000 and matured in December 1994.
Until October 1994 when Checker Taxi Association purchased 45% of Services
for $250,500 (which amount was used by Services to pay accrued interest and
to reduce the principal amount of the note), Services was owned by Messrs.
Markin, Solomon, Tessler, Thomas and Feldman. The balance of the note
(except for $57,309 which was forgiven) was paid prior to December 31, 1994.
Services is a party to an agreement dated December 15, 1992, with Yellow Cab
pursuant to which Yellow Cab purchases from Services display frames for
installation in its taxicabs and Services furnishes Yellow Cab advertising
copy for insertion into the frames. Services receives such advertising copy
as an agent in Chicago for an unrelated company which is in the business of
selling and arranging for local and national advertising. Of the revenues
generated from such advertising, 30% will be retained by Services and the
balance will be delivered to Yellow Cab until such time as Yellow Cab has
recovered costs advanced by it for the installation of advertising frames in
500 of its taxicabs (approximately $78,000). The terms of Yellow Cab are the
same or more favorable than those offered by Services to unrelated third
parties.
Each of Messrs. Markin, Solomon, Tessler and Thomas received from
Holdings interest payments of $790,428 in 1994 pursuant to the terms of the
senior notes held by them (see Note F of the Notes to Consolidated Financial
Statements - December 31, 1994).
Jeffrey M. Feldman is the nephew of David R. Markin.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Common Stock, which is the only class of stock of the Company, is
owned as follows:
<PAGE>
<PAGE> 30
<TABLE>
<CAPTION>
No. of Shares of Common Stock Percent of
Name of Record and Beneficially Owned Class
- ---- -------------------------------- ----------
<S> <C> <C>
David R. Markin 325 32.5
Martin L. Solomon 225 22.5
Allan R. Tessler 225 22.5
Wilmer J. Thomas, Jr. 225 22.5
</TABLE>
The address of each of the shareholders is c/o Great Dane Holdings Inc.,
2016 North Pitcher Street, Kalamazoo, Michigan 49007.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Item 11. EXECUTIVE COMPENSATION - COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION."
<PAGE>
<PAGE> 31
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1 and 2. FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES:
The following consolidated financial statements and consolidated
financial statement schedules of Great Dane Holdings Inc. and subsidiaries
and the report thereon of independent auditors are filed as part of this
Annual Report on Form 10-K and are incorporated by reference in Item 8:
A. Report of Independent Auditors.
B. Consolidated Financial Statements.
Consolidated Balance Sheets as of December 31, 1993 and 1994.
Consolidated Statements of Shareholders' Deficit for the years
ended December 31, 1992, 1993 and 1994.
Consolidated Statements of Operations for the years ended
December 31, 1992, 1993 and 1994.
Consolidated Statements of Cash Flows for the years ended
December 31, 1992, 1993 and 1994.
Notes to Consolidated Financial Statements - December 31, 1994.
C. Consolidated Financial Statement Schedules.
Schedule III - Condensed Financial Information of Registrant
Schedule VIII - Valuation and Qualifying Accounts
Schedule XIV - Supplemental Information Concerning Property-
Casualty Insurance Operations
See the accompanying Index to Financial Statements and Financial
Statement Schedules Covered by Report of Independent Auditors appearing after
the signature page to this Annual Report on Form 10-K.
3. See the accompanying Index to Exhibits which precedes the Exhibits
filed with this Annual Report on Form 10-K.
(b) REPORTS ON FORM 8-K:
None
(c) EXHIBITS:
See the accompanying Index to Exhibits which precedes the Exhibits filed
with this Annual Report on Form 10-K.
<PAGE>
<PAGE> 32
(d) FINANCIAL STATEMENT SCHEDULES REQUIRED BY REGULATION S-X:
See the accompanying Index to Financial Statements and Financial
Statement Schedules Covered by Report of Independent Auditors which
appears after the signature page to this Annual Report on Form 10-K.
<PAGE>
<PAGE> 33
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
February 15, 1995 GREAT DANE HOLDINGS, INC.
By: /s/ David R. Markin
------------------------------------------
David R. Markin
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons, including at least a
majority of the members of its Board of Directors, on behalf of Registrant
and in the capacities and on the dates indicated.
/s/ Allan R. Tessler Chairman of the Board February 15, 1995
- --------------------------
Allan R. Tessler
/s/ David R. Markin President, Chief Executive February 15, 1995
- -------------------------- Officer and Director
David R. Markin
/s/ Jay H. Harris Executive Vice President February 15, 1995
- -------------------------- and Chief Operating Officer
Jay H. Harris
/s/ Marlan R. Smith Treasurer (Principal February 15, 1995
- -------------------------- Financial Officer and
Marlan R. Smith Principal Accounting Officer)
/s/ Martin L. Solomon Vice Chairman of the Board February 15, 1995
- -------------------------- and Secretary
Martin L. Solomon
Vice Chairman of the Board
- --------------------------
Wilmer J. Thomas, Jr.
<PAGE>
<PAGE> 34
INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
COVERED BY REPORT OF INDEPENDENT AUDITORS
The following consolidated financial statements of Great Dane Holdings Inc.
and subsidiaries are submitted herewith in response to Item 8:
Page
----
- - Report of Independent Auditors F-1
- - Consolidated Balance Sheets as of December 31, 1993 and 1994 F-2
- - Consolidated Statements of Shareholders' Deficit for the
Years Ended December 31, 1992, 1993 and 1994 F-4
- - Consolidated Statements of Operations for the Years Ended
December 31, 1992, 1993 and 1994 F-5
- - Consolidated Statements of Cash Flows for the Years Ended
December 31, 1992, 1993 and 1994 F-6
- - Notes to Consolidated Financial Statements--December 31, 1994 F-8
The following consolidated financial statement schedules of Great Dane
Holdings Inc. and subsidiaries are submitted herewith in response to Item
14(d):
Schedule III - Condensed Financial Information of Registrant S-1
Schedule VIII - Valuation and Qualifying Accounts S-4
Schedule XIV - Supplemental Information Concerning Property-
Casualty Insurance Operations S-6
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been
omitted.
<PAGE>
<PAGE> F-1
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Great Dane Holdings Inc.
We have audited the accompanying consolidated balance sheets of Great Dane
Holdings Inc. and subsidiaries as of December 31, 1993 and 1994, and the
related consolidated statements of operations, shareholders' deficit and cash
flows for each of the three years in the period ended December 31, 1994. Our
audits also included the financial statement schedules listed in the Index at
Item 14(a). These financial statements and schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Great Dane
Holdings Inc. and subsidiaries at December 31, 1993 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
/s/ Ernst & Young LLP
Kalamazoo, Michigan
February 14, 1995
<PAGE>
<PAGE> F-2
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands, except share data)
December 31,
1993 1994
-------- --------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 40,078 $ 34,875
Accounts receivable, less allowance for doubtful
accounts of $748 (1993) and $1,342 (1994)
(Note F) 75,701 90,076
Inventories (Notes C and F) 94,112 96,580
Other current assets 11,823 19,729
---------- ----------
Total current assets 221,714 241,260
Property, plant and equipment, net (Notes D,
F and G) 122,355 113,948
Insurance Subsidiary's investments (Note E) 90,838 91,094
Cost in excess of net assets acquired, net of
accumulated amortization of $6,252 (1993)
and $7,502 (1994) 43,743 42,493
Trademark, net of accumulated amortization
of $1,750 (1993) and $2,100 (1994) 11,696 11,346
Other assets 26,990 21,910
---------- ----------
Total assets $ 517,336 $ 522,051
========== ==========
</TABLE>
<PAGE>
<PAGE> F-3
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands, except share data)
December 31,
1993 1994
-------- --------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' DEFICIT:
Accounts payable $ 77,876 $ 80,863
Notes payable (Note F) 5,000 5,000
Income taxes payable (Note J) 7,726 12,663
Accrued compensation 15,838 17,955
Accrued interest 11,746 11,802
Customer deposits 730 14,113
Other accrued liabilities 37,341 36,402
Current portion of long-term debt 14,321 13,613
---------- ----------
Total current liabilities 170,578 192,411
Long-term debt, excluding current portion
(Note F):
Shareholders 30,000 30,000
Other 246,952 244,652
---------- ----------
276,952 274,652
Insurance Subsidiary's unpaid losses and loss
adjustment expenses 71,179 69,318
Unearned insurance premiums 9,547 12,203
Deferred income taxes 9,803 2,750
Postretirement benefits other than pensions
(Note H) 49,609 51,061
Other noncurrent liabilities 39,053 46,372
Minority interest (Notes G and I) 40,132 586
---------- ----------
Total liabilities 666,853 649,353
Shareholders' deficit (Notes A, E and F):
Common stock, par value $1.00:
Authorized 3,000 shares
Outstanding 1,000 shares 1 1
Additional paid-in capital 14,999 14,999
Retained earnings (deficit) (36,217) (11,869)
Unrealized appreciation (depreciation) on
Insurance Subsidiary's investments in
certain debt and equity securities 73 (2,060)
Notes receivable from shareholders (625) (625)
Amount paid in excess of Motors's net assets (127,748) (127,748)
---------- ----------
Total shareholders' deficit (149,517) (127,302)
Commitments and contingencies (Note G)
---------- ----------
Total liabilities and
shareholders' deficit $ 517,336 $ 522,051
========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-4
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
Unrealized
Appreciation
(Depreciation) Amount
on Notes Paid in
Additional Investments Receivable Excess of
Common Paid-In Retained in Certain from Motors's
Stock Capital Earnings Securities Share- Net Assets
(Note A) (Note A) (Deficit) (Note E) holders (Note A)
-------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balances at January 1, 1992 $ 1 $14,999 $ 14,600 $ 399 $(625) $(127,748)
Unrealized depreciation on
investment in equity
securities --- --- --- (367) --- ---
Net loss --- --- (7,555) --- --- ---
----- ------- --------- -------- ------ ----------
Balances at December 31, 1992 1 14,999 7,045 32 (625) (127,748)
Unrealized appreciation on
investment in equity
securities --- --- --- 41 --- ---
Net loss --- --- (43,262) --- --- ---
----- ------- --------- -------- ------ ----------
Balances at December 31, 1993 1 14,999 (36,217) 73 (625) (127,748)
Unrealized depreciation on
investment in certain debt
and equity securities --- --- --- (2,133) --- ---
Net income --- --- 24,348 --- --- ---
----- ------- --------- -------- ------ ----------
Balances at December 31, 1994 $ 1 $14,999 $(11,869) $(2,060) $(625) $(127,748)
===== ======= ========= ======== ====== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-5
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(in thousands, except share and per share amounts)
Year Ended December 31,
1992 1993 1994
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Trailer manufacturing and distribution $ 536,336 $ 711,862 $ 859,089
Automotive products manufacturing 112,631 127,925 157,568
Vehicular operations including rental
income of $37,382 (1992); $38,360
(1993) and $38,712 (1994) 40,580 42,103 43,653
Insurance premiums earned 27,186 27,436 36,167
---------- ---------- -----------
Total revenues 716,733 909,326 1,096,477
Cost of revenues:
Cost of sales (561,546) (728,471) (870,656)
Cost of vehicular operations (30,120) (30,916) (32,066)
Cost of insurance operations (19,204) (19,418) (26,510)
---------- ---------- -----------
Total cost of revenues (610,870) (778,805) (929,232)
---------- ---------- -----------
Gross profit 105,863 130,521 167,245
Selling, general and administrative
expense (76,877) (83,176) (91,600)
Interest expense (42,726) (41,614) (40,165)
Interest income 8,895 7,396 7,101
Other income (expense), net (2,023) 3,494 1,002
Special charge--Note G --- (7,500) ---
---------- ---------- -----------
Income (loss) before minority equity,
income taxes, and accounting changes (6,868) 9,121 43,583
Minority equity (Notes B and I) --- --- (586)
---------- ---------- -----------
Income (loss) before income taxes
and accounting changes (6,868) 9,121 42,997
Income tax expense (Note J) (687) (5,757) (18,649)
---------- ---------- -----------
Income (loss) before accounting changes (7,555) 3,364 24,348
Accounting changes (Notes H and J) --- (46,626) ---
---------- ---------- -----------
Net income (loss) $ (7,555) $ (43,262) $ 24,348
========== ========== ===========
Weighted average number of shares used
in per share computations (Note A) 1,000 1,000 1,000
========== ========== ===========
Income (loss) per share:
Income (loss) before accounting
changes $ (7,555) $ 3,364 $ 24,348
Accounting changes --- (46,626) ---
---------- ---------- -----------
Net income (loss) per share $ (7,555) $ (43,262) $ 24,348
========== ========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-6
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
Year Ended December 31,
1992 1993 1994
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (7,555) $ (43,262) $ 24,348
Adjustment to reconcile net income
(loss) to net cash provided by
operating activities:
Accounting changes --- 46,626 ---
Depreciation and amortization 21,054 23,295 22,594
Deferred income tax benefit (4,311) (8,512) (9,044)
Amortization of cost in excess of net
assets acquired 1,250 1,250 1,250
Amortization of debt discount 1,181 1,372 1,595
(Gain) loss on sale of property,
plant and equipment 217 207 (376)
Investment gains (690) (1,079) (276)
Increase in minority equity --- --- 586
Other noncash charges 6,386 7,562 10,203
Changes in operating assets and
liabilities:
Accounts receivable (12,788) (11,970) (15,140)
Finance lease receivables 5,131 4,408 1,511
Inventories (7,820) (22,251) (2,468)
Other assets (5,634) 679 (2,463)
Accounts payable 8,281 21,193 2,987
Income taxes 4,489 824 6,037
Unpaid losses and loss
adjustment expenses 5,046 (4,601) (1,861)
Unearned insurance premiums 4,673 (917) 2,656
Postretirement benefits other
than pension --- 4,497 1,452
Other liabilities 6,288 11,359 12,760
---------- ---------- ----------
NET CASH FLOW PROVIDED BY OPERATING
ACTIVITIES 25,198 30,680 56,351
</TABLE>
<PAGE>
<PAGE> F-7
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
Year Ended December 31,
1992 1993 1994
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment $ (17,549) $ (20,006) $ (18,209)
Proceeds from disposal of property,
plant and equipment and other
productive assets 2,783 2,599 1,979
Purchase of investments available for
sale --- --- (10,124)
Purchase of investments held to maturity (32,190) (64,052) (13,220)
Proceeds from sale of investments
available for sale --- --- 2,769
Proceeds from maturity and redemption
of investments held to maturity 31,617 65,019 17,567
---------- ---------- ----------
NET CASH FLOW USED IN INVESTING
ACTIVITIES (15,339) (16,440) (19,238)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 32,090 2,500 10,069
Repayments of borrowings (39,772) (17,967) (14,672)
Return of limited partner's capital (1,035) (894) (37,713)
---------- ---------- ----------
NET CASH FLOW USED IN FINANCING
ACTIVITIES (8,717) (16,361) (42,316)
---------- ---------- ----------
Increase (decrease) in cash and cash
equivalents 1,142 (2,121) (5,203)
Beginning cash and cash equivalents 41,057 42,199 40,078
---------- ---------- ----------
ENDING CASH AND CASH EQUIVALENTS $ 42,199 $ 40,078 $ 34,875
========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<PAGE> F-8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
December 31, 1994
NOTE A--ORGANIZATION
On October 19, 1994, International Controls Corp. ("ICC") changed its name
and its jurisdiction of incorporation through a merger into its wholly-
owned subsidiary, Great Dane Holdings Inc. (the "Company"), a Delaware
corporation. Each of the outstanding shares of common stock of ICC was
converted into a pro rata portion of 1,000 shares of common stock, $1 par
value per share, of the Company. As a result of the above, the Company has
3,000 shares of $1 par value common stock authorized and 1,000 shares
issued and outstanding. All share and per share data and affected amounts
have been adjusted to reflect these changes as though they had occurred at
the beginning of the earliest period presented. On November 16, 1994, the
Company's Board of Directors approved a resolution, subject to shareholder
approval, to be effective prior to the consummation of an initial public
offering, increasing the number of authorized shares of common stock to 50
million, reducing the par value to $0.01 per common share and splitting the
shares 16,800 for 1. This resolution also authorized 5 million shares of
$1 par value preferred stock.
The Company has two operating subsidiaries, Great Dane Trailers, Inc.
("Great Dane") and Checker Motors Corporation ("Motors"). During 1989, the
Company purchased all of the common stock of Motors, the general partner of
Checker Motors Co., L.P. (the "Partnership), a Delaware limited partnership
(the "Motors acquisition").
Immediately after the Motors acquisition, substantially all of Motors'
former shareholders purchased, through Checker Holding Corp. ("Holding"),
all of the outstanding common stock of the Company (the "Holding buyout").
Holding was created solely for the purpose of acquiring the stock of the
Company and was subsequently merged into the Company. The Holding buyout
has been accounted for as if Motors acquired the Company (a "reverse
acquisition"), since there was no significant change in control of Motors.
Under generally accepted accounting principles for reverse acquisitions,
the net assets of Motors acquired in the Motors acquisition cannot be
revalued to estimated fair value. Accordingly, the $127.7 million excess
of the amount paid over the historical book value of Motors net assets has
been accounted for as a separate component reducing shareholders' equity
and is not subject to amortization. The fair value of Motors net assets,
as estimated by management, is significantly greater than historical book
value, but no appraisal of fair value is available.
NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of Great Dane Holdings Inc. and its subsidiaries, including
the Partnership and the Partnership's wholly-owned subsidiaries, including
American Country Insurance Company ("Insurance Subsidiary"). All
significant intercompany accounts and transactions have been eliminated.
CASH EQUIVALENTS: The Company considers all highly liquid investments,
other than Insurance Subsidiary investments, with a maturity of three
months or less when purchased to be cash equivalents.
<PAGE>
<PAGE> F-9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued. . .
INVENTORIES: Inventories are stated at the lower of cost or market. The
cost of inventories is determined principally on the last-in, first-out
("LIFO") method.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are stated at
cost. Depreciation is provided based on the assets' estimated useful
lives, principally by the straight-line method.
Estimated depreciable lives are as follows:
<TABLE>
<S> <C>
Buildings 10-40 years
Transportation equipment 2-6 years
Machinery, equipment, furniture and fixtures 3-12 years
</TABLE>
INTANGIBLE ASSETS: Intangible assets, principally cost in excess of net
assets acquired and a trademark, are being amortized on the straight-line
basis over periods of 5 to 40 years.
CUSTOMER DEPOSITS: Substantially all customer deposits represent advanced
payments from a customer in connection with tooling production for this
customer.
MINORITY INTEREST: Minority interest represents the limited partner's
allocable share of the Partnership's net assets (see Notes G and I) and the
share of net assets of South Charleston Stamping & Manufacturing Company
("SCSM") allocable to the minority interest holder.
REVENUE RECOGNITION: Revenues from sales of trailers that are manufactured
in response to customers' orders are recorded when such products are
completed and invoiced. Rental income from vehicle leases is recognized as
earned. Vehicles are generally leased on a daily or weekly basis to
unaffiliated operators. Insurance Subsidiary premiums are recognized as
income ratably over the period covered by the policies. Unearned premium
reserves are calculated on the monthly pro-rata basis. Realized gains and
losses on investments are determined on a specific identification basis and
are included in the determination of net income.
DEBT ISSUE EXPENSE: Expenses incurred in connection with the issuance of
debt are capitalized and amortized as interest expense over the life of the
debt.
LOSSES AND LOSS ADJUSTMENT EXPENSES: The Insurance Subsidiary's liability
for unpaid losses and loss adjustment expenses represents an estimate of
the ultimate net costs of all losses which are unpaid at the balance sheet
dates, and is determined using case-basis evaluations and statistical
analysis. These estimates are continually reviewed and any adjustments
which become necessary are included in current operations. Since the
liability is based on estimates, the ultimate settlement of losses and the
related loss adjustment expenses may vary from the amounts included in the
consolidated financial statements.
<PAGE>
<PAGE> F-10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued. . .
RECLASSIFICATION: Certain 1993 amounts have been reclassified to conform
to the 1994 classifications.
NOTE C--INVENTORIES
Inventories are summarized below (dollars in thousands):
<TABLE>
<CAPTION>
December 31,
1993 1994
-------- --------
<S> <C> <C>
Raw materials $ 53,105 $ 60,998
Work-in-process 10,956 15,877
Finished goods 30,051 19,705
---------- ----------
$ 94,112 $ 96,580
========== ==========
</TABLE>
Inventories would not differ materially if the first-in, first-out costing
method were used for inventories costed by the LIFO method.
NOTE D--PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are summarized below (dollars in thousands):
<TABLE>
<CAPTION>
December 31,
1993 1994
-------- --------
<S> <C> <C>
Land and buildings $ 54,167 $ 56,430
Transportation equipment 32,830 31,597
Machinery, equipment, furniture and fixtures 125,067 129,085
---------- ----------
212,064 217,112
Less accumulated depreciation and amortization (89,709) (103,164)
---------- ----------
$ 122,355 $ 113,948
========== ==========
</TABLE>
NOTE E--INVESTMENTS
Effective January 1, 1994, the Company adopted the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." In accordance with this
statement, prior period financial statements have not been restated to
reflect the change in accounting principle. The opening balance of
<PAGE>
<PAGE> F-11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE E--INVESTMENTS--Continued. . .
shareholders' deficit was decreased by $1.4 million (net of $0.8 million in
deferred income taxes) to reflect the net unrealized holding gains on
securities classified as available-for-sale previously carried at amortized
cost or lower of cost or market.
Insurance company management evaluated the investment portfolio and, based
on the Insurance Subsidiary's ability and intent, has classified securities
between the held-to-maturity and available-for-sale categories. Held-to-
maturity securities are stated at amortized cost. Debt securities not
classified as held-to-maturity and marketable equity securities are
classified as available-for-sale. Available-for-sale securities are stated
at fair value, with the unrealized gains and losses, net of tax, reported
as a separate component of shareholders' deficit.
Following is a summary of held-to-maturity and available-for-sale
securities of the Insurance Subsidiary, which are generally reserved for
Insurance Subsidiary operations, as of December 31, 1994:
<TABLE>
<CAPTION>
Held-To-Maturity
---------------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $ 7,285 $ 73 $ 143 $ 7,215
Obligations of states and
political subdivisions 8,828 51 367 8,512
Mortgage-backed securities 3,142 --- 200 2,942
Corporate and other debt
securities 25,943 88 1,005 25,026
-------- -------- -------- --------
$ 45,198 $ 212 $ 1,715 $ 43,695
======== ======== ======== ========
</TABLE>
<PAGE>
<PAGE> F-12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE E--INVESTMENTS--Continued. . .
<TABLE>
<CAPTION>
Available-For-Sale
---------------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Obligations of states and
political subdivisions $ 9,958 $ 10 $ 689 $ 9,279
Corporate and other debt
securities 23,198 272 1,148 22,322
-------- -------- -------- --------
Total debt securities 33,156 282 1,837 31,601
Equity securities 15,994 227 1,926 14,295
-------- -------- -------- --------
Total available-for-
sale $ 49,150 $ 509 $ 3,763 $ 45,896
======== ======== ======== ========
</TABLE>
The amortized cost and estimated market value of debt securities at
December 31, 1994, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or
prepayment penalties.
<TABLE>
<CAPTION>
Held-To-Maturity
---------------------
Estimated
Fair
Cost Value
-------- --------
<S> <C> <C>
Due in one year or less $ 7,300 $ 7,314
Due after one year through five years 28,338 27,512
Due after five years through ten years 4,424 4,074
Due after ten years 1,994 1,853
-------- --------
42,056 40,753
Mortgage-backed securities 3,142 2,942
-------- --------
$ 45,198 $ 43,695
======== ========
</TABLE>
<PAGE>
<PAGE> F-13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE E--INVESTMENTS--Continued. . .
<TABLE>
<CAPTION>
Available-For-Sale
---------------------
Estimated
Fair
Cost Value
-------- --------
<S> <C> <C>
Due in one year or less $ 289 $ 284
Due after one year through five years 2,847 2,833
Due after five years through ten years 19,296 18,132
Due after ten years 10,724 10,352
-------- --------
$ 33,156 $ 31,601
======== ========
</TABLE>
The proceeds from sales of available-for-sale securities was $2.8 million
for the year ended December 31, 1994. No gross gains or gross losses were
realized on those sales during the year ended December 31, 1994.
Bonds with an amortized cost of $2.3 million at December 31, 1994, were on
deposit to meet certain regulatory requirements.
NOTE F--BORROWINGS
Long-term debt is summarized below (dollars in thousands) (see Note O):
<TABLE>
<CAPTION>
December 31,
1993 1994
-------- --------
<S> <C> <C>
12-3/4% Senior Subordinated Debentures less
debt discount of $11,124 (1993) and
$9,725 (1994) $ 120,916 $ 122,315
14-1/2% Subordinated Discount Debentures less
debt discount of $6,531 (1993) and
$6,335 (1994) 54,816 55,012
Notes payable to shareholders 30,000 30,000
Great Dane term loan payable 21,511 17,411
Great Dane Revolving credit line 17,132 27,201
Partnership term loan payable 22,500 16,500
Equipment term loan 5,500 3,500
Economic Development term loan 10,909 10,375
Installment notes 979 ---
Other debt 7,010 5,951
---------- ----------
291,273 288,265
Less current portion (14,321) (13,613)
---------- ----------
$ 276,952 $ 274,652
========== ==========
</TABLE>
<PAGE>
<PAGE> F-14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE F--BORROWINGS--Continued. . .
Interest on the $132 million face value of 12-3/4% Senior Subordinated
Debentures is payable semiannually at the stated rate. The recorded debt
discount is being amortized as interest expense over the expected life of
the debentures using an imputed interest rate of approximately 15%
compounded semiannually. Under the terms of the debentures, the Company's
payment of dividends is limited to, among other things, 50% of consolidated
net income subsequent to June 30, 1986, plus $12 million. At December 31,
1994, the Company was restricted from paying a dividend. The debentures
are redeemable at the option of the Company in whole or in part at a
decreasing premium. The debentures are subject to redemptions through a
sinking fund whereby the Company is required to make five annual sinking
fund payments of $18 million commencing August 1, 1996, with the final
payment due August 1, 2001.
Interest on the $61 million face value of 14-1/2% Subordinated Discount
Debentures is payable semiannually at the stated rate. The recorded debt
discount is being amortized as interest expense over the expected life of
the debentures using an imputed interest rate of approximately 16.7%
compounded semiannually. The 14-1/2% debentures are subject to redemption
through a sinking fund whereby the Company is required to redeem, at their
face value, on January 1 in each of the years 1997 through 2005, 7-1/2% of
the principal amount of the debentures outstanding on January 1, 1997. The
balance of debentures are due January 1, 2006. The debentures are callable
any time at their face value and are subordinated to all present or future
indebtedness of the Company not expressly subordinated to, or on a parity
with, the debentures.
The notes payable to shareholders, which were paid off in February 1995
(see Note O), bore interest payable quarterly in arrears at an annual rate
equal to the prime rate of a New York bank (8.5% at December 31, 1994) plus
3-1/2%.
In March 1990, Great Dane entered into a five year loan and security
agreement ("Agreement") with certain banks. The Agreement made available
to Great Dane a $33 million five-year term loan and a $47 million revolving
credit line. In 1993, the maximum revolving credit line was increased to
$65 million. The amount available under the revolving credit line is based
upon the amount of Great Dane's eligible trade accounts receivable and
inventory as defined in the Agreement. The additional amount available
under the revolving credit line under the borrowing base terms of the
Agreement totaled $30.2 million at December 31, 1994. The term loan is
payable in equal monthly installments of $0.34 million plus interest at the
bank's prime interest rate (8.5% at December 31, 1994) plus 1-1/2%, with
the balance due in March 1995. The revolving credit line is due in 1995
and requires interest payments at the bank's prime rate (8.5% at December
31, 1994) plus 1-1/2%. In February 1995, Great Dane entered into an
amended and restated loan and security agreement with certain banks (See
Note O). Accordingly, since these obligations have been refinanced on a
long-term basis, the amounts have been classified as long-term debt as of
December 31, 1994.
<PAGE>
<PAGE> F-15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE F--BORROWINGS--Continued. . .
All borrowings under the Agreement are fully secured by substantially all
of the Great Dane assets. The Agreement requires Great Dane to, among
other things, comply with certain financial covenants, and limits the
amount of loans and transfers to the Company, limits additions to and sales
of Great Dane's fixed assets and limits additional Great Dane borrowings.
Under the most restrictive covenant, no additional transfers of funds to
the Company are available until after December 31, 1994.
During 1992, the Partnership entered into a Loan and Guaranty Agreement
with a bank pursuant to which the bank provided a $30 million term loan to
the Partnership. The term loan requires twenty quarterly principal
payments of $1.5 million, plus interest at the bank's prime rate (8.5% at
December 31, 1994) plus 1-1/4%, which payments commenced December 31, 1992.
The term loan is secured by substantially all of the Partnership's assets,
excluding the stock of the Insurance Subsidiary. The term loan agreement,
which is guaranteed by Motors, requires Motors to, among other things,
comply with certain financial covenants and limits additional loans to
Motors.
The equipment term loan requires quarterly payments of $0.5 million plus
interest at the bank's prime rate (8.5% at December 31, 1994) plus 1-1/4%.
The obligation is secured by certain machinery and equipment with a net
carrying amount of $5.9 million at December 31, 1994.
In connection with the Partnership term loan and the equipment term loan,
Motors is required to comply with certain financial covenants.
The economic development term loan, which is guaranteed by Motors, is
payable by SCSM to the West Virginia Economic Development Authority, and
requires monthly payments of $0.1 million, including interest at 5% with
the unpaid balance due 2008. The interest rate will be adjusted in April
1998 and 2003, so as to remain equal to 75% of the base rate, as defined,
plus 1/2%. The loan is secured by certain machinery and equipment with a
net carrying amount of $22.5 million at December 31, 1994.
Maturities of long-term debt for the four years subsequent to 1995, after
giving effect to the payoff of the notes payable to shareholders and to the
refinancing of Great Dane and Motors debt, are as follows: $14.2 million
in 1996, $32.2 million in 1997, $32.2 million in 1998 and $29.0 million in
1999.
Interest paid totaled $42.4 million in 1992, $39.8 million in 1993 and
$38.5 million in 1994.
SCSM has a line of credit with a bank totaling $7.5 million at December 31,
1994. Borrowing under the line ($5.0 million at December 31, 1994) bears
interest at the bank's prime rate (8.5% at December 31, 1994) plus 1%.
The Partnership has $3.8 million available under a line of credit with a
bank. Borrowings under the line ($0 at December 31, 1994) bear interest at
the bank's prime rate (8.5% at December 31, 1994) plus 1%.
The weighted average interest rate on short-term borrowings outstanding as
of December 31, 1993 and 1994 was 7.25% and 9.75% respectively.
<PAGE>
<PAGE> F-16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE G--COMMITMENTS AND CONTINGENCIES
On February 8, 1989, the Boeing Company ("Boeing") filed a lawsuit naming
the Company, together with three prior subsidiaries of the Company, as
defendants in Case No. CV89-119MA, United States District Court for the
District of Oregon. In that lawsuit, Boeing sought damages and declaratory
relief for past and future costs resulting from alleged groundwater
contamination at a location in Gresham, Oregon, where the three prior
subsidiaries of the Company formerly conducted business operations. On
December 22, 1993, the Company entered into a settlement with Boeing,
settling all claims asserted by Boeing in the lawsuit. Pursuant to the
settlement terms, the Company will pay Boeing $12.5 million over the course
of five years, at least $5 million of which has been committed by certain
insurance companies in the form of cash or irrevocable letters of credit.
In accordance with the settlement agreement, Boeing's claims against the
Company and the three former subsidiaries have been dismissed with
prejudice and Boeing has released and indemnified the Company with respect
to certain claims. Accordingly, a $7.5 million special charge was recorded
in 1993, to provide for the cost associated with this legal proceeding.
On March 4, 1992, Motors received notice that the Insurance Commissioner of
the State of California, as Conservator and Rehabilitator of ELIC, a
limited partner of the Partnership, had filed an Amendment to the
Application for Order of Conservation filed in Superior Court of the State
of California for the County of Los Angeles. The amendment seeks to add to
the Order, dated April 11, 1991, Motors, the Partnership and Checker
Holding Corp. III, a limited partner of the Partnership. The amendment
alleges that the action by Motors invoking provisions of the Partnership
Agreement that alter ELIC's rights in the Partnership upon the occurrence
of certain events is improper and constitutes an impermissible forfeiture
of ELIC's interest in the Partnership and a breach of fiduciary duty to
ELIC. The amendment seeks (a) a declaration of the rights of the parties
in the Partnership and (b) damages in an unspecified amount. The
Partnership believes that it has meritorious defenses to the claims of
ELIC. On April 15, 1994, the Company and the Conservator entered into a
letter agreement pursuant to which the Company agreed to purchase ELIC's
interest in the Partnership for $37 million. On May 26, 1994, the
California Court approved a settlement of this litigation. Pursuant to the
Settlement Agreement, on December 22, 1994, Motors redeemed ELIC's interest
in the Partnership for $37.0 million (the "Minority Interest Redemption")
and the litigation was thereafter dismissed with prejudice. Under certain
circumstances, if all or substantially all of the assets of the Partnership
are sold within five years of the consummation of the Minority Interest
Redemption, ELIC may be entitled to receive a payment equal to the positive
difference between (x) the distribution ELIC would have received upon
liquidation of the Partnership as a result of such transaction, calculated
in accordance with the provisions of the Partnership Agreement as if it had
continued to hold its partnership interest, and (y) the future value of
$37.0 million calculated at 15% per annum from the date of the Minority
Interest Redemption to the date of such transaction.
<PAGE>
<PAGE> F-17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE G--COMMITMENTS AND CONTINGENCIES--Continued. . .
In 1988, Great Dane entered into an operating agreement with the purchaser
of a previously wholly-owned finance company ("Finance"). Under the terms
of the agreement, the purchaser is given the opportunity to finance certain
sales of Great Dane. The 1988 operating agreement requires that Great
Dane, among other things, (i) not finance the sale of its products for the
first eight years and (ii) maintain a minimum net worth as defined in the
agreement. In addition, under this operating agreement, Great Dane is
liable to the purchaser for 50% of losses incurred in connection with the
realization of certain new receivables financed by the purchaser subsequent
to the sale of Finance subject to certain maximums. Failure to comply with
these requirements of the agreement would result in Great Dane having to
repay the purchaser varying amounts reducing to $5 million during the year
ending September 8, 1996. At December 31, 1994, Great Dane was in
compliance with the provisions of the operating agreement.
In addition, at December 31, 1994, Great Dane Trailers has guaranteed the
realization of receivables of approximately $0.6 million in connection with
the sale of Finance and is partially responsible for the realization of new
receivables of approximately $156.9 million financed by the purchaser under
the operating agreement subject to certain maximums. In addition to Great
Dane's guarantee, these receivables are also collateralized by a security
interest in the respective trailers originally sold by Great Dane. A loss
reserve of $3.1 million, for potential losses that may be incurred on the
ultimate realization of these receivables, is included in other accrued and
other non-current liabilities in the December 31, 1994, consolidated
balance sheet.
To secure certain obligations, the Company and its subsidiaries had
outstanding letters of credit aggregating approximately $3.4 million at
December 31, 1994, which letters of credit were fully secured by cash
deposits included in other assets in the consolidated balance sheets. In
addition, Great Dane has standby letters of credit aggregating
approximately $7.6 million and the Partnership has standby letters of
credit aggregating approximately $1.2 million outstanding at December 31,
1994.
The Company and certain of its subsidiaries have employment agreements with
three officers of the Company that provide for minimum annual compensation
of approximately $1.8 million. The contracts expire on various dates from
June 1995 to February 1997.
The Company and its subsidiaries lease real estate and equipment. Certain
leases are renewable and provide for monthly rentals, real estate taxes and
other operating expenses. The Company believes that, in the normal course
of business, leases that expire will be renewed or replaced by other
leases. Rental expense under operating leases was approximately $3.8
million in 1992, $4.8 million in 1993, and $5.5 million in 1994. Minimum
rental obligations for all noncancelable operating leases at December 31,
1994 are as follows: $3.0 million in 1995, $2.8 million in 1996, $2.6
million in 1997, $2.5 million in 1998, $2.4 million in 1999, and $14.6
million thereafter.
<PAGE>
<PAGE> F-18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE G--COMMITMENTS AND CONTINGENCIES--Continued. . .
Management believes that none of the above legal actions, guarantees or
commitments will have a material adverse effect on the Company's
consolidated financial position.
NOTE H--RETIREMENT PLANS
The Company and its subsidiaries have defined benefit pension plans
applicable to substantially all employees. The contributions to these
plans are based on computations by independent actuarial consultants. The
Company's general funding policy is to contribute amounts required to
maintain funding standards in accordance with the Employee Retirement
Income Security Act. Employees' benefits are based on years of service and
the employees' final average earnings, as defined by the plans.
Net periodic pension cost includes the following components (dollars in
thousands):
<TABLE>
<CAPTION>
Year Ended December 31,
1992 1993 1994
-------- -------- --------
<S> <C> <C> <C>
Service cost--benefits earned
(normal cost) $ 1,473 $ 1,752 $ 2,384
Interest on projected benefit
obligation 3,565 3,972 4,384
Return on investments (2,718) (2,867) (1,007)
Net amortization and deferral 129 328 (1,459)
-------- -------- --------
Net periodic pension cost
charged to expense $ 2,449 $ 3,185 $ 4,302
======== ======== ========
</TABLE>
Gains and losses and prior service cost are amortized over periods ranging
from seven to fifteen years. Other assumptions used in the calculation of
the actuarial present value of the projected benefit obligation were as
follows:
<TABLE>
<CAPTION>
1992 1993 1994
---- ---- ----
<S> <C> <C> <C>
Discount rate 8-1/4% 7-1/2% 7-1/2% - 8%
Rate of increase in compensa-
tion levels 4% - 5% 4% - 4-1/4% 4% - 4-1/4%
Long-term rate of return on
assets 5% - 9-1/2% 5% - 9-1/2% 5% - 9%
</TABLE>
<PAGE>
<PAGE> F-19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE H--RETIREMENT PLANS--Continued. . .
The following table sets forth the plans' funded status and amounts
recognized in the Company's consolidated balance sheets (dollars in
thousands):
<TABLE>
<CAPTION>
December 31,
1993 1994
---------- ----------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligations $ 41,846 $ 44,642
========== ==========
Accumulated benefit obligation $ 44,731 $ 47,836
========== ==========
Plan assets (principally guaranteed investment
contracts with insurance companies) $ 41,664 $ 43,541
Projected benefit obligation 54,568 60,655
---------- ----------
Projected benefit obligation in excess of
plan assets (12,904) (17,114)
Unrecognized prior service cost 1,115 778
Unrecognized net loss 1,687 6,353
Minimum liability (1,450) (2,351)
Unrecognized net obligation at transition 1,819 1,591
---------- ----------
Pension liability recognized in
the balance sheets (9,733) (10,743)
Less noncurrent liability 6,442 6,943
---------- ----------
Current pension liability $ (3,291) $ (3,800)
========== ==========
</TABLE>
Relative positions and undertakings in multiemployer pension plans covering
certain of the Partnership's employees are not presently determinable.
Expenses related to multiemployer pension plans totaled $0.2 million, $0.2
million and $0.3 million for the years ended December 31, 1992, 1993 and
1994, respectively.
Expense related to defined contribution plans, which is based on a
stipulated contribution for hours worked or employee contributions,
approximated $0.3 million in 1992, $0.5 million in 1993 and $0.5 million in
1994.
The Company and its subsidiaries provide postretirement health care and
life insurance benefits to eligible retired employees. The Company's
policy is to fund the cost of medical benefits as paid. Prior to 1993, the
Company recognized expense in the year the benefits were provided. The
amount charged to expense for these benefits was approximately $2.5 million
in 1992. Effective January 1, 1993, the Company adopted SFAS No.106,
"Employers Accounting for Postretirement Benefits Other Than Pensions."
This statement requires the accrual of the cost of providing postretirement
<PAGE>
<PAGE> F-20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE H--RETIREMENT PLANS--Continued. . .
benefits, including medical and life insurance coverage, during the active
service period of the employee. The Company recorded a charge of $29.7
million (net of taxes of $16.5 million), or $29,762 per share, during 1993
to reflect the cumulative effect of this change in accounting principle.
The following table sets forth the plan's funded status reconciled with
amounts recognized in the Company's consolidated balance sheets (in
thousands):
<TABLE>
<CAPTION>
December 31,
1993 1994
---------- ----------
<S> <C> <C>
Accumulated post retirement obligation:
Retirees $ (34,040) $ (32,473)
Fully eligible active plan participants (4,319) (5,315)
Other active plan participants (11,218) (9,751)
---------- ----------
(49,577) (47,539)
Unrecognized net (gain) loss 1,119 (2,568)
Unrecognized prior service cost (3,432) (3,146)
---------- ----------
Accrued postretirement benefit liability
recorded in balance sheet (51,890) (53,253)
Less noncurrent liability 49,609 51,061
---------- ----------
Current postretirement benefit
liability $ (2,281) $ (2,192)
========== ==========
</TABLE>
Net periodic postretirement benefit cost includes the following components
(in thousands):
<TABLE>
<CAPTION>
Year Ended
December 31,
1993 1994
---------- ----------
<S> <C> <C>
Service cost $ 634 $ 541
Interest cost 3,888 3,625
Unrecognized prior service cost --- (286)
---------- ----------
$ 4,522 $ 3,880
========== ==========
</TABLE>
The health care cost trend rate as of December 31, 1994, ranges from 12.6%
down to 5.5% over the next 20 years and remains level thereafter. The
<PAGE>
<PAGE> F-21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE H--RETIREMENT PLANS--Continued. . .
health care cost trend rate assumption has a significant effect on the
amounts reported. For example, increasing the assumed health care cost
trend rates by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1994, by
$2.9 million. The weighted-average discount rate used in determining the
accumulated postretirement benefit obligation was 7.5% and 8.0% at December
31, 1993 and 1994, respectively.
The effect of adopting SFAS No. 106 decreased 1993 pre-tax income by $2.0
million as compared to 1992.
NOTE I--MINORITY EQUITY
On April 11, 1991, ELIC was placed in conservatorship. In accordance with
the provisions of the Partnership Agreement, the Partnership continues, but
ELIC's interest in the Partnership and rights under the Partnership
Agreement are limited to the right to receive the balance of its capital
account as calculated and on the terms set forth in the Partnership
Agreement. On December 22, 1994, the Company purchased ELIC's interest in
the Partnership for $37 million.
Minority equity for the year ended December 31, 1994, represents the
minority interest holder's allocable share of SCSM's net income for the
period.
NOTE J--INCOME TAXES
Effective January 1, 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes."
As permitted under the new rules, prior years financial statements have not
been restated. The Company recorded a charge of $16.9 million, or $16,864
per share, during 1993 to reflect the cumulative effect of this change in
accounting principle. Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for
income tax purposes.
Significant components of the Company's deferred tax assets and
liabilities as of December 31, 1993 and 1994 are as follows (dollars in
thousands):
<PAGE>
<PAGE> F-22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE J--INCOME TAXES--Continued. . .
<TABLE>
<CAPTION>
December 31,
1993 1994
---------- ----------
<S> <C> <C>
Deferred tax assets:
Other postretirement benefits $ 18,961 $ 19,675
Pension 3,377 2,799
Reserves 10,986 13,143
Bad debt reserve 1,601 1,769
Other 5,555 6,868
---------- ----------
40,480 44,254
Valuation allowance (1,000) (1,000)
---------- ----------
39,480 43,254
Deferred tax liabilities:
Property, plant and equipment 31,646 28,519
Finance lease receivables 517 ---
Debenture discount 4,647 4,354
Intangible assets 5,249 4,525
Inventory 3,624 2,530
Other 645 76
---------- ----------
46,328 40,004
---------- ----------
Net deferred tax assets (liabilities) $ (6,848) $ 3,250
========== ==========
</TABLE>
The components of income tax expense are as follows (dollars in thousands):
<TABLE>
<CAPTION>
Deferred Method Liability Method
--------------- ----------------
Year Ended Year Ended
December 31, December 31,
1992 1993 1994
---------- ---------- ----------
<S> <C> <C> <C>
Current taxes:
Federal $ (3,296) $ (10,244) $ (23,395)
State (1,702) (4,025) (4,298)
---------- ---------- ----------
(4,998) (14,269) (27,693)
Deferred taxes 4,311 8,512 9,044
---------- ---------- ----------
Income tax expense $ (687) $ (5,757) $ (18,649)
========== ========== ==========
</TABLE>
<PAGE>
<PAGE> F-23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE J--INCOME TAXES--Continued. . .
The components of the deferred tax benefit are as follows (dollars in
thousands):
<TABLE>
<CAPTION>
Year Ended
December 31,
1992
--------
<S> <C>
Tax depreciation less than book depreciation $ 1,742
Finance leases (37)
Inventory reserves 505
Financing costs (75)
Warranty reserves 22
Other reserves 602
Partnership allocation 1,469
Other 83
--------
Deferred tax benefit $ 4,311
========
</TABLE>
Income tax expense differs from the amount computed by applying the
statutory federal income tax rate to income (loss) before income taxes.
The reasons for these differences are as follows (dollars in thousands):
<PAGE>
<PAGE> F-24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE J--INCOME TAXES--Continued. . .
<TABLE>
<CAPTION>
Deferred Method Liability Method
--------------- ----------------
Year Ended Year Ended
December 31, December 31,
1992 1993 1994
---------- ---------- ----------
<S> <C> <C> <C>
Computed expected tax benefit
(expense) $ 2,335 $ (3,192) $ (15,049)
(Increase) decrease in taxes
resulting from:
State income taxes, net of
federal income tax
benefit (1,123) (2,616) (2,794)
Appraisal depreciation (1,024) --- ---
Amortization of goodwill
and other items (530) (643) (714)
Nontaxable Partnership
income 574 446 286
Other (919) 248 (378)
---------- ---------- ----------
Actual tax expense $ (687) $ (5,757) $ (18,649)
========== ========== ==========
</TABLE>
Income taxes paid totaled $3.9 million in 1992, $13.4 million in 1993 and
$24.5 million in 1994.
NOTE K--RELATED PARTY TRANSACTIONS
The Company leases an airplane owned by a corporation of which a director
is the sole shareholder. Lease expenses totaled $0.7 million each year in
1992 and 1993 and $1.1 million in 1994.
NOTE L--INDUSTRY SEGMENT INFORMATION
The Company operates in four principal segments:
<PAGE>
<PAGE> F-25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE L--INDUSTRY SEGMENT INFORMATION--Continued. . .
TRAILER MANUFACTURING SEGMENT--Manufacturing and distribution of highway
truck trailers.
AUTOMOTIVE PRODUCTS SEGMENT--Manufacturing metal stampings and assemblies
and coordination of related tooling production for motor vehicle
manufacturers.
VEHICULAR OPERATIONS SEGMENT--Leasing taxicabs.
INSURANCE OPERATIONS SEGMENT--Providing property and casualty insurance
coverage to the Partnership and to outside parties.
Trailer Manufacturing segment sales to J. B. Hunt totaled approximately
$50.0 million in 1992, $92.3 million in 1993 and $85.3 million in 1994.
Automotive product net sales to General Motors Corporation totaled
approximately $109.1 million in 1992, $121.5 million in 1993 and $145.9
million in 1994 (includes accounts receivable of $8.9 million, $8.9 million
and $13.0 million at December 31, 1992, 1993 and 1994, respectively).
Industry segment data is summarized as follows (dollars in thousands):
<PAGE>
<PAGE> F-26
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE L--INDUSTRY SEGMENT INFORMATION--Continued. . .
Trailer Automotive Vehicular Insurance
Manufacturing Products Operations Operations Eliminations Consolidated
------------- -------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
1992
Revenues:
Outside customers $ 536,336 $ 112,631 $ 40,580 $ 27,186 $ --- $ 716,733
Intersegment sales --- 1 4,043 13,161 (17,205) ---
---------- ---------- ---------- ---------- ---------- ----------
$ 536,336 $ 112,632 $ 44,623 $ 40,347 $ (17,205) $ 716,733
========== ========== ========== ========== ========== ==========
Operating profit (loss) $ 17,590 $ 11,622 $ 5,727 $ (1,557) $ 33,382
Corporate expenses (4,396)
Interest income:
Segment 1,168 6,321 7,489
Corporate 1,406
Interest expense:
Segment (5,852) (5,852)
Corporate (36,874)
Other expenses, net (2,023)
----------
Loss before income taxes $ (6,868)
==========
Identifiable assets $ 230,465 $ 66,561 $ 25,516 $ 117,960 $ 440,502
Partnership assets 38,712
Corporate assets 14,549
----------
Total assets at December 31, 1992 $ 493,763
==========
Depreciation and amortization:
Segment $ 6,303 $ 4,148 $ 10,099 $ 462 $ 21,012
Other 42
Capital expenditures 4,996 1,889 10,412 252 17,549
</TABLE>
<PAGE>
<PAGE> F-27
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE L--INDUSTRY SEGMENT INFORMATION--Continued. . .
Trailer Automotive Vehicular Insurance
Manufacturing Products Operations Operations Eliminations Consolidated
------------- -------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
1993
Revenues:
Outside customers $ 711,862 $ 127,925 $ 42,103 $ 27,436 $ --- $ 909,326
Intersegment sales --- --- 4,346 13,400 (17,746) ---
---------- ---------- ---------- ---------- ---------- ----------
$ 711,862 $ 127,925 $ 46,449 $ 40,836 $ (17,746) $ 909,326
========== ========== ========== ========== ========== ==========
Operating profit (loss) $ 32,381 $ 15,306 $ 6,251 $ (1,947) $ --- $ 51,991
Corporate expense (4,646)
Interest income:
Segment 428 5,877 6,305
Corporate 1,091
Interest expense:
Segment (4,811) (4,811)
Corporate (36,803)
Special charge (7,500)
Other income, net 3,494
----------
Income before income taxes $ 9,121
==========
Identifiable assets $ 259,837 $ 67,937 $ 20,493 $ 116,692 $ 464,959
Partnership assets 37,701
Corporate assets 14,676
----------
Total assets at December 31, 1993 $ 517,336
==========
Depreciation and amortization $ 8,280 $ 4,991 $ 9,530 $ 494 $ 23,295
Capital expenditures 7,265 4,728 7,913 100 20,006
</TABLE>
<PAGE>
<PAGE> F-28
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE L--INDUSTRY SEGMENT INFORMATION--Continued. . .
Trailer Automotive Vehicular Insurance
Manufacturing Products Operations Operations Eliminations Consolidated
------------- -------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
1994
Revenues:
Outside customers $ 859,089 $ 157,568 $ 43,653 $ 36,167 $ --- $1,096,477
Intersegment sales --- --- 3,648 12,145 (15,793) ---
---------- ---------- ---------- ---------- ---------- -----------
$ 859,089 $ 157,568 $ 47,301 $ 48,312 $ (15,793) $1,096,477
========== ========== ========== ========== ========== ===========
Operating profit (loss) $ 58,619 $ 19,652 $ 6,824 $ (916) $ --- $ 84,179
Corporate expenses (8,534)
Interest income:
Segment 5,510 5,510
Corporate 1,591
Interest expense:
Segment (3,784) (3,784)
Corporate (36,381)
Other expenses, net 1,002
Minority equity (586)
-----------
Income before income taxes $ 42,997
===========
Identifiable assets $ 264,147 $ 81,976 $ 17,827 $ 116,062 $ 480,012
Partnership assets 36,776
Corporate assets 5,263
-----------
Total assets at December 31, 1994 $ 522,051
===========
Depreciation and amortization:
Segment $ 7,876 $ 5,294 $ 8,992 $ 409 $ 22,571
Other 23
Capital expenditures:
Segment 8,937 1,152 7,580 215 17,884
Other 325
Intersegment sales are accounted for at prices comparable to normal unaffiliated customer sales. Corporate and Partnership
assets consist of short-term investments, savings deposits and certain other assets.
</TABLE>
<PAGE>
<PAGE> F-29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE M--FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company in
estimating the fair value of financial instruments:
CASH AND CASH EQUIVALENTS: The carrying amount reported in the balance
sheet for cash and cash equivalents approximates its fair value.
INDEBTEDNESS: The carrying amounts of the Company's notes payable to
shareholders, Great Dane term loan payable, Great Dane revolving credit
line, Partnership term loan payable, equipment term loan, economic
development term loan and line of credit approximate their fair value. The
fair values of the Company's 12-3/4% Senior Subordinated Debentures and 14-
1/2% Subordinated Discount Debentures are based on quoted market prices.
The fair values of the Company's other indebtedness is estimated using
discounted cash flow analyses based on current market rates.
The carrying amount and fair value of the Company's indebtedness at
December 31, 1994, are as follows (dollars in thousands):
<TABLE>
<CAPTION>
Carrying Amount Fair Value
--------------- ----------
<S> <C> <C>
Long-term debt and notes payable $ 293,265 $ 292,000
</TABLE>
<PAGE>
<PAGE> F-30
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE N--SELECTED QUARTERLY DATA (UNAUDITED)
(dollars in thousands, except per share amounts)
1993 QUARTER ENDED 1994 QUARTER ENDED
----------------------------------------------- -----------------------------------------------
March 31 June 30 September 30 December 31 March 31 June 30 September 30 December 31
-------- ------- ------------ ----------- -------- ------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 204,933 $ 225,407 $ 230,655 $ 248,331 $ 271,680 $ 277,622 $ 256,679 $ 290,496
Gross profit 29,302 33,808 31,126 36,285 40,845 44,969 39,495 41,936
Income (loss) before
accounting changes (744) 1,350 (536) 3,294 6,386 8,391 2,310 7,261
Accounting changes (46,626) --- --- --- --- --- --- ---
Net income (loss) (47,370) 1,350 (536) 3,294 6,386 8,391 2,310 7,261
Income (loss) per share:
Income (loss) before
accounting changes $ (744) $ 1,350 $ (536) $ 3,294 $ 6,386 $ 8,391 $ 2,310 $ 7,261
Accounting changes (46,626) --- --- --- --- --- --- ---
Net income (loss) (47,370) 1,350 (536) 3,294 6,386 8,391 2,310 7,261
</TABLE>
<PAGE>
<PAGE> F-31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE O--SUBSEQUENT EVENTS
In January 1995, Motors and its subsidiaries finalized a refinancing with
a bank whereby Motors entered into a loan agreement providing for a $45
million term loan and a $20 million revolving credit facility. The funds
from the term loan were used to repay approximately $27 million of bank
debt including the Partnership term loan, the equipment term loan and the
notes payable to the bank, provide $15 million to the Company to retire a
portion of certain notes outstanding to the Company's shareholders and pay
fees and expenses. Availability under the revolving credit facility is
based on the amount of eligible trade accounts receivable and inventory and
may be used for working capital needs, as well as for general corporate
purposes.
The new term loan requires twenty quarterly principal payments of
approximately $2.3 million, commencing June 30, 1995, plus interest at
either the bank's prime rate plus 1.25% (subject to reductions of up to
0.5% upon the occurrence of certain events) or a selected Eurodollar
contract rate plus 300 basis points (subject to reductions of up to 50
basis points upon the occurrence of certain events). The new term loan is
secured by substantially all of Motors' assets including the stock of the
Insurance Subsidiary. The new term loan agreement requires Motors to,
among other things, comply with certain financial covenants, limits
additions to and sales of Motors' fixed assets and limits additional
borrowings by Motors.
In February 1995, Great Dane Trailers amended its loan and security
agreement. Pursuant to the amended agreement, the Lenders have loaned $28
million as a term loan and have agreed to provide, at any given time, up to
$150 million (less amounts then outstanding as a term loan) as a revolving
credit facility (subject to availability based on the amount of eligible
trade accounts receivable and inventory) to be used as working capital by
Great Dane and for general corporate purposes. The initial term loan
proceeds, which were drawn immediately upon closing, were used, together
with drawings under the revolver, to repay approximately $17 million of
bank debt, provide $15 million to the Company to retire the balance of the
shareholder notes and pay fees and expenses. The term loan requires
monthly principal payments of $0.3 million plus interest on the unpaid
principal amount of the loan in arrears at a rate equal to 1% above the
prime rate of interest charged from time to time by Bank of America or a
rate equal to 2.5% above a selected Eurodollar contract rate with the
unpaid principal balance due five years after the closing date. The loans
are secured by substantially all of the assets of Great Dane and its
subsidiaries. The Agreement requires Great Dane to, among other things,
comply with certain financial covenants, and limits the amount of loans and
transfers to the Company, limits additions to and sales of Great Dane's
fixed assets and limits additional Great Dane borrowings.
In January 1995, Motors liquidated the Partnership.
<PAGE>
<PAGE> 32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
NOTE O--SUBSEQUENT EVENTS--Continued. . .
On November 23, 1994, the Company filed a Registration Statement on Form S-
1 with the Securities and Exchange Commission in connection with an initial
public offering ("IPO") of the Company's common stock. The Company is
registering 6,555,000 shares of common stock (including 855,000 shares
which the underwriters have the right to purchase to cover over-allotments)
(in each case, giving effect to a 16,800 to 1 split of the common stock to
be effected upon consummation of the IPO). It is currently estimated that
the initial public offering price will be between $13 and $15 per share.
All of the net proceeds are intended to be used to redeem approximately $72
million of the Company's 12-3/4% Senior Subordinated Debentures, due 2001,
which will be sufficient to satisfy all remaining sinking fund payments on
this indebtedness.
<PAGE>
<PAGE> S-1
<TABLE>
<CAPTION>
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
GREAT DANE HOLDINGS INC.
CONDENSED BALANCE SHEETS
(dollars in thousands)
December 31,
1993 1994
---------- ----------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 1,468 $ 1,401
Accounts receivable 566 535
Other current assets 4,345 1,481
---------- ----------
Total Current Assets 6,379 3,417
Equipment, net --- 302
Investments in subsidiaries 91,388 152,873
Other assets 16,331 15,022
---------- ----------
TOTAL ASSETS $ 114,098 $ 171,614
========== ==========
LIABILITIES AND SHAREHOLDERS' DEFICIT:
Accounts payable $ 34 $ 869
Income taxes payable (recoverable) (1,702) 9,062
Accrued compensation 256 257
Accrued interest 11,468 11,468
Other accrued liabilities 9,565 7,041
---------- ----------
Total Current Liabilities 19,621 28,697
Long-term debt 205,732 207,327
Other noncurrent liabilities 31,713 29,489
Intercompany accounts with subsidiaries 6,622 31,343
Shareholders' deficit:
Common stock 1 1
Paid-in capital 14,999 14,999
Retained earnings deficit (36,217) (11,869)
Amount paid in excess of Motors'
net assets (127,748) (127,748)
Notes receivable from shareholders (625) (625)
---------- ----------
Total Shareholders' Deficit (149,590) (125,242)
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 114,098 $ 171,614
========== ==========
</TABLE>
<PAGE>
<PAGE> S-2
<TABLE>
<CAPTION>
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT--CONTINUED
GREAT DANE HOLDINGS INC.
CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands)
Year Ended December 31,
1992 1993 1994
---------- ---------- ----------
<S> <C> <C> <C>
Selling, general and
administrative expenses $ (4,396) $ (4,646) $ (8,534)
Interest expense (30,138) (30,216) (30,812)
Equity in earnings of
subsidiaries 14,959 29,376 48,323
Other income (expense) (99) 211 307
Special charge --- (7,500) ---
Intercompany income:
Corporate charges 1,008 1,008 1,008
Interest 305 --- ---
---------- ---------- ----------
Income (loss) before income
taxes and accounting changes (18,361) (11,767) 10,292
Income tax benefit 10,806 15,131 14,056
---------- ---------- ----------
Income (loss) before accounting
changes (7,555) 3,364 24,348
Accounting changes --- (46,626) ---
---------- ---------- ----------
NET INCOME (LOSS) $ (7,555) $ (43,262) $ 24,348
========== ========== ==========
</TABLE>
<PAGE>
<PAGE> S-3
<TABLE>
<CAPTION>
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT--CONTINUED
GREAT DANE HOLDINGS INC.
CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Year Ended December 31,
1992 1993 1994
---------- ---------- ----------
<S> <C> <C> <C>
NET CASH FLOW USED IN OPERATING
ACTIVITIES $ (20,973) $ (47,640) $ (11,317)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of equipment --- --- (325)
Investment in subsidiaries --- --- (30,000)
Other (334) 5,900 16
---------- ---------- ----------
NET CASH FLOW PROVIDED BY
(USED IN) INVESTING
ACTIVITIES (334) 5,900 (30,309)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Advances from subsidiaries 21,284 38,278 41,559
---------- ---------- ----------
NET CASH FLOW PROVIDED BY
FINANCING ACTIVITIES 21,284 38,278 41,559
---------- ---------- ----------
DECREASE IN CASH AND CASH
EQUIVALENTS (23) (3,462) (67)
Beginning cash and cash
equivalents 4,953 4,930 1,468
---------- ---------- ----------
ENDING CASH AND CASH
EQUIVALENTS $ 4,930 $ 1,468 $ 1,401
========== ========== ==========
</TABLE>
The Registrant's subsidiaries declared dividends totaling $120.9 million in
1992, $22 million in 1993 and $15 million in 1994. These dividends were
declared to offset certain intercompany account balances at the respective
dates.
<PAGE>
<PAGE> S-4
<TABLE>
<CAPTION>
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
- -----------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------
Additions Charged to:
Balance at --------------------- Balance at
Description Beginning Cost and Other Deductions<F1> End of
of Period Expenses Accounts Period
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1992:
Deducted from assets:
Allowance for doubtful accounts
--trade $ 606 $ 183 $ --- $ (166) $ 623
======== ======== ======== ======== ========
Allowance for doubtful accounts
--finance lease receivables $ 944 $ 52 $ --- $ (317) $ 679
======== ======== ======== ======== ========
Contract & warranty reserves $ 8,263 $ 3,564 $ --- $(3,452) $ 8,375
======== ======== ======== ======== ========
Workers' compensation $ 265 $ 4,584 $ --- $(3,008) $ 1,841
======== ======== ======== ======== ========
Claims $ 2,717 $ 783 $ --- $ (168) $ 3,332
======== ======== ======== ======== ========
YEAR ENDED DECEMBER 31, 1993:
Deducted from assets:
Allowance for doubtful accounts
--trade $ 623 $ 234 $ --- $ (109) $ 748
======== ======== ======== ======== ========
Allowance for doubtful accounts
--finance lease receivables $ 679 $ 52 $ --- $ (572) $ 159
======== ======== ======== ======== ========
Contract & warranty reserves $ 8,375 $ 5,439 $ --- $(3,429) $10,385
======== ======== ======== ======== ========
Workers' compensation $ 1,841 $ 1,200 $ --- $(1,927) $ 1,114
======== ======== ======== ======== ========
Claims $ 3,332 $ 1,103 $ --- $(1,106) $ 3,329
======== ======== ======== ======== ========
</TABLE>
<PAGE>
<PAGE> S-5
<TABLE>
<CAPTION>
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
- -----------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------
Additions Charged to:
Balance at --------------------- Balance at
Description Beginning Cost and Other Deductions<F1> End of
of Period Expenses Accounts Period
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994:
Deducted from assets:
Allowance for doubtful accounts
--trade $ 748 $ 804 $ --- $ (210) $ 1,342
======== ======== ======== ======== ========
Allowance for doubtful accounts
--finance lease receivables $ 159 $ (172) $ --- $ 13 $ 0
======== ======== ======== ======== ========
Contract & warranty reserves $10,385 $ 8,076 $ --- $(4,016) $14,445
======== ======== ======== ======== ========
Workers' compensation $ 1,114 $ 956 $ --- $ (435) $ 1,635
======== ======== ======== ======== ========
Claims $ 3,329 $ 1,078 $ --- $(2,103) $ 2,304
======== ======== ======== ======== ========
- ---------------
<FN>
<F1> Reclassification to other reserves and utilization of reserves.
</TABLE>
<PAGE>
<PAGE> S-6
<TABLE>
<CAPTION>
SCHEDULE XIV
SUPPLEMENTAL INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(dollars in thousands)
- ----------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F COL. G COL. H COL. I COL. J COL. K
- ----------------------------------------------------------------------------------------------------------------------------------
Reserves Claims and
for Claim
Unpaid Adjustment Amortiza-
Claims Expenses tion Paid
and Discount, Incurred or Claims
Deferred Claim if any, Related to: Deferred and
Policy Adjust- Deducted Net------------------ Policy Claim
Affiliation Acquisi- ment in Unearned Earned Invest- (1) (2) Acquisi- Adjust-
with tion Expense Column Premiums Premiums ment Current Prior tion ment Premium
Registrant Costs <F1> C <F2> <F3> Income Year Years Costs Expenses Written
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WHOLLY-OWNED INSURANCE SUBSIDIARY:
- ----------------------------------
Year Ended:
December 31, 1992 $ 1,832 $ 75,780 $ --- $10,463 $ 40,347 $ 8,227 $ 30,322 $ 2,043 $ (241) $ 27,319 $ 39,238
======== ======== ======== ======== ======== ======== ======== ======== ======== ======== ========
December 31, 1993 $ 1,893 $ 71,179 $ --- $ 9,547 $ 40,836 $ 7,838 $ 33,193 $ (269) $ 61 $ 30,832 $ 39,920
======== ======== ======== ======== ======== ======== ======== ======== ======== ======== ========
December 31, 1994 $ 2,258 $ 69,318 $ --- $12,203 $ 48,312 $ 6,890 $ 39,517 $ (592) $ 365 $ 37,010 $ 50,652
======== ======== ======== ======== ======== ======== ======== ======== ======== ======== ========
- ---------------
<FN>
<F1> Excludes reinsurance recoverable on unpaid claims and claims adjustment expense of $13,888, $7,195 and $3,419 in 1992, 1993
and 1994, respectively, in connection with the restatement of the balance sheet loss reserve amounts as reported in
accordance with SFAS No. 113.
<F2> Excludes net ceded premiums of $286, $286 and $603 in 1992, 1993 and 1994, respectively, in connection with the restatement
of the balance sheet unearned premium amounts as reported in accordance with SFAS No. 113.
<F3> Includes premiums earned of $13,161, $13,400 and $12,145 in 1992, 1993 and 1994, respectively, in connection with
coverage provided to other entities in the consolidated group which have been eliminated in consolidation.
</TABLE>
<PAGE>
<PAGE> E-1
INDEX TO EXHIBITS
The following Exhibits required by Item 601 of Regulation S-K (and
numbered in conformity therewith) are filed herewith or incorporated by
reference herein:
3.1 - Certificate of Incorporation of the Company (incorporated herein
by reference to Exhibit 3.1 to Registration Statement No. 033-
56595 filed with the Securities and Exchange Commission on
November 23, 1994 (the "1994 S-1").
3.2 - Bylaws of the Company (incorporated herein by reference to
Exhibit 3.2 to the 1994 S-1).
4.1 - Form of Indenture between the Company and First Fidelity Bank,
National Association, New Jersey, as trustee ("First Fidelity")
relating to the 12-3/4% Senior Subordinated Debentures due August
1, 2001, of International Controls Corp ("ICC") (incorporated
herein by reference to Exhibit 4.1 to Registration Statement No.
33-7212 filed with the Securities and Exchange Commission on July
15, 1986).
4.2 - First Supplemental Indenture, dated as of October 19, 1994, among
ICC, the Company and First Fidelity relating to the 12-3/4%
Senior Subordinated Debentures due August 1, 2001 (incorporated
herein by reference to Exhibit 4.2 to the 1994 S-1).
4.3 - Form of Indenture between the Company and Midlantic National
Bank, as trustee ("Midlantic"), relating to the 14-1/2% Sub-
ordinated Discount Debentures due January 1, 2006, of ICC
(incorporated herein by reference to Exhibit 4.1 to Registration
Statement No. 33-1788 filed with the Securities and Exchange
Commission on November 26, 1985).
4.4 - First Supplemental Indenture, dated October 19, 1994, among ICC,
the Company and Midlantic relating to the 14-1/2% Subordinated
Discount Debentures due January 1, 2006 (incorporated herein by
reference to Exhibit 4.4 to the 1994 S-1).
4.5 - Agreement to furnish additional documents upon request by the
Securities and Exchange Commission (incorporated herein by
reference to Exhibit 4.3 to the Company's Annual Report on Form
10-K for the year ended December 31, 1989 (the "1989 10-K").
10.1 - Amended and Restated Employment Agreement, dated as of November
1, 1985, between Motors and David R. Markin ("Markin Employment
Agreement") (incorporated herein by reference to Exhibit 10.18 to
the 1989 10-K).
10.2 - Amendment, dated as of March 4, 1992, to Markin Employment
Agreement (incorporated herein by reference to Exhibit 10.3 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1991 (the "1991 10-K")).
<PAGE>
<PAGE> E-2
10.3 - Extension, dated July 12, 1993, of Amended and Restated Employ-
ment Agreement between Motors and David R. Markin (incorporated
herein by reference to Exhibit 10.6 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1993 (the
"1993 10-K").
10.4 - Amended and Restated Employment Agreement, dated as of June 1,
1992, between Yellow Cab and Jeffrey Feldman (incorporated herein
by reference to Exhibit 28.2 of the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1992 (the "June 1992 10-
Q")).
10.5 - Form of Stated Benefit Salary Continuation Agreement (incorpo-
rated herein by reference to Exhibit 10.21 to the 1989 10-K).
10.6 - Employment Agreement, dated as of July 1, 1992, between the
Company and Jay H. Harris (incorporated herein by reference to
Exhibit 28.1 to the June 1992 10-Q).
10.7 - Amendment, dated April 6, 1994, to Harris Employment Agreement
(incorporated herein by reference to Exhibit 10.10 to the 1994 S-
1).
10.8 - Lease, dated December 1, 1988, between SCSM and Park Corporation
(incorporated herein by reference to Exhibit 10.25 to the 1989
10-K).
10.9 - Assumption Agreement, dated as of August 1, 1989, by and between
Motors and the West Virginia Economic Development Authority
(incorporated herein by reference to Exhibit 10.12 to the
Company's Annual Report on Form 10-K for the year ended December
31, 1990).
10.10 - Agreement, dated as of September 1, 1991, between Yellow Cab
Company and Jerry E. Feldman (incorporated herein by reference to
Exhibit 10.12 to the 1991 10-K).
10.11 - Form of Checker Motors Corporation Excess Benefit Retirement
Plan, effective January 1, 1983 (incorporated herein by reference
to Exhibit 19.9 to the 1991 10-K).
10.12 - Amended and Restated License Agreement, dated December 30, 1992,
between Motors and Checker Taxi Association, Inc. (incorporated
herein by reference to Exhibit 10.28 to the Company's Annual
Report on Form 10-K for the year ended December 31 1992 (the
"1992 10-K")).
10.13 - Employment Agreement, dated as of January 1, 1994, between the
Company and David R. Markin (incorporated herein by reference to
Exhibit 10.36 to the 1994 S-1).
10.14 - Great Dane Holdings Inc. 1994 Stock Option Plan.*
10.16 - Settlement Agreement, dated as of June 21, 1994, among John
Garamendi, as Insurance Commissioner of the State of California,
<PAGE>
<PAGE> E-3
Base Assets Trust, the Partnership, Motors, Checker Holding
Corp.III and Holdings (incorporated herein by reference to
Exhibit 10.38 to the 1994 S-1).
10.17 - Form of Indemnification Agreement (incorporated herein by
reference to Exhibit 10.39 to the 1994 S-1).
10.18 - Sale, Installation and Technical Assistance Agreement, dated
November 14, 1983, between Graaff KG and Great Dane Trailers,
Inc. (incorporated herein by reference to Exhibit 10.40 to the
1994 S-1).
10.19 - Form of Great Dane Trailers, Inc., Supplemental Retirement Income
Plan, effective January 1, 1994 (incorporated herein by reference
to Exhibit 10.41 to the 1994 S-1).
10.20 - Amended and Restated Operating Agreement, dated as of August 31,
1988, between Associates Commercial Corporation (as successor to
Great Dane Finance Company) and Great Dane Trailers, Inc. (the
"Associates Agreement") (incorporated herein by reference to
Exhibit 10.43 to the 1994 S-1).
10.21 - Amendment, dated February 7, 1994, to the Associates Agreement
(incorporated herein by reference to Exhibit 10.44 to the 1994 S-
1).
10.22 - Amendment, dated May 18, 1994, to the Associates Agreement
(incorporated herein by reference to Exhibit 10.45 to the 1994 S-
1).
10.23 - Loan Agreement, dated as of January 26, 1995, by and among
Motors, Yellow Cab, Chicago AutoWerks, CMC Kalamazoo, SCSM, the
Lenders named therein and NBD Bank, as Agent ("NBD").*
10.24 - Pledge Agreement and Irrevocable Proxy, dated as of January 26,
1995, given by Motors to NBD.*
10.25 - Security Agreement, dated as of January 26, 1995, made by Motors,
Yellow Cab, Chicago AutoWerks and CMC Kalamazoo to NBD.*
10.26 - Amended and Restated Loan and Security Agreement, dated as of
February 14, 1995, among Great Dane Trailers, Inc., Great Dane
Los Angeles, Inc., and Great Dane Trailers Tennessee, Inc., the
financial institutions named therein, and BankAmerica Business
Credit, Inc., as Agent ("BABC").*
10.27 - Amended and Restated Pledge Agreement, dated as of February 14,
1995, made by Great Dane Trailers, Inc., in favor of BABC.*
10.28 - Amended and Restated Agreement Regarding Stock and Other Matters,
dated as of February 14, 1995, between the Company and BABC.*
21.1 - Subsidiaries of the Company.*
27.1 - Financial Data Schedule.*
<PAGE>
<PAGE> E-4
28.1 - Schedule P of Annual Statements provided by Country to Illinois
Regulatory Authorities (filed under cover of Form SE filed with
the Securities and Exchange Commission on February 17, 1995).
________________
*Filed herewith.
<PAGE>
<PAGE> EX-10.14-1
EXHIBIT 10.14
GREAT DANE HOLDINGS INC.
1994 STOCK OPTION PLAN
1. PURPOSE
The purpose of this Stock Option Plan (the "Plan") is to encourage and
enable key employees (which term, as used herein, shall include officers),
and directors, of Great Dane Holdings Inc. or a parent or subsidiary thereof
(collectively, unless the context otherwise requires, the "Corporation"),
consultants, and advisors to the Corporation, and other persons or entities
providing goods or services to the Corporation to acquire a proprietary
interest in the Corporation through the ownership of common stock of the
Corporation. As used herein, the term "parent" or "subsidiary" shall mean any
present or future corporation which is or would be a "parent corporation" or
"subsidiary corporation" of the Corporation determined in a manner consistent
with the requirements of Section 424 of the Internal Revenue Code of 1986, as
amended (the "Code"). Such directors, consultants, advisors, and other
persons or entities providing goods or services to the Corporation and
entitled to receive options hereunder are hereinafter collectively referred
to as the "Associates". Such ownership will provide such employees and
Associates with a more direct stake in the future welfare of the Corporation
and encourage them to remain employed by or associated with the Corporation.
It is also expected that the Plan will encourage qualified persons to seek
and accept employment or association with the Corporation.
2. ADMINISTRATION
(a) The Plan shall be administered by a Stock Option Committee
(the "Committee"), consisting of persons who are "disinterested persons"
within the meaning of Rule 16(b) promulgated under the Securities Exchange
Act of 1934, as amended from time to time.
(b) A majority of the members of the Committee shall constitute a
quorum, and the action of a majority of the members of the Committee present
at a meeting at which a quorum is present, as well as actions taken pursuant
to the unanimous written consent of all of the members of the Committee
without holding a meeting, shall be deemed to be actions of the Committee.
All actions of the Committee and all interpretations and decisions made by
the Committee with respect to any question arising under the Plan shall be
final and conclusive and shall be binding upon the Corporation and all other
interested parties.
(c) Subject to the terms and conditions of the Plan and such
limitations as the Board of Directors may from time to time impose, the
Committee shall be responsible for the overall management and administration
of the Plan and shall have such authority as shall be necessary or
appropriate in order to carry out its responsibilities, including, without
limitation, the authority to (i) interpret and construe the Plan and to
determine the terms of all options granted pursuant to the Plan, but subject
to the provisions of the Plan, including, but not limited to, the persons to
whom, and the time or times at which, grants shall be made, the number of
options to be included in the grants, the number of options which shall be
treated as incentive stock options (in the case of options granted to
employees) as described in Section 422 of the Code, the number of options
<PAGE>
<PAGE> EX-10.14-2
which do not qualify as incentive stock options ("non-qualified
options"),whether an option will be granted together with a stock
appreciation right and the terms and conditions thereof; (ii) to adopt rules
and regulations and to prescribe forms for the operation and administration
of the Plan; and (iii) to take any other action not inconsistent with the
provisions of the Plan that it may deem necessary or appropriate.
3. ELIGIBILITY AND PARTICIPATION
Key employees are eligible to receive incentive stock options and key
employees and Associates are eligible to receive non-qualified options and
stock appreciation rights. Each option and stock appreciation right shall be
granted, and the number of shares and stock appreciation rights subject
thereto shall be determined by the Committee.
4. STOCK APPRECIATION RIGHTS
(a) An employee or Associate who has been granted options pursuant
to the Plan may at the same time that the options are granted, also be
granted stock appreciation rights relating to some or all of the shares
subject to such options. Any such stock appreciation right shall be
evidenced by a written agreement which shall (i) identify the option to which
the stock appreciation right relates; (ii) specify the number of shares
covered by the stock appreciation right; (iii) specify the exercise price at
which the stock appreciation right may be exercised; and (iv) contain such
other terms and conditions not inconsistent with the Plan as the Committee
may, in its discretion, prescribe.
(b) Upon exercise of a stock appreciation right, the Company shall
pay to the employee or Associate an amount equal to the difference between
(i) the fair market value of the shares to which the stock appreciation right
relates on the date of exercise, over (ii) the exercise price of such stock
appreciation right. Payment may, in the Committee's discretion, be made in
cash (including check, bank draft or money order), in shares of common stock
of the Corporation equivalent in value to the excess of such fair market
value over such exercise price, or in a combination of cash and shares of
common stock of the Corporation which, together, are equivalent in value to
the excess of such fair market value over such exercise price.
5. SHARES SUBJECT TO THE PLAN
(a) Options and stock appreciation rights shall be evidenced by written
agreements which shall, among other things (i) designate the option as either
an incentive stock option or a non-qualified stock option, (ii) specify the
number of shares covered by the option; (iii) specify the exercise price,
determined in accordance with paragraph 8 hereof, for the shares subject to
the option; (iv) specify the option period determined in accordance with
paragraph 7 hereof; (v) set forth specifically or incorporate by reference
the applicable provisions of the Plan; and (vi) contain such other terms and
conditions not inconsistent with the Plan as the Committee may, in its
discretion, prescribe.
(b) The stock to be offered and delivered under the Plan, whether
pursuant to the exercise of an option or a stock appreciation right, shall be
shares of the Corporation's authorized common stock and may be unissued
shares or reacquired shares, as the Committee may from time to time
determine. Subject to adjustment as provided in paragraph 14 hereof, the
<PAGE>
<PAGE> EX-10.14-3
aggregate number of shares to be delivered under the Plan shall not exceed
1,600,000.00 shares. If an option expires or terminates for any reason
during the term of the Plan prior to the exercise thereof in full, the shares
subject to but not delivered under such option shall be available for options
thereafter granted. The shares under a related option which is surrendered
upon the exercise of a stock appreciation right shall be charged against the
aggregate number of shares available which may be delivered under the Plan.
The maximum number of shares of common stock with respect to which options or
rights may be granted during the life of the Plan to any employee shall not
exceed 400,000.
6. INCENTIVE STOCK OPTIONS
(a) An option designated by the Committee as an "incentive stock
option" is intended to qualify as an "incentive stock option" within the
meaning of Section 422 of the Code. An incentive stock option shall only be
granted to a key employee of the Corporation.
(b) No incentive stock option shall provide any person with a right to
purchase shares to the extent that such right first becomes exercisable
during a prescribed calendar year and the sum of (i) the fair market value
(determined as of the date of grant) of the shares subject to such incentive
stock option which first becomes available for purchase during such calendar
year, plus (ii) the fair market value (determined as of the date of grant) of
all shares subject to incentive stock options previously granted to such
person which first become available for purchase during such calendar year,
exceeds $100,000.
(c) Without the prior written consent of the Committee, no person shall
dispose of shares acquired pursuant to the exercise of an incentive stock
option until after the later of (i) the second anniversary of the date on
which the incentive stock option was granted, or (ii) the first anniversary
of the date on which the shares were acquired pursuant to the exercise of
such option; provided, however, that a transfer to a trustee, receiver, or
other fiduciary in any insolvency proceeding, as described in Section
422(c)(3) of the Code, shall not be deemed to be such a disposition. The
optionee shall make appropriate arrangements with the Corporation for any
taxes which the Corporation is obligated to collect in connection with any
such disposition, including any federal, state or local withholding taxes.
7. TERM OF OPTION PERIOD
The term during which options or stock appreciation rights may be
granted under the Plan shall expire on [date which is 10 years from the date
of this Plan]. Options and stock appreciation rights shall expire not later
than the tenth anniversary (the fifth anniversary in the case of incentive
stock options granted to a person who owns (within the meaning of Section
424(d) of the Code) more than 10 percent of the total combined voting power
of all classes of stock of the Corporation at the time such option is
granted) of the date the option or stock appreciation right is granted.
8. OPTION PRICE
The price at which shares may be purchased upon exercise of a particular
option shall be such price as may be fixed by the Committee but in no event
less than the minimum required in order to comply with any applicable law,
rule or regulation and, in the case of incentive stock options, shall not be
<PAGE>
<PAGE> EX-10.14-4
less than 100 percent, or in the case of incentive stock options granted to
an optionee who is a 10 percent stockholder (within the meaning of paragraph
7 hereof), shall not be less than 110 percent, of the fair market value (as
defined in paragraph 9) of such shares on the date such option is granted.
9. STOCK AS FORM OF EXERCISE PAYMENT
An employee or Associate who owns shares of the Corporation's common
stock may elect to use such shares, with the value thereof to be determined
as the fair market value of such shares on the day prior to the date of
exercise of the option, to pay all or part of the option price required by
reason of the exercise of an option. As used herein, fair market value shall
be deemed to be the closing price on such day of the Corporation's common
stock (if the Corporation's common stock is then traded on a national
securities exchange or in the NASDAQ National Market System) or, if not so
traded, the average of the closing bid and asked prices thereof on such day.
The optionee shall make appropriate arrangements with the Corporation for any
taxes which the Corporation is obligated to collect in connection with the
exercise of such option, including federal, state or local withholding taxes.
10. EXERCISE OF OPTIONS AND RIGHTS
(a) Each option and stock appreciation right granted shall be
exercisable in whole or in part at any time, or from time to time, during the
option period as the Committee may determine; provided that the election to
exercise an option or stock appreciation right shall be made in accordance
with applicable federal and state laws and regulations; and provided,
further, that neither a stock appreciation right, the exercise of which would
result in a cash payment, nor any related option shall be exercisable during
the first six months of the option period, except that, subject to the
written agreements covering the stock appreciation right and related option,
this six-month limitation shall not apply if the employee or Associate to
whom such stock appreciation right and related option have been granted dies
or becomes disabled prior to the expiration of the six-month period. No
stock appreciation right can be exercised by an employee or Associate unless
(i) the Corporation has been subject to the reporting requirements of Section
12 of the Securities Exchange Act of 1934 for at least one year prior to the
date of such exercise and has filed all reports and statements required to be
filed pursuant to that section during that period and (ii) the corporation on
a regular basis does release for publication quarterly and annual summary
statements of sales and earnings.
(b) No option may at any time be exercised with respect to a fractional
share. If shares are issued pursuant to the exercise of a stock appreciation
right, no fractional shares shall be issued; payment shall be made in cash
for any such fractional shares.
(c) No shares shall be delivered pursuant to the exercise of any option
or stock appreciation right, in whole or in part, until qualified for
delivery under such securities laws and regulations as may be deemed by the
Committee to be applicable thereto, until such shares are listed on each
securities exchange on which the Corporation's common stock may then be
listed, and until, in the case of the exercise of an option, payment in full
of the option price is received by the Corporation in cash or common stock of
the Corporation as provided in paragraph 9. Unless prior to the exercise of
the option the shares of the Corporation's common stock issuable upon such
exercise have been registered with the Securities and Exchange Commission
<PAGE>
<PAGE> EX-10.14-5
pursuant to the Securities Act of 1933, the notice of exercise shall be
accompanied by a representation or agreement of the individual exercising the
option to the Corporation to the effect that such shares are being acquired
for investment and not with a view to the resale or distribution thereof or
such other documentation as may be required by the Corporation unless in the
opinion of counsel to the Corporation such representation, agreement, or
documentation is not necessary to comply with said Act. No holder of an
option or stock appreciation right, or such holder's legal representative,
legatee, or distributes shall be or be deemed to be a holder of any shares
subject to such option or stock appreciation right unless and until a
certificate or certificates therefor is issued in his name.
11. ACCELERATION OF VESTING
(a) An option shall automatically be vested and immediately exercisable
in full upon the occurrence of any of the following events:
(i) Any person within the meaning of Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, other than the Corporation, has
become the beneficial owner, within the meaning of Rule 13d-3 under such
Act, of 75% (seventy-five percent) or more of the combined voting power
of the Corporation's then outstanding voting securities, unless such
ownership by such person has been approved by the Board of Directors
immediately prior to the acquisition of such securities by such person;
(ii) The first day on which shares of the Corporation's common
stock are purchased pursuant to a tender offer or exchange offer, unless
such offer is made by the Corporation or unless such officer has been
approved or not opposed by the Board of Directors;
(iii) The stockholders of the Corporation have approved an
agreement to merge or consolidate with or into another corporation (and
the Corporation is not the survivor of such merger or consolidation) or
an agreement to sell or otherwise dispose of all or substantially all of
the Corporation's assets (including a plan of liquidation), unless the
Board of Directors has resolved that options shall not automatically
vest; or
(iv) During any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors of the
corporation cease for any reason to constitute at least a majority
thereof, unless the election or the nomination for the election by the
Corporation's stockholders of each new director was approved by a vote
of at least a majority of the directors then still in office who were
directors at the beginning of the period.
(b) Other than upon the occurrence of any of the events described in
paragraph 11(a), the Committee shall have the authority at any time or from
time to time to accelerate the vesting of any individual option and to permit
any stock option not theretofore exercisable to become immediately
exercisable.
12. TRANSFER OF OPTIONS AND RIGHTS
Options and stock appreciation rights granted under the Plan may not be
transferred except by will or the laws of descent and distribution and,
during the lifetime of the employee or Associate to whom granted, may be
<PAGE>
<PAGE> EX-10.14-6
exercised only by such employee or Associate or by such employee's or
Associate's guardian or legal representative.
13. DEATH, RETIREMENT, AND TERMINATION OF EMPLOYMENT
(a) An incentive stock option or non-qualified stock option, which has
not theretofore expired, shall terminate at the time of the death of the
employee to whom granted or of the termination for any reason of the
employee's employment with the Corporation, and no shares may thereafter be
delivered pursuant to such option, except that, subject to the condition that
no option may be exercised later than the tenth anniversary of the date the
option was granted:
(i) upon the termination of the employment of any such employee
due to disability or retirement, the employee may, within a period of up
to two years after the date of such termination, purchase some or all of
the shares covered by the employee's nonqualified stock options which
was exercisable immediately prior to such termination;
(ii) upon the termination of the employment of any such employee
due to disability or retirement, the employee may, within three months
after the date of such termination (12 months in the case of disability)
purchase some or all of the shares covered by the employee's incentive
stock option which was exercisable immediately prior to such
termination; shares not purchased within three months (12 months in the
case of disability) after the date of termination due to disability or
retirement under such incentive stock option may be purchased within two
years after the date of such termination but no longer will be incentive
stock option stock; and
(iii) upon the death of any employee while in the active service
of the Corporation or of any such disabled or retired employee within
the above-referenced periods, the person or persons to whom the
employee's rights under the option are transferred by will or the laws
of descent and distribution may, within 12 months after the date of the
employee's death, purchase some or all of the shares covered by such
employee's option which was exercisable on the date of his death.
The Committee may, if it determines that to do so would be in the
Corporation's best interests, provide in a specific case or cases for the
exercise of options which would otherwise terminate upon termination of
employment with the Corporation for any reason, upon such terms and
conditions as the Committee determines to be appropriate. Nothing in the
Plan or in any option agreement shall confer any right to continue in the
employ of the Corporation or interfere in any way with the right of the
Corporation to terminate the employment of a recipient at any time.
In the case of a recipient on an approved leave of absence, the
Committee may, if it determines that to do so would be in the best interests
of the Corporation, provide in a specific case for continuation of options
during such leave of absence, such continuation to be on such terms and
conditions as the Committee determines to be appropriate. Leaves of absence
for such period and purposes conforming to the personnel policy of the
Corporation as may be approved by the Committee shall not be deemed
terminations or interruptions of employment.
<PAGE>
<PAGE> EX-10.14-7
For purposes of this paragraph 13, disability shall have the meaning
provided in Section 22(e)(3) of the Code and "retirement" shall mean
retirement pursuant to a pension or retirement plan adopted by the
Corporation or at the normal retirement date prescribed from time to time by
the Corporation.
(b) If an employee to whom a stock appreciation right has been granted
ceases employment with the Corporation for any reason, including death and
retirement, such stock appreciation right may be exercisable at the
discretion of the Committee but only to the extent and upon the conditions
that its related option is exercisable under subparagraph (a) of this
paragraph.
(c) Options granted to Associates shall be subject to such terms and
provisions as the Committee shall determine in the event of the death,
retirement, or disability of an Associate or the termination of an
Associate's association with the Corporation.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
(a) If the Corporation's outstanding common stock is hereafter changed
by reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination, or exchange of shares or the
like, or dividends payable in shares of the Corporation's common stock, an
appropriate adjustment shall be made by the Board of Directors upon
recommendation of the Committee in the aggregate number
of shares available under the Plan and in the number of shares and price per
share subject to outstanding options. All adjustments made pursuant to this
paragraph to the terms or conditions of an incentive stock option shall be
subject to the requirements of Section 424 of the Code.
(b) Any adjustment in the number of shares shall apply proportionately
to only the unexercised portion of any option granted hereunder. If
fractions of a share would result from any such adjustment, the adjustment
shall be revised to the next higher whole number of shares.
15. TERMINATION, MODIFICATION, AND AMENDMENT
The Plan shall terminate 10 years from the earlier of the date of its
adoption by the Board of Directors or the date on which the Plan is approved
by the stockholders of the Corporation and no option shall be granted after
termination of the Plan.
The Plan may from time to time be terminated, modified, or amended by
the affirmative vote of the holders of a majority of the outstanding shares
of the Corporation entitled to vote thereon.
The Board of Directors may at any time terminate the Plan or from time
to time make such modifications or amendments of the Plan as it may deem
advisable including, without limitation, modifications to reflect changes in
applicable law; provided, however, that the Board of Directors shall not (i)
modify or amend the Plan in any way that would disqualify any option issued
pursuant to the Plan as an incentive stock option as defined in Section 422
of the Code or (ii) without approval by the affirmative vote of the holders
of a majority of the outstanding shares of the Corporation entitled to vote
thereon, increase (except as provided by paragraph 14) the maximum number of
shares as to which options may be granted under the Plan.
<PAGE>
<PAGE> EX-10.14-8
No termination, modification, or amendment of the Plan, may, without the
consent of the individual to whom the option or stock appreciation right
shall have been previously granted, adversely affect the rights conferred by
such option or stock appreciation right.
16. EFFECTIVE DATE
The Plan shall become effective upon the adoption by the Board of
Directors, subject to the approval by the affirmative vote of the holders of
a majority of the outstanding shares of the Corporation present, in person,
or by proxy, at a stockholders meeting duly held within one year following
adoption of the Plan by the Board of Directors. All options granted prior to
the date of such stockholder approval shall be subject to such approval.
<PAGE> EX-10.23-1
EXHIBIT 10.23
THIS LOAN AGREEMENT, dated as of January 26, 1995 (this "Agreement"), is
by and among CHECKER MOTORS CORPORATION, a Delaware corporation (the
"Company"), YELLOW CAB COMPANY, a Delaware corporation ("Yellow Cab"),
CHICAGO AUTOWERKS INC., a Delaware corporation ("AutoWerks"), CMC KALAMAZOO
INC., a Delaware corporation ("CMC") and SOUTH CHARLESTON STAMPING &
MANUFACTURING COMPANY, a West Virginia corporation ("SCSM") (the Company,
Yellow Cab, AutoWerks, CMC and SCSM may each be referred to as a "Borrower"
and collectively as the "Borrowers"), the Lenders set forth on the signature
pages hereof (collectively, the "Lenders" and individually, a "Lender") and
NBD Bank, a Michigan banking corporation, as agent for the Lenders (in such
capacity, the "Agent").
INTRODUCTION
------------
The Borrowers desire to obtain a revolving credit facility, including
letters of credit, in the aggregate principal amount of $20,000,000 and a
term loan in the aggregate principal amount of $45,000,000, in order to repay
certain indebtedness owing by the Borrowers and Great Dane Holdings Inc. and
to provide funds and other financial accommodations for working capital and
other general corporate purposes of the Borrowers, and the Lenders are
willing to make such term loan and to establish such a credit facility in
favor of the Borrowers on the terms and conditions herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
-----------
0.1 CERTAIN DEFINITIONS. As used herein the following terms shall have the
following respective meanings:
"ACTUARIAL PRESENT VALUE OF ACCUMULATED PLAN BENEFITS" shall mean, with
respect to any Plan as of any date, the "Actuarial present value of
accumulated plan benefits" of such Plan as defined in Statement of Financial
Accounting Standards No. 35 ("SFAS 35"), determined pursuant to Generally
Accepted Accounting Principles, uniformly applied.
"ACIC" shall mean American Country Insurance Company, an Illinois
corporation.
"ADVANCE" shall mean any Loan and any Letter of Credit Advance.
"AFFILIATE", when used with respect to any person, shall mean any other
person which, directly or indirectly, controls or is controlled by or is
under common control with such person or is a director or executive officer
of such person. For purposes of this definition "control" (including the
correlative meanings of the terms "controlled by" and "under common control
with"), with respect to any person, shall mean possession, directly or
indirectly, of the power to vote 5% or more of the Voting Stock or other
ownership interest or to direct or cause the direction of the management and
policies of such person, whether through the ownership of Voting Stock or by
contract or otherwise; PROVIDED, HOWEVER, any current or future owner of the
<PAGE>
<PAGE> EX-10.23-2
10% (or such lesser amount as it may own in the future) minority interest in
SCSM shall not be considered an Affiliate if the only reason it would be
considered an Affiliate is because of such ownership interest in SCSM.
"APPLICABLE EURODOLLAR RATE MARGIN" shall mean the following margins,
adjusted on the 60th day of each fiscal quarter of the Company, commencing
with the 60th day of the first full fiscal quarter following the Effective
Date, based upon the applicable Interest Coverage Ratio in the table below,
with the applicable Interest Coverage Ratio determined for each fiscal
quarter based upon such ratio for the four most recently ended fiscal
quarters; PROVIDED, HOWEVER, that (a) during the continuance of any Event of
Default the Applicable Eurodollar Rate Margin for the Loans shall be 3.00%
and (b) after the IPO Completion Date, provided no Event of Default has
occurred and is continuing, each of the following margins shall be reduced by
0.25%:
<TABLE>
<CAPTION>
Interest Eurodollar Rate
Coverage Ratio Margin
-------------- ---------------
<S> <C>
(i) Greater than or 2.75%
4.5 to 1.0
(ii) Less than or 3.00%
equal to
4.5 to 1.0
</TABLE>
"APPLICABLE FLOATING RATE MARGIN" shall mean the following margins,
adjusted on the 60th day of each fiscal quarter of the Company, commencing
with the 60th day of the first full fiscal quarter after the Effective Date,
based upon the applicable Interest Coverage Ratio in the table below, with
the applicable Interest Coverage Ratio determined for each fiscal quarter
based upon such ratio for the four most recently ended fiscal quarters;
PROVIDED, HOWEVER, that (a) during the continuance of any Event of Default
the Applicable Floating Rate Margin for the Loans shall be 1.25%: and (b)
after the IPO Completion Date, provided no Event of Default has occurred and
is continuing, each of the following margins shall be reduced by 0.25%:
<TABLE>
<CAPTION>
Interest Floating Rate
Coverage Ratio Margin
-------------- -------------
<S> <C>
(i) Greater than 4.5 to 1.0 1.00%
(ii) Less than or equal to 4.5 to 1.0 1.25%
</TABLE>
"APPLICABLE LENDING OFFICE" shall mean, with respect to any Advance made
by any Lender or with respect to such Lender's Commitment, the office of such
Lender or of any Affiliate of such Lender located at the address specified as
the applicable lending office for such Lender set forth next to the name of
<PAGE>
<PAGE> EX-10.23-3
such Lender in the signature pages hereof or any other office of such Lender
or of any Affiliate of such Lender hereafter selected and notified to the
Borrowers and the Agent by such Lender.
"AVAILABLE CASH" means, at any date, all cash and cash equivalents of
the Company and its Subsidiaries at such date as the same are (or should be)
set forth in a consolidated balance sheet of the Company and its Subsidiaries
as of such date, determined on a consolidated basis in accordance with
generally accepted accounting principles, adjusted as follows: the amount of
Available Cash shall be (a) adjusted so that all reductions of Available Cash
shall be consistent with general historical practice, and (b) increased by an
amount, if positive, equal to the amount of any additional Available Cash
that would be determined under this definition if the days that accounts
receivables and payables are outstanding and the inventory turnover for the
relevant period varied from general historical amounts.
"AVERAGE LIFE TO STATED MATURITY" shall mean, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date
of determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of each such
principal payment by (ii) the sum of all such principal payments.
"BLOCKED ACCOUNT AGREEMENT" is defined in Section 3.4(d).
"BORROWING" shall mean the aggregation of Advances, including each
Letter of Credit issuance, of the Lenders to be made to the Borrowers, or
continuations and conversions of any Loans, made pursuant to Article II on a
single date and, in the case of any Loans, for a single Eurodollar Interest
Period, which Borrowings may be classified for purposes of this Agreement by
reference to the type of Loans or the type of Advance comprising the related
Borrowing, e.g., a "Eurodollar Rate Borrowing" is a Borrowing comprised of
Eurodollar Rate Loans and a "Letter of Credit Borrowing" is an Advance
comprised of a single Letter of Credit.
"BORROWING BASE" shall mean, as of any date, the sum of (a) an amount
equal to 85% of the value of Eligible Accounts Receivable plus (b) an amount
equal to 55% of the value of Eligible Inventory.
"BORROWING BASE CERTIFICATE" for any date shall mean an appropriately
completed report as of such date in substantially the form of EXHIBIT A
hereto, certified as true and correct as of such date by a duly authorized
officer of the Company.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which the Agent is not open to the public for carrying on
substantially all of its banking functions in Detroit, Michigan.
"CAPITAL EXPENDITURES" shall mean, for any period, the additions to
property, plant and equipment and other capital expenditures of the Company
and its Subsidiaries for such period as the same are (or should be) set
forth, in accordance with Generally Accepted Accounting Principles, in
consolidated financial statements of the Company and its Subsidiaries for
such period.
<PAGE>
<PAGE> EX-10.23-4
"CAPITAL LEASE" of any person shall mean any lease which, in accordance
with Generally Accepted Accounting Principles, is or should be capitalized on
the books of such person.
"CAPITAL LEASE OBLIGATIONS" shall mean all obligations of the Borrowers
to pay rent or any other amount under a lease (or other agreement conveying
the right to use any asset) for any assets to the extent such obligations are
required to be classified and accounted for as a Capital Lease on a balance
sheet of such person under Generally Accepted Accounting Principles and, for
purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with Generally Accepted
Accounting Principles.
"CAPITAL STOCK" shall include capital stock and any securities
exchangeable for or convertible into capital stock and any warrants, rights
or other options to purchase or otherwise acquire capital stock or such
securities.
"CASH FLOW COVERAGE EXCESS" shall mean, without duplication, for any
period, the difference of (a) the sum of Net Income for such period, plus, to
the extent deducted in determining Net Income, depreciation and amortization
expense, plus, to the extent not included in determining such Net Income,
cash dividends received by the Company during such period from ACIC, plus the
difference, if any, between income tax expense of the Company and its
Subsidiaries for such period minus amounts paid by the Company to tax
authorities (and not to Great Dane Holdings for the payment of taxes) during
such period for income taxes of the Company and its Subsidiaries, minus (b)
the difference of (i) the sum of consolidated Capital Expenditures (less (to
the extent not included in Net Income) proceeds received from the sale of
fixed assets in the ordinary course of business and excluding Capital
Expenditures which are financed outside of this Agreement to the extent of
the amount financed, provided that the principal portion of such payments on
such financing shall be considered Capital Expenditures for purposes of this
definition) of the Company and its Subsidiaries for such period, plus the
current portion of Funded Debt (other than the outstanding principal balance
of the Revolving Credit Advances that may be considered current due to the
scheduled Termination Date being less than one year from the last day of such
period) as of the last day of such period, minus (ii) the decrease of the
Available Cash attributable to the use of Available Cash for Capital
Expenditures between the date immediately preceding such period and the last
day of such period, all as determined for the Company and its Subsidiaries on
a consolidated basis in accordance with Generally Accepted Accounting
Principles.
"CASH FLOW COVERAGE RATIO" shall mean, without duplication, for any
period, the ratio of (a) the sum of Net Income for such period, plus, to the
extent deducted in determining such Net Income, depreciation and amortization
expense, plus, to the extent not included in determining such Net Income,
cash dividends received by the Company during such period from ACIC, to (b)
the difference of (i) the sum of consolidated Capital Expenditures (less (to
the extent not included in Net Income) proceeds received from the sale of
fixed assets in the ordinary course of business and excluding Capital
Expenditures which are financed outside of this Agreement to the extent of
the amount financed, provided that payments on such financing shall be
considered Capital Expenditures for purposes of this definition) of the
Company and its Subsidiaries for such period, plus the current portion of
Funded Debt (other than the outstanding principal balance of the Revolving
<PAGE>
<PAGE> EX-10.23-5
Credit Advances that may be considered current due to the scheduled
Termination Date being less than one year from the last day of such period)
as of the last day of such period, minus (ii) the decrease of the Available
Cash attributable to the use of Available Cash for Capital Expenditures
between the date immediately preceding such period and the last day of such
period, all as determined for the Company and its Subsidiaries on a
consolidated basis in accordance with Generally Accepted Accounting
Principles.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) prior to any Public Offering of Capital Stock of Great Dane
Holdings, the Permitted Holders shall fail to own more than 50% of the
Capital Stock of Great Dane Holdings; (b) after any Public Offering of
Capital Stock by Great Dane Holdings, (i) the Permitted Holders shall fail to
own at least 25% of the Capital Stock of Great Dane Holdings, including
without limitation any Capital Stock sold in such Public Offering, at any
time during the 24 month period after the date the completion of such Public
Offering, or (ii) the Permitted Holders shall fail to own at least 20% of the
Capital Stock of Great Dane Holdings, including without limitation any
Capital Stock sold in such Public Offering, at any time after 24 months after
the completion of such Public Offering; (c) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than
the Permitted Holders, is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have beneficial ownership of all shares that such Person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more Voting Stock of all
classes of Voting Stock of Great Dane Holdings than owned by the Permitted
Holders; (d) during any period of two consecutive years, individuals who at
the beginning of such period constituted the board of directors of Great Dane
Holdings (together with any new directors whose election to such board of
directors or whose nomination for election by the stockholders of Great Dane
Holdings, was approved by a vote of 51% of the members of the board of
directors then still in office who were either members of the board of
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute at
least two-thirds of such board of directors then in office; or (e) Great Dane
Holdings shall fail to own, free and clear of any Lien, all capital stock of
the Company.
"CHECKER L.P." shall mean Checker Motors Co., L.P., a Delaware limited
partnership.
"C/L/C" shall mean any commercial letter of credit issued hereunder.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations thereunder.
"COMMITMENT" shall mean, with respect to each Lender, the commitment of
each such Lender to make Loans and to participate in Letter of Credit
Advances made through the Agent pursuant to Section 2.1, in amounts not
exceeding in aggregate principal amount outstanding at any time the
respective commitment amounts for each such Lender set forth next to the name
of each such Lender in the signature pages hereof, as such amounts may be
reduced from time to time pursuant to Section 2.2. The Commitment of each
Lender to make Revolving Credit Advances under Section 2.1(a) is herein
referred to as its "Revolving Credit Commitment" and the Commitment of each
<PAGE>
<PAGE> EX-10.23-6
Lender to make the Term Loan under Section 2.1(b) is referred to as its "Term
Loan Commitment".
"CONCENTRATION ACCOUNT" is defined in Section 3.4(d).
"CONSOLIDATED" or "CONSOLIDATED" shall mean, when used with reference to
any financial term in this Agreement, the aggregate for two or more persons
of the amounts signified by such term for all such persons determined on a
consolidated basis in accordance with Generally Accepted Accounting
Principles.
"CONTINGENT LIABILITIES" of any person shall mean, as of any date, all
obligations of others for which such person is contingently liable, as
guarantor, surety, accommodation party, partner or in any other capacity, or
in respect of which obligations such person assures a creditor against loss
or agrees to take any action to prevent any such loss (other than
endorsements of negotiable instruments for collection in the ordinary course
of business), including without limitation all reimbursement obligations of
such person in respect of any letters of credit, surety bonds or similar
obligations and all obligations of such person to advance funds to, or to
purchase assets, property or services from, any other person in order to
maintain the financial condition of such other person.
"CONTRACTUAL OBLIGATION" shall mean as to any person, any provision of
any security issued by such person or of any agreement, instrument or other
undertaking to which such person is a party or by which it or any of its
property is bound.
"CORPORATE EXPENSES" shall mean corporate obligations, past, present or
future, of Great Dane Holdings, as determined in accordance with Generally
Accepted Accounting Principles, made in the ordinary course of business and
consistent with historical practice, provided that no such corporate expense
shall be classified as a Corporate Expense if (a) it constitutes any payment
on any Indebtedness, (b) it is made at a time an Event of Default or Default
has occurred and is continuing, (c) such corporate expense is in respect of
any contract or undertaking not negotiated on an arm's length basis or (d) it
is an expense which, in the reasonable judgment of Great Dane Holdings or the
Company, is not necessary and beneficial to Great Dane Holdings or the
Company.
"CURRENT ASSETS" and "CURRENT LIABILITIES" shall mean, as of any date,
all assets or liabilities, respectively, of the Company and its Subsidiaries
which, in accordance with Generally Accepted Accounting Principles, should be
classified as current assets or current liabilities, respectively, on a
balance sheet of the Company and its Subsidiaries, PROVIDED, HOWEVER, that
(a) any assets that are classified as current assets solely because they are
held for sale shall not be considered Current Assets, and (b) the outstanding
principal balance of the Revolving Credit Advances that may be considered
current due to the scheduled Termination Date being less than one year from
such date shall not be considered Current Liabilities at any time, all as
determined for the Company and its Subsidiaries on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
"DEFAULT" shall mean any event or condition which might become an Event
of Default with notice or lapse of time or both.
"DEFAULTING LENDER" is defined in Section 2.4(d).
<PAGE>
<PAGE> EX-10.23-7
"DEPOSITARY BANKS" is defined in Section 3.4(d).
"DEPOSITORY ACCOUNTS" is defined in Section 3.4(d).
"DOLLARS" and "$" shall mean the lawful money of the United States of
America.
"EBIT" shall mean, for any period, Net Income for such period PLUS all
amounts deducted in determining such Net Income on account of (a) Interest
Expense and (b) taxes based on or measured by income, all as determined for
the Company and its Subsidiaries on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
"EBITDA" shall mean, for any period, EBIT for such period PLUS all
amounts deducted in determining such EBIT on account of depreciation and
amortization.
"EFFECTIVE DATE" shall mean the effective date specified in the final
paragraph of this Agreement.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean, as of any date, those trade
accounts receivable owned by any Borrower which are denominated in Dollars
and in which any Borrower has granted to the Agent for the benefit of the
Lenders and the Agent a first-priority perfected security interest pursuant
to the Security Agreement, valued at the face amount thereof less sales,
excise or similar taxes (to the extent included in such face amount and not
previously paid or accrued by such Borrower) and less returns, discounts,
claims, credits and allowances of any nature at any time issued, owing,
granted, outstanding, available or claimed, less the amount of all reserves,
limits and deductions set forth in this definition or as otherwise provided
in this Agreement, but shall not include any such account receivable (a) that
is not a bona fide existing obligation created by the sale and delivery of
inventory, goods or other property (provided, however, that inventory, goods
or other property shall be deemed to have been delivered, notwithstanding the
fact that it remains on the premises of a Borrower, if (i) it has been sold,
(ii) it is not counted as inventory at such time and (iii) it has not
remained on the premises of such Borrower for a period of more than 90 days
after its sale without the obligation to pay the invoice for it being
acknowledged by the account debtor in a manner satisfactory to the Agent), or
the furnishing of services or other good and sufficient consideration to
customers of any Borrower in the ordinary course of business, (b) if it
remains outstanding more than 90 days past the date of the original invoice
issued by such Borrower with respect to the sale giving rise thereto,
provided that invoices are not dated past the date of such sale, (c) that is
subject to any dispute, contra-account, debit memo, defense, offset or
counterclaim or any Lien (except Permitted Liens), or the inventory, goods,
property, services or other consideration of which such account receivable
constitutes proceeds is subject to any such Lien, including without
limitation if the account debtor on any such account receivable is also any
Borrower's creditor or supplier, or the account debtor has disputed liability
with respect to any such account receivable, or the account receivable
otherwise is or may become subject to any right of offset by the account
debtor, provided that each such account receivable shall be ineligible only
to the extent of such dispute, contra-account, defense, offset or
counterclaim or any such Lien, (d) in respect of which the inventory, goods,
property, services or other consideration have been rejected or the amount is
<PAGE>
<PAGE> EX-10.23-8
in dispute, (e) that is due from any Affiliate of any Borrower, (f) that has
been classified by any Borrower as doubtful or has otherwise failed to meet
established or customary credit standards of any Borrower, (g) that is
payable by any person located outside the United States (which shall not be
deemed to include any territories of the United States) or Canada and are not
supported by letters of credit issued to the Agent by commercial banks
reasonably acceptable to the Agent, and in form and substance acceptable to
the Agent, provided that accounts receivable owing by General Motors
Corporation, Ford Motor Company or the Chrysler Corporation or any of their
Subsidiaries located in Mexico shall not be deemed ineligible due to this
clause (g), (h) with respect to which any representation or warranty
contained in Section 4.11 is incorrect at any time, (i) that is payable by
the United States or any of its departments, agencies or instrumentalities or
by any state or other governmental entity, unless such Borrower duly assigns
its rights to payment of such account receivable to the Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727 at seq.),
(j) that is payable by any person as to which 50% or more of the aggregate
amount of such accounts receivable payable by such person to any Borrower do
not otherwise constitute Eligible Accounts Receivable, (k) that is payable by
any person that is the subject of any proceeding seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up or reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief
or protection of debtors or seeking the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property, or that is not generally paying its debts as they become due or has
admitted in writing its inability to pay its debts generally or has made a
general assignment for the benefit of creditors, (l) that is evidenced by a
promissory note or other instrument, (m) that is subordinate or junior in
right or priority of payment to any other obligation or claim, (n) the total
unpaid accounts receivable of any account debtor (other than General Motors
Corporation, Ford Motor Company, Chrysler Corporation, any major foreign auto
maker operating in the United States and any of their Subsidiaries or
Affiliates and other corporations acceptable to the Agent) of any Borrower
exceeds twenty-five percent (25%) of the net amount of all accounts
receivable included in the Borrowing Base for a period of two months, but in
all cases only to the extent of such excess or (o) that for any other reason
is at any time reasonably deemed to be ineligible by the Agent.
"ELIGIBLE INVENTORY" shall mean, as of any date, that inventory owned by
any Borrower that constitutes raw materials or finished goods in which any
Borrower has granted to the Agent for the benefit of the Lenders a first-
priority perfected security interest pursuant to the Security Agreement,
valued at the lower of cost or market on a FIFO basis, less the amount of all
reserves, limits and deductions set forth in this definition or as otherwise
provided in this Agreement, but shall not include any such inventory (a) that
does not constitute raw materials or finished goods readily salable or usable
in the business of any Borrower, (b) that is located outside the United
States (which shall not be deemed to include any territories of the United
States), (c) that is subject to, or any accounts or other proceeds resulting
from the sale or other disposition thereof could be subject to, any Lien
(except Permitted Liens), including any sale on approval or sale or return
transaction or any consignment, (d) that is not in the possession of any
Borrower, (e) that is held for lease or is the subject of any lease, (f) that
is subject to any trademark, trade name or licensing arrangement, or any law,
rule or regulation, that could limit or impair the ability of the Lenders
and the Agent to promptly exercise all rights of the Lenders and the Agent
<PAGE>
<PAGE> EX-10.23-9
under the Security Documents, (g) unless waived by the Agent, if such
inventory is located on premises not owned by any Borrower and the landlord
or other owner of such premises shall not have waived its distraint, lien and
similar rights with respect to such inventory and shall not have agreed to
permit the Lenders and the Agent to enter such premises pursuant to a waiver
and agreement of such person in favor of and in form and substance acceptable
to the Lenders and the Agent, (h) with respect to which any insurance
proceeds are not payable to the Lenders and the Agent as a loss payee or are
payable to any loss payee other than the Lenders and the Agent or any
Borrower, (i) any finished goods which are not the subject of a purchase
order or any finished goods which exceed the amount anticipated to be
required under any purchase order for a period of time greater than twelve
months, or (j) that for any other reason is at any time reasonably deemed to
be ineligible by the Agent.
"ENVIRONMENTAL CERTIFICATE" shall mean an appropriately completed
environmental certificate in the form of EXHIBIT B attached hereto, delivered
by the Borrowers, certified as true and correct as of such date by an
executive officer of each Borrower acceptable to the Agent.
"ENVIRONMENTAL LAWS" at any date shall mean all provisions of law,
statute, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein, or by any
court, agency, instrumentality, regulatory authority or commission of any of
the foregoing concerning the protection of, or regulating the discharge of
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations thereunder.
"ERISA AFFILIATE" shall mean, with respect to any person, any trade or
business (whether or not incorporated) which, together with such person,
would be treated as a single employer under Section 414 of the Code.
"EURODOLLAR BUSINESS DAY" shall mean, with respect to any Eurodollar
Rate Loan, a day which is both a Business Day and a day on which dealings in
Dollar deposits are carried out in the London interbank market with respect
to such Eurodollar Rate Loan.
"EURODOLLAR INTEREST PERIOD" shall mean, with respect to any Eurodollar
Rate Loan, the period commencing on the day such Eurodollar Rate Loan is made
or converted to a Eurodollar Rate Loan and ending on the day which is one,
two, three or six months thereafter, as any Borrower may elect under Section
2.4 or 2.7, and each subsequent period commencing on the last day of the
immediately preceding Eurodollar Interest Period and ending on the day which
is one, two, three or six months thereafter, as any Borrower may elect under
Section 2.4 or 2.7, PROVIDED, HOWEVER, that (a) any Eurodollar Interest
Period which commences on the last Eurodollar Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in
the appropriate subsequent calendar month) shall end on the last Eurodollar
Business Day of the appropriate subsequent calendar month, (b) each
Eurodollar Interest Period which would otherwise end on a day which is not a
Eurodollar Business Day shall end on the next succeeding Eurodollar Business
Day or, if such next succeeding Eurodollar Business Day falls in the next
succeeding calendar month, on the next preceding Eurodollar Business Day, and
<PAGE>
<PAGE> EX-10.23-10
(c) no Eurodollar Interest Period which would end after the Maturity Date (or
the Termination Date with respect to any Revolving Credit Loans) shall be
permitted.
"EURODOLLAR RATE" shall mean, with respect to any Eurodollar Rate Loan
and the related Eurodollar Interest Period, the per annum rate that is equal
to the sum of:
(a) the Applicable Eurodollar Rate Margin in effect from time to time,
plus
(b) the rate per annum obtained by dividing (i) the per annum rate of
interest at which deposits in Dollars for such Eurodollar Interest Period and
in an aggregate amount comparable to the amount of such Eurodollar Rate Loan
to be made by the Agent in its capacity as a Lender hereunder are offered to
the Agent by other prime banks in the London interbank market at
approximately 11:00 a.m. London time on the second Eurodollar Business Day
prior to the first day of such Eurodollar Interest Period by (ii) an amount
equal to one minus the stated maximum rate (expressed as a decimal) of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) that are specified on the first day
of such Eurodollar Interest Period by the Board of Governors of the Federal
Reserve System (or any successor agency thereto) for determining the maximum
reserve requirement with respect to eurocurrency funding (currently referred
to as "Eurocurrency liabilities" in Regulation D of such Board) maintained by
a member bank of such System;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one-hundredth of one percent
(1/100 of 1%).
"EURODOLLAR RATE LOAN" shall mean any Loan which bears interest at the
Eurodollar Rate.
"EVENT OF DEFAULT" shall mean any of the events or conditions described
in Section 6.1.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FEDERAL FUNDS RATE" shall mean the per annum rate that is equal to the
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published by
the Federal Reserve Bank of New York for such day, or, if such rate is not so
published for any day, the average of the quotations for such rates received
by the Agent from three federal funds brokers of recognized standing selected
by the Agent in its discretion;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one-hundredth of one percent
(1/100 of 1%), which Federal Funds Rate shall change simultaneously with any
change in such published or quoted rates.
"FLOATING RATE" shall mean the per annum rate equal to the sum of (a)
the Applicable Floating Rate Margin in effect from time to time plus (b) the
greater of (i) the Prime Rate in effect from time to time , and (ii) the sum
of one percent (1%) per annum plus the Federal Funds Rate in effect from time
<PAGE>
<PAGE> EX-10.23-11
to time; which Floating Rate shall change simultaneously with any change in
such Prime Rate or Federal Funds Rate, as the case may be.
"FLOATING RATE LOAN" shall mean any Loan which bears interest at the
Floating Rate.
"14-1/2% SUBORDINATED DEBT" shall mean Great Dane Holding's 14-1/2%
Subordinated Discount Debentures due January 1, 2006.
"FUNDED DEBT" shall mean all interest-bearing Indebtedness, including
without limitation all Capital Lease Obligations, all as determined for the
Company and its Subsidiaries on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean generally accepted
accounting principles in effect from time to time, and applied on a basis
consistent with that reflected in the financial statements referred to in
Section 4.6.
"GREAT DANE TRAILERS" shall mean Great Dane Trailers, Inc., a Georgia
corporation.
"GREAT DANE TENNESSEE" shall mean Great Dane Trailers Tennessee, Inc.,
a Tennessee corporation.
"GREAT DANE L.A." shall mean Great Dane Los Angeles, Inc., a Georgia
corporation.
"GREAT DANE HOLDINGS" shall mean Great Dane Holdings Inc., a Delaware
corporation.
"INDEBTEDNESS" of any person shall mean, without duplication, as of any
date, (a) all obligations of such person for borrowed money, (b) all
obligations of such person as lessee under any Capital Lease, (c) all
obligations which are secured by any Lien existing on any asset or property
of such person whether or not the obligation secured thereby shall have been
assumed by such person (to the extent of such Lien if such obligation is not
assumed), (d) all obligations of such person for the unpaid purchase price
for goods, property or services acquired by such person, except for trade
accounts payable arising in the ordinary course of business which are not
overdue by more than 60 days or, if overdue by more than 60 days, are being
disputed in good faith, (e) all obligations of such person in respect of any
interest rate or currency swap, rate cap or other similar transaction (valued
in an amount equal to the highest termination payment, if any, that would be
payable by such person upon termination for any reason on the date of
determination), and (f) all obligations of others similar in character to
those described in clauses (a) through (e) of this definition for which such
person is contingently liable, as guarantor, surety, accommodation party,
partner or in any other capacity, or in respect of which obligations such
person assures a creditor against loss or agrees to take any action to
prevent any such loss (other than endorsements of negotiable instruments for
collection in the ordinary course of business), including without limitation
all reimbursement obligations of such person in respect of letters of credit,
surety bonds or similar obligations and all obligations of such person to
advance funds to, or to purchase assets, property or services from, any
other person in order to maintain the financial condition of such other
person.
<PAGE>
<PAGE> EX-10.23-12
"INTEREST COVERAGE RATIO" shall mean, for any period, the ratio of EBIT
for such period to Interest Expense for such period.
"INTEREST EXPENSE" shall mean, for any period, total interest and
related expense (including, without limitation, that portion of any Capital
Lease Obligation attributable to interest expense in conformity with
Generally Accepted Accounting Principles, amortization of debt discount, all
capitalized interest, the interest portion of any deferred payment
obligations, all commissions, discounts and other fees and charges owed with
respect to letter of credit and bankers acceptance financing, the net costs
and net payments under any interest rate hedging, cap or similar agreement,
or arrangement, prepayment charges, agency fees, restructuring, extension,
amendment, facility or similar fees, administrative fees, commitment fees and
capitalized transaction costs allocated to interest expense) with respect to
all outstanding Indebtedness of the Company and its Subsidiaries for such
period, determined for the Company and its Subsidiaries on a consolidated
basis in accordance with Generally Accepted Accounting Principles, except as
modified by this definition; PROVIDED, HOWEVER, that "Interest Expense" shall
not include any fees related to the closing of this transaction, the Great
Dane Trailers Loan Agreement or any Public Offering which are amortized by
any Borrower.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any Eurodollar
Rate Loan, the last day of each Eurodollar Interest Period with respect to
such Eurodollar Rate Loan and, in the case of any Eurodollar Interest Period
exceeding three months, those days that occur during such Eurodollar Interest
Period at intervals of three months after the first day of such Eurodollar
Interest Period, and (b) in all other cases, the last Business Day of each
March, June, September and December occurring after the date hereof,
commencing with the first such Business Day occurring after the date of this
Agreement.
"IPO COMPLETION DATE" shall mean the date Great Dane Holdings completes
a Public Offering and has received net cash proceeds (net of all underwriters
fees, legal fees and other costs and expenses) therefrom of at least
$50,000,000.
"LENDER COLLATERAL" shall mean all present and future accounts,
inventory, chattel paper, instruments, general intangibles, documents,
equipment, fixtures and all other assets, real or personal, of each Borrower.
"LENDER OBLIGATIONS" shall mean all indebtedness, obligations and
liabilities, whether now owing or hereafter arising, direct, indirect,
contingent or otherwise, of the Borrowers to the Agent or any Lender pursuant
to any of the Loan Documents.
"LETTER OF CREDIT" shall mean each S/L/C and C/L/C issued hereunder
having a stated expiry date or a date upon which the draft must be reimbursed
not later than twelve months after the date of issuance (provided that any
S/L/C or C/L/C can contain automatic extension provisions allowing for
extension beyond twelve months from the date of issuance unless terminated by
the Agent) and not later than the fifth Business Day before the Termination
Date issued by the Agent on behalf of the Lenders for the account of any
Borrower under an application and related documentation acceptable to the
Agent requiring, among other things, immediate reimbursement by such Borrower
to the Agent in respect of all drafts or other demand for payment honored
thereunder and all expenses paid or incurred by the Agent relative thereto.
<PAGE>
<PAGE> EX-10.23-13
Additionally, an existing letter of credit issued by NBD for the account of
the Company in the face amount of $1,200,000 shall be considered a Letter of
Credit issued hereunder.
"LETTER OF CREDIT ADVANCE" shall mean any issuance of a Letter of Credit
hereunder.
"LETTER OF CREDIT DOCUMENTS" shall have the meaning ascribed thereto in
Section 3.3(b).
"LIEN" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement
filing, lessor's or lessee's interest under any lease, subordination of any
claim or right, or any other type of lien, charge, encumbrance, preferential
arrangement or other claim or right.
"LOAN" shall mean any Revolving Credit Loan or the Term Loan.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Letter of
Credit Documents, the Security Documents, the Environmental Certificate and
any other agreement, instrument or document executed at any time in
connection with this Agreement.
"LOCKBOXES" is defined in Section 3.4(d).
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect upon (i)
the business, assets or other properties, liabilities or condition (financial
or otherwise), results of operations or prospects of the Company and its
Subsidiaries, taken as a whole, (ii) the ability of Borrowers to perform in
any material respect any of their obligations under the Loan Documents, or
(iii) the priority or value of the collateral for the Advances and the other
Lender Obligations.
"MATURITY DATE" shall mean, with respect to the Term Loan, the fifth
anniversary of the date such Term Loan is made.
"MULTIEMPLOYER PLAN" shall mean any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"NBD" shall mean NBD Bank, a Michigan banking corporation.
"NET ASSETS AVAILABLE FOR BENEFITS" shall mean, with respect to any Plan
as of any date, the "Net assets available for benefits" of such Plan as
defined in Statement of Financial Accounting Standards No. 35 ("SFAS 35"),
determined pursuant to Generally Accepted Accounting Principles, uniformly
applied.
"NET INCOME" shall mean, for any period, the net income (or loss) of the
Company and its Subsidiaries on a consolidated basis for such period taken as
a single accounting period, determined in accordance with Generally Accepted
Accounting Principles; MINUS to the extent included in determining such Net
Income, without duplication: (a) the income of any Person (other than a
Subsidiary of the Company) in which any Person other than the Company or any
of its Subsidiaries has a joint interest or partnership interest, except to
the extent of the amount of dividends or other distributions actually paid to
the Company or any of its Subsidiaries by such Person during such period, (b)
<PAGE>
<PAGE> EX-10.23-14
the income of any Person accrued prior to the date such Person becomes a
Subsidiary of the Company or is merged into or consolidated with the Company
or any of its Subsidiaries if such Person's assets are acquired by the
Company or any of its Subsidiaries, (c) the proceeds of any insurance policy,
except to the extent used to reimburse expenses which have been deducted from
Net Income, (d) gains (or PLUS losses) from the sale, exchange, transfer or
other disposition of property or assets not in the ordinary course of
business of the Company and its Subsidiaries and related tax effects in
accordance with Generally Accepted Accounting Principles, (e) any
extraordinary or non-recurring gains (or PLUS losses) of the Company or its
Subsidiaries, (f) the income of any Subsidiary of the Company to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or of any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that Subsidiary
and (g) a percentage of the net income of SCSM equal to the percentage of the
capital stock of SCSM which is not owned by the Company. It is acknowledged
and agreed that cash dividends received by the Company, directly or
indirectly, from ACIC shall be considered income of the Company, but no
revenues or other income of ACIC shall be considered income of the Company
and its Subsidiaries.
"NOTE" shall mean any Revolving Credit Note or any Term Note.
"OVERDUE RATE" shall mean (a) in respect of principal of Floating Rate
Loans, a rate per annum that is equal to the sum of three percent (3%) per
annum plus the Floating Rate, (b) in respect of principal of Eurodollar Rate
Loans, a rate per annum that is equal to the sum of three percent (3%) per
annum plus the per annum rate in effect thereon until the end of the then
current Eurodollar Interest Period for such Loan and, thereafter, a rate per
annum that is equal to the sum of three percent (3%) per annum plus the
Floating Rate, and (c) in respect of other amounts payable by any Borrower
hereunder (other than interest), a per annum rate that is equal to the sum of
three percent (3%) per annum plus the Floating Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"PERMITTED HOLDERS" shall mean (i) David R. Margin, Martin L. Solomon,
Allan R. Tessler and Wilmer J. Thomas, Jr. or any one of them, (ii) any
trusts created for the benefit of the persons described in clause (i) or
members of any such person's immediate family; and (iii) in the event of the
incompetence or death of any of the persons described in clause (i), such
person's estate, executor, administrator, committee or other personal
representatives or beneficiaries.
"PERMITTED LIENS" shall mean Liens permitted by Section 5.2(g) hereof.
"person" or "Person" shall include an individual, a corporation, an
association, a partnership, a trust or estate, a joint stock company, an
unincorporated organization, a joint venture, a trade or business (whether or
not incorporated), a government (foreign or domestic) and any agency or
political subdivision thereof, or any other entity.
"PLAN" shall mean, with respect to any person, any pension plan
(including a Multiemployer Plan) subject to Title IV of ERISA or to the
minimum funding standards of Section 412 of the Code which has been
<PAGE>
<PAGE> EX-10.23-15
established or maintained by such person or any ERISA Affiliate, or by any
other person if such person or any ERISA Affiliate could have liability with
respect to such pension plan.
"PLEDGE AGREEMENT" shall mean the pledge agreement entered into by the
Company in substantially the form of EXHIBIT C hereto, as amended or modified
from time to time.
"PRIME RATE" shall mean the per ann um rate announced by the Agent from
time to time as its "prime rate" (it being acknowledged that such announced
rate may not necessarily be the lowest rate charged by the Agent to any of
its customers); which Prime Rate shall change simultaneously with any change
in such announced rate.
"PROHIBITED TRANSACTION" shall mean any non-exempt transaction involving
any Plan which is proscribed by Section 406 of ERISA or Section 4975 of the
Code.
"PUBLIC OFFERING" shall mean any sale by a primary offering by Great
Dane Holdings of any common stock of Great Dane Holdings in a public offering
pursuant to a registration statement on Form S-1, S-2 or S-3 filed under the
Securities Acts of 1933, as amended, with, and declared effective by, the
Securities and Exchange Commission.
"REPORTABLE EVENT" shall mean a reportable event as described in Section
4043(b) of ERISA including those events as to which the thirty (30) day
notice period is waived under Part 2615 of the regulations promulgated by the
PBGC under ERISA.
"REQUIRED LENDERS" shall mean Lenders holding not less than (i) sixty
percent (60%) of the aggregate principal amount of the Advances then
outstanding (assuming, for purposes of this definition, that all settlements
necessary at the end of a Settlement Period pursuant to Section 2.4(c) shall
have taken place) or (ii) sixty percent (60%) of the Commitments if no
Advances are then outstanding; provided, however, if there are only three or
two Lenders entitled to vote hereunder, it shall take more than one Lender to
constitute the Required Lenders even if any one Lender holds the required 60%
described above.
"REQUIREMENT OF LAW" shall mean, as to any person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other governmental authority, in each case
applicable to or binding upon such person or any of its property or to which
such person or any of its property is subject.
"REVOLVING CREDIT ADVANCE" shall mean any Revolving Credit Loan and any
Letter of Credit Advance.
"REVOLVING CREDIT LOAN" shall mean any borrowing under Section 2.4
evidenced by the Revolving Credit Note and made pursuant to Section 2.1(a).
"REVOLVING CREDIT NOTE" shall mean any promissory note of the Borrowers
evidencing the Revolving Credit Loans, in substantially the form of EXHIBIT
D hereto, as amended or modified from time to time and together with any
promissory note or notes issued in exchange or replacement therefor.
<PAGE>
<PAGE> EX-10.23-16
"SECURITY AGREEMENT" shall mean the security agreement or agreements
entered into by the Borrowers for the benefit of the Agent and the Lenders
pursuant to this Agreement in substantially the form of EXHIBIT E hereto, as
amended or modified from time to time.
"SECURITY DOCUMENTS" shall mean, collectively, the Security Agreement,
the Pledge Agreement and all other related agreements and documents,
including financing statements and similar documents, delivered pursuant to
this Agreement or otherwise entered into by any person to secure the Advances
or any of the other Lender Obligations.
"SETTLEMENT PERIOD" is defined in Section 2.4(c).
"S/L/C" shall mean any standby letter of credit issued hereunder.
"SOLVENT" when used with respect to any person, shall mean that, as of
any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such person will, as of such date, exceed the amount
of all "liabilities of such person, contingent or otherwise", as of such
date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of debtors,
(b) the present fair saleable value of the assets of such person will, as of
such date, be greater than the amount that will be required to pay the
liability of such person on its debts as such debts become absolute and
matured, (c) such person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such
person will be able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", (ii) "claim" means any
(x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured and (iii) it is assumed value will be given to the
contribution rights granted under Section 8.14 hereof.
"STATED MATURITY" when used with respect to any Indebtedness or any
installment of interest thereon, shall mean the dates specified in such
Indebtedness as the fixed date on which the principal of such Indebtedness or
such installment of interest, as the case may be, is due and payable.
"SUBSIDIARY" shall mean with respect to any person, any corporation,
partnership, joint venture, trust or estate of which (or in which) more than
50% of (a) the issued and outstanding capital stock, (b) the interest in the
capital or profits of such partnership or joint venture or (c) the beneficial
interest in such trust or estate, is at the time directly or indirectly owned
or controlled by such person and/or by one or more of such person's other
Subsidiaries, provided that the corporations listed on SCHEDULE 1.1 hereto
shall not be considered Subsidiaries for so long as the aggregate book value
of the total assets of all corporations listed on SCHEDULE 1.1 does not
exceed $500,000 at any time. Unless otherwise qualified, all references to
a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company. Additionally, ACIC and the
Subsidiaries of ACIC shall not be considered a Subsidiary of any Borrower
except (i) to the extent specifically provided pursuant to the terms of this
Agreement, and (ii) for purposes of Sections 4.4, 4.5, 4.6, 4.9, 4.12, 4.14,
<PAGE>
<PAGE> EX-10.23-17
5.1(a)- (c), (e), 5.2(f), (g), (j), (n), (p), (q) and (r) and 6.1(e), (f) and
(h).
"TANGIBLE NET WORTH" shall mean, as of any date, (a) the amount of any
capital stock, paid in capital and similar equity accounts plus (or minus in
the case of a deficit) the capital surplus and retained earnings and the
amount of any foreign currency translation adjustment account shown as a
capital account, of the Company and its Subsidiaries on a consolidated basis,
less (b) the net book value of all items of the following character which are
included in the assets of the Company and its Subsidiaries on a consolidated
basis: (i) goodwill, including without limitation, the excess of cost over
book value of any asset, (ii) organization or experimental expenses, (iii)
unamortized debt discount and expense, (iv) patents, trademarks, trade names
and copyrights, (v) treasury stock, (vi) deferred taxes and deferred charges,
(vii) franchises, licenses and permits (viii) other assets which are deemed
intangible assets under generally accepted accounting principles and (ix) any
amounts owing from any Affiliate of the Company or any of its Subsidiaries,
whether as a note receivable, advance owing or otherwise.
"TAX SHARING AGREEMENT" shall mean the tax sharing agreement attached
hereto as SCHEDULE 1.1-2.
"TERM LOAN" shall mean the term loan made by the Banks under Section 2.4
evidenced by the Term Note and made pursuant to Section 2.1(b).
"TERM NOTE" shall mean any promissory note of the Borrowers evidencing
the Term Loan, in substantially the form of EXHIBIT E hereto, as amended or
modified from time to time and together with any promissory note or notes
issued in exchange or replacement therefor.
"TERMINATION DATE" shall mean the earlier to occur of (a) January 26,
2000 and (b) the date on which the Commitments shall be terminated pursuant
to Section 2.2 or 6.2.
"12-3/4% SUBORDINATED DEBT" shall mean Great Dane Holdings 12-3/4%
Senior Subordinated Debentures due August 1, 2001.
"UNFUNDED BENEFIT LIABILITIES" shall mean, with respect to any Plan as
of any date, the amount of the unfunded benefit liabilities determined in
accordance with Section 4001(a)(18) of ERISA as now in effect.
"VOTING STOCK" shall mean Capital Stock of the class or classes of
Capital Stock pursuant to which the holders thereof have general voting power
under ordinary circumstances to elect directors, managers or trustees of a
corporation (irrespective of whether or not at the time Capital Stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency).
"WITHHOLDING TAXES" is defined in Section 3.5.
1.2 OTHER DEFINITIONS; RULES OF CONSTRUCTION. As used herein, the
terms "AGENT", "LENDERS", "COMPANY", "BORROWER", "BORROWERS", "YELLOW CAB",
"AUTOWERKS", "SCSM", and "THIS AGREEMENT" shall have the respective meanings
ascribed thereto in the introductory paragraph of this Agreement. Such
terms, together with the other terms defined in Section 1.1, shall include
both the singular and the plural forms thereof and shall be construed
accordingly. All computations required hereunder and all financial terms
<PAGE>
<PAGE> EX-10.23-18
used herein shall be made or construed in accordance with Generally Accepted
Accounting Principles unless such principles are inconsistent with the
express requirements of this Agreement; PROVIDED that, if the Company
notifies the Agent that the Company wishes to amend any covenant in Article
V to eliminate the effect of any change in Generally Accepted Accounting
Principles in the operation of such covenant (or if the Agent notifies the
Company that the Required Lenders wish to amend Article V for such purpose),
then the Company's compliance with such covenant shall be determined on the
basis of Generally Accepted Accounting Principles in effect immediately
before the relevant change in Generally Accepted Accounting Principles became
effective, until either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Company and the Required Lenders. The terms
accounts, equipment, inventory, chattel paper, instruments, documents,
general intangibles and fixtures shall have the meanings ascribed thereto in
the Uniform Commercial Code as adopted in Michigan. Use of the terms
"HEREIN", "HEREOF", and "HEREUNDER" shall be deemed references to this
Agreement in its entirety and not to the Section or clause in which such term
appears. References to "SECTIONS" and "SUBSECTIONS" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
ARTICLE II.
THE COMMITMENTS AND THE ADVANCES
--------------------------------
1.3 Commitment of the Lenders.
-------------------------
(a) REVOLVING CREDIT ADVANCES. Each Lender agrees, for itself
only, subject to the terms and conditions of this Agreement, to make
Revolving Credit Loans to the Borrowers pursuant to Section 2.4 and Section
3.3 and to participate in Letter of Credit Advances to the Borrowers pursuant
to Section 2.4, from time to time from and including the Effective Date to
but excluding the Termination Date, not to exceed in aggregate principal
amount for all Borrowers at any time outstanding the amounts determined
pursuant to Section 2.1(c). Each Revolving Credit Advance shall be requested
and used by the Borrowers. All Borrowers are jointly and severally liable
for all Revolving Credit Advances and other Lender Obligations as described
in Section 8.14.
(b) TERM LOAN. Each Lender further agrees, for itself only,
subject to the terms and conditions of this Agreement, to make its portion of
a single Term Loan to the Borrowers on the Effective Date in an aggregate
amount not to exceed $45,000,000.
(c) LIMITATION ON AMOUNT OF ADVANCES. Notwithstanding anything in
this Agreement to the contrary, (i) the aggregate principal amount of the
Revolving Credit Advances made or participated in by any Lender at any time
outstanding shall not exceed the amount of its respective Revolving Credit
Commitment as of the date any such Revolving Credit Advance is made;
PROVIDED, HOWEVER, it is acknowledged and agreed that for purposes of
calculating the available Commitment of the Lenders the aggregate principal
amount of all outstanding Letters of Credit and all Loans shall be considered
usage of the Commitments, and (ii) the aggregate principal amount of all of
the Revolving Credit Advances at any time outstanding shall not exceed the
amount of the Borrowing Base of all Borrowers as shown on the most recent
<PAGE>
<PAGE> EX-10.23-19
Borrowing Base Certificate delivered by the Borrowers, PROVIDED, HOWEVER,
that the aggregate principal amount of Letter of Credit Advances outstanding
at any time shall not exceed $10,000,000.
2.2 TERMINATION AND REDUCTION OF COMMITMENTS. (a) The Borrowers shall
have the right to terminate or reduce the Commitments at any time and from
time to time at their option, PROVIDED that (i) the Borrowers shall give
notice of such termination or reduction to the Agent (with sufficient
executed copies for each Lender) specifying the amount and effective date
thereof, (ii) each partial reduction of the Commitments shall be in a minimum
amount of $1,000,000 and in an integral multiple of $1,000,000 and shall
reduce the Commitments of all of the Lenders proportionately in accordance
with the respective Commitment amounts for each such Lender set forth in the
signature pages hereof next to name of each such Lender, (iii) no such
termination or reduction shall be permitted with respect to any portion of
the Commitments as to which a request for an Advance pursuant to Section 2.4
is then pending and (iv) the Commitments may not be terminated by the Company
if any Advances are then outstanding and may not be reduced below the
principal amount of Advances then outstanding. The Commitments or any
portion thereof terminated or reduced pursuant to this Section 2.2, whether
optional or mandatory, may not be reinstated.
(1) For purposes of this Agreement, a Letter of Credit Advance (i)
shall be deemed outstanding in an amount equal to the sum of the maximum
amount available to be drawn under the related Letter of Credit on or after
the date of determination and on or before the stated expiry date thereof
plus the amount of any draws under such Letter of Credit that have not been
reimbursed as provided in Section 3.3 and (ii) shall be deemed outstanding at
all times on and before such stated expiry date or such earlier date on which
all amounts available to be drawn under such Letter of Credit have been fully
drawn, and thereafter until all related reimbursement obligations have been
paid pursuant to Section 3.3. As provided in Section 3.3, upon each payment
made by the Agent in respect of any draft or other demand for payment under
any Letter of Credit, the amount of any Letter of Credit Advance outstanding
immediately prior to such payment shall be automatically reduced by the
amount of each Loan deemed advanced in respect of the related reimbursement
obligation of the Borrowers.
2.3 FEES. (a) The Borrowers agree to pay to the Agent, for the pro
rata benefit of the Lenders, a commitment fee on the daily average unused
amount of its respective Revolving Credit Commitment, for the period from the
Effective Date to but excluding the Termination Date, at a rate equal to
three eighths of one (3/8%) percent per annum. Accrued commitment fees shall
be payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing on the first such Business Day occurring
after the Effective Date, and on the Termination Date.
(b) The Borrowers agree to pay to the Agent, for the pro rata
benefit of the Lenders, a closing fee in the amount of one and one-quarter
percent (1-1/4%) of the aggregate Commitments, whether used or unused and
including the Revolving Credit Commitments and the Term Loan Commitments.
Such closing fee shall be payable on or prior to the Effective Date.
(c) The Borrowers agree (i) with respect to S/L/Cs, to pay a fee
for the pro rata benefit of the Lenders computed at the rate of one and one-
half percent (1-1/2%) per annum of the maximum amount available to be drawn
<PAGE>
<PAGE> EX-10.23-20
from time to time under such S/L/C, which fee shall be paid annually in
advance at the time such S/L/C is issued for the period from and including
the date of issuance of such S/L/C to and including the stated expiry date of
such S/L/C, and (ii) with respect to C/L/Cs, to pay fees to be agreed upon
among the Borrowers, the Agent and the Required Lenders, which fees shall be
paid at each time as any C/L/C is presented or drawn upon, in whole or in
part, and if any C/L/C or portion thereof is not drawn upon, the Borrowers
shall pay an expiry fee to be agreed upon among the Borrowers, the Agent and
the Required Lenders. Such fees are nonrefundable and the Borrowers shall
not be entitled to any rebate of any portion thereof if such Letter of Credit
does not remain outstanding through its stated expiry date or for any other
reason. The Borrowers further agree to pay to the Agent, on demand, such
other customary administrative fees, charges and expenses of the Agent in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
(d) The Borrowers agree to pay to the Agent fees for its services
as Agent under this Agreement in such amounts as may from time to time be
agreed upon by the Borrowers and the Agent.
2.4 DISBURSEMENT OF ADVANCES. (a) The Company (on behalf of any
Borrower) shall give the Agent notice of its request for each Advance in
substantially the form of EXHIBIT G hereto not later than 11:00 a.m. Detroit
time (i) three Eurodollar Business Days prior to the date such Advance is
requested to be made if such Advance is to be made as a Eurodollar Rate Loan,
(ii) five Business Days prior to the date any Letter of Credit Advance is
requested to be made, and (iii) on the date such Advance is requested to be
made in all other cases, which notice shall specify whether a Eurodollar Rate
Loan, Floating Rate Loan or Letter of Credit Advance is requested and, in the
case of each requested Eurodollar Rate Loan, the Eurodollar Interest Period
to be initially applicable to such Loan and, in the case of each Letter of
Credit Advance, such information as may be necessary for the issuance thereof
by the Agent. The Agent, in the case of each Loan which is not being made
solely by the Agent under Section 2.4(c), promptly shall provide notice of
such requested Loan to each Lender. Subject to the terms and conditions of
this Agreement, the proceeds of each such requested Loan shall be made
available, by depositing the proceeds thereof into the Company's account with
the Agent. Subject to the terms and conditions of this Agreement, the Agent
shall, on the date any Letter of Credit Advance is requested to be made,
issue the related Letter of Credit on behalf of the Lenders for the account
of the Borrower requesting such Letter of Credit Advance. Notwithstanding
anything herein to the contrary, the Agent may decline to issue any requested
Letter of Credit on the basis that the beneficiary, the purpose of issuance
or the terms or the conditions of drawing are unlawful as determined by the
Agent. Each Borrower acknowledges and agrees that it does not need to
receive any notice from any other Borrower that an Advance is being requested
or made to such Borrower, and all Borrowers shall be jointly and severally
liable for all Advances made to any Borrower as provided in Section 8.14.
The Agent shall furnish each Lender on the first Business Day of each
calendar quarter a written report setting forth the average daily aggregate
maximum amount available to be drawn (assuming compliance with all conditions
<PAGE>
<PAGE> EX-10.23-21
to drawing) during the preceding calendar quarter under all Letters of Credit
and summarizing the issuance and expiration dates of Letters of Credit issued
during the preceding calendar quarter and drawings during such calendar
quarter under all Letters of Credit and setting forth each Lender's
participation therein.
(b) Each Lender, by 2:00 p.m. (Detroit time) on the date any
Borrowing in the form of a Loan is requested to be made by it under Section
2.4(a), shall make its pro rata share of such Borrowing available in
immediately available, freely transferable, cleared funds for disbursement to
the Borrower requesting such Loan pursuant to the terms and conditions of
this Agreement at the principal office of the Agent. Unless the Agent shall
have received notice from any Lender prior to 1:00 p.m. (Detroit time) on the
date such Borrowing is to be made in the case of a Floating Rate Borrowing
and two Eurodollar Business Days if such Borrowing is to be made as a
Eurodollar Rate Borrowing is requested to be made under Section 2.4(a) that
such Lender will not make available to the Agent such Lender's pro rata
portion of such Borrowing, the Agent may assume that such Lender has made
such portion available to the Agent on the date such Borrowing is requested
to be made in accordance with this Section 2.4(a). If and to the extent such
Lender shall not have so made such pro rata portion available to the Agent,
the Agent may (but shall not be obligated to) make such amount available to
such Borrower. If such Lender shall pay such amount to the Agent together
with interest, such amount so paid shall constitute a Loan by such Lender as
a part of the related Borrowing for purposes of this Agreement. The failure
of any Lender to make its pro rata portion of any such Borrowing available to
the Agent shall not relieve any other Lender of its obligations to make
available its pro rata portion of such Borrowing on the date such Borrowing
is requested to be made, but no Lender shall be responsible for failure of
any other Lender to make such pro rata portion available to the Agent on the
date of any such Borrowing.
(c) Because the Borrowers anticipate they may be requesting
borrowings of Floating Rate Loans on a daily basis and repaying Floating Rate
Loans on a daily basis through the collection of collateral, resulting in the
amount of outstanding Floating Rate Loans fluctuating from day to day, in
order to administer the Loans in an efficient manner and to minimize the
transfer of funds between the Agent and the Lenders, the Lenders hereby
instruct the Agent, and the Agent may (but is not obligated to) (i) make
available, on behalf of the Lenders, the full amount of all Floating Rate
Loans requested without requiring that each Lender receive prior notice of
the proposed Borrowing, including such Lender's proportionate share thereof
and the other matters covered by the notice of Borrowing and (ii) if the
Agent has made any such amounts available as provided in clause (i), upon
repayment of Floating Rate Loans, apply such amounts repaid directly to the
amounts made available by the Agent in accordance with clause (i) and not yet
settled as described below; provided that the Agent shall not advance funds
as described in clause (i) above if the Agent has actually received prior to
such Borrowing (x) written notice from any Borrower that a Default or Event
of Default is in existence or (y) a written notice of Borrowing from any
Borrower wherein the certification provided therein states that the
conditions to the making of the requested Floating Rate Loans have not been
satisfied or (z) a written notice from any Lender that the conditions to such
<PAGE>
<PAGE> EX-10.23-22
Borrowing have not been satisfied, which notice of Borrowing or notice, in
each case, shall not have been rescinded. If the Agent advances Floating
Rate Loans on behalf of the Lenders, as provided in the immediately preceding
sentence, the amount of each Lender's proportionate share of Loans shall be
computed weekly rather than daily and shall be adjusted upward or downward on
the basis of the amount of outstanding Floating Rate Loans as of 2:00 p.m.
(Detroit time) on the Business Day immediately preceding the date of each
computation; provided, however, that the Agent retains the absolute right at
any time or from time to time to make such adjustments at intervals more
frequent than weekly. The Agent shall deliver to each of the Lenders after
the end of each week, or such lesser period or periods as the Agent shall
determine, a summary statement of the amount of outstanding Floating Rate
Loans for such period (such week or lesser period or periods being hereafter
referred to as a "Settlement Period"). If the summary statement is sent by
the Agent and received by the Lenders prior to noon (Detroit time) each
Lender shall make the transfers described in the immediately succeeding
sentence no later than 2:00 p.m. (Detroit time) on the day such summary
statement was sent; and if such summary statement is sent by the Agent and
received by the Lenders after noon (Detroit time) on any Business Day, each
Lender shall make such transfers no later than 2:00 p.m. (Detroit time) on
the next succeeding Business Day. If the amount of a Lender's proportionate
share of the Floating Rate Loans in any Settlement Period is greater than the
amount of such Lender's proportionate share of the Floating Rate Loans for
the previous Settlement Period, such Lender shall forthwith (but in no event
later than the time set forth in the immediately preceding sentence) transfer
to the Agent by wire transfer in immediately available funds the amount of
the increase; and, on the other hand, if the amount of a Lender's
proportionate share of the Floating Rate Loans in any Settlement Period is
less than the amount of such Lender's proportionate share of the Floating
Rate Loans for the previous Settlement Period, the Agent shall forthwith
transfer to such Lender by wire transfer in immediately available funds the
amount of the decrease. The obligation of each of the Lenders to transfer
such funds with respect to any Loan permissible for the Agent to make
hereunder shall be irrevocable and unconditional and without recourse to or
warranty by the Agent. Each of the Agent and the Lenders agree to mark
their respective books and records at the end of each Settlement Period to
show at all times the dollar amount of their respective proportionate shares
of the outstanding Floating Rate Loans. Because the Agent on behalf of the
Lenders may be advancing and/or may be repaid Floating Rate Loans prior to
the time when the Lenders will actually advance and/or be repaid Floating
Rate Loans, interest with respect to Floating Rate Loans shall be allocated
by the Agent to each Lender (including the Agent) in accordance with the
amount of Floating Rate Loans actually advanced by and repaid to each Lender
(including the Agent) during each Settlement Period. Interest shall accrue
from and including the date such Loans are advanced by the Agent to but
excluding the date such Loans are repaid by the Borrowers or actually settled
by the applicable Lender as described in this Section 2.4.
(d) If the amounts described in Section 2.4(b) or (c) which are
allowed to be advanced by the Agent are not in fact made available and paid
to the Agent by a Lender (such Lender being hereinafter referred to as a
"Defaulting Lender") and the Agent has made such amount available to the
Borrowers, the Agent shall be entitled to recover such corresponding amount
<PAGE>
<PAGE> EX-10.23-23
on demand from such Defaulting Lender. If such Defaulting Lender does not
pay such corresponding amount forthwith upon the Agent's demand therefor, the
Agent shall promptly notify the Borrowers and the Borrowers shall immediately
(but in no event later than one Business Day after such demand) pay such
corresponding amount to the Agent. The Agent shall also be entitled to
recover from such Defaulting Lender and the Borrower interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to
either (i) if paid by such Defaulting Lender, the Federal Funds Rate for the
first 10 days when due and the then applicable rate of interest thereafter,
plus an amount equal to any costs (including legal expenses) and losses
incurred as a result of the failure of such Defaulting Lender to provide such
amount as provided in this Agreement, and (ii) if paid by the Borrower, the
then applicable rate of interest. Nothing herein shall be deemed to relieve
any Lender from its obligation to fulfill its commitments hereunder or to
prejudice any rights which any Borrower may have against any Lender as a
result of any default by such Lender.
(e) All Revolving Credit Loans made under this Section 2.4 shall
be evidenced by the Revolving Credit Notes and the Term Loan made under this
Section 2.4 shall be evidenced by the Term Notes, and all Loans shall be due
and payable and bear interest as provided in Article III. Each Lender is
hereby authorized by each Borrower to record in its books and records, the
date, amount and type of each Loan and the duration of the related Eurodollar
Interest Period (if applicable), the amount of each payment or prepayment of
principal thereon, and the other information provided for in its books and
records, which books and records shall constitute prima facie evidence of the
information so recorded, PROVIDED, HOWEVER, that failure of any Lender to
record, or any error in recording, any such information shall not relieve the
Borrowers of each of their obligations to repay the outstanding principal
amount of the Loans, all accrued interest thereon and other amounts payable
with respect thereto in accordance with the terms of the Notes and this
Agreement. Subject to the terms and conditions of this Agreement, the
Borrowers may borrow Loans under this Section 2.4 and under Section 3.3,
prepay Loans pursuant to Section 3.1 and reborrow Revolving Credit Loans, but
not the Term Loan, under this Section 2.4 and under Section 3.3.
(f) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized that
the Agent has the sole obligation under this Agreement to issue Letters of
Credit on behalf of the Lenders, and the Revolving Credit Commitment of each
Lender with respect to Letter of Credit Advances is expressly conditioned
upon the Agent's performance of such obligations. Upon such issuance by the
Agent of any Letter of Credit which the Agent is permitted to issue
hereunder, each Lender shall automatically acquire a pro rata risk
participation interest in such Letter of Credit Advance based on the amount
of its respective Revolving Credit Commitment. If the Agent shall honor a
draft or other demand for payment presented or made under any Letter of
Credit, the Agent shall provide notice thereof to each Lender on the date
such draft or demand is honored unless the Borrowers shall have satisfied
their reimbursement obligation under Section 3.3 by payment to the Agent on
such date. Each Lender, on such date, shall make its pro rata share of the
<PAGE>
<PAGE> EX-10.23-24
amount paid by the Agent available in immediately available funds at the
principal office of the Agent for the account of the Agent. If and to the
extent such Lender shall not have made such pro rata portion available to the
Agent, such Lender and the Borrowers severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date such amount was paid by the Agent until such amount is so made
available to the Agent at a per annum rate equal to the Federal Funds Rate.
If such Lender shall pay such amount to the Agent together with any such
interest, such amount so paid shall constitute a Loan by such Lender as part
of the Revolving Credit Borrowing disbursed in respect of the reimbursement
obligation of the Borrowers under Section 3.3 for purposes of this Agreement.
The failure of any Lender to make its pro rata portion of any such amount
paid by the Agent available to the Agent shall not relieve any other Lender
of its obligation to make available its pro rata portion of such amount, but
no Lender shall be responsible for failure of any other Lender to make such
pro rata portion available to the Agent.
2.5 CONDITIONS FOR FIRST DISBURSEMENT. The obligation of the Lenders
to make the first Advance hereunder is subject to receipt by the Agent of the
following documents and completion of the following matters, and receipt by
each Lender of the documents specified in clauses (d), (f), (h) and (j), and
any other documents requested by such Lender, and payment of the fees to such
Lender described in clause (i) below, in all cases in form and substance
satisfactory to each Lender and the Agent:
(a) CHARTER DOCUMENTS. Certificates of recent date of the
appropriate authority or official of each Borrower's respective state of
incorporation or organization (listing all partnership or charter documents
of each Borrower, on file in that office if such listing is available) and
certifying as to the good standing and existence of each Borrower, together
with copies of such partnership or charter documents of each Borrower,
certified as of a recent date by such authority or official and certified as
true and correct as of the Effective Date by a duly authorized officer of
each such Borrower;
(b) BY-LAWS AND CORPORATE AUTHORIZATIONS. Copies of the
partnership agreement or by-laws of each Borrower together with all
authorizing resolutions and evidence of other partnership or corporate action
taken by each Borrower to authorize the execution, delivery and performance
by each Borrower of this Agreement, the Notes and the other Loan Documents to
which such Borrower is a party and the consummation by such Borrower of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of each such Borrower;
(c) INCUMBENCY CERTIFICATE. Certificates of incumbency of each
Borrower containing, and attesting to the genuineness of, the signatures of
those officers authorized to act on behalf of such Borrower in connection
with this Agreement, the Notes and the other Loan Documents to which such
Borrower is a party and the consummation by such Borrower of the transactions
contemplated hereby, certified as true and correct as of the Effective Date
by a duly authorized officer of each such Borrower;
<PAGE>
<PAGE> EX-10.23-25
(d) NOTES. The Revolving Credit Notes and Term Notes duly
executed on behalf of each Borrower for each Lender;
(e) SECURITY DOCUMENTS. The Security Documents duly executed by
the parties thereto, together with:
(i) RECORDING, FILING, ETC. Evidence of the recordation,
filing and other action (including payment of any applicable taxes or fees)
in such jurisdictions as the Agent may deem necessary or appropriate with
respect to the Security Documents, including the filing of financing
statements and similar documents which the Agent may deem necessary or
appropriate to create, preserve or perfect the liens, security interests and
other rights intended to be granted to the Lenders or the Agent thereunder,
together with Uniform Commercial Code record and patent, trademark and
copyright searches in such offices as the Agent may request;
(ii) LEASED PROPERTY; LANDLORD WAIVERS. A schedule setting
forth all real property leased by each Borrower on which any material
inventory is located, together with copies of the related leases, certified
as true and correct as of the Effective Date by a duly authorized officer of
the Company, and, unless waived by the Agent, an agreement of each landlord
under such leases, in form and substance acceptable to the Agent, waiving its
distraint, lien and similar rights with respect to any material property
subject to the Security Documents and agreeing to permit the Agent to enter
such premises in connection therewith;
(iii) CASUALTY AND OTHER INSURANCE. Evidence that the
casualty and other insurance required pursuant to Section 5.1(c) and the
Security Agreement are in full force and effect, together with evidence that
the Agent is named as a lender loss payee and additional insured on all such
insurance policies; and
(iv) STOCK CERTIFICATES AND INSTRUMENTS. All original stock
certificates for all Capital Stock of ACIC, together with assignments
separate from certificate for each such stock certificate, and all original
promissory notes and other instruments payable to each Borrower in which a
security interest is being granted, each endorsed in blank;
(f) LEGAL OPINION. The favorable written opinion of Hutton Ingram
Yuzek Gainen Carroll & Bertolotti, counsel for the Borrowers in the form
attached as EXHIBIT H hereto;
(g) CONSENTS, APPROVALS, ETC. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations,
registrations or filings, if any, required on the part of any Borrower in
connection with the execution, delivery and performance of this Agreement,
the Notes, the other Loan Documents or the transactions contemplated hereby
or as a condition to the legality, validity or enforceability of this
Agreement, the Notes or any of the other Loan Documents, certified as true
and correct and in full force and effect as of the Effective Date by a duly
authorized officer of each Borrower, or, if none are required, a certificate
of such officer to that effect;
(h) ENVIRONMENTAL CERTIFICATE. An Environmental Certificate of
the Borrowers dated no earlier than seven days prior to the Effective Date;
<PAGE>
<PAGE> EX-10.23-26
(i) FEES. Payment of the fees described in Section 2.3(b) due on
the Effective Date;
(j) SOLVENCY CERTIFICATE, ETC. The Borrowers shall have executed
a solvency certificate in the form of EXHIBIT I hereto; and
(k) OTHER REQUIREMENTS. Such other documents, and completion of
such other matters, as the Agent or the Required Lenders may reasonably
request.
It is acknowledged and agreed that all conditions for the first Advance
described in this Section 2.5 must be satisfied on or before March 31, 1995,
and if not satisfied by March 31, 1995 any Lender may terminate its
Commitments.
2.6 FURTHER CONDITIONS FOR DISBURSEMENT. The obligation of the Lenders
to make any Advance (including the first Advance), or any continuation or
conversion under Section 2.7 is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties of each Borrower contained
in Article IV hereof and in each Security Document shall be true and correct
in all material respects on and as of the date such Advance is made (both
before and after such Advance is made) as if such representations and
warranties were made on and as of such date;
(b) No Default or Event of Default shall exist or shall have
occurred and be continuing on the date such Advance is made (whether before
or after such Advance is made);
(c) The Agent shall have received the Borrowing Base Certificate
required pursuant to Section 5.1(d)(vi); and
(d) In the case of any Letter of Credit Advance, the Borrower
requesting such Letter of Credit shall have delivered to the Agent an
application for the related Letter of Credit and other related documentation
requested by and acceptable to the Agent appropriately completed and duly
executed on behalf of such Borrower.
The Borrowers shall be deemed to have made a representation and warranty to
the Lenders at the time of the making of, and the continuation or conversion
of, each Advance to the effects set forth in clauses (a) and (b) of this
Section 2.6. For purposes of this Section 2.6 the representations and
warranties contained in Section 4.6 hereof shall be deemed made with respect
to both the financial statements referred to therein and the most recent
financial statements delivered pursuant to Section 5.1(d)(ii), (iii), (iv)
and (v).
2.7 SUBSEQUENT ELECTIONS AS TO LOANS. Each Borrower may elect (a) to
continue a Eurodollar Rate Loan, or a portion thereof, as a Eurodollar Rate
Loan or (b) to convert a Eurodollar Rate Loan, or a portion thereof, to a
Floating Rate Loan or (c) to convert a Floating Rate Loan, or a portion
thereof, to a Eurodollar Rate Loan in each case by giving notice thereof to
the Agent in substantially the form of EXHIBIT J hereto not later than 10:00
a.m. Detroit time four Eurodollar Business Days prior to the date any such
continuation of or conversion to a Eurodollar Rate Loan is to be effective
<PAGE>
<PAGE> EX-10.23-27
and not later than 10:00 a.m. Detroit time one Business Day prior to the date
such continuation or conversion is to be effective in all other cases,
PROVIDED that an outstanding Eurodollar Rate Loan may only be converted on
the last day of the then current Eurodollar Interest Period with respect to
such Loan, and PROVIDED, FURTHER, if a continuation of a Loan as, or a
conversion of a Loan to, a Eurodollar Rate Loan is requested, such notice
shall also specify the Eurodollar Interest Period to be applicable thereto
upon such continuation or conversion. The Agent, not later than the Business
Day next succeeding the day such notice is given, shall provide notice of
such election to the Lenders. If any Borrower shall not timely deliver such
a notice with respect to any outstanding Eurodollar Rate Loan, such Borrower
shall be deemed to have elected to convert such Eurodollar Rate Loan to a
Floating Rate Loan on the last day of the then current Eurodollar Interest
Period with respect to such Loan.
2.8 LIMITATION OF REQUESTS AND ELECTIONS. (a) Notwithstanding any
other provision of this Agreement to the contrary, if, upon receiving a
request for a Eurodollar Rate Loan pursuant to Section 2.4, or a request for
a continuation of a Eurodollar Rate Loan as a Eurodollar Rate Loan, or a
request for a conversion of a Floating Rate Loan to a Eurodollar Rate Loan
pursuant to Section 2.7, (i) in the case of any Eurodollar Rate Loan,
deposits in Dollars for periods comparable to the Eurodollar Interest Period
elected by the Borrower are not available to any Lender in the London
interbank market, or (ii) the Eurodollar Rate will not adequately and fairly
reflect the cost to any Lender of making, funding or maintaining the related
Eurodollar Rate Loan, or (iii) by reason of national or international
financial, political or economic conditions or by reason of any applicable
law, treaty or other international agreement, rule or regulation (whether
domestic or foreign) now or hereafter in effect, or the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Lender with
any guideline, request or directive of such authority (whether or not having
the force of law), including without limitation exchange controls, it is
impracticable, unlawful or impossible for, or shall limit or impair the
ability of, (A) any Lender to make or fund the relevant Borrowing or to
continue such Borrowing as a Borrowing of the then existing type or to
convert a Borrowing to such a Borrowing, or (B) the Borrowers to make or any
Lender to receive any payment under this Agreement at the place specified for
payment hereunder or to freely convert any amount paid into Dollars at market
rates of exchange or to transfer any amount paid or so converted to the
address of its principal office specified in Section 8.2, then the Borrowers
shall not be entitled, so long as such circumstances continue, to request a
Borrowing of the affected type pursuant to Section 2.4 or a continuation of
or conversion to a Borrowing of the affected type pursuant to Section 2.7.
In the event that such circumstances no longer exist, the Lenders shall again
consider requests for Borrowings of the affected type pursuant to Section
2.4, and requests for continuations of and conversions to Loans of the
affected type pursuant to Section 2.7.
(b) Notwithstanding any other provision of this Agreement to the
contrary and in order to give effect to the provisions of Section 3.1(a)(ii),
the Borrowers shall make requests for Eurodollar Rate Loans pursuant to
Section 2.4, and requests for continuations of and conversions to Eurodollar
Rate Loans pursuant to Section 2.7, such that on each date that any scheduled
principal payment is due with respect to the Term Loan, either Floating Rate
Loans, or Eurodollar Rate Loans having a Eurodollar Interest Period ending on
<PAGE>
<PAGE> EX-10.23-28
such date, or any combination thereof, are outstanding on such date in an
aggregate outstanding principal amount not less than the amount of such
principal payment.
2.9 MINIMUM AMOUNTS; LIMITATION ON NUMBER OF LOANS; ETC. Except for
(a) Advances which exhaust the entire remaining amount of the Commitments,
and (b) payments required pursuant to Section 3.1(c) or Section 3.9, each
Advance and each continuation or conversion pursuant to Section 2.7 and each
prepayment thereof shall be in a minimum amount of, in the case of
Eurodollar Rate Loans, $2,000,000 and in integral multiples of $100,000 and
in the case of Floating Rate Loans (other than Floating Rate Loans made by
the Agent pursuant to Section 2.4(c), which may be in such amounts as agreed
to from time to time between the Agent and the Company), $1,000,000 and in
integral multiples of $100,000 and each Letter of Credit Advance shall be in
a minimum amount of $25,000. No more than six Eurodollar Interest Periods
shall be permitted to exist at any one time with respect to all Loans
outstanding hereunder from time to time.
2.10 BORROWING BASE ADJUSTMENTS. (a) Each Borrower agrees that if at
any time any trade account receivable or any inventory of any Borrower fails
to constitute Eligible Accounts Receivable or Eligible Inventory, as the case
may be, for any reason, the Agent or the Required Lenders may, at any time
and notwithstanding any prior classification of eligibility, classify such
asset or property as ineligible and exclude the same from the computation of
the Borrowing Base without in any way impairing the rights of the Lenders and
the Agent in and to the same under the Security Agreement.
(b) Subject to the last sentence of this Section 2.10(b), the
Agent at all times shall be entitled to increase, reduce, create or release
reserves against the Borrowing Base and otherwise increase or decrease the
standard of eligibility hereunder for Eligible Accounts Receivable and
Eligible Inventory. Subject to the last sentence of this Section 2.10(b),
the Required Lenders shall each have the right to direct the Agent to
increase or create additional reserves or otherwise increase the standard of
eligibility as they may deem necessary or appropriate in each case. Each
modification of the reserves and eligibility standards hereunder by the
Required Lenders or the Agent shall be reasonably made, taken upon such
written notice to Borrower as is commercially practical in light of the
events giving rise to the modification or creation of the reserve or
modification of eligibility standards and, if such action would result in a
decrease or increase in the Borrowing Base in amount equal to or greater than
$500,000, made only with written consent of the Required Lenders.
2.11 SECURITY AND COLLATERAL. To secure the Lender Obligations the
Borrowers shall execute and deliver, or cause to be executed and delivered,
to the Lenders and the Agent Security Documents granting
liens and security interests in all Lender Collateral, provided that it is
acknowledged and agreed that the Lenders and the Agent will not be taking
liens and security interests in real property owned by any of the Borrowers,
but the Agent reserves the right to request the execution and delivery of
documents and agreements to grant the lien and security interest in all real
property if at any time required by the Required Lenders.
2.12 USE OF PROCEEDS. Proceeds of the Term Loan in the aggregate
amount of $45,000,000 shall be used to pay in full all indebtedness owing by
any of the Borrowers to NBD, with the remainder being used for working
<PAGE>
<PAGE> EX-10.23-29
capital and general corporate purposes, including making payments to Great
Dane Holdings, provided that not more than $25,000,000 of the cash on hand,
the proceeds of the Term Loan and the initial Revolving Credit Advance shall
be transferred to Great Dane Holdings.
<PAGE>
<PAGE> EX-10.23-30
ARTICLE III.
PAYMENTS AND PREPAYMENTS OF ADVANCES
------------------------------------
3.1 PRINCIPAL PAYMENTS AND PREPAYMENTS.
(a) Unless earlier payment is required under this Agreement, (i)
the Borrowers shall pay to the Lenders on the Termination Date the entire
outstanding principal amount of the Revolving Credit Loans and (ii) the
Borrowers shall pay to the Lenders the outstanding principal amount of the
Term Loan in twenty equal consecutive quarterly payments of $2,250,000 each
payable on the last Business Day of each March, June, September and December
commencing with the last Business Day of June 30, 1995, to and including the
Maturity Date, and the entire outstanding principal amount of the Term Loan
shall be due and payable.
(b) The Borrowers may at any time and from time to time prepay all
or a portion of the Loans, without premium or penalty, PROVIDED that (i) the
Borrowers may not prepay any portion of any Loan as to which an election for
a continuation of or a conversion to a Eurodollar Rate Loan is pending
pursuant to Section 2.4, and (ii) unless earlier payment is required under
this Agreement, any Eurodollar Rate Loan may only be prepaid on the last day
of the then current Eurodollar Interest Period with respect to such Loan.
Upon the giving of such notice, the aggregate principal amount of such Loan
or portion thereof so specified in such notice, together with such accrued
interest and other amounts, shall become due and payable on the specified
prepayment date.
(c) If at any time the aggregate outstanding principal amount of
the Revolving Credit Advances shall exceed the then Borrowing Base, the
Borrowers shall forthwith pay to the Lenders an amount for application to the
outstanding principal amount of the Revolving Credit Loans, or provide to the
Lenders cash collateral in respect of outstanding Letters of Credit in an
amount, such that the aggregate amount of such payments and such cash
collateral is not less than the amount of such excess.
(d) All prepayments of the Term Loan, whether optional or
mandatory, shall be applied to installments of principal of the Term Loan in
the inverse order of their maturities and no partial prepayment of the Term
Loan shall reduce the amount or defer the date of the scheduled installments
of principal required to be paid thereon.
3.2 INTEREST PAYMENTS. The Borrowers shall pay interest to the Lenders
on the unpaid principal amount of each Loan, for the period commencing on the
date such Loan is made until such Loan is paid in full, on each Interest
Payment Date and at maturity (whether at stated maturity, by acceleration or
otherwise), and thereafter on demand, at the following rates per annum:
(a) During such periods that such Loan is a Floating Rate Loan,
the Floating Rate.
(b) During such periods that such Loan is a Eurodollar Rate Loan,
the Eurodollar Rate applicable to such Loan for each related Eurodollar
Interest Period.
<PAGE>
<PAGE> EX-10.23-31
Notwithstanding the foregoing paragraphs (a) and (b), the Borrowers shall pay
interest on demand by the Agent at the Overdue Rate on the outstanding
principal amount of any Loan and any other amount payable by any Borrower
hereunder (other than interest) during any period when an Event of Default
exists and if required by the Required Lenders.
3.3 LETTER OF CREDIT REIMBURSEMENT PAYMENTS. (a) (i) The Borrowers
agree to pay to the Agent, on the day on which the Agent shall honor a draft
or other demand for payment presented or made under any Letter of Credit, an
amount equal to the amount paid by the Agent in respect of such draft or
other demand under such Letter of Credit and all expenses paid or incurred
by the Agent relative thereto. Unless the Borrowers shall have made such
payment to the Agent on such day, upon each such payment by the Agent, the
Agent shall be deemed to have disbursed to the Borrower for whose account
such Letter of Credit was issued, and such Borrower shall be deemed to have
elected to satisfy its reimbursement obligation by, a Loan bearing interest
at the Floating Rate for the account of the Lenders in an amount equal to the
amount so paid by the Agent in respect of such draft or other demand under
such Letter of Credit. Such Loan shall be disbursed notwithstanding any
failure to satisfy any conditions for disbursement of any Loan set forth in
Article II hereof and, to the extent of the Loan so disbursed, the
reimbursement obligation of such Borrower under this Section 3.3 shall be
deemed satisfied; PROVIDED, HOWEVER, that nothing in this Section 3.3 shall
be deemed to constitute a waiver of any Default or Event of Default caused by
the failure to satisfy the conditions for disbursement or otherwise.
(ii) If, for any reason (including without limitation as a
result of the occurrence of an Event of Default with respect to any Borrower
pursuant to Section 6.1(h)), Floating Rate Loans may not be made by the
Lenders as described in Section 3.3(a)(i), then (A) the Borrowers agree that
each reimbursement amount not paid pursuant to the first sentence of Section
3.3(a)(i) shall bear interest, payable on demand by the Agent, at the
interest rate then applicable to Floating Rate Loans, and (B) effective on
the date each such Floating Rate Loan would otherwise have been made, each
Lender severally agrees that it shall unconditionally and irrevocably,
without regard to the occurrence of any Default or Event of Default, in lieu
of deemed disbursement of loans, to the extent of such Lender's Commitment,
purchase a participating interest in each reimbursement amount. Each Lender
will immediately transfer to the Agent, in same day funds, the amount of its
participation. Each Lender shall share on a pro rata basis (calculated by
reference to its Commitment) in any interest which accrues thereon and in all
repayments thereof. If and to the extent that any Lender shall not have so
made the amount of such participating interest available to the Agent, such
Lender and the Borrowers severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date
of demand by the Agent until the date such amount is paid to the Agent, at
(x) in the case of the Borrowers, the interest rate then applicable to
Floating Rate Loans and (y) in the case of such Lender, the Federal Funds
Rate.
(b) The reimbursement obligation of the Borrowers under this
Section 3.3 shall be absolute, unconditional and irrevocable and shall remain
in full force and effect until all Lender Obligations shall have been
satisfied, and such obligations of the Borrowers shall not be affected,
modified or impaired upon the happening of any event, including without
<PAGE>
<PAGE> EX-10.23-32
limitation, any of the following, whether or not with notice to, or the
consent of, the Borrowers:
(i) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of
Credit Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Letter of Credit
Documents;
(iii) The existence of any claim, setoff, defense or other
right which any Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any persons or entities for whom any
such beneficiary or any such transferee may be acting), the Agent or any
Lender or any other person or entity, whether in connection with any of the
Letter of Credit Documents, the transactions contemplated herein or therein
or any unrelated transactions;
(iv) Any draft or other statement or document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) Payment by the Agent to the beneficiary under any Letter
of Credit against presentation of documents which do not comply with the
terms of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on the part of the
Agent or any Lender or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred upon the
Agent, any Lender or any such party under this Agreement or any of the Letter
of Credit Documents, or any other acts or omissions on the part of the Agent,
any Lender or any such party;
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation of
law or otherwise of any Borrower from the performance or observance of any
obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which any Borrower has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to any
Borrower against the Agent or any Lender. Nothing in this Section 3.3 shall
limit the liability, if any, of the Agent to any Borrower pursuant to Section
8.5.
3.4 PAYMENT METHOD. (a) All payments to be made by any Borrower
hereunder will be made to the Agent for the account of the Lenders in
immediately available, freely transferable, cleared funds not later than 3:00
p.m. Detroit time on the date on which such payment shall become due at the
principal office of the Agent specified in Section 8.2. Payments received
after 3:00 p.m. at the place for payment shall be deemed to be payments made
<PAGE>
<PAGE> EX-10.23-33
prior to 3:00 p.m. at the place for payment on the next succeeding Business
Day. Each Borrower hereby authorizes the Agent to charge its bank accounts
in order to cause timely payment of amounts due hereunder to be made (subject
to sufficient funds being available in such bank account for that purpose).
(b) At the time of making each such payment, the Borrower making
such payment shall, subject to the other terms and conditions of this
Agreement, specify to the Agent that Loan or other obligation hereunder to
which such payment is to be applied. In the event that such Borrower fails
to so specify the relevant obligation or if an Event of Default shall have
occurred and be continuing, the Agent may apply such payments as it may
determine in its sole discretion (subject to Section 6.3), provided that the
Agent shall endeavor to apply such payments to any obligations that are due
on such date.
(c) On the day such payments are deemed received, the Agent shall
remit to the Lenders their pro rata shares of such payments in immediately
available funds to the Lenders at their respective address in the United
States specified for notices pursuant to Section 8.2. In the case of
payments of principal and interest on any Borrowing, such pro rata shares
shall be determined with respect to each such Lender by the ratio which the
outstanding principal balance of its Loan included in such Borrowing bears to
the outstanding principal balance of the Loans of all of the Lenders included
in such Borrowing, and in the case of fees paid pursuant to Section 2.3 and
other amounts payable hereunder (other than the Agent's fees payable pursuant
to Section 2.3(d) and amounts payable to any Lender under Section 3.7), such
pro rata shares shall be determined with respect to each such Lender by the
ratio which the Commitment (or the Advances if such Commitment has expired or
been terminated) of such Lender bears to the Commitments (or the Advances if
such Commitments have expired or been terminated) of all the Lenders.
(d) (i) CMC and SCSM have established, or will establish on or
before 45 days after the Effective Date, and shall continue to maintain the
lockboxes set forth on SCHEDULE 3.4(d)(i) hereto and other depositary
accounts acceptable to the Agent, and have instructed, or will instruct on or
before 45 days after the Effective Date, and shall continue to instruct all
account debtors on all accounts receivable and other obligations owing to
each Borrower to remit payments to its Lockboxes or such other depositary
accounts acceptable to the Agent. On or before 45 days after the Effective
Date, all amounts received by CMC and SCSM from any account debtor, in
addition to all cash and other remittances received from any source including
but not limited to proceeds from asset sales and judgments, shall upon
receipt be deposited into a Depository Account with the Agent (as defined
below).
(ii) Each Borrower, other than CMC and SCSM, will establish,
promptly upon the occurrence and during the continuance of an Event of
Default, and without limiting or otherwise impairing any other remedies which
may be exercised by the Agent and the Lenders upon the occurrence of an Event
of Default, lockboxes (collectively with the lockboxes described in clause
(d)(i) above, the "Lockboxes") and other depository accounts acceptable to
the Agent and shall instruct all account debtors and all accounts receivable
and other obligations owing to each such Borrower to remit payments to its
Lockboxes or such other depository accounts acceptable to the Agent. Upon
and during the continuance of an Event of Default, all amounts received by
such Borrowers from any account debtor, in addition to all cash and other
<PAGE>
<PAGE> EX-10.23-34
remittances received from any source including but not limited to proceeds
from asset sales and judgments, shall, upon receipt, be deposited into a
Depository Account (as defined below).
(iii) Upon the occurrence and during the continuance of an
Event of Default, each Borrower, the Agent and financial institutions
selected by each Borrower and acceptable to the Agent (the "Depositary
Banks") shall enter into appropriate blocked account arrangements, on terms
and subject to documentation in form and substance satisfactory to the Agent
(the "Blocked Account Agreements") providing, among other things, for the
following:
(A) The Borrowers opening bank accounts in their name at each
Depositary Bank (collectively, together with any other such accounts
established from time to time in accordance herewith, the "Depository
Accounts").
(B) All receipts received in the Lockboxes or otherwise
received by any Borrower shall be transferred at the end of each day to the
appropriate Depository Account. All funds in each Depository Account shall
at all times be pledged to the Agent pursuant to Blocked Account Agreements,
and all Depository Accounts shall be cash collateral accounts, with all cash,
checks, and other similar items of payment in such Depository Accounts
securing payment of all Lender Obligations, and in which each Borrower shall
have granted, and each Depositary Bank shall have acknowledged, a first
priority lien in favor of the Agent.
(C) Upon terms and subject to conditions set forth in the
Blocked Account Agreements, all available amounts held in each Depository
Account shall be electronically transferred, either by wire transfer,
automated clearing houses or other means acceptable to the Agent, daily, or
as they otherwise become available, into a concentration account in the name
and under the sole control of the Agent at the principal office of the Agent
and the Agent is hereby granted a first priority lien and security interest
in all funds and other amounts on deposit on each such concentration account
securing all of the Lender Obligations. Such concentration account shall be
established (the "Concentration Account"), with all amounts in each
Depository Account transferred into the Concentration Account.
(D) Upon and during the continuance of any Event of Default
all good funds deposited into the Concentration Account shall be applied to
the Advances until paid in full.
3.5 NO SETOFF OR DEDUCTION. All payments of principal of and interest
on the Loans and other amounts payable by the Borrowers hereunder and under
the other Loan Documents shall be made by the Borrowers without setoff or
counterclaim, and, subject to the next succeeding sentence, free and clear
of, and without deduction or withholding for, or on account of, any present
or future taxes, levies, imposts, duties, fees, assessments, or other charges
of whatever nature, imposed by any governmental authority, or by any
department, agency or other political subdivision or taxing authority. If
any such taxes, levies, imposts, duties, fees, assessments or other charges
(other than taxes imposed on the overall net income of any Lender or the
Agent) are imposed (collectively, "Withholding Taxes"), the Borrowers will
pay such additional amounts as may be necessary so that payment of principal
of and interest on the Loans and other amounts payable hereunder and under
<PAGE>
<PAGE> EX-10.23-35
the other Loan Documents, after withholding or deduction for or on account
thereof, will not be less than any amount provided to be paid hereunder or
thereunder and, in any such case, the Borrowers will furnish to the Lenders
certified copies of all tax receipts evidencing the payment of such amounts
within 45 days after the date any such payment is due pursuant to applicable
law. At the request of the Company and at the Company's expense, each Lender
agrees to take reasonable efforts to obtain any credit or refund with respect
to any such Withholding Taxes if such Lender can do so without prejudicing
any of such Lender's rights to obtain any allowances or other relief or any
other rights of such Lender, provided that the efforts to be taken and the
amount of any credit or refund shall be determined by such Lender, and the
Borrowers shall not have access to any of such Lender's tax and other
records.
3.6 PAYMENT ON NON-BUSINESS DAY; PAYMENT COMPUTATIONS. Except as
otherwise provided in this Agreement to the contrary, whenever any
installment of principal of, or interest on, any Loan or any other amount due
hereunder becomes due and payable on a day which is not a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day and,
in the case of any installment of principal, interest shall be payable
thereon at the rate per annum determined in accordance with this Agreement
during such extension. Computations of interest and other amounts due under
this Agreement shall be made on the basis of a year of 360 days (or 365 or
366 days, as the case may be, when computing the Floating Rate) for the
actual number of days elapsed, including the first day but excluding the last
day of the relevant period.
3.7 ADDITIONAL COSTS. (a) In the event that any applicable law,
treaty or other international agreement, rule or regulation (whether domestic
or foreign) now or hereafter in effect and whether or not presently
applicable to any Lender or the Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Lender or the
Agent with any guideline, request or directive of any such authority (whether
or not having the force of law), shall (i) affect the basis of taxation of
payments to any Lender or the Agent of any amounts payable by any Borrower
under this Agreement (other than taxes imposed on the overall net income of
any Lender or the Agent), or (ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by any Lender or the Agent, or
(iii) shall impose any other condition with respect to this Agreement, or any
of the Commitments, the Notes or the Loans or any Letter of Credit, and the
result of any of the foregoing is to increase the cost to any Lender or the
Agent, as the case may be, of making, funding or maintaining any Eurodollar
Rate Loan or any Letter of Credit or to reduce the amount of any sum
receivable by any Lender or the Agent, as the case may be, thereon, then the
Borrowers shall pay to such Lender or the Agent, as the case may be, from
time to time, upon request by such Lender (with a copy of such request to be
provided to the Agent) or the Agent, additional amounts sufficient to
compensate such Lender or the Agent, as the case may be, for such increased
cost or reduced sum receivable to the extent, in the case of any Eurodollar
Rate Loan, such Lender or the Agent is not compensated therefor in the
computation of the interest rate applicable to such Eurodollar Rate Loan. A
<PAGE>
<PAGE> EX-10.23-36
statement, including a calculation, as to the amount of such increased cost
or reduced sum receivable, prepared in good faith and in reasonable detail by
such Lender or the Agent, as the case may be, and submitted by such Lender or
the Agent, as the case may be, to the Borrowers, shall be conclusive and
binding for all purposes absent manifest error in computation. Each Lender
agrees that it will not treat the Borrowers substantially different from any
other comparable borrower of such Lender with respect to the amount owing
under this Section 3.7(a).
(b) In the event that any applicable law, treaty or other
international agreement, rule or regulation (whether domestic or foreign) now
or hereafter in effect and whether or not presently applicable to any Lender
or the Agent, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Lender or the Agent with any guideline, request
or directive of any such authority (whether or not having the force of law),
including any risk-based capital guidelines, affects or would affect the
amount of capital required or expected to be maintained by such Lender or the
Agent (or any corporation controlling such Lender or the Agent) and such
Lender or the Agent, as the case may be, determines that the amount of such
capital is increased by or based upon the existence of such Lender's or the
Agent's obligations or Advances hereunder and such increase has the effect of
reducing the rate of return on such Lender's or the Agent's (or such
controlling corporation's) capital as a consequence of such obligations
hereunder to a level below that which such Lender or the Agent (or such
controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy),
then the Borrowers shall pay to such Lender or the Agent, as the case may be,
from time to time, upon request by such Lender (with a copy of such request
to be provided to the Agent) or the Agent, additional amounts sufficient to
compensate such Lender or the Agent (or such controlling corporation) for any
increase in the amount of capital and reduced rate of return which such
Lender or the Agent reasonably determines to be allocable to the existence of
such Lender's or the Agent's obligations hereunder. A statement, including
a calculation, as to the amount of such compensation, prepared in good faith
and in reasonable detail by such Lender or the Agent, as the case may be, and
submitted by such Lender or the Agent to the Borrowers, shall be conclusive
and binding for all purposes absent manifest error in computation. Such
Lender or the Agent may, at its option, specify that such amounts be paid by
way of an increase in the commitment fees payable by the Borrowers pursuant
to Section 2.3(a). Each Lender agrees that it will not treat the Borrowers
substantially different from any other comparable borrower of such Lender
with respect to the amount owing under this Section 3.7(b).
3.8 ILLEGALITY AND IMPOSSIBILITY. In the event that any applicable
law, treaty or other international agreement, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Lender, or any interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by any Lender with any guideline, request or directive
of such authority (whether or not having the force of law), including without
limitation exchange controls, (a) shall make it unlawful or impossible for
any Lender to maintain any Loan under this Agreement, or (b) shall make it
<PAGE>
<PAGE> EX-10.23-37
impracticable, unlawful or impossible for, or shall in any way limit or
impair ability of, any Borrower to make or any Lender to receive any payment
under this Agreement at the place specified for payment hereunder, the
Borrowers shall upon receipt of notice thereof from such Lender, repay in
full the then outstanding principal amount of each Loan so affected, together
with all accrued interest thereon to the date of payment and all amounts
owing to such Lender under Section 3.9, (i) on the last day of the then
current Eurodollar Interest Period applicable to such Loan if such Lender may
lawfully continue to maintain such Loan to such day, or (ii) immediately if
such Lender may not continue to maintain such Loan to such day.
3.9 INDEMNIFICATION. If a Borrower makes any payment of principal with
respect to any Eurodollar Rate Loan on any other date than the last day of an
Eurodollar Interest Period applicable thereto (whether pursuant to Section
3.1(c), Section 3.8, Section 6.2 or otherwise), or if any Borrower fails to
borrow any Eurodollar Rate Loan after notice has been given to the Lenders in
accordance with Section 2.4, or if any Borrower fails to make any payment of
principal or interest in respect of a Eurodollar Rate Loan when due, the
Borrowers shall reimburse each Lender on demand for any resulting loss or
expense incurred by each such Lender, including without limitation any loss
incurred in obtaining, liquidating or employing deposits from third parties,
whether or not such Lender shall have funded or committed to fund such Loan.
A statement as to the amount of such loss or expense, prepared in good faith
and in reasonable detail by such Lender and submitted by such Lender to the
Borrowers, shall be conclusive and binding for all purposes absent manifest
error in computation. Calculation of all amounts payable to such Lender
under this Section 3.9 shall be made as though such Lender shall have
actually funded or committed to fund the relevant Eurodollar Rate Loan
through the purchase of an underlying deposit in an amount equal to the
amount of such Loan in the relevant market and having a maturity comparable
to the related Eurodollar Interest Period and, through the transfer of such
deposit to a domestic office of such Lender in the United States; PROVIDED,
HOWEVER, that such Lender may fund any Eurodollar Rate Loan in any manner it
sees fit and the foregoing assumption shall be utilized only for the purpose
of calculation of amounts payable under this Section 3.9.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
------------------------------
Each of the Borrowers represents and warrants to the Lenders and the
Agent that:
4.1 CORPORATE EXISTENCE AND POWER. It is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
jurisdiction of incorporation, and is duly qualified to do business, and is
in good standing, in all jurisdictions listed on SCHEDULE 4.1, and the
failure to qualify to do business in any other jurisdiction will not have a
Material Adverse Effect. It has all requisite power to own or lease the
properties used in its business and to carry on its business as now being
conducted and as proposed to be conducted, and to execute and deliver this
<PAGE>
<PAGE> EX-10.23-38
Agreement, the Notes and the other Loan Documents to which it is a party and
to engage in the transactions contemplated by this Agreement.
4.2 CORPORATE AUTHORITY. The execution, delivery and performance by
each Borrower of this Agreement, the Notes and the other Loan Documents to
which it is a party have been duly authorized by all necessary corporate
action and are not in contravention of any law, rule or regulation, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court
or governmental authority, or of the terms of such Borrower's charter or by-
laws or of any contract or undertaking to which such Borrower is a party or
by which such Borrower or any of its property may be bound or affected and
will not result in the imposition of any Lien on any of their property or of
any of their Subsidiaries except for Permitted Liens.
4.3 BINDING EFFECT. This Agreement is, and the Notes and the other
Loan Documents to which any Borrower is a party when delivered hereunder
will be, legal, valid and binding obligations of each Borrower enforceable
against each Borrower in accordance with their respective terms, except as
enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws affecting the enforcement of the rights of creditors generally.
4.4 SUBSIDIARIES, ETC. SCHEDULE 4.4 hereto correctly sets forth the
name, jurisdiction of organization and ownership of each Subsidiary of each
Borrower. Each such Subsidiary and each corporation or partnership becoming
a Subsidiary of any Borrower after the date hereof is and will be a
corporation or partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and is and will
be duly qualified to do business, and in good standing, in all jurisdictions
listed on SCHEDULE 4.4, and the failure to qualify to do business in any
other jurisdiction will not have a Material Adverse Effect. Each Subsidiary
of each Borrower has and will have all requisite power to own or lease the
properties used in its business and to carry on its business as now being
conducted and as proposed to be conducted. All outstanding shares of capital
stock of each class of each corporate Subsidiary of each Borrower have been
and will be validly issued and are and will be fully paid and nonassessable
and, except as to director's qualifying shares, 10% of the Capital Stock of
SCSM or as otherwise disclosed in writing to the Lenders from time to time,
are and will be owned, beneficially and of record, by a Borrower or another
Subsidiary of a Borrower free and clear of any Liens.
4.5 LITIGATION. Except as set forth in SCHEDULE 4.5 hereto, there is
no action, suit or proceeding pending or, to the best of the Borrowers'
knowledge, threatened against or affecting any Borrower or any of their
respective Subsidiaries before or by any court, governmental authority or
arbitrator, which if adversely decided might have, either individually or
collectively, a Material Adverse Effect and, to the best of each Borrower's
knowledge, there is no basis for any such action, suit or proceeding.
4.6 FINANCIAL CONDITION. The consolidated balance sheet of the Company
and its Subsidiaries and the consolidated statements of income and cash
flows of the Company and its Subsidiaries, of Great Dane Trailers and its
Subsidiaries and of Great Dane Holdings and its Subsidiaries for the fiscal
year ended December 31, 1993 and reported on by Ernst & Young, independent
<PAGE>
<PAGE> EX-10.23-39
certified public accountants, and the interim consolidated balance sheet and
interim consolidated statements of income and cash flows of the Company and
its Subsidiaries and of Great Dane Holdings and its Subsidiaries for the
nine-month period ending September 30, 1994, copies of which have been
furnished to the Lenders, fairly present, and the financial statements of the
Company and its Subsidiaries, of Great Dane Trailers and its Subsidiaries and
of Great Dane Holdings and its Subsidiaries delivered pursuant to Section
5.1(d) will fairly present, the consolidated financial position of the
Company and its Subsidiaries, of Great Dane Trailers and its Subsidiaries and
of Great Dane Holdings and its Subsidiaries as at the respective dates
thereof, and the consolidated results of operations of the Company and its
Subsidiaries, of Great Dane Trailers and its Subsidiaries and of Great Dane
Holdings and its Subsidiaries for the respective periods indicated, all in
accordance with Generally Accepted Accounting Principles consistently applied
(subject, in the case of said interim statements, to year-end audit
adjustments). There has been no event or development which has had or could
reasonably be expected to have a Material Adverse Effect since December 31,
1993. There is no material contingent liability of the Company or any of its
Subsidiaries in accordance with Generally Accepted Accounting Principles that
is not reflected in such financial statements or in the notes thereto.
4.7 USE OF ADVANCES. The Borrowers will use the proceeds of the
Advances as required hereunder and for their general corporate purposes.
Neither any Borrower nor any of their respective Subsidiaries extends or
maintains, in the ordinary course of business, credit for the purpose,
whether immediate, incidental, or ultimate, of buying or carrying margin
stock (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Advance will be
used for the purpose, whether immediate, incidental, or ultimate, of buying
or carrying any such margin stock or maintaining or extending credit to
others for such purpose. After applying the proceeds of each Advance, such
margin stock will not constitute more than 25% of the value of the assets
(either of or any Borrower alone or of the Borrowers and their respective
Subsidiaries on a consolidated basis) that are subject to any provisions of
this Agreement or any Security Document that may cause the Advances to be
deemed secured, directly or indirectly, by margin stock.
4.8 CONSENTS, ETC. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the
Borrowers pursuant to Section 2.5(g), if any, each of which is in full force
and effect, no consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without limitation any creditor, lessor or
stockholder of any Borrower or any of their respective Subsidiaries, is
required on the part of any Borrower in connection with the execution,
delivery and performance of this Agreement, the Notes, the other Loan
Documents or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of this Agreement, the Notes or any of
the other Loans Documents.
4.9 TAXES. Except as set forth on SCHEDULE 4.9, the Borrowers and
their respective Subsidiaries have filed all tax returns (federal, state and
local) required to be filed and have paid all taxes shown thereon to be due,
<PAGE>
<PAGE> EX-10.23-40
including interest and penalties, or have established adequate financial
reserves on their respective books and records for payment thereof in
accordance with Generally Accepted Accounting Principles. Except as set
forth on SCHEDULE 4.9, neither any Borrower nor any of their respective
Subsidiaries knows of any actual or proposed tax assessment or any basis
therefor, and no extension of time for the assessment of deficiencies in any
federal or state tax has been granted by any Borrower or any such Subsidiary.
4.10 TITLE TO PROPERTIES. Except as otherwise disclosed in the latest
balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this Agreement,
the Borrowers or one or more of their respective Subsidiaries have good and
marketable fee simple title to all of the real property, and a valid and
indefeasible ownership interest in all of the other properties and assets
(including, without limitation, the collateral subject to the Security
Documents to which any of them is a party) reflected in said balance sheet or
subsequently acquired by any Borrower or any such Subsidiary except such
properties and assets the failure of title to which would not have a Material
Adverse Effect on the Borrowers and their respective Subsidiaries on a
consolidated basis. All of such properties and assets are free and clear of
any Lien, except for Permitted Liens.
4.11 BORROWING BASE. All trade accounts receivable and inventory of
each Borrower represented or reported by the Company to be, or are otherwise
included in, Eligible Accounts Receivable and Eligible Inventory comply in
all respects with the requirements therefor set forth in the definition
thereof, and the computations of the Borrowing Base set forth in each
Borrowing Base Certificate is true and correct.
4.12 ERISA. The Borrowers and their ERISA Affiliates and their
respective Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable with respect to any
Plan to the extent that noncompliance of such provisions would reasonably be
expected to have a Material Adverse Effect. During the six years prior to
the date hereof, no Prohibited Transaction and no Reportable Event has
occurred with respect to any such Plan which has resulted or may reasonably
be expected to result in any material liability of any Borrower or ERISA
Affiliates which could have a Material Adverse Effect. Except as disclosed
on SCHEDULE 4.12, none of the Borrowers or any of their ERISA Affiliates is
an employer with respect to any Multiemployer Plan. The Borrowers and their
ERISA Affiliates have met the minimum funding requirements under ERISA and
the Code with respect to each of their respective Plans, to the extent that
not meeting such funding requirements would reasonably be expected to have a
Material Adverse Effect, and have paid all premiums due to the PBGC, to the
extent that nonpayment of these premiums would reasonably be expected to have
a Material Adverse Effect, and are not in material breach of any obligation
relating to any Plan which could have Material Adverse Effect. As of
December 31, 1993, the aggregate amount of Actuarial Present Value of
Accumulated Plan Benefits did not exceed the aggregate amount of Net Assets
Available for Plan Benefits with respect to all Plans of the Borrowers, their
Subsidiaries and their ERISA Affiliates by more than $3,800,000.
4.13 DISCLOSURE. No report or other information furnished in writing
by any Borrower or by any officer, director or accountant of any Borrower to
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<PAGE> EX-10.23-41
any Lender or the Agent in connection with the negotiation or administration
of this Agreement contains any material misstatement of fact or omits to
state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which they
were made. Neither this Agreement, the Notes, the other Loan Documents nor
any other document, certificate, or report or written statement or other
written information furnished to any Lender or the Agent by of any Borrower
or any officer, director or accountant in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits
to state a material fact in order to make the statements contained herein and
therein not misleading in light of the circumstances in which they were made.
There is no fact known to any Borrower which materially and adversely
affects, or which in the future may (so far as any Borrower can now foresee)
materially and adversely affect, the business, properties, operations or
condition, financial or otherwise, of any Borrower or any of their respective
Subsidiaries, which has not been set forth in this Agreement or in the other
documents, certificates, statements, reports and other information furnished
in writing to the Lenders by or on behalf of any Borrower in connection with
the transactions contemplated hereby.
4.14 NO DEFAULT. No Borrower is in default or has received any notice
of default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
4.15 INTELLECTUAL PROPERTY. Set forth on SCHEDULE 4.15 is a complete
and accurate list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of each
Borrower showing as of the Effective Date the jurisdiction in which
registered, the registration number, the date of registration and the
expiration date. Each Borrower and each of its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, technology, know-how
and processes necessary for the conduct of its business as currently
conducted (the "INTELLECTUAL PROPERTY") except for those the failure to own
or license which could not reasonably be expected to have a Material Adverse
Effect. No claim has been asserted and is pending by any person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does any Borrower know
of any valid basis for any such claim. The use of such Intellectual Property
by any Borrower does not infringe on the rights of any Person, and, to the
knowledge of each Borrower, no Intellectual Property has been infringed,
misappropriated or diluted by any other Person, except for such claims,
infringements, misappropriations and dilutions that, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
4.16 NO BURDENSOME RESTRICTIONS. No Requirement of Law or Contractual
Obligation applicable to any Borrower could reasonably be expected to have a
Material Adverse Effect.
4.17 LABOR MATTERS. There are no strikes or other labor disputes
against any Borrower pending or, to the knowledge of any Borrower, threatened
that (individually or in the aggregate) could reasonably be expected to have
a Material Adverse Effect. Hours worked by and payment made to employees of
<PAGE>
<PAGE> EX-10.23-42
each Borrower and its Subsidiaries have not been in violation of the Fair
Labor Standards Act or any other applicable Requirement of Law dealing with
such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. All payments due from any
Borrower on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability
on the books of the Borrowers.
4.18 SOLVENCY. Each Borrower is, and after giving effect to the
transactions described herein and to the incurrence or assumption of all
Indebtedness and obligations being incurred or assumed in connection herewith
will be and will continue to be, Solvent.
4.19 EXECUTIVE LIFE INSURANCE COMPANY; REORGANIZATION OF CHECKER L.P.
Except as set forth on SCHEDULE 4.19, the capital account and all other
amounts owing to Executive Life Insurance Company due to any interest it may
have in Checker L.P. have been paid in full, and all interest in Checker L.P.
previously owned by Executive Life Insurance Company are now owned by the
Company. Checker L.P. has been reorganized and all of its assets have been
distributed to the Company, Yellow Cab, AutoWerks and CMC.
4.20 TAXI MEDALLIONS. The Company is the record owner and Yellow Cab
is the beneficial owner of all taxi medallions identified on Schedule 4.20,
provided that Yellow Cab may become the record owner. The Company and Yellow
Cab have provided the City of Chicago, Commissioner of Consumers Services
with all notices required to be given by a licensee pursuant to the City of
Chicago, Department of Consumer Services, Rules and Regulations for Public
Passenger Vehicle License Holders and there are no other notices or consents
required. No charges have been filed with the City of Chicago Mayors License
Commission to revoke any licenses or taxi medallion identified on the
Schedules to any Security Agreement. The Agent, for the benefit of itself
and the Lenders, has a first priority, enforceable and perfected security
interest in the taxi medallions identified as pledged to the Agent on
Schedule 4.20.
ARTICLE V.
COVENANTS
---------
5.1 AFFIRMATIVE COVENANTS. Each Borrower covenants and agrees that,
until the Termination Date and thereafter until payment in full of the
principal of and accrued interest on the Notes and all other Lender
Obligations and the performance of all other obligations of the Borrowers
under this Agreement and the other Loan Documents, unless the Required
Lenders shall otherwise consent in writing, the Borrowers shall, and shall
cause each of their respective Subsidiaries to:
(a) PRESERVATION OF OR CORPORATE EXISTENCE, ETC. Except for
mergers and dissolutions permitted pursuant to Section 5.2(h), do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and its qualification as a foreign corporation, as
<PAGE>
<PAGE> EX-10.23-43
the case may be, in good standing in each jurisdiction in which such
qualification is necessary under applicable law and in which failure to
qualify would have a Material Adverse Effect, and the rights, licenses,
permits (including those required under Environmental Laws), franchises,
patents, copyrights, trademarks and trade names material to the conduct of
its businesses taken as a whole; and defend all of the foregoing against all
claims, actions, demands, suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency or regulatory
authority.
(b) COMPLIANCE WITH LAWS, ETC. Comply in all material respects
with all applicable laws, rules, regulations and orders of any governmental
authority, whether federal, state, local or foreign (including without
limitation ERISA, the Code and Environmental Laws), in effect from time to
time, where failure to comply might have a Material Adverse Effect; and pay
and discharge promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income, revenues or property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise, which, if unpaid,
might give rise to Liens upon such properties or any portion thereof, except
to the extent that payment of any of the foregoing is then being contested in
good faith by appropriate legal proceedings and with respect to which
adequate financial reserves have been established on the books and records of
any Borrower or any of their respective Subsidiaries in accordance with
Generally Accepted Accounting Principles.
(c) MAINTENANCE OF PROPERTIES; INSURANCE. Maintain in good
repair, working order and condition as is customary for the industry all
material property used or useful in, and material to, the business of any
Borrower or any of their respective Subsidiaries and from time to time make,
and cause to be made all appropriate repairs and renewals thereto and
replacements thereof; and maintain insurance with responsible and reputable
insurance companies or associations in such amounts, on such terms and
covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties similarly situated and maintain in
full force and effect public liability insurance, insurance against claims
for personal injury or death or property damage occurring in connection with
any of its activities or any properties owned, occupied or controlled by it,
in such amount as it shall reasonably deem necessary, and maintain such other
insurance as may be required by law or as may be reasonably requested by the
Required Lenders for purposes of assuring compliance with this Section
5.1(c).
(d) REPORTING REQUIREMENTS. Furnish to the Agent for distribution
to the Lenders the following:
(i) Promptly and in any event within three calendar days
after becoming aware of (A) the occurrence of any Default or Event of
Default, (B) the commencement of any material litigation against, by or
affecting any Borrower or any of their respective Subsidiaries, and any
material developments therein which has resulted in or which is likely in the
reasonable judgment of management of any Borrower to result in a Material
Adverse Effect, (C) entering into any material contract or undertaking that
<PAGE>
<PAGE> EX-10.23-44
is not entered into in the ordinary course of business or (D) any development
in the business or affairs of any Borrower or any of their respective
Subsidiaries which has resulted in or which is likely in the reasonable
judgment of management of any Borrower, to result in a Material Adverse
Effect, a statement of the treasurer of such Borrower, as the case may, be
setting forth details of each such Default or Event of Default or such
litigation, material contract or undertaking or development and the action
which such Borrower or such Subsidiary, as the case may be, has taken and
proposes to take with respect thereto;
(ii) As soon as available and in any event within 60 days
after the end of each fiscal quarter of the Company and Great Dane Holdings,
the consolidated balance sheet of Great Dane Holdings and its Subsidiaries
and the consolidated and consolidating balance sheet of the Company and its
Subsidiaries as of the end of such quarter, and the related consolidated
statements of income and cash flows of Great Dane Holdings and its
Subsidiaries and the related consolidated and consolidating statements of
income and cash flows of the Company and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter (provided that the consolidated income statement for the Company
and its Subsidiaries shall also be provided for such quarter), setting forth
in each case in comparative form the corresponding figures for the
corresponding date or period of the preceding fiscal year, all in reasonable
detail and duly certified (subject to year-end audit adjustments) by the
treasurer, the controller or a vice president of Great Dane Holdings, in the
case of such financial statements of Great Dane Holdings, and of the Company,
in the case of such financial statements of the Company, as having been
prepared in accordance with Generally Accepted Accounting Principles subject
to normal year end adjustments, together with a certificate of the treasurer,
the controller or a vice president of the Company (A) stating that no Default
or Event of Default has occurred and is continuing or, if a Default or Event
of Default has occurred and is continuing, a statement setting forth the
details thereof and the action which the Company has taken and proposes to
take with respect thereto, and (B) containing a computation (which
computation shall accompany such certificate and shall be in reasonable
detail) showing compliance with Sections 5.2(a), (b), (c), (d), (e) and (l);
(iii) As soon as available and in any event within 30 days
after the end of each month, the consolidated balance sheet of the Company
and its Subsidiaries as of the end of such month, and the related
consolidated statements of income and cash flows of the Company and its
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding date or
period of the preceding fiscal year, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the treasurer, the
controller, or a vice president of the Company as having been prepared in
accordance with Generally Accepted Accounting Principles subject to normal
year end adjustments, together with a certificate of the treasurer, the
controller or a vice president of the Company stating that no Default or
Event of Default has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement setting forth the details
<PAGE>
<PAGE> EX-10.23-45
thereof and the action which the Company has taken and proposes to take with
respect thereto;
(iv) As soon as available and in any event within 120 days
after the end of each fiscal year Great Dane Holdings, the Company and Great
Dane Trailers, a copy of the consolidated balance sheet of Great Dane
Holdings and its Subsidiaries, the consolidated and consolidating balance
sheet of the Company and its Subsidiaries and the consolidated balance sheet
of Great Dane Trailers and its Subsidiaries as of the end of such fiscal year
and the related consolidated statements of income and cash flows of Great
Dane Holdings and its Subsidiaries, the related consolidated and
consolidating statements of income and cash flows of the Company and its
Subsidiaries and the related consolidated statements of income and cash flows
of Great Dane Trailers and its Subsidiaries for such fiscal year, with a
customary audit report of Ernst & Young, or other independent certified
public accountants acceptable to the Required Lenders, reported on without a
"going concern" or like qualification or exception, or qualification arising
out of the scope of the audit, together with a certificate of such
accountants for the Company (A) stating that they have reviewed this
Agreement and stating further whether, in the course of their review of such
financial statements, they have become aware of any Default or Event of
Default and, if such a Default or Event of Default exists and is continuing,
a statement setting forth the nature and status thereof, and (B)containing a
computation by the Company (which computation shall accompany such
certificate and shall be in reasonable detail) showing compliance with
Sections 5.2(a), (b), (c), (d), (e) and (l);
(v) Promptly after the sending or filing thereof, copies of
all reports, proxy statements and financial statements which Great Dane
Holdings or any of its Subsidiaries sends to or files with any of their
respective security holders or any securities exchange or the Securities and
Exchange Commission or any successor agency thereof, including without
limitation all forms 10-Q and 10-K;
(vi) As soon as available and in any event within 15 Business
Days after the end of each month, a Borrowing Base Certificate prepared as of
the close of business on the last day of such month, together with supporting
schedules, in form and detail satisfactory to the Agent, setting forth such
information as the Agent may request with respect to the aging, value,
location and other information relating to the computation of the Borrowing
Base and the eligibility of any property or assets included in such
computation, certified as true and correct by the treasurer of the Company;
(vii) Promptly and in any event within 10 calendar days after
receiving (A) a copy of any notice of intent to terminate any Plan of any
Borrower or any ERISA Affiliate filed with the PBGC where the Plan has
Unfunded Benefit Liabilities, (B) a statement of the treasurer of the Company
setting forth the details of the occurrence of any Reportable Event with
respect to any such Plan, if notice of such Reportable Event has not been
waived by the PBGC, (C) a copy of any notice that any Borrower or any ERISA
Affiliate may receive from the PBGC relating to the intention of the PBGC to
appoint a trustee to administer any Plan, or (D) a copy of any notice of
failure to make a required installment of a material amount or other material
<PAGE>
<PAGE> EX-10.23-46
payment within the meaning of Section 412(n) of the Code or Section 302(f) of
ERISA with respect to any such Plan or, a copy of any such notice if the
aggregate amount of installments or other payments which the Borrowers or any
of their ERISA Affiliates has failed to make is material;
(viii) As soon as available and in any event within 30 days
after the end of each month, a report with respect to CMC and SCSM setting
forth a summary and aging of accounts receivable of CMC and SCSM, a listing
of any checks held after the due date of the related vendor invoice and
setting forth the corresponding due dates of such invoices and a summary of
the payables of each Borrower, in form and detail satisfactory to the Agent,
certified as true and correct by the treasurer of each Borrower;
(ix) As soon as available and in any event on the same day
that Borrowing Base Certificates under Section 5.1(d)(vi) are delivered, a
report identifying the inventory of each Borrower, and the cost and location
thereof as of the end of the most recently ended month, in form and detail
satisfactory to the Agent, certified as true and correct by the treasurer of
each Borrower;
(x) As soon as available and in any event within 120 days
after the end of each calendar year, projections for the three year period
following such calendar year, in the form currently provided; and
(xi) Promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of any
Borrower or any of their respective Subsidiaries as any Lender may from time
to time reasonably request.
(e) ACCOUNTING; ACCESS TO RECORDS, BOOKS, ETC. Maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
Generally Accepted Accounting Principles and to comply with the requirements
of this Agreement and, at any reasonable time and from time to time, (i)
permit the Agent or any agents or representatives thereof to examine and make
copies of and abstracts from the records and books of account of, and visit
the properties of, the Borrowers and their respective Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrowers and their
respective Subsidiaries with their respective directors, officers, employees
and independent auditors, and each Lender shall, at its expense, be able to
accompany the Agent or any agents or representatives thereof during any such
examination or discussion, and by this provision each of the Borrowers hereby
authorizes such persons to discuss such affairs, finances and accounts with
the Agent, and (ii) permit the Agent, the Lenders and any of their agents or
representatives to conduct a comprehensive field audit of its books, records,
properties and assets, including without limitation all collateral subject to
the Security Documents, at the expense of the Borrowers, provided that (x)
each Lender shall be limited to one representative during such field audit to
be reimbursed for expenses on a per diem basis only and (y) no more than one
such field audit may be conducted per year at the expense of the Borrowers,
which expense of the Agent shall be limited to $5,000 per field audit,
provided, further, that more frequent field audits may be performed without
<PAGE>
<PAGE> EX-10.23-47
expense to the Borrowers and after and during the continuance of an Event of
Default all such field audits shall be at the expense of the Borrowers.
(f) ADDITIONAL SECURITY AND COLLATERAL. Promptly execute and
deliver and cause each Subsidiary of the Borrowers to execute and deliver,
additional Security Documents, within 5 days after request therefor by the
Lenders and the Agent, sufficient to grant to the Agent for the benefit of
the Lenders liens and security interests in any after acquired property. The
Company shall notify the Lenders and the Agent, within 5 days after the
occurrence thereof, of the acquisition of any property by any Borrower that
is not subject to the existing Security Documents or the security interest
therein is not perfected pursuant to the existing Security Documents,
including without limitation the acquisition of any promissory note or other
instrument or any Capital Stock, any person becoming a Subsidiary and any
other event or condition that may require additional action of any nature in
order to cause any such Subsidiary to become a Borrower hereunder and to
preserve the effectiveness and perfected status of the liens and security
interests of the Lenders and the Agent with respect to such property pursuant
to the Security Documents, and the Borrowers agree to take all such action
and execute all documents requested by the Agent to cause any such Subsidiary
to become a Borrower and to preserve the effectiveness and perfect the status
of such liens and security interests, including delivering all originals of
all promissory notes or other instruments payable to any Borrower or any
capital stock owned by a new Borrower.
(g) FURTHER ASSURANCES. Execute and deliver within 30 days after
reasonable request therefor by the Required Lenders or the Agent, all further
instruments and documents and take all further action that may be necessary
or desirable, or that the Agent may reasonably request, in order to give
effect to, and to aid in the exercise and enforcement of the rights and
remedies of the Lenders under, this Agreement, the Notes and the other Loan
Documents, including without limitation causing each lessor of real property
to any Borrower or any of their respective Subsidiaries to execute and
deliver to the Agent, prior to or upon the commencement of any tenancy, an
agreement in form and substance acceptable to the Required Lenders and the
Agent duly executed on behalf of such lessor waiving any distraint, lien and
similar rights with respect to any property subject to the Security Documents
and agreeing to permit the Lenders and the Agent to enter such premises in
connection therewith.
(h) INDEPENDENT CORPORATE EXISTENCE. Maintain its independent
corporate existence from Great Dane Holdings and Great Dane Trailers and any
other Subsidiaries of Great Dane Holdings and Great Dane Trailers other than
the Borrowers, not commingle any material assets of any of the Borrowers with
Great Dane Holdings or Great Dane Trailers or any of their Subsidiaries
(other than the Borrowers), and take all actions to maintain such existence,
and no Borrower (except as set forth on Schedule 5.2(n) hereto) shall be
liable, directly or indirectly, in any manner for any of the indebtedness or
other obligations of Great Dane Holdings or of Great Dane Trailers or any of
their Subsidiaries (other than the Borrowers).
(i) ADDITIONAL COVENANTS. If at any time any Borrower shall enter
into any instrument or agreement relating to or amending any terms or
<PAGE>
<PAGE> EX-10.23-48
conditions applicable to any of its Indebtedness which includes covenants,
terms, conditions, or defaults not substantially provided for in this
Agreement or more favorable to the lender or lenders thereunder than those
provided for in this Agreement, then the Borrowers shall promptly so advise
the Agent and the Lenders. Thereupon, if the Required Lenders shall request,
upon notice to the Borrowers, the Borrowers and the Lenders shall enter into
an amendment to this Agreement or an additional agreement (as the Required
Lenders may request), providing for substantially the same covenants, terms,
conditions, compensation and defaults as those provided for in such
instrument or agreement to the extent required and as may be selected by the
Required Lenders.
5.2 NEGATIVE COVENANTS. Until the Termination Date and thereafter
until payment in full of the principal of and accrued interest on the Notes
and all other Lender Obligations and the performance of all other obligations
of the Borrowers under this Agreement and the other Loan Documents, the
Borrowers agree that, unless the Required Lenders shall otherwise consent in
writing, the Company shall not, and shall not permit any of its respective
Subsidiaries with respect to Sections 5.2(f) through 5.2(r) to:
(a) CASH FLOW COVERAGE RATIO. Permit or suffer the Cash Flow
Coverage Ratio to be less than 1.1 to 1.0 as of the end of any fiscal
quarter, commencing with the fiscal quarter ending June 30, 1995, as
calculated for the four consecutive fiscal quarters then ending, provided
that if any amount to be calculated under the definition of Cash Flow
Coverage Ratio relates to a period prior to January 1, 1995, the amount
calculated shall be for the period beginning January 1, 1995 through the end
of such fiscal quarter with such amount annualized.
(b) INTEREST COVERAGE RATIO. Permit or suffer the Interest
Coverage Ratio to be less than 3.0 to 1.0 as of the end of any fiscal
quarter, commencing with the fiscal quarter ending June 30, 1995, as
calculated for the four consecutive fiscal quarters then ending, provided
that if any amount to be calculated under the definition of Interest Coverage
Ratio relates to a period prior to January 1, 1995, the amount calculated
shall be for the period beginning January 1, 1995 through the end of such
fiscal quarter with such amount annualized.
(c) FUNDED DEBT TO EBITDA. Permit or suffer the ratio of Funded
Debt to EBITDA to exceed 2.5 to 1.0 as of the end of any fiscal quarter, as
calculated for the four fiscal quarters then ending.
(d) TANGIBLE NET WORTH. Permit or suffer the Tangible Net Worth
at any time to be less than the sum of (i) $15,000,000, plus (ii) 30% of the
consolidated Net Income of the Company and its Subsidiaries, such amount to
be added as of the end of each fiscal year of the Company, provided, that, if
such Net Income is negative in any fiscal year, the amount added for such
fiscal year shall be zero and shall not alter or otherwise affect the amount
added for any other fiscal year.
(e) LIQUIDITY. Permit or suffer the sum of the aggregate cash on
hand (which shall not include any cash subject to any Lien other than in
favor of the Agent) of the Company and its Subsidiaries plus the unused
<PAGE>
<PAGE> EX-10.23-49
availability under the Revolving Credit Commitments to be less than
$10,000,000 for more than 30 days during the first 365 days after the
Effective Date.
(f) INDEBTEDNESS. Create, incur, assume or in any manner become
liable in respect of, or suffer to exist, any Indebtedness other than:
(i) The Advances;
(ii) The Indebtedness described in SCHEDULE 5.2(f) hereto,
including any renewals, extensions, substitutions, refundings, refinancing or
replacements (collectively, a "refinancing") of any such Indebtedness,
including any successive refinancing so long as the aggregate principal
amount of Indebtedness represented thereby is not increased by such
refinancing plus the lesser of (A) the stated amount of any premium or other
payment required to be paid in connection with such a refinancing pursuant to
the terms of the Indebtedness being refinanced or (B) the amount of premium
or other payment actually paid at such time to refinance the Indebtedness,
plus, in either case, the amount of expenses of the applicable Borrower
incurred in connection with such refinancing and such refinancing does not
reduce or advance the Average Life to Stated Maturity or the Stated Maturity
of such Indebtedness;
(iii) Indebtedness in aggregate outstanding principal amount
not exceeding the amount allowed to be secured by one or more liens permitted
by Section 5.2(g)(vi) hereof;
(iv) Loans outstanding of any Borrower owing to another
Borrower, provided such loan was permitted by Section 5.2(m)(iv) and it is
hereby agreed by each Borrower that all such loans shall be subordinate and
junior in right of payment and in all other respects to the Advances and all
other present and future indebtedness, obligations and liabilities owing to
the Agent and the Lenders and no payment of any kind, whether directly or
indirectly, shall be made on such loans upon the occurrence and during the
continuance of any Default or Event of Default;
(v) Interest rate or currency swaps, rate caps or other
similar transactions (valued in an amount equal to the highest termination
payment, if any, that would be payable by such person upon termination for
any reason on the date of determination) not exceeding $15,000,000, provided
that any such interest rate or currency swap, rate cap or other similar
transaction shall only be entered into in connection with fixing the interest
rate payable on the Loans and not for any speculative purposes;
(vi) Contingent Liabilities of ACIC incurred in the ordinary
course of its insurance business;
(vii) Contingent Liabilities of the Borrowers consisting of
surety bonds incurred in the ordinary course of business;
(viii) Secured Indebtedness in aggregate outstanding
principal amounts not exceeding the amount allowed to be secured by Section
5.2(g)(viii); and
<PAGE>
<PAGE> EX-10.23-50
(ix) Other unsecured Indebtedness of any Borrower in the
aggregate outstanding amount for all Borrowers not to exceed $10,000,000,
provided that both before and after incurring any such Indebtedness, no Event
of Default or Default shall have occurred and be continuing or would be
caused thereby on a proforma basis (with such proforma basis to be based on
assumptions and otherwise in form and substance satisfactory to the Lenders).
(g) LIENS. Create, incur or suffer to exist any Lien on any of
the assets, rights, revenues or property, real, personal or mixed, tangible
or intangible, whether now owned or hereafter acquired, of the Company or any
of its Subsidiaries, other than:
(i) Liens for taxes and other governmental charges not
delinquent or for taxes being contested in good faith by appropriate
proceedings and as to which adequate financial reserves have been established
on its books and records in accordance with Generally Accepted Accounting
Principles;
(ii) Liens (other than any Lien imposed by ERISA or any
Environmental Law) created and maintained in the ordinary course of business
which are not material in the aggregate, and which would not have a Material
Adverse Effect and which constitute (A) pledges or deposits under worker's
compensation laws, unemployment insurance laws or similar legislation, (B)
good faith deposits in connection with bids, tenders, contracts or leases to
which the Company or any of its Subsidiaries is a party for a purpose other
than borrowing money or obtaining credit, including rent security deposits,
(C) liens imposed by law, such as those of carriers, warehousemen and
mechanics, if payment of the obligation secured thereby is not yet due, (D)
Liens securing taxes, assessments or other governmental charges or levies not
yet subject to penalties for nonpayment, (E) pledges or deposits to secure
public or statutory obligations of the Company or any of its Subsidiaries and
(F) liens arising by operation of law pursuant to Article 2 of the Uniform
Commercial Code;
(iii) Liens affecting real property which constitute minor
survey exceptions or defects or irregularities in title, minor encumbrances,
easements or reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of such real property, PROVIDED
that all of the foregoing, in the aggregate, do not at any time materially
detract from the value of said properties or materially impair their use in
the operation of the businesses of the Company or any of its Subsidiaries;
(iv) Liens created pursuant to the Security Documents,
provided that it is acknowledged and agreed that if any such Liens secures
any indebtedness, obligations or other liabilities owing to any Lender other
than Lender Obligations, the Lien securing such other indebtedness,
obligations or liabilities shall be subordinate on terms and provisions
satisfactory to the Required Lenders (including, without limitation,
containing terms and provisions prohibiting any enforcement of such
subordinate Liens without the prior consent of the Required Lenders) to all
the Liens securing the Lender Obligations, and any distribution of proceeds
<PAGE>
<PAGE> EX-10.23-51
of any such other assets shall be in the priority specified in Section
6.3(e);
(v) Each Lien described in SCHEDULE 5.2(g)(v) hereto may be
suffered to exist upon substantially the same terms as those existing on the
date hereof and any Lien arising from the extension, renewal or refinancing
of the Liens covered by this subsection so long as the aggregate principal
amount secured by such Lien is not thereby increased (other than by amounts
described in clauses (A) and (B) of Section 5.2(f)(ii)) and the other
conditions described in Section 5.2(f)(ii) are satisfied;
(vi) Any Lien (in addition to those described on Schedule
5.2(g)(v)) created to secure payment of a portion of the purchase price of,
whether pursuant to borrowed money or a Capitalized Lease, or existing at the
time of acquisition of, any tangible fixed asset acquired by the Company or
any of its Subsidiaries may be created or suffered to exist upon such fixed
asset if the outstanding principal amount of the Indebtedness secured by such
Lien does not at any time exceed the purchase price paid by the Company or
such Subsidiary for such fixed asset and the aggregate principal amount of
all Indebtedness secured by such Liens does not exceed the sum of (A)
$25,000,000 plus (B) an amount, to be added as of the end of each fiscal
year, equal to the amount of Capital Expenditures which could have been made
during such year under Section 5.2(l) but were not, and the amount to be
added pursuant to this clause (B) shall be added only at the election of the
Company, PROVIDED that such Lien does not encumber any other asset at any
time owned by the Company or such Subsidiary, except that if the creditor
holding any such Lien is a Lender such Lien may also extend to the other
assets of the Borrowers provided that such Lien on such other assets is
subordinate on terms and provisions satisfactory to the Required Lenders
(including, without limitation, containing terms and provisions prohibiting
any enforcement of such subordinate Liens without the prior consent of the
Required Lenders) to all the Liens securing the Lender Obligations and any
distribution of proceeds of any such other assets shall be in the priority
specified in Section 6.3(e), and PROVIDED, FURTHER, that not more than one
such Lien, except for the subordinate liens in favor of any Lender permitted
hereunder, shall encumber such fixed asset at any one time;
(vii) The interest or title of a lessor under any operating
lease otherwise permitted under this Agreement with respect to the property
subject to such lease to the extent performance of the obligations of the
Company or its Subsidiary thereunder are not delinquent;
(viii) The Liens described on Schedule 5.2(g)(viii) which may
be incurred by the Borrowers in the future, provided that such Liens do not
attach to any other assets or secure any other Indebtedness other than the
amounts and as otherwise described on Schedule 5.2(g)(viii); and
(ix) Liens on cash securing surety bonds permitted by Section
5.2(f)(vii).
(h) MERGER; ACQUISITIONS; ETC. Purchase or otherwise acquire,
whether in one or a series of transactions, all or a substantial portion of
the business, assets, rights, revenues or property, real, personal or mixed,
<PAGE>
<PAGE> EX-10.23-52
tangible or intangible, of any person, or all or a substantial portion of the
capital stock of or other ownership interest in any other person; nor merge
or consolidate or amalgamate with any other person or take any other action
having a similar effect, nor enter into any joint venture or similar
arrangement with any other person, or liquidate or dissolve any Subsidiary,
PROVIDED, HOWEVER, that (i) any Borrower may merge with another Borrower,
provided that prior to any such merger the Borrowers shall execute all
financing statements and all other documents required by the Agent to ensure
the continued perfection of all Liens in favor of the Agent, (ii) any
Subsidiary of the Company may be dissolved or liquidated if all its assets
are transferred to the Company, provided that prior to any such dissolution
or liquidation the Borrowers shall execute all financing statements and all
other documents required by the Agent to ensure the continued perfection of
all Liens in favor of the Agent, (iii) any of the Borrowers may be
reincorporated in any State in the United States, provided that prior to any
such reincorporation the Borrowers shall execute all financing statements and
all other documents required by the Agent to ensure the continued perfection
of all Liens in favor of the Agent, (iv) any Borrower may acquire all or any
substantial portion of the business, assets, rights, revenue or property of
any person provided that (A) the aggregate amount paid or payable, whether in
cash, securities, property or otherwise, for all such acquisitions by the
Borrowers after the Effective Date does not exceed $20,000,000, (B) both
before and after any such acquisition, no Event of Default or Default has
occurred and is continuing or would be caused thereby, (C) both before and
after giving effect to the payment of all consideration for any such
acquisition the unused availability under the Commitments is equal to or
greater than $5,000,000 and for the period of thirty (30) days prior to such
acquisition, giving effect to the expenditures for such acquisition on a pro
forma basis as if it had taken place 30 days prior to such acquisition, the
daily average unused availability under the Commitments was equal to or
greater than $10,000,000, (D) the Cash Flow Coverage Ratio is equal to or
greater than 1.3 to 1.0 as of the most recently ended fiscal quarter of the
Company prior to such acquisition, (E) the Borrower making such acquisition
is the surviving entity, and (F) the terms of such acquisition are reasonably
acceptable to the Required Lenders. The Lenders agree that they will not
unreasonably withhold their consent to any acquisition by the Borrower.
(i) DISPOSITION OF ASSETS; ETC. Except for the replacement of the
taxi fleet of Yellow Cab in the ordinary course of business, the
relinquishment of taxi medallions required by law, the transfer of assets of
any Borrower to another Borrower and the sale of 200 taxi medallions per
year, sell, lease, license, transfer, assign or otherwise dispose of any of
its business, assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, whether in one or a series of transactions, other
than inventory sold in the ordinary course of business upon customary credit
terms and sales of scrap or obsolete or aged material or equipment.
(j) NATURE OF BUSINESS. Make any material change in the nature of
its business from that engaged in on the date of this Agreement or engage in
any other businesses other than those in which it is engaged on the date of
this Agreement or engage in any other businesses other than those in which is
engaged on the date of this Agreement.
<PAGE>
<PAGE> EX-10.23-53
(k) RESTRICTED PAYMENTS. Other than the transfer of up to
$25,000,000 to Great Dane Holdings described in Section 2.12 (which will
occur on or before the date six months after the Effective Date), make, pay,
declare or authorize any payment or transfers of any kind, including without
limitation loans, advances, dividends and other distributions, directly or
indirectly, to Great Dane Holdings or any of its Subsidiaries or Affiliates
(other than the Borrowers) cumulatively since the Effective Date which would
at any time exceed the sum of $20,000,000 plus Cash Flow Coverage Excess
since the Effective Date plus, if no Default or Event of Default has occurred
or is continuing, the amount of any life insurance proceeds received and
retained by the Company in excess of amounts paid for such life insurance
cumulatively since the Effective Date (the "Maximum Amount") and provided
that each such payment or other transfer is made only to (i) make payments on
the 14 1/2% Subordinated Debt or 12 3/4% Subordinated Debt and required
payments when due under the Tax Sharing Agreement, or (ii) pay Corporate
Expenses. For so long as the agreements and documents evidencing the 12 3/4%
Subordinated Debt remain in effect and prohibit the granting of a restriction
on the making of dividends or other distributions on the Capital Stock of the
Borrowers, but not thereafter, (A) notwithstanding the foregoing or any other
provision of this Agreement, the Company shall not be restricted from paying
dividends or making other distributions out of a pool smaller than one equal
to 100% of the amount legally available under applicable corporate law for
such payments or distributions and (B) prior to any such additional dividend,
distribution or payment which would cause all payments and transfers,
including without limitation such additional dividends and distributions, to
Great Dane Holdings since the Effective Date to exceed the Maximum Amount,
the Borrowers shall make a prepayment to the Banks in an amount equal to 100%
of the then outstanding balance of the Term Loan. Additionally, if the sum
of the aggregate cash on hand (which shall not include any cash subject to
any Lien) of the Company and its Subsidiaries, plus the unused the
availability under the Revolving Credit Commitments was less than $5,000,000
on more than 30 of the most recently ended 365 days prior to the date any
dividend, distribution or payment or other transfer by the Company or any of
its Subsidiaries is made to Great Dane Holdings or any of its Subsidiaries or
Affiliates (other than the Borrowers), and the Borrowers make any payment,
distribution or other transfer to Great Dane Holdings or any of its
Subsidiaries or Affiliates (other than the Borrowers), the Borrowers shall
make a prepayment to the Lenders in an amount equal to 100% of the then
outstanding balance of the Term Loan.
(l) CAPITAL EXPENDITURES. Permit or suffer Capital Expenditures,
exclusive of any Capital Expenditures which are financed by allowed
Indebtedness other than Advances, to exceed, in any calendar year, an amount
equal to (i) the sum of (A) $18,000,000 plus (B) the amount by which Capital
Expenditures were less than $18,000,000 in the previous calendar year,
provided that such amount under this clause (B) shall not exceed $4,000,000,
minus (ii) the amount by which the allowed Indebtedness to be secured by
Liens under Section 5.2(g)(vi) is elected by the Company to be increased
pursuant to clause (B) thereof.
(m) INVESTMENTS, LOANS AND ADVANCES. Purchase or otherwise
acquire any Capital Stock of or other ownership interest in, or debt
securities of or other evidences of Indebtedness of, any other person; nor
make any loan or advance of any of its funds or property or make any other
<PAGE>
<PAGE> EX-10.23-54
extension of credit to, or make any investment or acquire any interest
whatsoever in, any other person; nor incur any Contingent Liability, except
as permitted pursuant to Section 5.2(f); other than (i) extensions of trade
credit made in the ordinary course of business on customary credit terms and
commission, travel and similar advances made to officers and employees in the
ordinary course of business, and (ii) commercial paper of any United States
issuer having the highest rating then given by Moody's Investors Service,
Inc., or Standard & Poor's Corporation, direct obligations of and obligations
fully guaranteed by the United States of America or any agency or
instrumentality thereof, or certificates of deposit of any commercial bank
which is a member of the Federal Reserve System and which has capital,
surplus and undivided profit (as shown on its most recently published
statement of condition) aggregating not less than $100,000,000, PROVIDED,
HOWEVER, that each of the foregoing investments has a maturity date not later
than 90 days after the acquisition thereof by any Borrower, (iii) those
investments, loans, advances and other transactions described in SCHEDULE
5.2(m) hereto, having the same terms as existing on the date of this
Agreement, but no extension or renewal thereof shall be permitted, (iv) loans
among the Borrowers, provided that the original of any promissory note
evidencing such loans is delivered to the Agent, endorsed in blank, (v) loans
by any Borrowers to any of their account debtors consisting solely of the
conversion to loans in the ordinary course of business of existing accounts
receivable incurred in the ordinary course of business which are past due,
and (vi) loans by Borrowers to Great Dane Holdings to the extent permitted by
Section 5.2(k)
(n) TRANSACTIONS WITH AFFILIATES. Enter into, become a party to,
or become liable in respect of, any contract or undertaking with any
Affiliate except in the ordinary course of business and on terms not less
favorable to such Borrower or such Subsidiary than those which could be
obtained if such contract or undertaking were an arms length transaction with
a person other than an Affiliate, except for the existing transactions
described on SCHEDULE 5.2(n); provided, however, as to transactions with
Affiliates which are allowed under this Section 5.2(n), the Company shall
disclose such transactions to the Lenders (which disclosure may be in any
filings made by Great Dane Holdings or any of its Subsidiaries with the
Securities and Exchange Commission or any successor agency thereof) and the
aggregate amount of the annual payments payable by the Borrowers under all
such transactions with Affiliates which are not in effect as of the Effective
Date (other than investments by ACIC in any Borrower or any of their
Affiliates and fluctuations in commissions payable for investment services)
shall not exceed $1,000,000.
(o) NEGATIVE PLEDGE AND OTHER TRANSACTIONS LIMITATION. Enter into
any agreement with any person other than the Lenders pursuant hereto which
prohibits or limits the ability of (i) any Borrower or any of their
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its assets, rights, revenues or property, real, personal or mixed, tangible
or intangible, whether now owned or hereafter acquired, or (ii) any
Subsidiary of the Company to pay dividends or make loans to the Company.
(p) INCONSISTENT AGREEMENTS. Enter into any agreement containing
any provision which would be violated or breached by any Loan Document or any
<PAGE>
<PAGE> EX-10.23-55
of the transactions contemplated hereby or by performance by any Borrower of
its obligations in connection therewith.
(r) OTHER CHANGES. Amend the certificate of incorporation of the
Company or any of its Subsidiaries or change the fiscal year of any Borrower,
or make any material amendment to the Tax Sharing Agreement, other than
changes to the certificate of incorporation of any Borrower as necessary to
reincorporate any Borrower in another state.
ARTICLE VI.
DEFAULT
-------
6.1 EVENTS OF DEFAULT. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived pursuant to Section 8.1:
(a) NONPAYMENT. Any Borrower shall fail to pay when due any
principal of the Notes, or any reimbursement obligation under Section 3.3
(whether by deemed disbursement of a Loan or otherwise) or any interest on
the Notes or any fees or any other amount payable hereunder, which failure
continues for a period of three calendar days after notice thereof shall have
been given by the Agent to the Company, provided that the Overdue Rate shall
apply at all times after such failure; or
(b) MISREPRESENTATION. Any representation or warranty made by any
Borrower in Article IV hereof or in any Loan Document or any other
certificate, report, financial statement or other document furnished by or on
behalf of any Borrower in connection with this Agreement, shall prove to have
been incorrect in any material respect when made or deemed made and, if such
representation or warranty may be cured, such representation or warranty
shall continue to be incorrect in any material respect when made or deemed
made for 20 calendar days after notice thereof shall have been given to the
Company by the Agent; or
(c) CERTAIN COVENANTS. Any Borrower shall fail to perform or
observe any (i) term, covenant or agreement contained in Section 5.1(f) or
(g) or Section 5.2 (other than Section 5.2(p) and (r)) hereof, or (ii) term,
covenant or agreement contained in Section 5.1(d) and any such failure shall
remain unremedied for five calendar days after notice thereof shall have been
given to the Company by the Agent; or
(d) OTHER DEFAULTS. Any Borrower shall fail to perform or observe
any other term, covenant or agreement contained in this Agreement or in any
Loan Document, and any such failure shall remain unremedied for 20 calendar
days after notice thereof shall have been given to the Company by the Agent
(or such longer or shorter period of time as may be specified in such Loan
Document); or
(e) CROSS DEFAULT. Any Borrower or any of their respective
Subsidiaries or Great Dane Holdings shall fail to pay any part of the
principal of, the premium, if any, or the interest on, or any other payment
<PAGE>
<PAGE> EX-10.23-56
of money due under any of its Indebtedness (other than Indebtedness
hereunder), beyond any period of grace provided with respect thereto, which
individually or together with other such Indebtedness as to which any such
failure exists has an aggregate outstanding principal amount in excess of
$3,000,000; or if any Borrower or any of their respective Subsidiaries, or
Great Dane Holdings fails to perform or observe any other term, covenant or
agreement contained in, or if any other event or condition occurs or exists
under, any agreement, document or instrument evidencing or securing any such
Indebtedness having such aggregate outstanding principal amount, or under
which any such Indebtedness was incurred, issued or created, beyond any
period of grace, if any, provided with respect thereto if the effect of such
failure is either (i) to cause, or permit the holders of such Indebtedness
(or a trustee on behalf of such holders) to cause, any payment in respect of
such Indebtedness to become due prior to its due date or (ii) to permit the
holders of such Indebtedness (or a trustee on behalf of such holders) to
elect a majority of the board of directors of such Person; or
(f) JUDGMENTS. One or more judgments or orders for the payment of
money which individually or together with such other judgments and orders
against the Borrowers and their Subsidiaries has an aggregate amount in
excess of $3,000,000, shall be rendered against any Borrower or any of their
respective Subsidiaries, or any other judgment or order (whether or not for
the payment of money) shall be rendered against or shall affect any Borrower
or any of their respective Subsidiaries which causes or could cause a
Material Adverse Effect, and either (i) such judgment or order shall have
remained unsatisfied and such Borrower or such Subsidiary shall not have
taken action necessary to stay enforcement thereof by reason of pending
appeal or otherwise, prior to the expiration of the applicable period of
limitations for taking such action or, if such action shall have been taken,
a final order denying such stay shall have been rendered, or (ii) enforcement
proceedings shall have been commenced by any creditor upon any such judgment
or order; or
(g) ERISA. The occurrence of a Reportable Event that results in
or could reasonably be expected to result in material liability of any
Borrower or their ERISA Affiliates to the PBGC or to any Plan and such
Reportable Event is not corrected within thirty (30) days after the
occurrence thereof; or the occurrence of any Reportable Event which could
reasonably be expected to constitute grounds for termination of any Plan of
any Borrower or any of their respective Subsidiaries or their ERISA
Affiliates by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer any such Plan and such
Reportable Event is not corrected within thirty (30) days after the
occurrence thereof; or the filing by any Borrower or any of their ERISA
Affiliates of a notice of intent to terminate a Plan or the institution of
other proceedings to terminate a Plan where the Plan has any material
Unfunded Benefit Liability; or any Borrower or any of their ERISA Affiliates
shall fail to pay when due any material liability to the PBGC or to a Plan;
or the PBGC shall have instituted proceedings to terminate, or to cause a
trustee to be appointed to administer, any Plan of any Borrower or any of
their ERISA Affiliates; or any person engages in a Prohibited Transaction
with respect to any Plan which results in or could reasonably be expected to
result in material liability of any Borrower, any of their ERISA Affiliates,
<PAGE>
<PAGE> EX-10.23-57
any Plan of any Borrower or their ERISA Affiliates or fiduciary of any such
Plan; or failure by any Borrower or any of their ERISA Affiliates to make a
required installment or other payment to any Plan within the meaning of
Section 302(f) of ERISA or Section 412(n) of the Code that results in or
could reasonably be expected to result in material liability of any Borrower
or any of their ERISA Affiliates to the PBGC or any Plan; or the withdrawal
of any Borrower or any of their ERISA Affiliates from a Plan during a plan
year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; or any Borrower or any of their ERISA Affiliates shall
fail to make any regular contribution attributable to the employees of any of
them when due to any Multiemployer Plan and such failure continues for a
period of thirty (30) days after such contribution becomes due; or a
proceeding is reasonably instituted by a fiduciary or sponsor of any
Multiemployer Plan to which any Borrower or any of their ERISA Affiliates
contributes or is required to contribute or collect contributions pursuant to
Section 515 of ERISA; or any Borrower or any of their ERISA Affiliates
completely or partially withdraws from any Multiemployer Plan which action
might result in withdrawal liability to any Borrower or any of their ERISA
Affiliates in excess of $1,000,000; or any Borrower or any of their ERISA
Affiliates is notified by the fiduciary or sponsor of any Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being terminated or
liquidated under Title VI of ERISA; and, in each of the foregoing cases
described in this Section 6.1(g), such event or condition, together with all
other events or conditions, if any, could subject the Borrowers or any of
their ERISA Affiliates to any tax, penalty or other liability which in the
aggregate could reasonably be expected to exceed $3,000,000 in any year; or
(h) INSOLVENCY, ETC. Great Dane Holdings or any of its
Subsidiaries, including without limitation any Borrower, Great Dane Trailers
and any of its Subsidiaries, but excluding Trailer Rental Company and Great
Dane Los Angeles, Inc. so long as there is no material increase in the amount
of their assets (all of the foregoing defined herein as the "Specified Great
Dane Entities") shall be dissolved or liquidated, other than any liquidation
of any Borrower into another Borrower or of any Subsidiary of Great Dane
Trailers into Great Dane Trailers or another Subsidiary thereof, or otherwise
permitted by Section 5.2(h), (or any judgment, order or decree therefor shall
be entered), or shall generally not pay its debts as they become due, or
shall admit in writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors, or shall institute,
or there shall be instituted against any Specified Great Dane Entity, any
proceeding or case seeking to adjudicate it a bankrupt or insolvent or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief or protection of
debtors or seeking the entry of an order for relief, or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its assets, rights, revenues or property, and, if such
proceeding is instituted against any Specified Great Dane Entity and is being
contested by such Specified Great Dane Entity, as the case may be, in good
faith by appropriate proceedings, such proceeding shall remain undismissed or
unstayed for a period of 45 days; or any Specified Great Dane Entity shall
take any action (corporate or otherwise) to authorize or further any of the
actions described above in this subsection; or
<PAGE>
<PAGE> EX-10.23-58
(i) LOAN DOCUMENTS. Any event of default described in any Loan
Document shall have occurred and be continuing, or any material provision of
any Loan Document shall at any time for any reason cease to be valid and
binding and enforceable against any obligor thereunder, or any of the Liens
intended to be created by any Security Document shall cease to be or shall
not be a valid and perfected Lien having the priority contemplated thereby,
or the validity, binding effect or enforceability thereof shall be contested
by any person, or any obligor, shall deny that it has any or further
liability or obligation thereunder, or any material provision thereof shall
be terminated, invalidated or set aside, or be declared ineffective or
inoperative or in any way cease to give or provide to the Lenders and the
Agent the benefits purported to be created thereby; or
(j) PUBLIC OFFERING. Great Dane Holdings shall fail to use the
first $72,000,000 (or such lesser amount as is actually received) of the net
cash proceeds (net of all underwriters' fees, legal fees and other costs and
expenses) from any offering, whether public or private, of its Capital Stock
to make payments on the 12-3/4% Subordinated Debt; or
(k) GREAT DANE TRAILERS. Great Dane Holdings shall transfer any
of its interest in Great Dane Trailers, or Great Dane Trailers or any of its
Subsidiaries shall sell all or substantially all of their assets, and in each
of the foregoing cases shall fail to use the proceeds thereof to make
payments on Indebtedness owing by Great Dane Holdings; or
(l) CROSS ACCELERATION. Great Dane Trailers or any of its
Subsidiaries or any Subsidiary of Great Dane Holdings (other than any
Borrower or any Subsidiary of any Borrower) shall fail to pay any part of the
principal of, the premium, if any, or the interest on, or any other payment
of money due under any of its Indebtedness beyond any period of grace
provided with respect thereto, which individually or together with such other
Indebtedness as to which any such failure exists has an aggregate outstanding
principal amount in excess of $5,000,000; or if Great Dane Trailers or any of
its Subsidiaries or any Subsidiary of Great Dane Holdings (other than any
Borrower or any Subsidiary of any Borrower) fails to perform or observe any
other term, covenant or agreement contained in, or if any other event or
condition occurs or exists under, any agreement, document or instrument
evidencing or securing any such Indebtedness having such aggregate
outstanding principal amount, or under which any such Indebtedness was
incurred, issued or created, beyond any period of grace, if any, provided
with respect thereto if the effect of such failure is to cause such
Indebtedness to become due prior to its due date; or
(m) CONTROL. Any Change of Control shall occur.
6.2 REMEDIES.
(a) Upon the occurrence and during the continuance of any Event of
Default, the Agent, upon being directed to do so by the Required Lenders,
shall by notice to the Borrowers (i) terminate the Commitments or (ii)
declare the outstanding principal of, and accrued interest on, the Notes, all
unpaid reimbursement obligations in respect of drawings under Letters of
Credit and all other amounts owing under this Agreement and the other Loan
<PAGE>
<PAGE> EX-10.23-59
Documents to be immediately due and payable, or (iii) demand immediate
delivery of cash collateral, and the Borrowers agree to deliver such cash
collateral upon demand, in an amount equal to the maximum amount that may be
available to be drawn at any time prior to the stated expiry of all
outstanding Letters of Credit, or any one or more of the foregoing, whereupon
the Commitments shall terminate forthwith and all such amounts, including
such cash collateral, shall become immediately due and payable, PROVIDED that
in the case of any event or condition described in Section 6.1(h) with
respect to any Borrower, the Commitments shall automatically terminate
forthwith and all such amounts, including such cash collateral, shall
automatically become immediately due and payable without notice; in all cases
without demand, presentment, protest, diligence, notice of dishonor or other
formality, all of which are hereby expressly waived. Such cash collateral
delivered in respect of outstanding Letters of Credit shall be deposited in
a special cash collateral account to be held by the Agent as collateral
security for the payment and performance of the Borrowers' obligations under
this Agreement and the other Loan Documents to the Lenders and the Agent.
(b) The Agent, upon being directed to do so by the Required
Lenders, shall, in addition to the remedies provided in Section 6.2(a),
exercise and enforce any and all other rights and remedies available to it,
whether arising under this Agreement, the Notes or any other Loan Document or
under applicable law, in any manner deemed appropriate by the Agent, as the
case may be, including suit in equity, action at law, or other appropriate
proceedings, whether for the specific performance (to the extent permitted by
law) of any covenant or agreement contained in this Agreement or in the Notes
or any other Loan Document or in aid of the exercise of any power granted in
this Agreement, the Notes or any other Loan Document.
(c) Upon the occurrence and during the continuance of any Event of
Default, each Lender may at any time and from time to time, without notice to
any Borrower (any requirement for such notice being expressly waived by each
Borrower) set off and apply against any and all of the obligations of each
Borrower now or hereafter existing under this Agreement and the other Loan
Documents, whether owing to such Lender or any other Lender or the Agent, any
and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to
or for the credit or the account of any Borrower and any property of any
Borrower from time to time in possession of such Lender, irrespective of
whether or not such Lender shall have made any demand hereunder and although
such obligations may be contingent and unmatured. Each of the Borrowers
hereby grants to the Lenders and the Agent a lien on and security interest in
all such deposits, indebtedness and property as collateral security for the
payment and performance of the obligations of each Borrower under this
Agreement and the other Loan Documents. The rights of such Lender under this
Section 6.2(c) are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which such Lender may have.
6.3 DISTRIBUTION OF PROCEEDS OF COLLATERAL. All proceeds of any
realization on the Lender Collateral received by the Agent pursuant to the
Security Documents or any payments on any of the liabilities secured by the
Security Documents received by the Agent or any Lender upon and during the
<PAGE>
<PAGE> EX-10.23-60
continuance of any Event of Default shall be allocated and distributed as
follows:
(a) First, to the payment of all costs and expenses, including
without limitation all attorneys' fees, of the Agent in connection with the
enforcement of the Security Documents and otherwise administering this
Agreement;
(b) Second, to the payment of all costs, expenses and fees,
including without limitation, commitment fees and attorneys fees, owing to
the Lenders pursuant to the Lender Obligations on a pro rata basis in
accordance with the Lender Obligations consisting of fees, costs and expenses
owing to the Lenders under the Lender Obligations, for application to payment
of such liabilities;
(c) Third, to the Lenders on a pro rata basis in accordance with
the Lender Obligations consisting of interest owing to the Lenders under the
Lender Obligations, for application to payment of such liabilities;
(d) Fourth, to the Lenders on a pro rata basis in accordance with
the Lender Obligations consisting of principal (including without limitation
any cash collateral for any outstanding Letters of Credit) owing to the
Lenders under the Lender Obligations, for application to payment of such
liabilities;
(e) Fifth, to the payment of any and all other amounts owing to
the Lenders on a pro rata basis in accordance with the total amount of such
Indebtedness owing to each of the Lenders, for application to payment of such
liabilities; and
(f) Sixth, to the Borrowers or such other person as may be legally
entitled thereto.
6.4 LETTER OF CREDIT LIABILITIES. For the purposes of payments and
distributions under Section 6.3, the full amount of Lender Obligations on
account of any Letter of Credit then outstanding but not drawn upon shall be
deemed to be then due and owing. Amounts distributable to the Lenders on
account of such Lender Obligations under such Letter of Credit shall be
deposited in a separate interest bearing collateral account in the name of
and under the control of the Agent and held by the Agent first as security
for such Letter of Credit Lender Obligations and then as security for all
other Lender Obligations and the amount so deposited shall be applied to the
Letter of Credit Lender Obligations at such times and to the extent that such
Letter of Credit Lender Obligations become absolute liabilities and if and to
the extent that the Letter of Credit Lender Obligations fail to become
absolute Lender Obligations because of the expiration or termination of the
underlying letters of credit without being drawn upon then such amounts shall
be applied to the remaining Lender Obligations in the order provided in
Section 6.3. Each Borrower hereby grants to the Agent, for the benefit of
the Lenders, a lien and security interest in all such funds deposited in such
separate interest bearing collateral account, as security for all the Lender
Obligations as set forth above.
<PAGE>
<PAGE> EX-10.23-61
ARTICLE VII.
THE AGENT AND THE LENDERS
-------------------------
7.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement, the Notes and the other
Loan Documents as are delegated to the Agent by the terms hereof or thereof,
together with all such powers as are reasonably incidental thereto. The
provisions of this Article VII are solely for the benefit of the Agent, and
the Lenders, and no Borrower shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, Agent shall act solely as agent of the Lenders
and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrowers.
7.2 AGENT AND AFFILIATES. NBD, in its capacity as a Lender hereunder,
shall have the same rights and powers hereunder as any other Lender and may
exercise or refrain from exercising the same as though it were not the Agent.
NBD its respective affiliates may (without having to account therefor to any
Lender) accept deposits from, lend money to, and generally engage in any kind
of banking, trust, financial advisory or other business with any Borrower or
any of their respective Subsidiaries as if it were not acting as Agent
hereunder, and may accept fees and other consideration therefor without
having to account for the same to the Lenders.
7.3 SCOPE OF AGENT'S DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Lender, and
no implied covenants, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or shall otherwise exist against the Agent.
As to any matters not expressly provided for by this Agreement (including,
without limitation, collection and enforcement action under the Notes and the
other Loan Documents), the Agent shall not be required to exercise any
discretion or take any action, but the Agent shall take such action or omit
to take any action pursuant to the reasonable written instructions of the
Required Lenders and may request instructions from the Required Lenders. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, pursuant to the written instructions of the Required Lenders (or all
of the Lenders, as the case may be, in accordance with the requirements of
this Agreement), which instructions and any action or omission pursuant
thereto shall be binding upon all of the Lenders; PROVIDED, HOWEVER, that the
Agent shall not be required to act or omit to act if, in the judgment of the
Agent such action or omission may expose it to personal liability or is
contrary to this Agreement, the Notes or the other Loan Documents or
applicable law.
7.4 RELIANCE BY AGENT. The Agent shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it
to be genuine and correct and to have been sent or given by or on behalf of
a proper person. The Agent may treat the payee of any Note as the holder
thereof unless and until it receives written notice of the assignment thereof
<PAGE>
<PAGE> EX-10.23-62
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party hereto. The
Agent may employ agents (including without limitation collateral agents) and
may consult with legal counsel (who may be counsel for the Borrowers),
independent public accountants and other experts selected by it and shall not
be liable to the Lenders, except as to money or property received by it or
its authorized agents, for the negligence or misconduct of any such agent
selected by it with reasonable care or for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
7.5 DEFAULT. The Agent shall not be deemed to have knowledge of the
occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Lender or any Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice, the Agent shall give written
notice thereof to the Lenders.
7.6 LIABILITY OF AGENT. The Agent nor any of its directors, officers,
agents, or employees shall be liable to the Lenders for any action taken or
not taken by it or them in connection herewith with the consent or at the
request of the Required Lenders (or all Lenders if required hereunder) or in
the absence of its or their own gross negligence or willful misconduct.
Neither the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or
verify (i) any recital, statement, warranty or representation contained in
this Agreement, any Note or any other Loan Document, or in any certificate,
report, financial statement or other document furnished in connection with
this Agreement, (ii) the performance or observance of any of the covenants or
agreements of any Borrower, (iii) the satisfaction of any condition specified
in Article II hereof, or (iv) the validity, effectiveness, legal
enforceability, value or genuineness of this Agreement, Notes or the other
Loan Documents or any collateral subject thereto or any other instrument or
document furnished in connection herewith.
7.7 NONRELIANCE ON AGENT AND OTHER LENDERS. Each Lender acknowledges
and agrees that it has, independently and without reliance on the Agent or
any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Borrowers and deci-
sion to enter into this Agreement and that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own analysis and decision in taking or not taking action under this
Agreement. The Agent shall not be required to keep itself informed as to the
performance or observance by any Borrower of this Agreement, the Notes or the
other Loan Documents or any other documents referred to or provided for
herein or to inspect the properties or books of any Borrower and, except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, neither the Agent shall have
any duty or responsibility to provide any Lender with any information
concerning the affairs, financial condition or business of any Borrower or
<PAGE>
<PAGE> EX-10.23-63
any of their respective Subsidiaries which may come into the possession of
the Agent or any of its affiliates.
7.8 INDEMNIFICATION. The Lenders agree to indemnify the Agent (to the
extent not reimbursed by the any Borrower, but without limiting any
obligation of any Borrower to make such reimbursement), ratably according to
the respective principal amounts of the Advances then outstanding made by
each of them (or if no Advances are at the time outstanding, ratably
according to the respective amounts of their Commitments), from and against
any and all claims, damages, losses, liabilities, costs or expenses of any
kind or nature whatsoever (including, without limitation, fees and
disbursements of counsel) which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or
the transactions contemplated hereby or any action taken or omitted by the
Agent under this Agreement, PROVIDED, HOWEVER, that no Lender shall be
liable for any portion of such claims, damages, losses, liabilities, costs or
expenses (a) resulting from the Agent's gross negligence or willful
misconduct or (b) for which the Borrowers are not obligated to indemnify the
Agent under the proviso in Section 8.5(b). Without limiting the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including without limitation
fees and expenses of counsel) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, to the extent that the Agent is not reimbursed for such expenses
by any Borrower, but without limiting the obligation of the Borrowers to make
such reimbursement. Each Lender agrees to reimburse the Agent promptly upon
demand for its ratable share of any amounts owing to the Agent by the Lenders
pursuant to this Section. If the indemnity furnished to the Agent under this
Section shall, in the judgment of the Agent, be insufficient or become
impaired, the Agent may call for additional indemnity from the Lenders and
cease, or not commence, to take any action until such additional indemnity is
furnished.
7.9 SUCCESSOR AGENT. The Agent may resign as such at any time upon
thirty days' prior written notice to the Borrowers and the Lenders. In the
event of any such resignation, the Required Lenders shall, by an instrument
in writing delivered to the Borrowers and, the Agent, appoint a successor,
which shall be a commercial bank or finance company organized under the laws
of the United States or any State thereof and having a combined capital and
surplus of at least $500,000,000. If a successor is not so appointed or does
not accept such appointment before the Agent's resignation becomes effective,
the retiring Agent may appoint a temporary successor (which temporary
successor shall be a Lender unless each Lender has refused to be such
successor) to act until such appointment by the Required Lenders is made and
accepted or if no such temporary successor is appointed as provided above by
the retiring Agent, the Required Lenders shall thereafter perform all the
duties of the Agent hereunder until such appointment by the Required Lenders
is made and accepted. Any successor to the Agent shall execute and deliver
to the Borrowers and the Lenders an instrument accepting such appointment and
thereupon such successor Agent, without further act, deed, conveyance or
transfer shall become vested with all of the properties, rights, interests,
<PAGE>
<PAGE> EX-10.23-64
powers, authorities and obligations of its predecessor hereunder with like
effect as if originally named as Agent hereunder. Upon request of such
successor Agent, the Borrowers and the retiring Agent shall execute and
deliver such instruments of conveyance, assignment and further assurance and
do such other things as may reasonably be required for more fully and
certainly vesting and confirming in such successor Agent all such properties,
rights, interests, powers, authorities and obligations. The provisions of
this Article VII shall thereafter remain effective for such retiring Agent
with respect to any actions taken or omitted to be taken by such Agent while
acting as the Agent hereunder.
7.10 SHARING OF PAYMENTS. The Lenders agree among themselves that, in
the event that any Lender shall obtain payment in respect of any Advance or
any other obligation owing to the Lenders under this Agreement through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise in
excess of its ratable share of payments received by all of the Lenders on
account of the Advances and other Lender Obligations (or if no Advances are
outstanding, ratably according to the respective amounts of the Commitments),
such Lender shall promptly purchase from the other Lenders participation in
such Advances and other Lender Obligations in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that
all of the Lenders share such payment in accordance with such ratable shares.
The Lenders further agree among themselves that if payment to a Lender
obtained by such Lender through the exercise of a right of set-off, banker's
lien, counterclaim or otherwise as aforesaid shall be rescinded or must
otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of participation theretofore sold, return
its share of that benefit to each Lender whose payment shall have been
rescinded or otherwise restored. The Borrowers each agrees that any Lender
so purchasing such a participation may, to the fullest extent permitted by
law, exercise all rights of payment, including set-off, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender
were a holder of such Advance or other obligation in the amount of such
participation. The Lenders further agree among themselves that, in the event
that amounts received by the Lenders, and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Lenders under this Agreement. Except as otherwise expressly provided in
this Agreement, if any Lender or the Agent shall fail to remit to the Agent
or any other Lender an amount payable by such Lender or the Agent to the or
such other Lender pursuant to this Agreement on the date when such amount is
due, such payments shall be made together with interest thereon for each date
from the date such amount is due until the date such amount is paid to the
Agent or such other Lender at a rate per annum equal to the rate at which
borrowings are available to the payee in its overnight federal funds market.
It is further understood and agreed among the Lenders and the Agent that if
the Agent shall engage in any other transactions with the Borrowers and shall
have the benefit of any collateral or security therefor which does not
expressly secure the obligations arising under this Agreement except by
virtue of a so-called dragnet clause or comparable provision, the Agent shall
be entitled to apply any proceeds of such collateral or security first in
<PAGE>
<PAGE> EX-10.23-65
respect of the obligations arising in connection with such other transaction
before application to the obligations arising under this Agreement.
7.11 WITHHOLDING TAX EXEMPTION. Each Lender that is not organized and
incorporated under the laws of the United States or any State thereof agrees
to file with the Agent and the Borrowers, in duplicate, (a) on or before the
later of (i) the Effective Date and (ii) the date such Lender becomes a
Lender under this Agreement and (b) thereafter, for each taxable year of such
Lender (in the case of a Form 4224) or for each third taxable year of such
Lender (in the case of any other form) during which interest or fees arising
under this Agreement and the Notes are received, unless not legally able to
do so as a result of a change in United States income tax law enacted, or
treaty promulgated, after the date specified in the preceding clause (a), on
or prior to the immediately following due date of any payment by any Borrower
hereunder, a properly completed and executed copy of either Internal Revenue
Service Form 4224 or Internal Revenue Service Form 1001 and Internal Revenue
Service Form W-8 or Internal Revenue Service Form W-9 and any additional form
necessary for claiming complete exemption from United States withholding
taxes (or such other form as is required to claim complete exemption from
United States withholding taxes), if and as provided by the Code or other
pronouncements of the United States Internal Revenue Service, and such Lender
warrants to the Borrowers that the form so filed will be true and complete;
PROVIDED that such Lender's failure to complete and execute such Form 4224 or
Form 1001, or Form W-8 or Form W-9, as the case may be, and any such
additional form (or any successor form or forms) shall not relieve the
Borrowers of any of their obligations under this Agreement, except as
otherwise provided in this Section 7.11.
ARTICLE VIII
MISCELLANEOUS
-------------
8.1 AMENDMENTS, ETC. (a) No amendment, modification, termination or
waiver of any provision of this Agreement or any other Loan Document nor any
consent to any departure therefrom shall be effective unless the same shall
be in writing and signed by the Borrowers and Required Lenders and, to the
extent any rights or duties of the Agent may be affected thereby, the Agent;
PROVIDED, HOWEVER, that no such amendment, modification, termination, waiver
or consent shall, without the consent of all of the Lenders, (i) authorize or
permit the extension of time for, or any reduction of the amount of, any
payment or prepayment of the principal of, or interest on, the Notes or any
Letter of Credit reimbursement obligation, or any fees or other amount
payable hereunder, (ii) amend, extend or terminate the respective
Commitments, except as allowed pursuant to this Agreement, of any Lender or
modify the provisions of this Section regarding the taking of any action
under this Section or the provisions of Section 7.10 or the definition of
Required Lenders or any provision of this Agreement requiring the consent of
all of the Lenders, (iii) provide for the release of any material portion of
the collateral subject to any Security Document, (iv) modify any other
provision of this Agreement which by its terms requires the consent of all of
the Lenders, or (v) amend or modify this Section 8.1, PROVIDED, FURTHER, that
<PAGE>
<PAGE> EX-10.23-66
any modification of any term or provision in Article VII shall require the
consent of the Agent.
(b) Any such amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no Lender
that has failed to fund any required Advance hereunder or made any other
payment required by such Lender under this Agreement shall be entitled to
vote (whether to consent or to withhold its consent) with respect to any
amendment, modification, termination or waiver of any provision of this
Agreement or any departure therefrom or any direction from the Lenders to the
Agent, and, for purposes of determining the Required Lenders at any time when
any Lender is in default under this Agreement, the Commitments and Advances
of such defaulting Lenders shall be disregarded. Notwithstanding anything
herein to the contrary, this Section 8.1(c) is an agreement among the Lenders
only and may be modified at any time without the consent of the Borrowers,
and nothing in this Section 8.1(c) shall confer any rights or interests upon
any Borrower.
8.2 NOTICES. (a) Except as otherwise provided in Section 8.2(c)
hereof, all notices and other communications hereunder, and service of
process pursuant to Section 8.8, shall be in writing and shall be delivered
or sent to the Borrowers at 2016 N. Pitcher Street, Kalamazoo, Michigan
49007, Attention: Treasurer, with a copy to Jay Harris at such address,
Facsimile No. 616-343-1660, Facsimile Confirmation No. (616) 343-6121, and to
the Agent and the Lenders at the respective addresses for notices set forth
on the signatures pages hereof, or to such other address as may be designated
by any Borrower, the Agent or any Lender by notice to the other parties
hereto. All notices and other communications shall be deemed to have been
given at the time of actual delivery thereof to such address, or, unless
sooner delivered, (i) if sent by certified or registered mail, postage
prepaid, to such address, on the third day after the date of mailing, (ii) if
sent by telex, upon receipt of the appropriate answer back, or (iii) if sent
by facsimile transmission, upon confirmation of receipt by telephone at the
number specified for confirmation, PROVIDED, HOWEVER, that notices to the
Agent shall not be effective until received.
(b) Notices by any Borrower to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.2,
requests for Advances pursuant to Section 2.4, requests for continuations or
conversions of Loans pursuant to Section 2.7 and notices of prepayment
pursuant to Section 3.1 shall be irrevocable and binding on the Borrowers.
(c) Any notice to be given by any Borrower to the Agent pursuant
to Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or any
Lender hereunder, may be given by telephone, and all such notices given by
any Borrower must be immediately confirmed in writing in the manner provided
in Section 8.2(a). Any such notice given by telephone shall be deemed
effective upon receipt thereof by the party to whom such notice is to be
given. The Borrowers shall indemnify and hold harmless the Lenders and the
Agent from any and all losses, damages, liabilities and claims arising from
their good faith reliance on any such telephone notice.
<PAGE>
<PAGE> EX-10.23-67
8.3 NO WAIVER BY CONDUCT; REMEDIES CUMULATIVE. No course of dealing on
the part of the Agent or any Lender, nor any delay or failure on the part of
the Agent or any Lender in exercising any right, power or privilege hereunder
shall operate as a waiver of such right, power or privilege or otherwise
prejudice the Agent's, or such Lender's rights and remedies hereunder; nor
shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to the Agent, or any Lender under this
Agreement, the Notes or any other Loan Document is intended to be exclusive
of any other right or remedy, and every right and remedy shall be cumulative
and in addition to every other right or remedy granted thereunder or now or
hereafter existing under any applicable law. Every right and remedy granted
by this Agreement, the Notes or any other Loan Document or by applicable law
to the Agent, or any Lender may be exercised from time to time and as often
as may be deemed expedient by the Agent, or any Lender and, unless contrary
to the express provisions of this Agreement, the Notes or any other Loan
Document, irrespective of the occurrence or continuance of any Default or
Event of Default.
8.4 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All terms,
covenants, agreements, representations and warranties of any Borrower made
herein or in any other Loan Document or in any certificate, report, financial
statement or other document furnished by or on behalf of any Borrower in
connection with this Agreement shall be deemed to be material and to have
been relied upon by the Lenders, notwithstanding any investigation heretofore
or hereafter made by any Lender or on such Lender's behalf, and those
covenants and agreements of the Borrowers set forth in Section 3.7, 3.9 and
8.5 hereof shall survive the repayment in full of the Advances and the
termination of the Commitments.
8.5 EXPENSES; INDEMNIFICATION. (a) Each of the Borrowers agrees to
pay, or reimburse the Agent or a Lender, as the case may be, for the payment
of, on demand, (i) the reasonable fees and expenses of counsel to the Agent,
including without limitation the fees and expenses of Messrs. Dickinson,
Wright, Moon, Van Dusen & Freeman, and counsel to each Lender, in connection
with the preparation, execution, delivery and administration of this
Agreement, the Notes, the other Loan Documents and in connection with
advising the Agent as to its rights and responsibilities with respect
thereto, and in connection with any amendments, waivers or consents in
connection therewith, provided that the amount recoverable by each Lender
under this clause (i) shall not exceed $10,000, (ii) all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing or recording of this Agreement, Notes, the other
Loan Documents (or the verification of filing, recording, perfection or
priority thereof) or the consummation of the transactions contemplated
hereby, and any and all liabilities with respect to or resulting from any
delay in paying or omitting to pay such taxes or fees, (iii) all reasonable
costs and expenses of the Agent and the Lenders (including reasonable fees
and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise)) in connection with any Default or Event of Default
or the enforcement of, or the exercise or preservation of any rights under,
this Agreement or the Notes or any other Loan Document or in connection with
any refinancing or restructuring of the credit arrangements provided under
<PAGE>
<PAGE> EX-10.23-68
this Agreement, (iv) all reasonable costs and expenses incurred by the Agent
(or any Lender to the extent described in Section 5.1(e)) pursuant to any
field audit as described in Section 5.1(e), and (v) all reasonable costs and
expenses of the Agent and the Lenders (including reasonable fees and expenses
of counsel) in connection with any action or proceeding relating to a court
order, injunction or other process or decree restraining or seeking to
restrain the Agent from paying any amount under, or otherwise relating in any
way to, any Letter of Credit and any and all costs and expenses which any of
them may incur relative to any payment under any Letter of Credit.
(b) Each of the Borrowers hereby indemnifies and agrees to hold
harmless the Lenders and the Agent, and their respective officers, directors,
employees and agents, harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature whatsoever which
the Lenders or the Agent or any such person may incur or which may be claimed
against any of them by reason of or in connection with any Letter of Credit,
and neither any Lender nor the Agent or any of their respective officers,
directors, employees or agents shall be liable or responsible for: (i) the
use which may be made of any Letter of Credit or for any acts or omissions of
any beneficiary in connection therewith; (ii) the validity, sufficiency or
genuineness of documents or of any endorsement thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (iii) payment by the Agent to the
beneficiary under any Letter of Credit against presentation of documents
which do not comply with the terms of any Letter of Credit, including failure
of any documents to bear any reference or adequate reference to such Letter
of Credit; (iv) any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit; or (v) any other event or circumstance
whatsoever arising in connection with any Letter of Credit; PROVIDED,
HOWEVER, that the Borrowers shall not be required to indemnify the Lenders
and the Agent and such other persons, and the Agent shall be liable to the
Borrowers to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by any Borrower which were
caused by (A) the Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand
for payment and other documentation strictly complying with the terms and
conditions of such Letter of Credit, or (B) the payment by the Agent to the
beneficiary under any Letter of Credit against presentation of documents
which do not comply with the terms of the Letter of Credit to the extent, but
only to the extent, that such payment constitutes gross negligence or wilful
misconduct of the Agent. It is understood that in making any payment under
a Letter of Credit the Agent will rely on documents presented to it under
such Letter of Credit as to any and all matters set forth therein without
further investigation and regardless of any notice or information to the
contrary, and such reliance and payment against documents presented under a
Letter of Credit substantially complying with the terms thereof shall not be
deemed gross negligence or wilful misconduct of the Agent in connection with
such payment. It is further acknowledged and agreed that a Borrower may
have rights against the beneficiary or others in connection with any Letter
of Credit with respect to which the Agent is alleged to be liable and it
shall be a precondition of the assertion of any liability of the Agent under
this Section that such Borrower shall first have taken reasonable steps to
<PAGE>
<PAGE> EX-10.23-69
enforce remedies in respect of the alleged loss against such beneficiary and
any other parties obligated or liable in connection with such Letter of
Credit and any related transactions.
(c) In consideration of the execution and delivery of this
Agreement by each Lender and the extension of the Commitments, each of the
Borrowers hereby indemnifies and holds the Agent, each Lender and each of
their respective officers, directors, employees and agents (collectively, the
"INDEMNIFIED PARTIES") free and harmless from and against any and all
actions, causes of action, suits, losses, costs, liabilities and damages, and
expenses, including reasonable attorneys' fees and disbursements
(collectively, the "INDEMNIFIED LIABILITIES"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to:
(i) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Advance;
(ii) the entering into and performance of this Agreement and
any other agreement or instrument executed in connection herewith by any of
the Indemnified Parties (including any action brought by or on behalf of any
Borrower as the result of any proper determination by the Required Lenders
not to fund any Advance);
(iii) any investigation, litigation or proceeding related to
any acquisition or proposed acquisition by any Borrower or any of their
respective Subsidiaries of any portion of the stock or assets of any person,
whether or not the Agent, or such Lender is party thereto;
(iv) any of the matters for which the Lenders and the Agent
are indemnified pursuant to the Environmental Certificate or otherwise.
Notwithstanding the above, if any Indemnified Liability arises by reason of
the relevant Indemnified Party's gross negligence or willful misconduct or
breach of this Agreement, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, each of the Borrowers hereby
agrees to make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable
law. Each of the Borrowers shall be obligated to indemnify the Indemnified
Parties for all Indemnified Liabilities subject to and pursuant to the
foregoing provisions, regardless of whether any Borrower or any of their
respective Subsidiaries had knowledge of the facts and circumstances giving
rise to such Indemnified Liability. For purposes of the section, "HAZARDOUS
MATERIALS" shall have the meaning ascribed thereto in the Environmental
Certificate.
8.6 SUCCESSORS AND ASSIGNS. (a) This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and assigns, PROVIDED that the Borrowers may not, without the
prior consent of the Lenders, assign any of their rights or obligations
hereunder or under the Notes or any other Loan Document (except for mergers
and transfers of assets between the Borrowers permitted hereunder) and the
Lenders shall not be obligated to make any Advance hereunder to any entity
other than the Borrowers.
<PAGE>
<PAGE> EX-10.23-70
(b) Any Lender may sell to any financial institution or
institutions, and such financial institution or institutions may further
sell, a participation interest (undivided or divided) in, the Advances and
such Lender's rights and benefits under this Agreement, the Notes and the
other Loan Documents, and to the extent of that participation interest such
participant or participants shall have the same rights and benefits against
each Borrower under Section 3.7, 3.9 and 6.2(c) as it or they would have had
if such participant or participants were the Lender making the Advances to
such Borrower hereunder, PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement shall remain unmodified and fully effective
and enforceable against such Lender, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Borrowers, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement,
and (v) such Lender shall not grant to its participant any rights to consent
or withhold consent to any action taken by such Lender or the Agent under
this Agreement other than action requiring the consent of all of the Lenders
hereunder.
(c) The Agent, from time to time in its sole discretion may
appoint agents for the purpose of servicing and administering this Agreement
and the transactions contemplated hereby and enforcing or exercising any
rights or remedies of the Agent, as the case may be, provided under this
Agreement, the Notes, any Loan Documents or otherwise. In furtherance of
such agency, each of the Agent may from time to time direct that the
Borrowers provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. Each Borrower hereby
consents to the appointment of such agent and agrees to provide all such
notices, reports and other documents and to otherwise deal with such agent
acting on behalf of the Agent, as the case may be, in the same manner as
would be required if dealing with the Agent itself.
(d) Each Lender may, with the prior consent of the Borrowers and
the Agent, which consent shall not be unreasonably withheld and may not be
withheld by any Borrower if any Event of Default has occurred and is
continuing, assign to one or more banks or other entities all or a portion of
its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and
the Note or Notes held by it); PROVIDED, HOWEVER, that (i) each such
assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations, (ii) except in the case of an assignment of all of a
Lender's rights and obligations under this Agreement, (A) the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000, and in
integral multiples of $1,000,000 thereafter (or such lesser amount as to
which the Borrowers and the Agent may consent) or, if the Commitments have
been terminated, the amount of the Advances (including Advances in which such
Lender is participating) shall in no event shall be less than $5,000,000 in
integral multiples of $1,000,000 thereafter (or such lesser amount as to
which the Borrowers and the Agent may consent) and (B) after giving effect to
<PAGE>
<PAGE> EX-10.23-71
each such assignment, the amount of the Commitment of the assigning Lender
shall in no event be less than $10,000,000 (or such lesser amount agreed to
by the Company and the Agent), unless terminated in its entirety, or, if the
Commitments have been terminated, the remaining principal balance of Advances
(including Advances in which such Lender is participating) shall in no event
be less than $10,000,000 (or such lesser amount as to which the Borrowers and
Agents may consent), (iii) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance in the form of EXHIBIT K hereto (an "ASSIGNMENT
AND ACCEPTANCE"), together with any Note or Notes subject to such assignment
and a processing and recordation fee of $3,000, and (iv) any Lender may
without the consent of the Borrowers or the Agent, and without paying any
fee, assign to any Affiliate of such Lender that is a bank or financial
institution all of its rights and obligations under this Agreement. Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and
(y) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
covering all of the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto).
(e) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of any Borrower or the performance or observance by any Borrower of
any of its obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.6 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon the Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
<PAGE>
<PAGE> EX-10.23-72
obligations that by the terms of this Agreement are required to be performed
by it as a Lender.
(f) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "REGISTER"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrowers, the Agent and the Lenders may treat
each person whose name is recorded in the Register as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for
inspection by any Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(g) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has
been completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrowers. Within five Business Days after its receipt of
such notice, each of the Borrowers, at its own expense, shall execute and
deliver to the Agent in exchange for the surrendered Note or Notes a new Note
to the order of such assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment hereunder, a new Note to the order of the assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such
new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated
the effective date of such Assignment and Acceptance and shall otherwise be
in substantially the form of EXHIBIT K hereto.
(h) The Borrowers shall not be liable for any costs or expenses of
any Lender in effectuating any participation or assignment under this Section
8.6.
(i) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 8.6, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers so long as any such
assignee or participant shall have executed a confidentiality agreement in
form and substance satisfactory to the Borrowers.
(j) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in, or
assign, all or any portion of its rights under this Agreement (including,
without limitation, the Loans owing to it and the Note or Notes held by it)
in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System; PROVIDED that such creation
of a security interest or assignment shall not release such Lender from its
obligations under this Agreement.
<PAGE>
<PAGE> EX-10.23-73
8.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
8.8 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement is a
contract made under, and shall be governed by and construed in accordance
with, the law of the State of Michigan applicable to contracts made and to be
performed entirely within such State and without giving effect to choice of
law principles of such State. Each of the Borrowers and the Lenders further
agrees that any legal or equitable action or proceeding with respect to this
Agreement, the Notes or any other Loan Document or the transactions
contemplated hereby shall be brought in any court of the State of Michigan,
or in any court of the United States of America sitting in Michigan, and each
Borrower and the Lenders hereby submit to and accept generally and
unconditionally the jurisdiction of those courts with respect to its person
and property, and, in the case of each Borrower irrevocably appoints the
Treasurer of Company, whose address in Michigan is 2016 N. Pitcher Street,
Kalamazoo, Michigan 49007, as its agent for service of process and
irrevocably consents to the service of process in connection with any such
action or proceeding by personal delivery to such agent or to such Borrower,
as the case may be, or by the mailing thereof by registered or certified
mail, postage prepaid to such Borrower at its address for notices pursuant to
Section 8.2. Each of the Borrowers shall at all times maintain such an agent
in Michigan for such purpose and shall notify the Lenders and the Agent of
such agent's address in Michigan within ten days of any change of address.
Nothing in this paragraph shall affect the right of the Lenders, and the
Agent to serve process in any other manner permitted by law or limit the
right of the Lenders or the Agent to bring any such action or proceeding
against any Borrower or property in the courts of any other jurisdiction.
Each Borrower and the Lenders hereby irrevocably waive any objection to the
laying of venue of any such action or proceeding in the above described
courts.
8.9 TABLE OF CONTENTS AND HEADINGS. The table of contents and the
headings of the various subdivisions hereof are for the convenience of
reference only and shall in no way modify any of the terms or provisions
hereof.
8.10 CONSTRUCTION OF CERTAIN PROVISIONS. If any provision of this
Agreement refers to any action to be taken by any person, or which such
person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such person, whether or not
expressly specified in such provision. Any reference herein to the grant of
a security interest to the Agent, or to the Agent and the Lenders shall be
deemed a grant of a security interest to the Agent for the benefit of itself,
and all Lenders.
8.11 INTEGRATION AND SEVERABILITY. This Agreement, the Notes, and the
other Loan Documents embody the entire agreement and understanding between
the Borrowers and the Agent, the Lenders, and supersede all prior agreements
and understandings, relating to the subject matter hereof. In case any one
or more of the obligations of any Borrower under this Agreement, the Notes or
<PAGE>
<PAGE> EX-10.23-74
any other Loan Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Borrowers shall not in any way be affected or impaired
thereby, and such invalidity, illegality or unenforceability in one
jurisdiction shall not affect the validity, legality or enforceability of the
obligations of any Borrower under this Agreement, the Notes or any other Loan
Document in any other jurisdiction.
8.12 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any such covenant, the fact that it would be permitted by an
exception to, or would be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default or an Event of Default
if such action is taken or such condition exists.
8.13 INTEREST RATE LIMITATION. Notwithstanding any provisions of this
Agreement, the Notes or any other Loan Document, in no event shall the amount
of interest paid or agreed to be paid by the Borrowers exceed an amount
computed at the highest rate of interest permissible under applicable law.
If, from any circumstances whatsoever, fulfillment of any provision of this
Agreement, the Notes or any other Loan Document at the time performance of
such provision shall be due, shall involve exceeding the interest rate
limitation validly prescribed by law which a court of competent jurisdiction
may deem applicable hereto, then, ipso facto, the obligations to be fulfilled
shall be reduced to an amount computed at the highest rate of interest
permissible under applicable law, and if for any reason whatsoever any
Lender shall ever receive as interest an amount which would be deemed
unlawful under such applicable law such interest shall be automatically
applied to the payment of principal of the Advances outstanding hereunder
(whether or not then due and payable) and not to the payment of interest, or
shall be refunded to the Borrowers if such principal and all other
obligations of the Borrowers to the Lenders have been paid in full.
8.14. JOINT AND SEVERAL OBLIGATIONS; CONTRIBUTION RIGHTS; SAVINGS
CLAUSE. (a) Notwithstanding anything to the contrary set forth herein or in
any Note or in any other Loan Document, the obligations of the Borrowers
hereunder and under the Notes and the other Loan Documents are joint and
several.
(b) If any Borrower makes a payment in respect of the Lender
Obligations it shall have the rights of contribution set forth below against
the other Borrowers; PROVIDED that such Borrower shall not exercise its right
of contribution until all the Lender Obligations shall have been finally paid
in full in cash. If any Borrower makes a payment in respect of the Lender
Obligations that is smaller in proportion to its Payment Share (as
hereinafter defined) than such payments made by the other Borrowers are in
proportion to the amounts of their respective Payment Shares, the Borrower
making such proportionately smaller payment shall, when permitted by the
preceding sentence, pay to the other Borrowers an amount such that the net
payments made by the Borrower in respect of the Lender Obligations shall be
shared among the Borrowers pro rata in proportion to their respective Payment
Shares. If any Borrower receives any payment that is greater in proportion
to the amount of its Payment Shares than the payments received by the other
<PAGE>
<PAGE> EX-10.23-75
Borrowers are in proportion to the amounts of their respective Payment
Shares, the Borrower receiving such proportionately greater payment shall,
when permitted by the second preceding sentence, pay to the other Borrowers
an amount such that the payments received by the Borrowers shall be shared
among the Borrowers pro rata in proportion to their respective Payment
Shares. Notwithstanding anything to the contrary contained in this paragraph
or in this Agreement, no liability or obligation of any Borrower that shall
accrue pursuant to this paragraph shall be paid nor shall it be deemed owed
pursuant to this paragraph until all of the Lender Obligations shall be
finally paid in full in cash.
For purposes hereof, the "Payment Share" of each Borrower shall be the
sum of (a) the aggregate proceeds of the Lender Obligations received by such
Borrower plus (b) the product of (i) the aggregate Lender Obligations
remaining unpaid on the date such Lender Obligations become due and payable
in full, whether by stated maturity, acceleration, or otherwise (the
"Determination Date") reduced by the amount of such Lender Obligations
attributed to all or such Borrowers pursuant to clause (a) above, times (ii)
a fraction, the numerator of which is such Borrower's net worth on the
effective date of this Agreement (determined as of the end of the immediately
preceding fiscal reporting period of such Borrower), and the denominator of
which is the aggregate net worth of all Borrowers on such effective date.
(c) It is the intent of each Borrower, the Agent and the Lenders
that each Borrower's maximum Lender Obligations shall be in, but not in
excess of:
(i) in a case or proceeding commenced by or against such
Borrower under the Bankruptcy Code on or within one year from the date on
which any of the Lender Obligations are incurred, the maximum amount that
would not otherwise cause the Lender Obligations (or any other obligations of
such Borrower to the Agent and the Lenders) to be avoidable or unenforceable
against such Borrower under (A) Section 548 of the Bankruptcy Code or (B) any
state fraudulent transfer or fraudulent conveyance act or statute applied in
such case or proceeding by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against such
Borrower under the Bankruptcy Code subsequent to one year from the date on
which any of the Lender Obligations are incurred, the maximum amount that
would not otherwise cause the Lender Obligations (or any other obligations of
such Borrower to the Agent and the Lenders) to be avoidable or unenforceable
against such Borrower under any state fraudulent transfer or fraudulent
conveyance act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code;
(iii) in a case or proceeding commenced by or against such
Borrower under any law, statute or regulation other than the Bankruptcy Code
(including, without limitation, any other bankruptcy, reorganization,
arrangement, moratorium, readjustment of debt, dissolution, liquidation or
similar debtor relief laws), the maximum amount that would not otherwise
cause the Lender Obligations (or any other obligations of such Borrower to
the Agent and the Lenders) to be avoidable or unenforceable against such
Borrower under such law, statute or regulation including, without limitation,
<PAGE>
<PAGE> EX-10.23-76
any state fraudulent transfer or fraudulent conveyance act or statute applied
in any such case or proceeding.
(d) The Borrowers acknowledge and agree that they have requested
that the Lenders make credit available to the Borrowers with each Borrower
expecting to derive benefit, directly and indirectly, from the loans and
other credit extended by the Lenders to the Borrowers.
8.15 CONSENTS TO RENEWALS, MODIFICATIONS AND OTHER ACTIONS AND EVENTS.
This Agreement and all of the obligations of the Borrowers hereunder shall
remain in full force and effect without regard to and shall not be released,
affected or impaired by: (a) any amendment, assignment, transfer,
modification of or addition or supplement to the Lender Obligations, this
Agreement, any Note or any other Loan Document; (b) any extension,
indulgence, increase in the Lender Obligations or other action or inaction in
respect of any of the Loan Documents or otherwise with respect to the Lender
Obligations, or any acceptance of security for, or guaranties of, any of the
Lender Obligations or Loan Documents, or any surrender, release, exchange,
impairment or alteration of any such security or guaranties including without
limitation the failing to perfect a security interest in any such security or
abstaining from taking advantage or of realizing upon any guaranties or upon
any security interest in any such security; (c) any default by any Borrower
under, or any lack of due execution, invalidity or unenforceability of, or
any irregularity or other defect in, any of the Loan Documents; (d) any
waiver by the Lenders or any other person of any required performance or
otherwise of any condition precedent or waiver of any requirement imposed by
any of the Loan Documents, any guaranties or otherwise with respect to the
Lender Obligations; (e) any exercise or non-exercise of any right, remedy,
power or privilege in respect of this Agreement or any of the other Loan
Documents; (f) any sale, lease, transfer or other disposition of the assets
of any Borrower or any consolidation or merger of any Borrower with or into
any other person, corporation, or entity, or any transfer or other
disposition by any Borrower or any other holder of any shares of capital
stock of any Borrower; (g) any bankruptcy, insolvency, reorganization or
similar proceedings involving or affecting any Borrower; (h) the release or
discharge of any Borrower from the performance or observance of any
agreement, covenant, term or condition under any of the Lender Obligations or
contained in any of the Loan Documents by operation of law; or (i) any other
cause whether similar or dissimilar to the foregoing which, in the absence of
this provision, would release, affect or impair the obligations, covenants,
agreements and duties of any Borrower hereunder, including without limitation
any act or omission by the Agent, or the Lender or any other any person which
increases the scope of such Borrower's risk; and in each case described in
this paragraph whether or not any Borrower shall have notice or knowledge of
any of the foregoing, each of which is specifically waived by each Borrower.
Each Borrower warrants to the Lenders that it has adequate means to obtain
from each other Borrower on a continuing basis information concerning the
financial condition and other matters with respect to the Borrowers and that
it is not relying on the Agent or the Lenders to provide such information
either now or in the future.
8.16 WAIVERS, ETC. Each Borrower unconditionally waives: (a) notice of
any of the matters referred to in Section 8.15 above; (b) all notices which
<PAGE>
<PAGE> EX-10.23-77
may be required by statute, rule or law or otherwise to preserve any rights
of the Agent, or the Lender, including, without limitation, presentment to
and demand of payment or performance from the other Borrowers and protect for
non-payment or dishonor; (c) any right to the exercise by the Agent, or the
Lender of any right, remedy, power or privilege in connection with any of the
Loan Documents; (d) any requirement that the Agent, or the Lender, in the
event of any default by any Borrower, first make demand upon or seek to
enforce remedies against, such Borrower or any other Borrower before
demanding payment under or seeking to enforce this Agreement against any
other Borrower; (f) any right to notice of the disposition of any security
which the Agent, or the Lender may hold from any Borrower or otherwise and
any right to object to the commercial reasonableness of the disposition of
any such security; and (g) all errors and omissions in connection with the
Agent, or the Lender's administration of any of the Lender Obligations, any
of the Loan Documents', or any other act or omission of the Agent, or the
Lender which changes the scope of the Borrower's risk, except as a result of
the gross negligence or willful misconduct of the Agent, or the Lender. The
obligations of each Borrower hereunder shall be complete and binding
forthwith upon the execution of this Agreement and subject to no condition
whatsoever, precedent or otherwise, and notice of acceptance hereof or action
in reliance hereon shall not be required.
8.17 WAIVER OF JURY TRIAL. THE LENDERS, THE AGENT AND THE BORROWERS,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE
TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER ANY LENDER, THE
AGENT, NOR ANY BORROWER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR
OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE
PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY
SUCH PARTY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the 26th day of January, 1995, which shall be
the Effective Date of this Agreement.
CHECKER MOTORS CORPORATION
By /s/ Jay Harris
----------------------------
Its Vice President
-------------------------
<PAGE>
<PAGE> EX-10.23-78
YELLOW CAB COMPANY
By /s/ Jay Harris
----------------------------
Its Vice President
-------------------------
CHICAGO AUTOWERKS INC.
By /s/ Jay Harris
----------------------------
Its Vice President
-------------------------
CMC KALAMAZOO INC.
By /s/ Jay Harris
----------------------------
Its Vice President
-------------------------
SOUTH CHARLESTON STAMPING &
MANUFACTURING COMPANY
By /s/ Larry Temple
----------------------------
Its Vice President
-------------------------
<PAGE>
<PAGE> EX-10.23-79
Address for Notices: NBD BANK, as a Lender
and as Agent
611 Woodward Avenue By /s/ Randy R. Balluff
Detroit, Michigan 48226 ----------------------------
Attention: Michigan Banking Division Its First Vice President
-------------------------
Facsimile No.: (313) 225-2458
Facsimile
Confirmation No.: (313) 225-1671
Revolving Credit Commitment Amount: $10,769,230
Term Loan Commitment Amount: $24,230,770
Percentage of
Total Commitments: 53.846154%
<PAGE>
<PAGE> EX-10.23-80
Address for Notices: THE BANK OF NEW YORK COMMERCIAL
CORPORATION
1290 Avenue of the Americas By /s/ Daniel J. Murray
3rd Floor ----------------------------------
New York, New York 10104
Its Vice President
Attention: Gurdatt Jagnanan -------------------------------
Facsimile No.: (212) 408-4319
Facsimile
Confirmation No.: (212) 408-4188
Revolving Credit Commitment Amount: $4,615,385
Term Loan Commitment Amount: $10,384,615
Percentage of
Total Commitments: 23.076923%
<PAGE>
<PAGE> EX-10.23-81
Address for Notices: THE FIRST NATIONAL BANK OF BOSTON
100 Federal Street By /s/ S. J. Mulholland
Mail Stop 01-22-07 ----------------------------------
Boston, MA 02106
Its Division Executive
Attention: Katherine Steiger -------------------------------
Facsimile No.: (617) 434-8964
Facsimile
Confirmation No.: (617) 434-4334
Revolving Credit Commitment Amount: $4,615,385
Term Loan Commitment Amount: $10,384,615
Percentage of
Total Commitments: 23.076923%
WP6:[WPWPS.00007.2275]AGR_AA1_09.LOAN
<PAGE> EX-10.24-1
EXHIBIT 10.24
EXHIBIT C
PLEDGE AGREEMENT AND IRREVOCABLE PROXY
--------------------------------------
THIS PLEDGE AGREEMENT dated as of January 26, 1995 (this "Pledge
Agreement"), is given by CHECKER MOTORS CORPORATION, a Delaware corporation
(the "Pledgor"), in favor of NBD BANK, a national banking association, as
agent (in such capacity, the "Agent") for the benefit of itself and the
Lenders (defined below).
RECITALS
--------
A. The Pledgor and certain other borrowers named therein
(collectively, the "Borrowers") have entered into a Loan Agreement, dated as
of January 26, 1995, (as amended or modified from time to time, including any
agreement entered into in substitution therefor, the "Loan Agreement"), with
the lenders parties thereto (the "Lenders") and the Agent pursuant to which
the Lenders agreed, subject to the terms and conditions thereof, to extend
credit to the Borrowers.
B. The Pledgor has agreed to pledge to the Agent, for the benefit of
the Lenders, and grant a first-priority security interest to the Agent, for
the benefit of the Lenders, in and to the collateral described herein and to
execute this Pledge Agreement.
For value received, the Pledgor hereby grants a first-priority security
interest to the Agent, for the benefit of the Lenders, in and to all of the
outstanding capital stock of the companies listed on the schedule attached
hereto as Schedule A (the "Pledged Subsidiaries", and said shares of stock,
together with any other shares and securities from time to time receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares, being called the "Pledged Stock"), to secure, (a) the prompt and
complete payment of all indebtedness and other obligations of each of the
Borrowers or any of their respective Subsidiaries now or hereafter owing to
the Lenders or the Agent under or on account of the Loan Agreement or any
other Loan Document, (b) the performance by each of the Borrowers of the
covenants under the Loan Agreement and the other Loan Documents and any
monies expended by the Agent in connection therewith, (c) the prompt and
complete payment of all obligations and the performance of all covenants of
each of the Borrowers under any interest rate or currency swap agreements or
similar transactions with any Lender and (d) the prompt and complete payment
of any and all other indebtedness, obligations and liabilities of any kind of
each of the Borrowers and any of their respective Subsidiaries to any Lender
or the Agent or any of them, in all cases, of any kind or nature, howsoever
created or evidenced and whether now or hereafter existing, direct or
indirect (including without limitation any participation interest acquired by
any Lender in any such indebtedness, obligations or liabilities of any
Borrower or any of their respective Subsidiaries to any other person),
absolute or contingent, joint and/or several, secured or unsecured, arising
by operation of law or otherwise, and whether incurred by any Borrower or any
of their respective Subsidiaries as principal, surety, endorser, guarantor,
<PAGE>
<PAGE> EX-10.24-2
accommodation party or otherwise, including without limitation all principal
and all interest (including any interest accruing subsequent to any petition
filed by or against any Borrower or any of their respective Subsidiaries
under the U.S. Bankruptcy Code), indemnity and reimbursement obligations,
charges, expenses, fees, reasonable attorneys' fees and disbursements and any
other amounts owing thereunder (all of the aforesaid indebtedness,
obligations and liabilities of the Borrowers and their respective
Subsidiaries being herein called the "Secured Obligations", and all of the
documents, agreements and instruments among the Borrowers, their respective
Subsidiaries, the Agent, the Lenders, or any of them, evidencing or securing
the repayment of, or otherwise pertaining to, the Secured Obligations being
herein collectively called the "Operative Documents"). The Pledgor is
herewith delivering to the Agent for the benefit of the Lenders originals of
all stock certificates of the Pledged Stock or taking such other action
acceptable to the Agent and the Lenders to perfect the security interest in
the Pledged Stock granted hereby.
The Pledgor further represents and warrants to, and agrees with, the
Agent for the benefit of the Lenders as follows:
1. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants
that the Pledged Stock is represented by the stock certificate or
certificates or shares described on Schedule 1 hereto, and that such stock
certificate or certificates, accompanied by an instrument of assignment or
transfer duly executed in blank by the Pledgor as the owner named in such
stock certificate or certificates, have been delivered to the Agent by the
Pledgor. The Pledgor further represents and warrants that (a) the Pledged
Stock is duly authorized and validly issued, fully paid and nonassessable and
constitutes 100% of all of the issued and outstanding shares of the capital
stock of each Pledged Subsidiary owned by the Company, (b) the Pledgor is the
legal and beneficial owner of the Pledged Stock, free and clear of all Liens
other than the Lien of Agent hereunder, with full right and power to deliver,
pledge and assign the Pledged Stock to the Agent hereunder, and (c) upon
delivery of the Pledged Stock to the Agent, the pledge of the Pledged Stock
pursuant to this Pledge Agreement creates in favor of the Agent a valid and
perfected first priority security interest in the Pledged Stock enforceable
against the Pledgor and all third parties and securing the payment of the
Secured Obligations.
2. TITLE; STOCK RIGHTS, DIVIDENDS, ETC. The Pledgor will warrant and
defend the Agent's title to the Pledged Stock, and the security interest
herein created, against all claims of all persons, and will maintain and
preserve such security interest. It is understood and agreed that the
collateral hereunder includes any stock rights, stock dividends, liquidating
dividends, new securities, payments, distributions and proceeds (including
cash dividends and sale proceeds) and other property to which the Pledgor may
become entitled by reason of the ownership of the Pledged Stock during the
existence of this Pledge Agreement, and any such property received by the
Pledgor shall be held in trust and forthwith delivered to the Agent to be
held hereunder in accordance with the terms of this Pledge Agreement.
3. REGISTRATION RIGHTS. If any Pledged Subsidiary at any time or from
time to time proposes to register any of its securities under the Securities
Act of 1933, the Pledgor will at each such time give notice to the Agent of
such Pledged Subsidiary's intentions so to do. Upon the request of the Agent
given 30 days after receipt of such notice, the Pledgor will cause all
Pledged Stock of such Pledged Subsidiary to be included in the registration
<PAGE>
<PAGE> EX-10.24-3
statement proposed to be filed, all to the extent requisite to permit the
public sale or other public disposition of such Pledged Stock so registered
by the holders thereof. The costs and expenses of all such registrations and
qualifications under said Act shall be paid by the Pledgor or such Pledged
Subsidiary, except that underwriting discounts and commissions in respect of
any Pledged Stock sold pursuant to any such registration statement shall be
borne by the sellers thereof. As expeditiously as possible after the
effective date of any such registration statement, the Pledgor will deliver
in exchange for any certificates representing shares of Pledged Stock so
registered pursuant to such registration, which bear any restrictive legend,
new Pledged Stock certificates not bearing such legend or any similar legend.
In the event of any such registration, the Pledgor hereby agrees to indemnify
and hold harmless the Agent and the Lenders as pledgee of the Pledged Stock
against any losses, claims, damages or liabilities to which the Agent and the
Lender may become subject to the extent that such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement, and any preliminary prospectus or filed prospectus, or in any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse the Agent and the Lenders for any legal or other expenses
reasonably incurred by the Agent and the Lenders in connection with
investigating or defending any such loss, claim, damage or liability. The
indemnifications contained in this paragraph shall include each person, if
any, who controls the Agent or any Lender.
4. EVENTS OF DEFAULT; REMEDIES. (a) Upon the occurrence of any Event
of Default under any Operative Document, an Event of Default shall be deemed
to have occurred hereunder and the Agent shall have all of the rights and
remedies provided by law and/or by this Pledge Agreement, including but not
limited to all of the rights and remedies of a secured party under the
Michigan Uniform Commercial Code, and the Pledgor hereby authorizes the Agent
to sell all or any part of the Pledged Stock at public or private sale and to
apply the proceeds of such sale to the costs and expenses thereof (including
the reasonable attorneys' fees and disbursements incurred by the Agent) and
then to the payment of the other Secured Obligations in the manner and order
set forth in the Loan Agreement. Any requirement of reasonable notice shall
be met if the Agent sends such notice to the Pledgor, by registered or
certified mail, at least 5 days prior to the date of sale, disposition or
other event giving rise to the required notice. The Agent or any Lender may
be the purchaser at any such sale. The Pledgor expressly authorizes such
sale or sales of the Pledged Stock in advance of and to the exclusion of any
sale or sales of or other realization upon any other collateral securing
indebtedness or other obligations owed to the Lenders. The Agent shall be
under no obligation to preserve rights against prior parties.
(b) The Pledgor hereby waives as to the Agent and the Lenders any
right of subrogation or marshalling of such stock and other collateral for
indebtedness or other obligations owed to the Agent and the Lenders. To this
end, the Pledgor hereby expressly agrees that any such collateral or other
security of the Pledgor or any other party which the Agent or any Lender may
hold, or which may come to any of their possession, may be dealt with in all
respects and particulars as though this Pledge Agreement were not in
existence. The Pledgor agrees and acknowledges that because of applicable
securities laws, the Agent may not be able to effect a public sale of the
Pledged Stock and sales at a private sale may be on terms less favorable than
<PAGE>
<PAGE> EX-10.24-4
if such securities were sold at a public sale and may be at a price less
favorable than a public sale. The Pledgor agrees that all such private sales
made under the foregoing circumstances shall be deemed to have been made in
a commercially reasonable manner.
(c) The Pledgor irrevocably designates, makes, constitutes and
appoints the Agent (and all persons designated by the Agent) as its true and
lawful attorney (and agent-in-fact) and the Agent, or the Agent's agent, may,
upon and after an Event of Default hereunder which has not been waived, with
notice to the Pledgor if the Secured Obligations have not been accelerated
and without notice if the Secured Obligations have been accelerated, take any
action as the Agent reasonably deems necessary under the circumstances to
enforce or otherwise take action in respect to the Pledged Stock as required
hereby, or to carry out any other obligation or duty of the Pledgor under
this Agreement. The Pledgor shall pay all reasonable fees and expenses,
including reasonable attorneys' fees and expenses, incurred by the Agent in
connection with such action.
5. ADDITIONAL REMEDIES; IRREVOCABLE PROXY. (a) Upon the occurrence of
any Event of Default, the Agent shall have also the right to vote the Pledged
Stock on all questions after giving notice to the Pledgor of its election to
exercise such rights. In the absence of any such Event of Default, the
Pledgor shall have the right to vote the Pledged Stock on all questions,
PROVIDED that voting by the Pledgor of the Pledged Stock shall be in
conformity with performance of the obligations of the Pledgor under the
Operative Documents.
(b) Whenever an Event of Default has occurred, the Agent may
transfer into its name, or into the name of its nominee or nominees, any or
all of the Pledged Stock and, as provided above, may vote any or all of the
Pledged Stock (whether or not so transferred) and may otherwise act with
respect thereto as though it were the outright owner thereof, the Pledgor
hereby irrevocably constituting and appointing the Agent as the proxy and
attorney-in-fact of the Pledgor, with full power of substitution, to do so.
(c) In furtherance of the foregoing whenever an Event of Default
has occurred, it is acknowledged that the Agent may vote the Pledged Stock to
remove the directors and officers of any Pledged Subsidiary, and to elect new
directors and officers of any Pledged Subsidiary, who thereafter shall manage
the affairs of such Pledged Subsidiary, operate its properties and carry on
its business and otherwise take any action with respect to the business,
properties and affairs of such Pledged Subsidiary which such new directors
shall deem necessary or appropriate, including, but not limited to, the
maintenance, repair, renewal or alteration of any or all of the properties of
such Pledged Subsidiary, the leasing, subleasing, sale or other disposition
of any or all of such properties, the borrowing of money on the credit of
such Pledged Subsidiary, and the employment of attorneys, agents or other
employees deemed by such new directors to be necessary for the proper
operation, conduct, winding up or liquidation of the business, properties and
affairs of such Pledged Subsidiary, and all revenues from the operation,
conduct, winding up or liquidation of the business, properties and affairs of
such Pledged Subsidiary after the payment of expenses thereof shall be
applied to the payment of the Secured Obligations.
(d) The Pledgor agrees that the proxy granted in this paragraph 5
is coupled with an interest and is and shall be both valid and irrevocable so
long as the Pledged Stock is subject to this Pledge Agreement. The Pledgor
<PAGE>
<PAGE> EX-10.24-5
further acknowledges that the term of said proxy may exceed three years from
the date hereof.
6. REMEDIES CUMULATIVE. No right or remedy conferred upon or reserved
to the Agent and the Lenders under any Operative Document is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative in addition to every other right or remedy given hereunder or now
or hereafter existing under any applicable law. Every right and remedy of
the Agent and the Lenders under any Operative Document or under applicable
law may be exercised from time to time and as often as may be deemed
expedient by the Agent and the Lenders. To the extent that it lawfully may,
the Pledgor agrees that it will not at any time insist upon, plead, or in any
manner whatever claim or take any benefit or advantage of any applicable
present or future stay, extension or moratorium law, which may affect
observance or performance of any provisions of any Operative Document; nor
will it claim, take or insist upon any benefit or advantage of any present or
future law providing for the valuation or appraisal of any security for its
obligations under any Operative Document prior to any sale or sales thereof
which may be made under or by virtue of any instrument governing the same;
nor will it, after any such sale or sales, claim or exercise any right, under
any applicable law to redeem any portion of such security so sold.
7. CONDUCT NO WAIVER. No waiver of default shall be effective unless
in writing executed by the Agent and waiver of any default or forbearance on
the part of the Agent in enforcing any of its rights under this Pledge
Agreement shall not operate as a waiver of any other default or of the same
default on a future occasion or of such right.
8. GOVERNING LAW; DEFINITIONS. This Pledge Agreement is a contract
made under, and shall be governed by and construed in accordance with, the
law of the State of Michigan applicable to contracts made and to be performed
entirely within such State and without giving effect to choice of law
principles of such State. The Pledgor agrees that any legal action or
proceeding with respect to this Pledge Agreement or the transactions
contemplated hereby may be brought in any court of the State of Michigan, or
in any court of the United States of America sitting in Michigan, and the
Pledgor hereby submits to and accepts generally and unconditionally the
jurisdiction of those courts with respect to its person and property, and
irrevocably appoints the Chief Financial Officer of the Pledgor, at the
Pledgor's address set forth in the Loan Agreement, as its agent for service
of process and irrevocably consents to the service of process in connection
with any such action or proceeding by personal delivery to such agent or to
the Pledgor or by the mailing thereof by registered or certified mail,
postage prepaid to the Pledgor at its address set forth in the Loan
Agreement. Nothing in this paragraph shall affect the right of the Agent to
serve process in any other manner permitted by law or limit the right of the
Agent to bring any such action or proceeding against the Pledgor or its
property in the courts of any other jurisdiction. The Pledgor hereby
irrevocably waives any objection to the laying of venue of any such suit or
proceeding in the above described courts. Terms used but not defined herein
shall have the respective meanings ascribed thereto in the Loan Agreement.
Unless otherwise defined herein or in the Loan Agreement, terms used in
Article 9 of the Uniform Commercial Code in the State of Michigan are used
herein as therein defined on the date hereof. The headings of the various
subdivisions hereof are for convenience of reference only and shall in no way
modify any of the terms or provisions hereof.
<PAGE>
<PAGE> EX-10.24-6
9. NOTICES. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Loan Agreement.
10. RIGHTS NOT CONSTRUED AS DUTIES. The Agent neither assumes nor
shall it have any duty of performance or other responsibility under any
contracts in which the Agent has or obtains a security interest hereunder.
If the Pledgor fails to perform any agreement contained herein, the Agent may
but is in no way obligated to itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Agent incurred in connection
therewith shall be payable by the Pledgor under paragraph 13. The powers
conferred on the Agent hereunder are solely to protect its interests in the
Pledged Stock and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Pledged Stock in its possession
and accounting for monies actually received by it hereunder, the Agent shall
have no duty as to any Pledged Stock or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining
to any Pledged Stock.
11. AMENDMENTS. None of the terms and provisions of this Pledge
Agreement may be modified or amended in any way except by an instrument in
writing executed by each of the parties hereto.
12. SEVERABILITY. If any one or more provisions of this Pledge
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired or prejudiced thereby.
13. EXPENSES. (a) The Pledgor agrees to indemnify the Agent from and
against any and all claims, losses and liabilities growing out of or
resulting from this Pledge Agreement (including, without limitation,
enforcement of this Pledge Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or willful misconduct.
(b) The Pledgor will, upon demand, pay to the Agent an amount of
any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Agent
may incur in connection with (i) the administration of this Pledge Agreement,
(ii) the custody, preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the Pledged Stock, (iii)
the exercise or enforcement of any of the rights of the Agent hereunder or
under the Operative Documents, or (iv) the failure of the Pledgor to perform
or observe any of the provisions hereof.
14. SUCCESSORS AND ASSIGNS; TERMINATION. This Pledge Agreement shall
create a continuing security interest in the Pledged Stock and shall be
binding upon the Pledgor, its successors and assigns, and inure, together
with the rights and remedies of the Agent hereunder, to the benefit of the
Agent and its successors, transferees and assigns. Upon the payment in full
in immediately available funds of all of the Secured Obligations and the
termination of all commitments to lend under the Operative Documents, the
security interest granted hereunder shall terminate and upon such termination
the Agent shall assign, transfer and deliver without recourse and without
warranty the Pledged Stock to the Pledgor (and any property received in
respect thereof) as has not theretofore been sold or otherwise applied
pursuant to the provisions of this Pledge Agreement.
<PAGE>
<PAGE> EX-10.24-7
15. WAIVER OF JURY TRIAL. The Agent and the Lenders, in accepting this
Pledge Agreement, and the Pledgor, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any litigation
based upon or arising out of this Pledge Agreement or any related instrument
or agreement or any of the transactions contemplated by this Pledge Agreement
or any course of conduct, dealing, statements (whether oral or written) or
actions of any of them. Neither the Agent, the Lenders, nor the Pledgor
shall seek to consolidate, by counterclaim or otherwise, any such action in
which a jury trial has been waived with any other action in which a jury
trial cannot be or has not been waived. These provisions shall not be deemed
to have been modified in any respect or relinquished by either the Agent and
the Lenders or the Pledgor except by a written instrument executed by all of
them.
IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be
duly executed as of the day and year first above written.
CHECKER MOTORS CORPORATION
By: /s/ Jay Harris
--------------------------------
Its: Vice President
---------------------------
Accepted and Agreed:
NBD BANK, as Agent
By: /s/ Randy R. Balluff
------------------------------
Its: First Vice President
--------------------------
WP6:[WPCMS.000007.2645]AGR_AA3_04
<PAGE>
<PAGE> EX-10.24-8
<TABLE>
<CAPTION>
Schedule 1 to Pledge Agreement
------------------------------
Percentage of
Name of Jurisdiction of Number of Shares Number of Stock Stock Ownership total shares of
Subsidiary Incorporation Issued to Pledgor Certificates Owned By Pledged Subsidiary
- ---------- ------------- ----------------- ------------ --------------- ------------------
<S> <S> <C> <S> <S> <C>
Yellow Cab Delaware 1000 Common #1 Checker Motors 100%
Company Corporation
CMC Kalamazoo Delaware 1000 Common #1 Checker Motors 100%
Inc. Corporation
Chicago Delaware 1000 Common #1 Checker Motors 100%
AutoWerks Inc. Corporation
American Country Illinois 24,900 1/2 Common #26 Checker Motors 100%
Insurance Company Corporation
South Charleston West 900 Common #5 Checker Motors 90%
Stamping & Virginia Corporation
Manufacturing
Company
</TABLE>
<PAGE> EX-10.25-1
EXHIBIT 10.25
EXHIBIT E
SECURITY AGREEMENT
------------------
THIS SECURITY AGREEMENT, dated as of January 26, 1995 (this "Security
Agreement"), is made by CHECKER MOTORS CORPORATION, a Delaware corporation,
YELLOW CAB COMPANY, a Delaware corporation, CHICAGO AUTOWERKS INC., a
Delaware corporation, CMC KALAMAZOO INC., a Delaware corporation, and SOUTH
CHARLESTON STAMPING & MANUFACTURING COMPANY, a West Virginia corporation
(collectively, the "Borrowers"), in favor of NBD BANK, a Michigan banking
corporation, as agent (in such capacity, the "Agent") for the benefit of
itself and the banks (the "Lenders") now or hereafter parties to the Loan
Agreement described below.
RECITALS
--------
A. The Borrowers have entered into a Loan Agreement of even date
herewith (as amended or modified from time to time, including any agreement
entered into in substitution therefor, the "Loan Agreement"), with the
Lenders and the Agent pursuant to which the Lenders may make Advances (as
therein defined) to the Borrowers.
B. Under the terms of the Loan Agreement, the Borrowers have agreed to
grant to the Agent, for the benefit of itself and the Lenders, a first-
priority security interest, subject only to security interests expressly
permitted by the Loan Agreement, in and to the Collateral hereinafter
described.
AGREEMENT
---------
To secure (a) the prompt and complete payment of all indebtedness and
other obligations of each of the Borrowers or any of their respective
Subsidiaries now or hereafter owing to the Lenders or the Agent under or on
account of the Loan Agreement or any other Loan Document (b) the performance
by each of the Borrowers of the covenants under the Loan Agreement and the
other Loan Documents and any monies expended by the Agent in connection
therewith, (c) the prompt and complete payment of all obligations and
performance of all covenants of each of the Borrowers under any interest rate
or currency swap agreements or similar transactions with any Lender and (d)
the prompt and complete payment of any and all other indebtedness,
obligations and liabilities of any kind of each of the Borrowers or any of
their respective Subsidiaries to the Agent or any Lender, or any of them, in
all cases, of any kind or nature, howsoever created or evidenced and whether
now or hereafter existing, direct or indirect (including without limitation
any participation interest acquired by any Lender in any such indebtedness,
obligations or liabilities of any Borrower or any Subsidiary of any Borrower
to any other person), absolute or contingent, joint and/or several, secured
or unsecured, arising by operation of law or otherwise, and whether incurred
<PAGE>
<PAGE> EX-10.25-2
by any such Borrower or any such Subsidiary as principal, surety, endorser,
guarantor, accommodation party or otherwise, including without limitation all
principal and all interest (including any interest accruing subsequent to any
petition filed by or against any Borrower or any Subsidiary of any Borrower
under the U.S. Bankruptcy Code), indemnity and reimbursement obligations,
charges, expenses, fees, reasonable attorneys' fees and disbursements and any
other amounts owing thereunder (all of the aforesaid indebtedness,
obligations and liabilities of the Borrowers and their respective
Subsidiaries being herein called the "Secured Obligations", and all of the
documents, agreements and instruments among the Borrowers, their respective
Subsidiaries, the Agent, the Lenders, or any of them, evidencing or securing
the repayment of, or otherwise pertaining to, the Secured Obligations
including without limitation the Loan Agreement, the Notes and the Security
Documents, being herein collectively called the "Operative Documents"), for
value received and pursuant to the Loan Agreement, each Borrower hereby
grants, assigns and transfers to the Agent for the benefit of the Lenders a
first-priority security interest, subject only to Permitted Liens, in and to
the following described property whether now owned or existing or hereafter
acquired or arising and wherever located (all of which is herein collectively
called the "Collateral"):
(a) All of each Borrower's present and future accounts, documents,
instruments, general intangibles and chattel paper, including, but without
limitation, all accounts receivable, contract rights, all deposit accounts
and all monies and claims for money due or to become due, security held or
granted to any Borrower, all of each Borrower's interest in the taxi
medallions identified on Schedule A hereto, and all assets described in
clause (d) below;
(b) All of each Borrower's furniture, fixtures, machinery and
equipment, whether now owned or hereafter acquired, and wherever located, and
whether used by such Borrower or any other person, or leased by such Borrower
to any person and whether the interest of such Borrower is as owner, lessee
or otherwise;
(c) All of each Borrower's present and future inventory of every type,
wherever located, including but not limited to raw materials, work in
process, finished goods and all inventory that is available for leasing or
leased to others by such Borrower;
(d) All other present and future assets of each Borrower (whether
tangible or intangible), including but not limited to all trademarks,
tradenames, service marks, patents, industrial designs, masks, trade names,
trade secrets, copyrights, franchises, customer lists, service marks,
computer programs, software, tax refund claims, licenses and permits, and the
good will associated therewith and all federal, state, foreign and other
applications and registrations therefor, all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof now or
hereafter in effect, all income, license royalties, damages and payments now
and hereafter due or payable under and with respect thereto, including,
without limitation, any damages, proceeds or payments for past or future
infringements thereof and all income, royalties, damages and payments under
all licenses thereof, the right to sue for past, present and future
infringements thereof, all right, title and interest of each Borrower as
licensor under any of the foregoing whether now owned and existing or
hereafter arising, and all other rights and other interests corresponding
<PAGE>
<PAGE> EX-10.25-3
thereto throughout the world (all of the assets described in this clause (d)
collectively referred to as the "Intellectual Property");
(e) All books, records, files, correspondence, computer programs,
tapes, disks, cards, accounting information and other data of each Borrower
related in any way to the Collateral described in clauses (a), (b), (c) and
(d) above, including but not limited to any of the foregoing necessary to
administer, sell or dispose of any of the Collateral;
(f) All substitutions and replacements for, and all additions and
accessions to, any and all of the foregoing; and
(g) All products and all proceeds of any and all of the foregoing, and,
to the extent not otherwise included, all payments under insurance (whether
or not the Agent is the loss payee thereof), and any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing.
1. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS. Each
Borrower further represents, warrants, covenants, and agrees with the Agent
for the benefit of the Lenders as follows:
(a) OWNERSHIP OF COLLATERAL; SECURITY INTEREST PRIORITY. At the
time any Collateral becomes subject to a security interest of the Agent
hereunder, unless the Agent shall otherwise consent, the Borrower shall be
deemed to have represented and warranted that (i) the Borrower is the legal
and beneficial owner of such Collateral and has the right and authority to
subject the same to the security interest of the Agent; (ii) other than
Permitted Liens and lessors' interests with respect to any security interest
in any property leased by the Borrower as lessee, none of the Collateral is
subject to any Lien other than that in favor of the Agent and there is no
effective financing statement or other filing covering any of the Collateral
on file in any public office, other than in favor of the Agent. This
Security Agreement creates in favor of the Agent a valid first-priority
security interest, subject only to Permitted Liens, in the Collateral
enforceable against the Borrower and all third parties and securing the
payment of the Secured Obligations. All financing statements required by
Lenders necessary to perfect such security interest in the Collateral have
been delivered by the Borrower to the Agent for filing.
(b) LOCATION OF OFFICES, RECORDS AND FACILITIES. The Borrower's
chief executive office and chief place of business and the office where the
Borrower keeps its records concerning its accounts, contract rights, chattel
papers, instruments, general intangibles and other obligations arising out of
or in connection with the sale or lease of goods or the rendering of services
or otherwise ("Receivables"), and all originals of all leases and other
chattel paper which evidence Receivables, is set forth on Schedule 1(b)(i)
hereto and none of the Receivables is evidenced by a promissory note or other
instrument except for such notes or other instruments delivered to the Agent
pursuant to the terms of this Agreement, except as otherwise provided
pursuant to the terms of the Loan Agreement. The Borrower will provide the
Agent with prior written notice of any proposed change in the location of its
chief executive office. The Borrower's only other offices and facilities are
at the locations set forth in Schedule 1(b)(ii) hereto. The Borrower will
provide the Agent with prior written notice of any change in the locations of
its other offices and the facilities at which any assets of the Borrower are
located to the extent that such change in location would necessitate the
<PAGE>
<PAGE> EX-10.25-4
filing of a new financing statement to maintain the Agent's perfected
security interest in the Collateral located at any such location. The tax
identification number of the Borrower is set forth on Schedule 1(b)(i). The
name of the Borrower is as set forth in the first paragraph of this Security
Agreement and the Borrower operates under no other names. The Borrower shall
not change its name or conduct any business under any tradenames, fictitious
names or assumed names without providing the Agent with prior written notice.
(c) LOCATION OF INVENTORY, FIXTURES, MACHINERY AND EQUIPMENT. (i)
All Collateral consisting of inventory is, and will be, located at the
locations listed on Schedule 1(c)(i) hereto, and at no other locations
without the prior written consent of the Agent. (ii) All Collateral
consisting of fixtures, machinery or equipment, is, and will be, located at
the locations listed on Schedule 1(c)(ii) hereto, and at no other locations
without the prior written consent of the Agent. If the Collateral described
in clauses (i) or (ii) is kept at leased locations or warehoused, the
Borrower has obtained appropriate landlord's lien waivers or appropriate
warehousemen's notices have been sent, each satisfactory to the Agent, unless
waived by the Agent. To the extent the Borrower leases any location
subsequent to the date hereof, the Borrower shall obtain a landlord's lien
waiver, satisfactory the Agent from the landlord of such new leased location.
Following the occurrence and during the continuance of any Event of Default
and upon the Agent's request, the Borrower shall transfer, at the Borrower's
expense, all inventory and equipment at any location with respect to which an
executed landlord agreement has not been delivered to the Agent to such other
location designated by the Agent.
(d) LIENS, ETC. The Borrower will keep the Collateral free at all
times from any and all liens, security interests or encumbrances other than
those described in paragraph 1(a)(ii) and those consented to in writing by
the Required Lenders. The Borrower will not, without the prior written
consent of the Agent, sell, lease, license, transfer, assign or otherwise
dispose, or permit or suffer to be sold, leased, licensed, transferred,
assigned or otherwise disposed, any of the Collateral, except for, prior to
an event of default only (notwithstanding any other agreement), the
following: inventory sold in the ordinary course of business and other assets
permitted to be sold, leased, licensed, transferred, assigned or otherwise
disposed under Section 5.2(i) of the Loan Agreement. The Agent or its
attorneys may at any and all reasonable times inspect the Collateral and for
such purpose may enter upon any and all premises where the Collateral is or
might be kept or located pursuant to the terms of Section 5.1(e) of the Loan
Agreement.
(e) INSURANCE. The Borrower shall keep the tangible Collateral
insured at all times against loss by theft, fire and other casualties. Said
insurance shall be issued by a company rated A or better by Best and shall be
in amounts sufficient to protect the Agent against any and all loss or damage
to the Collateral. The policy or policies which evidence said insurance
shall be delivered to the Agent upon request, shall contain a lender loss
payable endorsement in favor of the Agent, shall name the Agent for the
benefit of the Lenders as an additional insured, as its interest may appear,
shall not permit amendment, cancellation or termination without giving the
Agent at least 30 days prior written notice thereof, and shall otherwise be
in form and substance satisfactory to the Agent. Reimbursement under any
hazard insurance maintained by the Borrower pursuant to this paragraph 1(e)
may be paid directly to the person who shall have incurred liability covered
<PAGE>
<PAGE> EX-10.25-5
by such insurance, provided that if there is no Default or Event of Default
(whether before or after any event which caused any reimbursement under any
hazard insurance) the Borrower may use the proceeds of such insurance solely
to repair or replace the property damaged if the value of the property
damaged does not exceed $1,000,000 and it can be repaired or replaced within
three months, but if such conditions cannot be satisfied or if there is any
Default or Event of Default such amounts shall be paid to the Agent for
application to the Secured Obligations.
(f) TAXES, ETC. The Borrower will pay promptly, and within the
time that they can be paid without interest or penalty, any taxes,
assessments and similar imposts and charges, not being contested in good
faith, which are now or hereafter may become a Lien upon any of the
Collateral. If the Borrower fails to pay any such taxes, assessments or
other imposts or charges in accordance with this Section, the Agent shall
have the option to do so and the Borrower agrees to repay forthwith all
amounts so expended by the Agent with interest at the Overdue Rate.
(g) FURTHER ASSURANCES. The Borrower will do all acts and things
and will execute all financing statements and writings reasonably requested
by the Agent to establish, maintain and continue a perfected and valid
security interest of the Agent in the Collateral, and will promptly on demand
pay all reasonable costs and expenses of filing and recording all
instruments, including the costs of any searches deemed necessary by the
Agent, to establish and determine the validity and the priority of the
Agent's security interests. A carbon, photographic or other reproduction of
this Security Agreement or any financing statement covering the Collateral
shall be sufficient as a financing statement.
(h) LIST OF PATENTS, COPYRIGHTS, MASK WORKS AND TRADEMARKS.
Attached hereto as Schedule 1(h)(i) is a list of all patents and patent
applications owned by the Borrower. Attached hereto as Schedule 1(h)(ii) is
a list of all registered copyrights and all mask works and applications
therefor owned by the Borrower. Attached hereto as Schedule 1(h)(iii) is a
list of all trademarks and service marks owned by the Borrower. The Borrower
shall provide semi-annual updates to such schedules of all additional
patents, copyrights, mask works, trademarks or any applications therefor not
listed on such schedules and hereby authorizes the Agent to modify this
Agreement by amending Schedules 1(h)(i), 1(h)(ii) and 1(h)(iii) to include
all future patents, copyrights, mask works, trademarks and applications
therefor and agrees to execute all further instruments and agreements, if
any, if requested by the Agent to evidence the Agent's interest therein.
(i) MAINTENANCE OF TANGIBLE COLLATERAL. The Borrower will cause
the tangible Collateral material to the conduct of its business to be
maintained and preserved in the same condition, repair and working order as
when new, ordinary wear and tear excepted, and in accordance with any
manufacturer's manual, and shall forthwith, or, in the case of any loss or
damage to any of the tangible Collateral as quickly as practicable after the
occurrence thereof, make or cause to be made all repairs, replacements, and
other improvements which are necessary or desirable to such end. The
Borrower shall promptly furnish to the Agent a statement respecting any loss
or damage to any of the tangible Collateral.
(j) SPECIAL RIGHTS REGARDING RECEIVABLES. The Agent or any of its
agents may, at any time and from time to time in its sole discretion and
irrespective of the existence of any event of default under this Security
<PAGE>
<PAGE> EX-10.25-6
Agreement, verify, directly with each person (collectively, the "Obligors")
which owes any Receivables to the Borrower, the Receivables in any manner.
The Agent or any of its agents may, at any time from time to time after and
during the continuance of an event of default under this Security Agreement,
notify the Obligors of the security interest of the Agent in the Collateral
and/or direct such account debtors that all payments in connection with such
obligations and the Collateral be made directly to the Agent in the Agent's
name. If the Agent or any of its agents shall collect such obligations
directly from the Obligors, the Agent or any of its agents shall have the
right to resolve any disputes relating to returned goods directly with the
Obligors in such manner and on such terms as the Agent or any of its agents
shall deem appropriate. The Borrower directs and authorizes any and all of
its present and future account debtors to comply with requests for
information from the Agent, the Agent's designees and agents and/or auditors,
relating to any and all business transactions between the Borrower and the
Obligors. The Borrower further directs and authorizes all of its Obligors
upon receiving a notice or request sent by the Agent or the Agent's agents or
designees to pay directly to the Agent any and all sums of money or proceeds
now or hereafter owing by the Obligors to the Borrower, and any such payment
shall act as a discharge of any debt of such Obligor to the Borrower in the
same manner as if such payment had been made directly to the Borrower. The
Borrower agrees to take any and all action as the Agent may reasonably
request to assist the Agent in exercising the rights described in this
Section.
(k) MAINTENANCE OF INTELLECTUAL PROPERTY AND OTHER INTANGIBLE
COLLATERAL. The Borrower shall preserve and maintain all rights of the
Borrower and the Agent in all material Intellectual Property and all other
material intangible Collateral, including without limitation the payment of
all maintenance fees, filing fees and the taking of all appropriate action at
the Borrower's expense to halt the infringement of any of the Intellectual
Property or other Collateral, provided that, with respect to halting the
infringement of any Intellectual Property or other Collateral, the Borrower
does not need to take all such appropriate action if the Borrower has, or
after Event of Default the Required Lenders have, reasonably determined that
it is not in its best interest to demand or enforce cessation of such
infringement or other conduct because it is either not material or because
the adverse consequences to the Borrower would outweigh the benefits gained
by such demand or enforcement.
2. EVENTS OF DEFAULT. The occurrence of any Event of Default under
the Loan Agreement shall be deemed an Event of Default under this Security
Agreement.
3. REMEDIES. Upon the occurrence of any Event of Default, the Agent
shall have and may exercise any one or more of the rights and remedies
provided to it under this Security Agreement or any of the other Operative
Documents or provided by law, including but not limited to all of the rights
and remedies of a secured party under the Uniform Commercial Code, and each
Borrower hereby agrees to assemble the Collateral and make it available to
the Agent at a place to be designated by the Agent which is reasonably
convenient to both parties, authorizes the Agent to take possession of the
Collateral with or without demand and with or without process of law and to
sell and dispose of the same at public or private sale and to apply the
proceeds of such sale to the costs and expenses thereof (including reasonable
attorneys' fees and disbursements, incurred by the Agent) and then to the
payment and satisfaction of the Secured Obligations. Any requirement of
<PAGE>
<PAGE> EX-10.25-7
reasonable notice shall be met if the Agent sends such notice to the
Borrowers, by registered or certified mail, at least 5 days prior to the date
of sale, disposition or other event giving rise to a required notice. The
Agent or any Lender may be the purchaser at any such sale. Each Borrower
expressly authorizes such sale or sales of the Collateral in advance of and
to the exclusion of any sale or sales of or other realization upon any other
collateral securing the Secured Obligations. The Agent shall have no
obligation to preserve rights against prior parties. Each Borrower hereby
waives as to the Agent and each Lender any right of marshalling of such
Collateral and any other collateral for the Secured Obligations. To this
end, each Borrower hereby expressly agrees that any such collateral or other
security of any Borrower or any other party which the Agent may hold, or
which may come to any of the Lenders or any of their possession, may be dealt
with in all respects and particulars as though this Security Agreement were
not in existence. The parties hereto further agree that public sale of the
Collateral by auction conducted in any county in which any Collateral is
located or in which the Agent or any Borrower does business after
advertisement of the time and place thereof shall, among other manners of
public and private sale, be deemed to be a commercially reasonable
disposition of the Collateral. The Borrowers shall be jointly and severally
liable for any deficiency remaining after disposition of the Collateral.
4. SPECIAL REMEDIES CONCERNING CERTAIN COLLATERAL.
(a) Upon the occurrence of any Event of Default, each Borrower
shall, if requested to do so in writing, and to the extent so requested (i)
promptly collect and enforce payment of all amounts due such Borrower on
account of, in payment of, or in connection with, any of the Collateral, (ii)
hold all payments in the form received by such Borrower as trustee for the
Agent, without commingling with any funds belonging to such Borrower, and
(iii) forthwith deliver all such payments to the Agent with endorsement to
the Agent's order of any checks or similar instruments.
(b) Upon the occurrence of any Event of Default, each Borrower
shall, if requested to do so, and to the extent so requested, notify all
Obligors and other persons with obligations to such Borrower on account of or
in connection with any of the Collateral of the security interest of the
Agent in the Collateral and direct such account debtors and other persons
that all payments in connection with such obligations and the Collateral be
made directly to the Agent. The Agent itself may, upon the occurrence of an
Event of Default, so notify and direct any such account debtor or other
person that such payments are to be made directly to the Agent.
(c) Upon the occurrence of any Event of Default, for purposes of
assisting the Agent in exercising its rights and remedies provided to it
under this Security Agreement, each Borrower (i) hereby irrevocably
constitutes and appoints the Agent its true and lawful attorney, for and in
such Borrower's name, place and stead, to collect, demand, receive, sue for,
compromise, and give good and sufficient releases for, any monies due or to
become due on account of, in payment of, or in connection with the
Collateral, (ii) hereby irrevocably authorizes the Agent to endorse the name
of such Borrower, upon any checks, drafts, or similar items which are
received in payment of, or in connection with, any of the Collateral, and to
do all things necessary in order to reduce the same to money and (iii) with
respect to any Collateral, hereby irrevocably assents to all extensions or
postponements of the time of payment thereof or any other indulgence in
connection therewith, to each substitution, exchange or release of
<PAGE>
<PAGE> EX-10.25-8
Collateral, to the addition or release of any party primarily or secondarily
liable, to the acceptance of partial payments thereon and the settlement,
compromise or adjustment (including adjustment of insurance payments)
thereof, all in such manner and at such time or times as the Agent shall deem
advisable. Notwithstanding any other provisions of this Security Agreement,
it is expressly understood and agreed that the Agent shall have no duty, and
shall not be obligated in any manner, to make any demand or to make any
inquiry as to the nature or sufficiency of any payments received by it or to
present or file any claim or take any other action to collect or enforce the
payment of any amounts due or to become due on account of or in connection
with any of the Collateral.
5. LICENSE. The Agent is hereby granted a license or other right to
use, following the occurrence and during the continuance of an Event of
Default, without charge, each Borrower's labels, patents, copyrights, rights
of use of any name, trade secrets, trade names, trademarks, service marks,
customer lists and advertising matter, or any property of a similar nature,
as it pertains to the Collateral, in completing production of, advertising
for sale, and selling any Collateral, and such Borrower's rights under all
licenses and all franchise agreements shall inure to the Agent's benefit.
6. INJUNCTIVE RELIEF. Each Borrower recognizes that in the event such
Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be
inadequate relief to the Lenders; therefore, each Borrower agrees that the
Agent, if the Agent so determines and requests, shall be entitled to
temporary and permanent injunction relief in any such case without the
necessity of proving actual damages.
7. REMEDIES CUMULATIVE. No right or remedy conferred upon or reserved
to the Agent under any Operative Document is intended to be exclusive of any
other right or remedy, and every right and remedy shall be cumulative in
addition to every other right or remedy given hereunder or now or hereafter
existing under any applicable law. Every right and remedy of the Agent under
any Operative Document or under applicable law may be exercised from time to
time and as often as may be deemed expedient by the Agent. To the extent
that it lawfully may, each Borrower agrees that it will not at any time
insist upon, plead, or in any manner whatever claim or take any benefit or
advantage of any applicable present or future stay, extension or moratorium
law, which may affect observance or performance of any provisions of any
Operative Document; nor will it claim, take or insist upon any benefit or
advantage of any present or future law providing for the valuation or
appraisal of any security for its obligations under any Operative Document
prior to any sale or sales thereof which may be made under or by virtue of
any instrument governing the same; nor will such Borrower, after any such
sale or sales, claim or exercise any right, under any applicable law to
redeem any portion of such security so sold.
8. CONDUCT NO WAIVER. No waiver of default shall be effective unless
in writing executed by the Agent and waiver of any default or forbearance on
the part of the Agent in enforcing any of its rights under this Security
Agreement shall not operate as a waiver of any other default or of the same
default on a future occasion or of such right.
9. GOVERNING LAW; CONSENT TO JURISDICTION; DEFINITIONS. This Security
Agreement is a contract made under, and shall be governed by and construed in
accordance with, the law of the State of Michigan applicable to contracts
<PAGE>
<PAGE> EX-10.25-9
made and to be performed entirely within such State and without giving effect
to choice of law principles of such State. Each Borrower agrees that any
legal action or proceeding with respect to this Security Agreement or the
transactions contemplated hereby may be brought in any court of the State of
Michigan, or in any court of the United States of America sitting in
Michigan, and each Borrower hereby submits to and accepts generally and
unconditionally the jurisdiction of those courts with respect to its person
and property, and irrevocably appoints the Vice President Finance of such
Borrower, at such Borrower's address set forth in the Loan Agreement, as its
agent for service of process and irrevocably consents to the service of
process in connection with any such action or proceeding by personal delivery
to such agent or to such Borrower or by the mailing thereof by registered or
certified mail, postage prepaid to such Borrower at its address set forth in
the Loan Agreement. Nothing in this paragraph shall affect the right of the
Agent to serve process in any other manner permitted by law or limit the
right of the Agent to bring any such action or proceeding against any
Borrower or any of their property in the courts of any other jurisdiction.
Each Borrower hereby irrevocably waives any objection to the laying of venue
of any such suit or proceeding in the above described courts. Terms used but
not defined herein shall have the respective meanings ascribed thereto in the
Loan Agreement. Unless otherwise defined herein or in the Loan Agreement,
terms used in Article 9 of the Uniform Commercial Code in the State of
Michigan are used herein as therein defined on the date hereof. The headings
of the various subdivisions hereof are for convenience of reference only and
shall in no way modify any of the terms or provisions hereof.
10. NOTICES. All notices, demands, requests, consents and other
communications hereunder shall be delivered in the manner described in the
Loan Agreement.
11. RIGHTS NOT CONSTRUED AS DUTIES. The Agent neither assumes nor
shall it have any duty of performance or other responsibility under any
contracts in which the Agent has or obtains a security interest hereunder.
If any Borrower fails to perform any agreement contained herein, the Agent
may but is in no way obligated to itself perform, or cause performance of,
such agreement, and the reasonable expenses of the Agent incurred in
connection therewith shall be payable by the Borrowers under paragraph 14.
The powers conferred on the Agent hereunder are solely to protect its
interests in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its
possession and accounting for monies actually received by it hereunder, the
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
12. AMENDMENTS. None of the terms and provisions of this Security
Agreement may be modified or amended in any way except by an instrument in
writing executed by each of the parties hereto.
13. SEVERABILITY. If any one or more provisions of this Security
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired or prejudiced thereby.
14. EXPENSES. (a) Each of the Borrowers agrees to indemnify the Agent
from and against any and all claims, losses and liabilities growing out of or
resulting from this Security Agreement (including, without limitation,
<PAGE>
<PAGE> EX-10.25-10
enforcement of this Security Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or willful misconduct.
(b) Each of the Borrowers will, upon demand, pay to the Agent an
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Agent
may incur in connection with (i) the administration of this Security
Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral, (iii)
the exercise or enforcement of any of the rights of the Agent hereunder or
under the Operative Documents, or (iv) the failure of any Borrower to perform
or observe any of the provisions hereof.
15. SUCCESSORS AND ASSIGNS; TERMINATION. This Security Agreement shall
create a continuing security interest in the Collateral and shall be binding
upon each Borrower, its successors and assigns, and inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the Agent and
its successors, transferees and assigns. Upon the payment in full in
immediately available funds of all of the Secured Obligations and the
termination of all commitments to lend under the Operative Documents, the
security interest granted hereunder shall terminate and all rights to the
Collateral shall revert to each Borrower.
16. WAIVER OF JURY TRIAL. The Agent and the Lenders, in accepting this
Security Agreement, and each of the Borrowers, after consulting or having had
the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right any of them may have to a trial by jury in any
litigation based upon or arising out of this Security Agreement or any
related instrument or agreement or any of the transactions contemplated by
this Security Agreement or any course of conduct, dealing, statements
(whether oral or written) or actions of any of them. Neither the Agent, any
Lender nor any Borrower shall seek to consolidate, by counterclaim or
otherwise, any such action in which a jury trial has been waived with any
other action in which a jury trial cannot be or has not been waived. These
provisions shall not be deemed to have been modified in any respect or
relinquished by either the Agent, any Lender or any Borrower except by a
written instrument executed by all of them.
IN WITNESS WHEREOF, each Borrower has caused this Security Agreement to
be duly executed as of the day and year first set forth above.
CHECKER MOTORS CORPORATION
By: /s/ Jay Harris
--------------------------------
Its: Vice President
----------------------------
<PAGE>
<PAGE> EX-10.25-11
YELLOW CAB COMPANY
By: /s/ Jay Harris
--------------------------------
Its: Vice President
----------------------------
CHICAGO AUTOWERKS INC.
By: /s/ Jay Harris
--------------------------------
Its: Vice President
----------------------------
CMC KALAMAZOO INC.
By: /s/ Jay Harris
--------------------------------
Its: Vice President
----------------------------
SOUTH CHARLESTON STAMPING &
MANUFACTURING COMPANY
By: /s/ Larry Temple
--------------------------------
Its: Vice President
----------------------------
Accepted and Agreed:
NBD BANK, as Agent
By: /s/ Randy R. Balluff
-----------------------------------
Its: First Vice President
-----------------------------
<PAGE>
<PAGE> EX-10.25-12
CERTIFICATE OF ACKNOWLEDGEMENT
------------------------------
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
--------
The foregoing Security Agreement was acknowledged before me on this
26th day of January, 1995 by Jay Harris , the Vice President of
CHECKER MOTORS CORPORATION, a Delaware corporation, on behalf of said
corporation.
(Seal) Notary Public
/s/ Shirley Ferretti
------------------------------------
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
-----------
The foregoing Security Agreement was acknowledged before me on this
26th day of January, 1995 by Jay Harris , the Vice President
of YELLOW CAB COMPANY, a Delaware corporation, on behalf of said corporation.
(Seal) Notary Public
/s/ Shirley Ferretti
------------------------------------
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
----------
The foregoing Security Agreement was acknowledged before me on this
26th day of January, 1995 by Jay Harris , the Vice President
of CHICAGO AUTOWERKS INC., a Delaware corporation, on behalf of said
corporation.
(Seal) Notary Public
/s/ Shirley Ferretti
------------------------------------
<PAGE>
<PAGE> EX-10.25-13
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
-----------
The foregoing Security Agreement was acknowledged before me on this
26th day of January, 1995 by Jay Harris , the Vice President
of CMC KALAMAZOO, INC., a Delaware corporation, on behalf of said
corporation.
(Seal) Notary Public
/s/ Shirley Ferretti
------------------------------------
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
----------
The foregoing Security Agreement was acknowledged before me on this
26th day of January, 1995 by Larry Temple , the Vice President
of SOUTH CHARLESTON STAMPING & MANUFACTURING COMPANY, a West Virginia
corporation, on behalf of said corporation.
(Seal) Notary Public
/s/ Shirley Ferretti
--------------------------------------
STATE OF MICHIGAN )
) ss.
COUNTY OF WAYNE )
----------
The foregoing Security Agreement was acknowledged before me on this
26th day of January, 1995, by Randy R. Balluff, the First Vice President
of NBD Bank, as Agent, a Michigan banking corporation, on behalf of said
corporation.
(Seal)
Notary Public
/s/ Shirley Ferretti
------------------------------------
WP6:[WPWPS.00007.0000]EXH_AA1_03.SECURITY_AGREEMENT
<PAGE> EX-10.26-1
EXHIBIT 10.26
This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is dated as of
February 14, 1995, among the financial institutions listed on the signature
pages hereof (such financial institutions together with their respective
successors and assigns referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders") and BANKAMERICA BUSINESS
CREDIT, INC., a Delaware corporation, as agent (the "Agent") for the
Lenders, and GREAT DANE TRAILERS, INC., a Georgia corporation ("GDT"),
GREAT DANE LOS ANGELES, INC., a Georgia corporation ("GDLA"), and GREAT
DANE TRAILERS TENNESSEE, INC., a Tennessee corporation ("GDTT") (each of
the foregoing, individually, a "Borrower" and, collectively, the
"Borrowers").
W I T N E S S E T H:
--------------------
WHEREAS, GDT, GDTT, Great Dane Trailers Indiana, Inc. ("GDTI"),
Great Dane Trailers Nebraska, Inc. ("GDTN"), certain financial institutions
(the "Original Lenders") and Security Pacific Business Credit Inc.
("SPBC"), as agent for such Original Lenders, entered into a Loan and
Security Agreement dated as of March 21, 1990 (as amended, the "Original
Agreement"); and
WHEREAS, GDTI was merged with and into GDT, the surviving
corporation, on April 3, 1990 and GDTN was merged with and into GDT as of
December 1, 1994; and
WHEREAS, GDT acquired all of the issued and outstanding voting
stock of GDLA on March 3, 1993; and
WHEREAS, GDLA became a borrower party to the Original Loan
Agreement under and pursuant to the tenth amendment thereof; and
WHEREAS, the Lenders have appointed, and GDT, GDLA and GDTT have
consented to the appointment of, BankAmerica (as defined below) to succeed
SPBC as agent for the Original Lenders under the Original Agreement
pursuant to the Succession Agreement (as defined below); and
WHEREAS, BankAmerica, as Agent, and the other parties hereto wish
to amend and restate the Original Agreement to reflect the substitution of
BankAmerica Business Credit, Inc. as Agent, to increase the commitments of
the financial institutions parties hereto, to provide for the borrowing of
Eurodollar Rate Loans (as defined below) and to make certain other changes;
NOW, THEREFORE, the parties hereto, in consideration of the
mutual conditions and agreements set forth in this Agreement, and for other
good and valuable consideration, the receipt of which is hereby
acknowledged, hereby amend and restate the Original Agreement as follows:
1. INTERPRETATION OF THIS AGREEMENT.
--------------------------------
1.1 DEFINITIONS. As used herein:
<PAGE>
<PAGE> EX-10.26-2
"ACCOUNTS" means all of the Borrowers' now owned or hereafter
acquired or arising accounts, contract rights, and any other rights to
payment for the sale or lease of goods or rendition of services, whether or
not they have been earned by performance.
"ACCOUNT DEBTOR" means each Person obligated in any way on or in
connection with an Account.
"AFFILIATE" means: (a) any Person which, directly or indirectly,
controls, is controlled by or is under common control with, Holdings or any
Borrower; (b) any Person which beneficially owns or holds, directly or
indirectly, five percent (5.0%) or more of any class of Voting Stock of
Holdings or any Borrower; or (c) any Person, five percent (5.0%) or more of
any class of the Voting Stock (or if such Person is not a corporation, five
percent (5.0%) or more of the equity interest) of which is beneficially
owned or held, directly or indirectly, by Holdings or any Borrower.
Control (including, with correlative meanings, the terms "controlled by"
and "under common control with"), as used herein, means the possession,
directly or indirectly, of the power in any form to direct or cause the
direction of the management and policies of the Person in question.
"AGENT" means (a)(i) prior to the effectiveness of the Succession
Agreement, SPBC and (ii) on and after the effectiveness of the Succession
Agreement, BankAmerica, in each case in its capacity as agent for the
Lenders and (b) any successor Agent appointed pursuant to SECTION 15.7.
"AGENT ADVANCES" has the meaning specified in SECTION 15.8(A).
"AGGREGATE AVAILABILITY" means, at any time of determination, (a)
the Aggregate Maximum Revolver Amount MINUS (b) the sum of (i) the unpaid
principal balance of Revolving Loans outstanding; (ii) the Letter of Credit
Obligations of all Borrowers; and (iii) the Banker's Acceptance Obligations
of Borrowers.
"AGGREGATE MAXIMUM REVOLVER AMOUNT" means, at any time, an amount
representing the aggregate amount of the Maximum Revolver Amounts with
respect to all Borrowers at such time.
"AGREEMENT" means the Original Agreement, as amended and restated
by this Amended and Restated Loan and Security Agreement, as the same may
be further amended, supplemented, restated or otherwise modified from time
to time in accordance with the terms hereof.
"AMORTIZATION FACTOR" means, at any time, the product of
(x) 60/84 times (y) a fraction, the numerator of which is one (1) and the
denominator of which equals the number of regularly scheduled consecutive
installments remaining at such time (except the final such installment),
without giving effect to any prepayments made under this Agreement, as set
forth in the Term Notes delivered pursuant to SECTION 2.1(D)(II).
"ANNIVERSARY DATE" means each annual anniversary of the Effective
Date.
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in
SECTION 14.3(A).
"ASSOCIATES" means Associates Corporation of North America, a
Delaware corporation.
<PAGE>
<PAGE> EX-10.26-3
"AVAILABILITY" means, at any time of determination, with respect
to any Borrower, (a) the Maximum Revolver Amount for such Borrower MINUS
(b) the sum of (i) the unpaid principal balance of Revolving Loans
outstanding to such Borrower; (ii) the Letter of Credit Obligations of such
Borrower; (iii) the Banker's Acceptance Obligations of such Borrower.
"BABC ACCOUNT" means the Agent's account into which collections
of Accounts and other cash proceeds of collateral deposited in the
Concentration Account(s) may be transferred pursuant to the terms of the
applicable Restricted Account Agreement or otherwise as described in
SECTION 7.8.
"BA REVOLVING LOAN" and "BA REVOLVING LOANS" have the respective
meanings specified in SECTION 2.2(E).
"BANKAMERICA" means BankAmerica Business Credit, Inc., a Delaware
corporation.
"BANKER'S ACCEPTANCE" means a banker's acceptance issued or
caused to be issued for the account of a Borrower pursuant to ARTICLE 3B
which satisfy eligibility requirements established by the Board of
Governors of the Federal Reserve System from time to time and, in the case
of a Banker's Acceptance issued by a Lender, which satisfies such Lender's
internal requirements in effect from time to time.
"BANKER'S ACCEPTANCE AGREEMENT" means, with respect to a Banker's
Acceptance, such form of application therefor and form of agreement
therefor (whether in a single document or several documents), in form and
substance satisfactory to the applicable issuer of such Banker's Acceptance
and the Agent.
"BANKER'S ACCEPTANCE OBLIGATIONS" means, with respect to any
Borrower at any particular time, the sum of (a) the Banker's Acceptance
Reimbursement Obligations of such Borrower at such time, PLUS (b) the
aggregate face amount of Banker's Acceptances issued for the account of
such Borrower and outstanding at such time, PLUS (c) the aggregate face
amount of all Banker's Acceptances requested by such Borrower the issuance
of which has been authorized by the Agent pursuant to SECTION 3B.4(b) but
which have not yet been issued, in each case as determined by the Agent.
"BANKER'S ACCEPTANCE REIMBURSEMENT OBLIGATIONS" means the
reimbursement or repayment obligations of a Borrower to the Agent,
BankAmerica and/or other issuers of Banker's Acceptances pursuant to
SECTION 3B.5 or pursuant to a Banker's Acceptance Agreement with respect to
the aggregate face amount of Banker's Acceptances which have been paid by
the accepting institution in accordance with their terms.
"BANKER'S ACCEPTANCE SUBFACILITY" means that portion of the
Aggregate Maximum Revolver Amount available for the issuance of Banker's
Acceptances in an aggregate amount not to exceed $10,000,000.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
U.S.C. Section 101 et seq.).
"BENEFIT PLAN" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of
which any Borrower or any Related Company is, or within the immediately
preceding
<PAGE>
<PAGE> EX-10.26-4
six (6) years was, an "employer" as defined in Section 3(5) of ERISA or
could have liability under Section 4069 or Section 4212(c) of ERISA.
"BOA" means Bank of America National Trust and Savings
Association, a national banking association.
"BORROWED MONEY" means, at any time, the sum of (i) all Debt then
outstanding for the principal of Loans and (ii) all scheduled principal
payments on industrial revenue or development bonds owing by any Borrower
to the extent such payments are not cash collateralized.
"BORROWER PLEDGE AGREEMENT" means the Amended and Restated Pledge
Agreement dated of even date herewith, amending and restating the Pledge
Agreement dated as of March 21, 1990, as amended by the First Amendment to
Pledge Agreement made and entered into as of November 29, 1993, executed
and delivered by GDT, pursuant to which (i) all of the issued and
outstanding capital stock of GDLA, GDTN and GDTT was, and the outstanding
capital stock of GDLA and GDTT is and will continue to be, pledged to the
Agent for the benefit of the Secured Creditors as additional security for
the Obligations, and (ii) certain promissory notes payable to GDT were and
will be and continue to be pledged to the Agent for the benefit of the
Secured Creditors as additional security for the Obligations.
"BORROWING" means a borrowing consisting of Loans made on the
same day by the Lenders (or by BankAmerica in the case of a Borrowing
funded by BA Revolving Loans) and, in the case of the Term Loans
outstanding under the Original Agreement on the Effective Date, the
extension of the maturities thereof pursuant to SECTION 2.1(a).
"BUSINESS DAY" means any day that is not a Saturday, Sunday, or
day on which banks in New York or Georgia are required or permitted to
close and, if the applicable Business Day relates to any Eurodollar Rate
Loan or Interest Period therefor, any day on which dealings are carried on
in the London interbank market.
"CAPITAL EXPENDITURES" means all payments made by or due (whether
or not paid) from a Person during such Person's fiscal year in respect of
the cost of (i) any asset which would be classified as property, plant or
equipment in accordance with the Borrower's past business practices or
included in a comparable classification on a balance sheet prepared in
accordance with GAAP, including, without limitation, any Capital Lease,
(ii) the purchase price (and all liabilities of the business so acquired
whether or not assumed by such Person in connection therewith) of any stock
acquired by such Person, and (iii) the purchase price of the assets of any
business acquired by such Person.
"CAPITAL LEASE" means any lease of Property by GDT or any of its
Subsidiaries (other than any Capital Lease having an initial present value
of less than $50,000) which, in accordance with GAAP, should be reflected
as a liability on the consolidated balance sheet of GDT and its
Subsidiaries.
"CASH COLLATERAL" means all cash and Cash Equivalents pledged to
the Agent, for the benefit of the Secured Creditors, pursuant to pledge
agreements in form and substance satisfactory to the Agent, by GDT or any
of its Subsidiaries.
"CASH EQUIVALENTS" means (a) direct obligations of the United
States of America, or any agency thereof, or obligations guaranteed by the
<PAGE>
<PAGE> EX-10.26-5
United States of America; PROVIDED, HOWEVER, that such obligations mature
within one year from the date of acquisition thereof; (b) certificates of
deposit maturing within one year after the date of acquisition, banker's
acceptances, Eurodollar bank deposits, or overnight bank deposits, in each
case issued by, created by, or with a bank or trust company organized under
the laws of the United States or any state thereof, having a combined
capital, surplus and undivided profits of at least $100,000,000; or (c)
commercial paper given the highest rating by a national credit rating agency
and maturing not more than 270 days after the date of creation thereof.
"CLOSING FEE" has the meaning specified in SECTION 4.3.
"CODE" means the Internal Revenue Code of 1986, as amended and
any successor statute.
"COLLATERAL" has the meaning specified in SECTION 7.1.
"COLLATERAL RESTORATION" has the meaning specified in SECTION
10.5.
"COMMITMENT" means, at any time with respect to a Lender, such
Lender's Term Loan Commitment and Revolving Credit Commitment, and
"COMMITMENTS" means, collectively, the Term Loan Commitments and Revolving
Credit Commitments of all of the Lenders, the maximum amount of which shall
not exceed $150,000,000.
"CONCENTRATION ACCOUNTS" means the accounts maintained at any
bank or banks acceptable to the Agent which has or have executed a
Restricted Account Agreement acceptable to the Agent, into which
collections of Accounts and other cash proceeds of Collateral are
transferred from the Depositary Accounts or as otherwise described in
SECTION 7.8.
"CONTAMINANT" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-
derived substance or waste, or any constituent of any such substance or
waste.
"DEBENTURES" means the Senior Subordinated Debentures and the
Subordinated Discount Debentures.
"DEBT" means all liabilities of GDT and its Subsidiaries on a
consolidated basis determined in conformity with GAAP and includable on a
balance sheet prepared in conformity with GAAP or the accompanying notes
thereto.
"DEFAULT" means any event or condition which, with the giving of
notice or the passage of time or both, would constitute an Event of
Default.
"DEFAULT RATE" means a per annum rate equal to the sum of (a) the
otherwise applicable Interest Rate, Letter of Credit Fee, Banker's
Acceptance Fee or Facility Fee, as the case may be, PLUS (b) two percent
(2.00%). The Default Rate shall be adjusted simultaneously with any change
in the applicable Interest Rate.
"DEPOSITARY ACCOUNT" means each depositary account maintained by
any Borrower.
"DISTRIBUTION" means (a) any loan, advance or other financial
accommodation made by a Borrower to or for the account of Holdings, (b) any
<PAGE>
<PAGE> EX-10.26-6
fee or expense paid by a Borrower to or on behalf of Holdings, including
without limitation any fees or expenses incurred by the Borrowers in the
ordinary course of their business and paid by Holdings consisting of (i)
expenses for insurance customarily carried by the Borrowers or required by
the Agent, (ii) audit fees and expenses of Borrowers' independent public
accountants, (iii) expenses for federal and state income taxes subject to
the limitations set forth in SECTION 10.1 and (iv) required payments with
respect to the Plans identified with respect to GDT on SCHEDULES 9.10-A and
9.20-J and (c) any Dividend.
"DIVIDEND" means the payment or making of any dividend or other
distribution of property by a Borrower to Holdings in respect of capital
stock (or any options or warrants for such stock) of such Borrower,
provided, however, that the recharacterization as a dividend on the books
and records of a Borrower of any prior Distribution (which is not a
Dividend when made) to Holdings shall not constitute a "Dividend"
hereunder.
"DOL" means the United States Department of Labor or any
successor agency.
"DOLLARS" and "$" mean the lawful money of the United States of
America.
"EBITDA" means, with respect to any period of GDT and its
Subsidiaries, the sum of:
(i) the net income (or net loss) of GDT and its
Subsidiaries (determined in accordance with GAAP) for such period,
without giving effect to any GAAP extraordinary gains or losses; plus
(or minus)
(ii) to the extent that any of the items referred to in any
of clauses (A) through (D) below were deducted or added in calculating
such net income:
(A) interest expense of GDT and its Subsidiaries for such
period;
(B) federal and state income tax expense of GDT and its
Subsidiaries for such period after giving effect to any
increases or reductions in deferred income tax expense;
(C) the amount of all depreciation and amortization for
such period; and
(D) noncash charges for warranty expense and plant
closings or restructuring costs for such period; minus
(iii) the amount of cash expended in respect of any amount
which, under clause (D) above, was taken into account in determining
EBITDA for such period or any period subsequent to the Effective Date.
"EFFECTIVE DATE" means the date on which the initial Revolving
Loan is made, the initial Term Loan is made, the initial Letter of Credit
is issued or the initial Banker's Acceptance is issued under this Amended
and Restated Loan and Security Agreement.
"ELIGIBLE ACCOUNTS" means, at any time, with respect to any
Borrower, those Accounts of such Borrower which when scheduled to the Agent
<PAGE>
<PAGE> EX-10.26-7
and at all times thereafter do not violate the negative covenants and other
provisions of this Agreement and do satisfy the affirmative covenants and
other provisions of this Agreement and which the Agent deems eligible as
the basis for Revolving Loans, Letters of Credit and Banker's Acceptances,
based on criteria which the Agent establishes in its reasonable credit
judgment. The Agent agrees to notify (either in writing or orally and
promptly confirmed in writing) the applicable Borrower of the reason for
deeming an Account not to be an Eligible Account if the reason for
ineligibility is not one or more of the categories identified below, but
the failure to give such notice shall not affect the Agent's right to deem
an Account ineligible. The Agent's notice (described in the immediately
preceding sentence) shall apply only to Accounts arising or created after
the date the Borrowers received such notice. No Account shall be an
Eligible Account if:
(1) It is more than ninety (90) days past the date of the
original invoice (or the properly corrected invoice date in the
case of an invoice misdated because of a clerical mistake) issued
by a Borrower with respect to the sale giving rise thereto; or
(2) It is owed by an Account Debtor with respect to which
fifty percent (50%) or more of all Accounts owing by such Account
Debtor are unpaid for more than ninety (90) days after the
date(s) of the original invoice(s) with respect to such Accounts;
or
(3) It arises out of a sale not made in the ordinary course
of a Borrower's business or to a Person which is an Affiliate of
any Borrower or controlled by an Affiliate of any Borrower,
unless such Affiliate of such Borrower or Person controlled by an
Affiliate of such Borrower has been approved in writing by the
Agent as a party from whom Eligible Accounts can be generated; or
(4) Any warranty contained in this Agreement with respect
to all Eligible Accounts or any warranty with respect to such
Account contained in this Agreement has been breached; or
(5) The Account Debtor has disputed liability, or made any
claim with respect to any Account due from such Account Debtor to
such Borrower; or
(6) The Account Debtor has filed a petition for bankruptcy
or any other petition for relief under the Bankruptcy Code or any
other bankruptcy or insolvency law or has made an assignment for
the benefit of creditors, or any petition or other application
for relief under the Bankruptcy Code or any other bankruptcy or
insolvency law has been filed against the Account Debtor, or the
Account Debtor has so filed, suspended its business operations,
become insolvent, or suffered a receiver or a trustee to be
appointed for any of its assets or affairs; or
(7) It arises out of a sale to an Account Debtor outside
the continental United States or Canada, unless the sale is on
letter of credit or acceptance terms acceptable to the Agent; or
(8) It arises out of a sale to a customer on a bill-and-
hold (other than Permitted Bill and Hold Sales), guaranteed sale,
sale-and-return, sale on approval, consignment, or any other
repurchase or return basis; or
<PAGE>
<PAGE> EX-10.26-8
(9) (a) The aggregate outstanding amount of Accounts owed
by the Account Debtor exceeds $1,000,000; (b) the Agent has a
reasonable basis to believe that collection of such Account is
insecure or that such Account may not be paid by reason of the
Account Debtor's financial inability to pay; and (c) two weeks
have elapsed after the Agent has given to the Borrowers notice
(either in writing or orally and promptly confirmed in writing)
of the Agent's declaring that Accounts owed by such Account
Debtor are ineligible for the reason set forth in CLAUSE (b) of
this SUBPARAGRAPH (9);
(10) (a) The Account Debtor is a Public Authority or any
department, agency or instrumentality thereof, (b) the Account or
Accounts owed by such Account Debtor individually or in the
aggregate equal or exceed $250,000 at any time, and (c) the
applicable Borrower has not assigned its right to payment of such
Account to the Lender in accordance with the terms of the Federal
Assignment of Claims Act of 1940, as amended (31 U.S.C.
Section 3727 et seq.) or any similar statute applicable to such
Public Authority; or
(11) The goods giving rise to such Account have not been
shipped and delivered to and accepted by the Account Debtor
(other than with respect to Permitted Bill and Hold Sales) or the
services giving rise to such Account have not been performed by
the applicable Borrower and accepted by the Account Debtor; or
(12) (a) All Accounts owed by such Account Debtor exceed
$2,000,000 in the aggregate and (b) The aggregate Accounts owed
by such Account Debtor exceed a credit limit determined by the
Agent, in its reasonable discretion, at any time or times
hereafter and (c) the Agent has notified (either in writing or
orally and promptly confirmed in writing) the Borrowers of such
credit limit, but only to the extent such aggregate Accounts
exceed such credit limit; or
(13) It is an Account arising from a Permitted Bill and
Hold Sale and the goods giving rise to such Account have not been
shipped or delivered within forty-five (45) days after the date
of the original invoice issued by the applicable Borrower with
respect to the sale giving rise thereto; or
(14) It is an Account evidenced by chattel paper or
instruments unless (a) the Agent shall have specifically agreed
to include such Account as an Eligible Account, (b) only payments
then due and payable under such chattel paper or instrument shall
be included as an Eligible Account and (c) the originals of such
chattel paper or instruments have been endorsed and/or assigned
and delivered to the Agent in a manner satisfactory to the Agent;
or
(15) It is an Account which arises out of a transaction in
connection with which the applicable Borrower has obtained a bond
or other undertaking by a surety with respect to the Borrower's
performance of its obligations to the Account Debtor.
"ELIGIBLE INVENTORY" means Inventory of the applicable Borrower,
determined on a first-in-first-out basis and valued at the lower of cost or
<PAGE>
<PAGE> EX-10.26-9
market value, which the Agent deems eligible as the basis for Revolving
Loans, Letters of Credit and Banker's Acceptances, based on criteria which
the Agent establishes in its reasonable credit judgment. The Agent agrees
to notify (either in writing or orally and promptly confirmed in writing)
the applicable Borrower of the reason for deeming Inventory not to be
Eligible Inventory if the reason for ineligibility is not one or more of
the categories identified below, but the failure to give such notice shall
not affect the Agent's right to deem Inventory ineligible. No Inventory
shall be Eligible Inventory if: (a) it is obsolete or unmerchantable; (b)
it is located at premises not owned by a Borrower and such Borrower has
failed (i) in the case of premises leased by such Borrower, unless the
Agent shall have established a reserve with respect to such Inventory based
upon rentals due under the applicable lease and the likelihood that such
Inventory may not be accessible to the Agent, to deliver to the Agent a
landlord waiver in form and substance acceptable to the Agent and (ii) in
the case of Inventory held by a bailee and for which a negotiable
instrument has not been issued, to (A) cause to be filed a financing
statement or financing statements which (1) name the third party bailee as
the debtor/bailee, (2) name such Borrower as the secured party/bailor, (3)
name the Agent as the assignee of the secured party/bailor, and (4) contain
a description of such Inventory acceptable to the Agent and otherwise
comply with the requirements of Section 9-304(3) of the UCC and (B) take
such other steps as the Agent may reasonably request in order to establish
and preserve the priority of the Agent's lien on such Inventory against se-
cured creditors of the third party bailee or of such Borrower; (c) it is
not subject to a first priority perfected security interest in favor of the
Agent for the ratable benefit of the Secured Creditors; (d) it is raw
materials of the type shown on GDT inventory as codes 21 and 22 as coded on
the Effective Date (PROVIDED, HOWEVER, that any fabricated assemblies,
fabricated parts or spare parts in these inventory codes which are held by
the Borrowers for sale as replacement parts shall not be covered by this
exclusion), work-in-process (other than work-in-process described on
SCHEDULE 1.1-G), tooling, packaging and shipping materials, or supplies; or
(e) it is bill-and-hold Inventory, returned or defective Inventory, or
Inventory delivered to a Borrower on consignment.
"ENVIRONMENTAL COMPLIANCE RESERVE" means any reserve which the
Agent establishes from time to time for Remedial Action which exceeds
$750,000 in the aggregate as determined by the independent environmental
engineer retained pursuant to SECTION 10.7.
"ENVIRONMENTAL LAWS" means all federal, state and local laws,
rules, regulations, ordinances, programs, permits, guidance, orders and
consent decrees relating to health, safety, hazardous substances, and
environmental matters applicable to any Borrower and/or its business and
facilities (whether or not owned by it). Such laws and regulations include
but are not limited to the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq., as amended; the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.,
as amended; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq., as amended; the Clean Water Act, 42 U.S.C. Section 466 et seq., as
amended; the Clean Air Act, 46 U.S.C. Section 7401 et seq., as amended; and
state and federal lien and environmental cleanup programs.
"ENVIRONMENTAL LIEN" means a Lien in favor of any governmental
entity for (1) any liability under federal or state environmental laws or
regulations, or (2) damages arising from, or costs incurred by such
governmental entity in response to, a Release or threatened Release of
Contaminant into the environment.
<PAGE>
<PAGE> EX-10.26-10
"EQUIPMENT" means all of the Borrowers' now owned and hereafter
acquired machinery, equipment, office equipment, furniture, furnishings,
fixtures, and other tangible personal property (except Inventory),
including, without limitation, motor vehicles, aircraft, vessels, dies,
tools, jigs, and office equipment; together with all present and future
additions and accessions thereto, replacements therefor, component and
auxiliary parts and supplies used or to be used in connection therewith,
and all substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties and rights with respect thereto, wherever any of
the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"EURODOLLAR RATE" means, for each Interest Period in respect of
any Eurodollar Rate Loan, an interest rate per annum (rounded upward to the
nearest 1/16th of 1%) determined pursuant to the following formula:
LIBOR
Eurodollar Rate = --------------------------------------------
1.00 minus the Eurodollar Reserve Percentage
Where:
"EURODOLLAR RESERVE PERCENTAGE" means the maximum reserve
percentage (expressed as a decimal, rounded upward to the nearest
1/100th of 1%) in effect on the date LIBOR for such Interest Period is
determined (whether or not applicable to BOA) under regulations issued
from time to time by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities") having a
term comparable to such Interest Period; and
"LIBOR" means the rate of interest per annum determined by BOA to
be the arithmetic mean (rounded upward, if necessary, to the nearest
one-hundredth of one percent (1/100%)) of the rates of interest per
annum notified to BOA as the rate of interest at which dollar deposits
in an amount approximately equal to the amount of the Revolving Loan
to be made or continued as, or converted into, a Eurodollar Rate Loan
by the Lenders and having a maturity equal to such Interest Period
would be offered to major banks in the London interbank market at
their request at or about 11:00 a.m. (London time) on the second
Business Day before the commencement of such Interest Period.
"EURODOLLAR RATE LOAN" means a Loan bearing interest based on the
Eurodollar Rate in accordance with ARTICLE 2.
"EVENT OF DEFAULT" has the meaning specified in SECTION 12.1.
"EXCHANGE OFFER" means an offer by Holdings to the holders of the
Debentures to exchange all or a portion of the Debentures for newly issued
Securities of Holdings.
"EXCHANGE OFFER DOCUMENTS" means all documents transmitted to the
holders of the Debentures or filed with the SEC in connection with an
Exchange Offer.
<PAGE>
<PAGE> EX-10.26-11
"EXCLUDED TAXES" means franchise taxes and taxes upon or
determined by reference to any Lender's net income, gross receipts, or net
worth, in each case, imposed by the United States of America or any
political subdivision or taxing authority thereof or therein (including
without limitation any state or locality thereof or therein) or by any
jurisdiction in which the lending office or other branch of any Lender is
located, is resident or in which any Lender is organized or has its
principal or registered office (including, without limitation, branch taxes
imposed by the United States or similar taxes imposed by any subdivision
thereof or therein).
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in
the daily statistical release designated as H.15(519), or any successor
publication, published by the Board of Governors of the Federal Reserve
System on the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean, as
determined by the Agent, of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York City time) on that day
by each of three leading brokers of Federal funds transactions in New York
City selected in good faith by the Agent.
"FINANCIAL STATEMENTS" means, according to the context in which
it is used, the financial statements attached hereto as SCHEDULE 1.1-A, or
the pro forma balance sheet attached hereto as SCHEDULE 1.1-B, or any
financial statements required to be given to the Lenders pursuant to
SECTIONS 8.2(a), (b), and (c), or any combination thereof.
"FISCAL YEAR" means the fiscal year for financial accounting
purposes of each of the Borrowers, which shall end on December 31 of each
calendar year.
"FLOOR PLAN FINANCER" means Associates or any predecessor thereto
or successor thereto, or any other person providing floor plan financing to
Independent Dealers (as such term is defined in the Operating Agreement to
which Associates is a party on the date of this Agreement) or retail
financing to Great Dane Customers (as such term is or was defined in the
Operating Agreement) under a Floor Plan Financing Agreement, in each case
on the terms and subject to the conditions set forth in this Agreement.
"FLOOR PLAN FINANCING AGREEMENTS" means, collectively, the
Operating Agreements from time to time in effect, the Stock Purchase
Agreement among GDT, ICC and Associates dated as of August 15, 1988 and the
Tradename Agreement between GDT and Great Dane Financing Company dated as
of August 31, 1988.
"FLOOR PLAN ACCOUNTS" means Eligible Accounts which are owed by
Account Debtors who have a floor plan agreement or similar financing
arrangement with a Floor Plan Financer.
"FUNDING DATE" means the date on which any Term Loan or Revolving
Loan is to be made, continued or converted hereunder or the date on which
any Letter of Credit or Banker's Acceptance is issued hereunder.
"GAAP" means at any particular time with respect to GDT and its
Subsidiaries, generally accepted accounting principles as in effect at such
time, consistently applied.
<PAGE>
<PAGE> EX-10.26-12
"GENERAL INTANGIBLES" means all of each Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of
action and all other intangible personal property of such Borrower of every
kind and nature (other than Accounts), including, without limitation, all
Proprietary Rights, corporate or other business records, inventions,
designs, blueprints, plans, specifications, patents, patent applications,
trademarks, trade names, trade secrets, goodwill, copyrights, computer
software, customer lists, registrations, licenses, franchises, tax refund
claims, Reversions or any rights thereto and any other amounts payable to
such Borrower from any Plan or other employee benefit plan, rights and
claims against carriers and shippers, rights to indemnification, business
interruption insurance and proceeds thereof, property, casualty or any
similar type of insurance and any proceeds thereof, proceeds of insurance
covering the lives of key employees on which such Borrower is beneficiary,
and any letter of credit, guarantee, claim, security interest or other
security held by or granted to any Borrower to secure payment by an account
debtor of any of the Accounts.
"GEORGIA INTANGIBLES TAX" means the tax imposed under the
provisions of Section 48-6-61 of the Official Code of Georgia Annotated, as
it exists on each Term Funding Date.
"GUARANTOR" means any Person (other than a Borrower) who is
primarily or secondarily liable on any of the Obligations or who grants to
the Agent a Lien on any property of such Person as security for any of the
Obligations.
"GUARANTY" means, with respect to any Person, all obligations of
such Person which in any manner directly or indirectly guarantee or assure,
or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligation of any other Person (the "guar-
anteed obligations"), or to assure or in effect assure the holder of the
guaranteed obligations against loss in respect thereof, including, without
limitation, any such obligations incurred through an agreement, contingent
or otherwise: (a) to purchase the guaranteed obligations or any property
constituting security therefor; (b) to advance or supply funds for the
purchase or payment of the guaranteed obligations or to maintain a working
capital or other balance sheet condition; (c) to lease property or to
purchase any debt or equity securities or other Property or services.
"HOLDINGS" means Great Dane Holdings Inc., a Delaware
corporation, formerly known as International Controls Corp.
"HOLDINGS CONTROLLING SHAREHOLDERS" means any one or more of the
following individuals: Allan R. Tessler, David R. Markin, Martin L.
Solomon, Wilmer J. Thomas, Jr. and with respect to each of the foregoing
Persons a lineal descendent of such Person or the surviving spouse of such
Person.
"HOLDINGS STOCK AGREEMENT" means that certain Amended and
Restated Agreement Regarding Stock and Other Matters dated as of the
Effective Date, in form and substance satisfactory to the Lenders, executed
and delivered by Holdings and the Borrowers to the Agent for the benefit of
the Secured Creditors, which amends and restates the Agreement Regarding
Stock and Other Matters dated as of March 21, 1990 executed and delivered
by ICC and the other parties thereto for the benefit of the Secured
Creditors.
"ICC" means International Controls Corp., a Florida corporation,
which was reincorporated in the State of Delaware through a merger with its
<PAGE>
<PAGE> EX-10.26-13
wholly-owned subsidiary, Holdings, with Holdings being the surviving
corporation.
"INDENTURES" means, collectively, the Senior Subordinated
Debenture Indenture and the Subordinated Discount Debenture Indenture.
"INITIAL TERM FUNDING DATE" means the Term Funding Date which
shall occur on the Effective Date and on which the Lenders shall, subject
to the terms and conditions of this Agreement, make a portion of the New
Term Loan Funding available to GDT based on Equipment (other than Terre
Haute Equipment) and Real Estate appraisals received and reviewed by, and
in form and substance satisfactory to, the Agent and each Lender prior to
such Term Funding Date.
"INTERCOMPANY ACCOUNTS" means all assets and liabilities, however
arising, which are due to a Borrower from, which are due from a Borrower
to, or which otherwise arise from any transaction by a Borrower with, any
Affiliate, including, without limitation, all Distributions of the type
described in clause (a) of the definition thereof.
"INTEREST PAYMENT DATE" means: (a) with respect to any Reference
Rate Loan, the first Business Day of each month, commencing on the first
day of the first month following the Effective Date; (b) with respect to
any Eurodollar Rate Loan, the last day of the Interest Period applicable
thereto, and in the case of any Eurodollar Rate Loan having an Interest
Period of six (6) months, the day which is three months after the Funding
Date of such Eurodollar Rate Loan; and (c) the Termination Date.
"INTEREST PERIOD" means, with respect to any Eurodollar Rate
Loan, the period commencing on the Funding Date of such Eurodollar Rate
Loan and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that
is one (1), two (2), three (3) or six (6) months thereafter, as the
Borrower may (subject in all cases to availability) elect with respect to
Eurodollar Rate Loans; PROVIDED, HOWEVER, that (v) if any Interest Period
would otherwise end on a day which is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such
next succeeding Business Day falls in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (w)
any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month, (x) no Interest Period with respect
to any Term Loans (or any Portion or Portions thereof) being maintained as
Eurodollar Rate Loans may extend beyond a date on which GDT is required to
make a scheduled payment of principal of the Term Loans unless the
aggregate principal amount of Term Loans (or any Portion or Portions
thereof) with Interest Periods expiring on or before such date equals or
exceeds the principal amount required to be paid on the Term Loans on such
date, (y) no Interest Period shall end later than the last day of the
scheduled term of this Agreement, and (z) interest shall accrue from and
including the first day of an Interest Period to but excluding the last
Business Day of such Interest Period.
"INTEREST RATE" means each or any of the interest rates,
including the Default Rate, set forth in SECTION 4.1.
"INVENTORY" means all of the Borrowers' now owned and hereafter
acquired inventory, goods, merchandise, and other such personal property,
<PAGE>
<PAGE> EX-10.26-14
wherever located, to be furnished under any contract of service or held for
sale or lease, all returned goods, and materials and supplies of any kind,
nature or description which are or might be consumed in the Borrowers'
businesses or used in connection with the packing, shipping, advertising,
selling or finishing of such goods, merchandise and such other personal
property, and all documents of title or other documents representing them.
"IRS" means the Internal Revenue Service or any successor agency.
"LATEST PROJECTIONS" means: (a) on the Effective Date and
thereafter until the Lenders receive new projections pursuant to
SECTION 8.2(e), the projections of GDT and its Subsidiaries, on a
consolidated basis, monthly financial condition, results of operations, and
cash flow for the 1995 calendar year, attached hereto as SCHEDULE 1.1-C;
and (b) thereafter, the projections most recently received by the Lenders
pursuant to SECTION 8.2(e).
"L/C SUBFACILITY" means that portion of the Aggregate Maximum
Revolver Amount available for the issuance of Letters of Credit in an
aggregate amount not to exceed $20,000,000.
"LETTER OF CREDIT" means a Standby Letter of Credit or a
Merchandise Letter of Credit issued or caused to be issued for the account
of a Borrower pursuant to ARTICLE 3.
"LETTER OF CREDIT OBLIGATIONS" means, with respect to any
Borrower at any particular time, the sum of (a) the Letter of Credit
Reimbursement Obligations of such Borrower at such time, PLUS (b) the
aggregate maximum amount available for drawing under outstanding Letters of
Credit issued for the account of such Borrower at such time, PLUS (c) the
aggregate maximum amount available for drawing under Letters of Credit
requested by such Borrower the issuance of which has been authorized by the
Agent pursuant to SECTION 3A.4(b) but which have not yet been issued, in
each case as determined by the Agent.
"LETTER OF CREDIT REIMBURSEMENT AGREEMENT" means, with respect to
a Letter of Credit, such form of application therefor and form of agreement
therefor (whether in a single document or several documents), in form and
substance satisfactory to the applicable issuer of such Letter of Credit
and the Agent.
"LETTER OF CREDIT REIMBURSEMENT OBLIGATIONS" means the
reimbursement or repayment obligations of a Borrower to the Agent and/or
other issuers of Letters of Credit pursuant to SECTION 3A.5 or pursuant to
a Letter of Credit Reimbursement Agreement with respect to amounts which
have been drawn under Letters of Credit in accordance with their terms.
"LIEN" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including without limitation, a security interest, charge,
claim, or lien arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, agreement, security
agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes; and (b) to the extent not included under
clause (a), any reservation, exception, encroachment, easement, right-of-
way, covenant, condition, restriction, lease or other title exception or
encumbrance affecting Property.
<PAGE>
<PAGE> EX-10.26-15
"LOAN" means a Term Loan or a Revolving Loan (including a BA
Revolving Loan).
"LOAN ACCOUNT" has the meaning specified in SECTION 3A.10.
"LOAN DOCUMENTS" means this Agreement, the Term Notes, the Trade-
mark Agreement, the Patent Agreement, the Borrower Pledge Agreement, the
Holdings Stock Agreement, the Succession Agreement, the Mortgages, the
Mortgage Amendment Documents and all other agreements, instruments, and
documents heretofore, now or hereafter evidencing, securing, guaranteeing
or otherwise relating to the Obligations, the Collateral, the Real Estate,
or any other aspect of the transactions contemplated by this Agreement.
"MAJORITY LENDERS" means, at any time, Lenders whose Pro Rata
Shares aggregate (i) sixty-seven percent (67%) or more, so long as the Pro
Rata Share of NationsBank of Georgia, N.A., is thirty-three and 3333/10,000
percent (33.3333%) or more of the Commitments, (ii) more than fifty percent
(50%) if the Pro Rata Share of NationsBank of Georgia, N.A., is less than
the percentage described in clause (i) above and (iii) if no Commitments
are outstanding at such time, Lenders holding sixty-seven percent (67%) or
more than fifty percent (50%), as the case may be, based on the last
Commitments outstanding prior to such time, of the Loans outstanding at
such time and participation interests in Letter of Credit Obligations and
Banker's Acceptance Obligations outstanding at such time.
"MARKET PURCHASE" means a purchase by Holdings of Debentures, in
privately negotiated transactions, on the American Stock Exchange or in the
over-the-counter market.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon
(i) the business, assets or other properties, liabilities or condition
(financial or otherwise), results of operations or prospects of the
Borrowers and their Subsidiaries, taken as a whole, (ii) the ability of the
Borrowers to perform in any material respect any of their obligations under
the Loan Documents, or (iii) the priority or value of the Collateral or the
Real Estate subject to a Mortgage in Brazil, Indiana, Savannah, Georgia or
Wayne, Nebraska.
"MAXIMUM REVOLVER AMOUNT" means, at any time, for any Borrower,
(a) the lesser of:
(i) the total amount of the Revolving Credit Commitments as such
Revolving Credit Commitments may be reduced pursuant to SECTION
5.2; or
(ii) the sum of:
(A) up to eighty-five percent (85%) (in the Agent's
reasonable credit judgment) of the value of Eligible
Accounts of such Borrower other than Floor Plan Accounts,
(B) the lesser of (1) $2,000,000 or (2) up to twenty
percent (20%) (in the Agent's reasonable credit judgment)
of the value of Floor Plan Accounts owed to such Borrower,
and
(C) the lesser of:
<PAGE>
<PAGE> EX-10.26-16
(1) $50,000,000; PROVIDED, HOWEVER, that if such
Borrower is GDTT or GDLA, the maximum amount available
to such Borrower under this subsection (C) shall be
limited to $3,000,000 with respect to each of GDTT or
GDLA, as the case may be, or
(2) the sum of (x) sixty percent (60%) of the value of
such Borrower's Eligible Inventory other than Eligible
Inventory consisting of used Inventory and (y) the
lesser of (I) $5,000,000 or (II) sixty percent (60%)
of the value of such Borrower's Eligible Inventory
consisting of used Inventory; MINUS
(b) the sum of:
(i) reserves established by the Agent for accrued interest on
the Revolving Loans;
(ii) reserves established by the Agent because one or more
Account Debtors have not entered into an agreement with the Agent
which is acceptable to the Agent with respect to the waiver of
its right of set-off when:
(A) one or more of the Accounts owed by the applicable
Account Debtors are Eligible Accounts,
(B) such Account Debtors have a creditor relationship with
any Borrower, and
(C) the aggregate amount of the potential set-off is
$250,000 or more;
(iii) Environmental Compliance Reserves; and
(iv) all other reserves which the Agent reasonably establishes
(A) with respect to any failure (whether or not a cure or grace
period is provided herein) by the Borrowers to comply with the
terms, provisions, affirmative and negative covenants and other
agreements contained in this Agreement or any of the other Loan
Documents and (B) pursuant to SECTIONS 10.5 and 10.6.
The Agent agrees to give GDT oral (to be promptly confirmed in writing) or
written notice prior to establishing any reserve pursuant to CLAUSE (b) of
this definition of Maximum Revolver Amount but the failure to give such
notice shall not affect the Agent's right to establish such reserve. The
Agent shall compute the Maximum Revolver Amount for each week on the later
of (A) the Agent's receipt of the documents required to be delivered by the
Borrowers during such week pursuant to SECTION 7.7(a) and (B) the first
(1st) Business Day of such week, and the Maximum Revolver Amount so
computed shall remain in effect until recomputed on the later of (1) the
Agent's receipt of the documents required to be delivered by the Borrowers
during the next week pursuant to SECTION 7.7(a) and (2) the first (1st)
Business Day of the next week.
"MERCHANDISE LETTER OF CREDIT" means a documentary Letter of
Credit issued for the account of the Borrower to provide the intended means
of making payment when due by the Borrower for the purchase of Inventory
and available for drawing against presentation of, inter alia, negotiable
documents of title covering such Inventory.
<PAGE>
<PAGE> EX-10.26-17
"MORTGAGE AMENDMENT DOCUMENTS" has the meaning specified in
SECTION 7.1(b)(ii)(y).
"MORTGAGES" means all real property fee mortgages, leasehold
mortgages, assignments of leases, mortgage deeds, deeds of trust, deeds to
secure debt, security agreements, and other similar instruments entered
into in connection with the Original Agreement and now and hereafter
entered into which provide the Agent, for the benefit of the Secured
Creditors, a Lien on or other interest in any portion of the Premises or
the Real Estate or which relate to any such Lien or interest.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Borrower or a Related Company
contributes, is required to contribute, or has contributed within the
immediately preceding six (6) years or with respect to which any Borrower
or a Related Company could have liability under Section 4212(c).
"NET COLLATERAL VALUE" means, with respect to any Equipment or
Real Estate, the value, if any, assigned to such Equipment or Real Estate
in the appraisals received and reviewed by, and in form and substance
satisfactory to, the Agent and each Lender with respect to such Equipment
or Real Estate.
"NEW TERM LOAN FUNDING" shall mean the Term Loans to be made
hereunder on each Term Funding Date in an amount equal to Term Loan
Commitments on such Term Funding Date.
"NOTICE OF BORROWING" means a notice substantially in the form of
EXHIBIT A in the case of the Borrowing of Revolving Loans on the Effective
Date, or a notice substantially in the form of EXHIBIT B in the case of the
Borrowing of Term Loans on each Term Funding Date.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially
in the form of EXHIBIT F with respect to the conversion of Reference Rate
Loans to Eurodollar Rate Loans or Eurodollar Rate Loans to Reference Rate
Loans, as the case may be, or a continuation of Reference Rate Loans or
Eurodollar Rate Loans as such, as the case may be.
"OBLIGATIONS" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts, including Letter of
Credit Obligations and Banker's Acceptance Obligations, owing by each of
the Borrowers to the Lenders and/or the Agent, arising under or relating to
this Agreement, any other Loan Document, any Letter of Credit or any
Banker's Acceptance, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit,
opening of a letter of credit, acceptance, loan, guaranty, indemnification
or otherwise, whether direct or indirect (including, without limitation,
those acquired by assignment from others, and any participation by the
Lenders in any of the Borrowers' debts owing to others), absolute or
contingent, due or to become due, primary or secondary, as principal or
guarantor, and including, without limitation, all interest, charges,
expenses, fees, attorneys' fees, filing fees and any other sums chargeable
to any of the Borrowers hereunder, under another Loan Document, or under
any other agreement or instrument with the Lenders and/or the Agent.
"OPERATING AGREEMENT" means the Amended and Restated Operating
Agreement between GDT and Great Dane Finance Company, dated as of August
31, 1988. In the event that (a) the Operating Agreement expires or
otherwise terminates and (b) GDT enters into any other agreement or
agreements which
<PAGE>
<PAGE> EX-10.26-18
provides or provide for floor plan financing to Independent Dealers (as
such term is defined in the Operating Agreement in effect on the date of
this Agreement) or retail financing to Great Dane Customers (as such term
is defined in the Operating Agreement in effect on the date of this
Agreement), in each case for the same purposes provided in the Operating
Agreement, with any Person or Persons, in each case acceptable to the
Majority Lenders, "Operating Agreement" shall be deemed to mean such other
agreement or agreements.
"ORIGINAL TERM LOANS" shall mean any and all Term Loans made
pursuant to the Original Agreement and outstanding as of the Effective
Date.
"OVER ADVANCES" has the meaning specified in SECTION 2.3. All
Over Advances shall constitute Revolving Loans hereunder and shall be
subject to all the terms and conditions applicable to other Revolving
Loans.
"PARTICIPANT" means any Person who shall have been granted the
right by any Lender to participate in the financing provided pursuant to
this Agreement and who shall have entered into a participation agreement in
form and substance satisfactory to such Lender pursuant to the provisions
of SECTION 14.3(e).
"PATENT AGREEMENT" means the Patent Security Agreement dated of
even date herewith, executed and delivered by GDT to the Agent pursuant to
SECTION 7.2 to evidence and perfect the Agent's security interest in GDT's
patents and related licenses and rights as provided therein.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"PERMITTED BILL AND HOLD SALES" means any sale of Inventory made
by any Borrower in the ordinary course of its business with respect to
which the goods which are the subject matter of the sale are located on the
Borrowers' premises.
"PERMITTED LIENS" means:
(a) Liens for taxes not yet payable, or statutory Liens for
taxes in an amount not to exceed $100,000 provided that the payment of such
taxes which are due and payable is being contested in good faith and by
proper proceedings diligently pursued, and that reserves or other
appropriate provision, if any, as shall be required by GAAP shall have been
made therefor and that a stay of enforcement of any such Lien is in effect;
(b) Liens in favor of the Agent for the benefit of the Secured
Creditors;
(c) Liens upon Equipment granted or assumed in connection with
the acquisition of such Equipment by any Borrower after the Effective Date
(including, without limitation, pursuant to Capital Leases), PROVIDED that
(i) the Debt incurred to finance each such acquisition is permitted by
SECTION 10.13, and (ii) each such Lien attaches only to the Equipment
acquired with the Debt secured thereby;
(d) deposits under workmen's compensation, unemployment
insurance, social security and other similar laws, or to secure the
performance of bids, tenders or contracts (other than for the repayment of
borrowed money) or to secure indemnity, performance or other similar bonds
for the performance of
<PAGE>
<PAGE> EX-10.26-19
bids, tenders or contracts (other than for the repayment of borrowed money)
or to secure statutory obligations or surety or appeal bonds, or to secure
indemnity, performance or other similar bonds in the ordinary course of
business;
(e) Liens which arise by operation of law under Article 2 of the
Uniform Commercial Code in favor of unpaid sellers of goods or prepaying
buyers of goods, or liens in items of any accompanying documents or
proceeds of either arising by operation of law under Article 4 of the
Uniform Commercial Code in favor of a collecting bank;
(f) Liens arising by operation of law securing the claims or
demands of materialmen, mechanics, carriers, warehousemen, landlords and
other like Persons, PROVIDED that the payment thereof is not at the time
required by SECTION 10.1;
(g) Liens reflected on SCHEDULE 1.1-D hereto; and
(h) Liens for assessments or governmental charges or claims not
yet due other than Environmental Liens.
"PERSON" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association,
corporation, Public Authority, or any other entity.
"PLAN" means any employee benefit plan as defined in Section 3(3)
of ERISA in respect of which any Borrower or any Related Company is, or
within the immediately preceding six (6) years was, an "employer" as
defined in Section 3(5) of ERISA or could have liability under Section 4069
or Section 4212(c) of ERISA.
"PORTION" means, when used in relation to a Borrowing consisting
of Term Loans, a portion thereof in an amount of not less than each
Lender's Pro Rata Share of the next monthly installment payable under each
Term Loan then outstanding, designated by GDT as consisting of Term Loans
which are of the same type and which have the same Interest Period.
"PREMISES" means the land identified by addresses on SCHEDULE
1.1-E, together with all buildings, improvements, and fixtures thereon and
all tenements, hereditament, and appurtenances belonging or in any way
appertaining thereto, and which constitutes substantially all of the real
property in which any Borrower has any interests on the Effective Date.
"PRO RATA SHARE" means, at any time with respect to a Lender, a
fraction (expressed as a percentage), the numerator of which is the amount
of such Lender's Commitment at such time and the denominator of which is
the sum of all of the Lenders' Commitments at such time.
"PROPERTY" means any real or personal property, plant, building,
facility, structure, underground storage tank, equipment or unit, or other
asset owned, leased or operated by GDT or any of its Subsidiaries,
including, without limitation, GDT's or any such Subsidiary's Equipment,
Inventory and Real Estate.
"PROPRIETARY RIGHTS" means all of the Borrowers' now owned and
hereafter arising or acquired: patents, patent rights, copyrights, works
which are the subject matter of copyrights, trademarks, service marks,
trade names, trade styles, patent, trademark and service mark applications,
and all
<PAGE>
<PAGE> EX-10.26-20
licenses and rights related to any of the foregoing, including, without
limitation, those patents, trademarks, service marks and copyrights set
forth on SCHEDULE 1.1-F hereto, and all other rights under any of the
foregoing, all extensions, renewals, reissues, divisions, continuations,
and continuations-in-part of any of the foregoing, and all rights to sue
for past, present and future infringement of any of the foregoing.
"PUBLIC AUTHORITY" means the government of any country or
sovereign state, or of any state, province, municipality, or other
political subdivision thereof, or any department, agency, public
corporation or other instrumentality of any of the foregoing.
"REAL ESTATE" means all of the present and future interests of
each Borrower as owner, lessee, or otherwise, in the Premises, including,
without limitation, any interest arising from an option to purchase or
lease the Premises or any portion thereof.
"REAL ESTATE TERM FUNDING DATE" means the Term Funding Date which
shall occur after the Initial Term Funding Date and on which the Lenders
shall, subject to the terms and conditions of this Agreement, make all or a
portion of the New Term Loan Funding available to GDT based on Real Estate
appraisals received and reviewed by, and in form and substance satisfactory
to, the Agent and each Lender on or after the Initial Term Funding Date and
before such Real Estate Term Funding Date.
"REDEMPTION" means any redemption, purchase, repurchase or other
reacquisition by Holdings of a Debenture by means of or pursuant to a
Market Purchase, a Tender Offer or an Exchange Offer, or any combination
thereof.
"REFERENCE RATE" means the rate of interest publicly announced
from time to time by BOA in San Francisco, California, as its reference
rate. The Reference Rate is a rate set by BOA based upon various factors
including BOA's costs and desired return, general economic conditions, and
other factors, and is used as a reference point for pricing some loans.
BOA may price loans at, above or below the Reference Rate. Any change in
the Reference Rate shall take effect on the day specified in the public
announcement of such change.
"REFERENCE RATE LOAN" means a Loan bearing interest based on the
Reference Rate in accordance with ARTICLE 2.
"REGISTER" has the meaning specified in SECTION 14.3(c).
"RELATED COMPANY" means any (i) corporation which is a member of
the same controlled group of corporations (within the meaning of
Section 414(b) of the Code or Section 4001 of ERISA) as any Borrower; (ii)
partnership or other trade or business (whether or not incorporated) under
common control (within the meaning of Section 414(c) of the Code or Section
4001 of ERISA) with any Borrower; or (iii) member of the same affiliated
service group (within the meaning of Section 414(m) or (o) of the Code) as
any Borrower, any corporation described in clause (i) above or any
partnership, trade or business described in clause (ii) above.
"RELEASE" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration
into the indoor or outdoor environment or into or out of any Property,
including the movement of Contaminants through or in the air, soil, surface
water, groundwater or Property.
<PAGE>
<PAGE> EX-10.26-21
"REMEDIAL ACTION" means actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; or (iii) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
"RENTALS" means all payments due from the lessee or sublessee
under a lease or sublease, including, without limitation, basic rent and
percentage rent but excluding from the foregoing payments arising from (a)
leases with an original term of less than one year and (b) leases which by
their terms can be terminated by the applicable Borrower upon notice of
thirty (30) days or less without premium or penalty.
"REPORTABLE EVENT" has the meaning ascribed to that term in
Section 4043 of ERISA or the regulations promulgated thereunder.
"REQUIREMENTS OF LAW" means any foreign, federal, state or local
law, rule or regulation, permit, or other binding determination of any
Public Authority.
"RESTRICTED ACCOUNT AGREEMENT" has the meaning specified in
SECTION 7.8(b).
"RESTRICTED INVESTMENT" means any acquisition of property by GDT
or any of its Subsidiaries in exchange for cash or other property, whether
in the form of an acquisition of stock, debt security, or other
indebtedness or obligation, or the purchase or acquisition of any other
property, or by loan, advance, capital contribution, or subscription,
except acquisitions of the following: (a) businesses similar to the
business of GDT and its Subsidiaries as conducted on the Effective Date
acquired by purchasing either assets or stock so long as the acquisition
costs thereof (including all liabilities of the business so acquired
whether or not assumed by any Borrower in connection therewith) constitute
Capital Expenditures permitted hereunder; (b) goods held for sale or lease
or to be used in the provision of services by GDT or one of its
Subsidiaries in the ordinary course of business; (c) current assets arising
from the sale or lease of goods or the rendition of services in the
ordinary course of business of GDT or one of its Subsidiaries; (d) direct
obligations of the United States of America, or any agency thereof, or
obligations guaranteed by the United States of America, PROVIDED that such
obligations mature within one year after the date of acquisition thereof;
(e) certificates of deposit maturing within one year after the date of
acquisition, bankers' acceptances, Eurodollar bank deposits, or overnight
bank deposits, in each case issued by, created by, or with a bank or trust
company organized under the laws of the United States or any state thereof
having a combined capital, surplus and undivided profits of at least
$100,000,000; (f) commercial paper given the highest rating by a national
credit rating agency and maturing not more than 270 days after the date of
creation thereof; (g) Distributions of the type described in clause (a) of
the definition thereof and permitted under this Agreement; and (h) Capital
Expenditures permitted under this Agreement.
"REVERSIONS" means any funds which may become due to any Borrower
in connection with the termination of any Plan or other employee benefit
plan.
<PAGE>
<PAGE> EX-10.26-22
"REVOLVER FACILITY" means the revolving credit facility provided
for in SECTION 2.2.
"REVOLVING CREDIT COMMITMENT" means, with respect to each Lender,
on any date, an amount equal to the amount set forth beside such Lender's
name under the heading Revolving Credit Commitment on the signature pages
of this Agreement or, after an assignment pursuant to SECTION 14.3, shown
for such Lender in the Register, less, in each case, any Term Loans made by
such Lender and then outstanding or to be made on such date, and "Revolving
Credit Commitments" shall, collectively, mean the aggregate amount of the
Revolving Credit Commitments of all the Lenders which, as of any date,
equals $150,000,000 less any Term Loans then outstanding or to be made on
such date.
"REVOLVING CREDIT TERMINATION DATE" means the earliest of (i) the
fifth Anniversary Date, (ii) the date of termination in whole of the
Revolving Credit Commitments pursuant to SECTION 5.2, and (iii) the date of
termination of the Commitments pursuant to SECTION 12.2.
"REVOLVING LOANS" has the meaning specified in SECTION 2.2(a).
"RULING" means the ruling referred to in SECTION 10.33(a).
"SECURED CREDITORS" means, collectively, the Agent and the
Lenders including, without limitation, BankAmerica with respect to the BA
Revolving Loans, BOA, to the extent it is an issuer of a Letter of Credit
or issuer of a Banker's Acceptance, and any other Person entitled to
indemnification pursuant to the terms of this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"SECURITY" has the meaning specified in Section 2(1) of the
Securities Act.
"SENIOR SUBORDINATED DEBENTURE INDENTURE" means the Indenture
dated as of August 1, 1986 between ICC and First Fidelity Bank, National
Association, New Jersey, as amended by the First Supplemental Indenture
dated as of October 19, 1994 among ICC, Holdings and First Fidelity Bank,
National Association.
"SENIOR SUBORDINATED DEBENTURES" means the Senior Subordinated
Debentures due August 1, 2001 issued pursuant to the Senior Subordinated
Debenture Indenture.
"SOLVENT" or "SOLVENCY" means when used with respect to any
Person that (a) the fair value of all its Property is in excess of the
total amount of its debts (including contingent liabilities); (b) it is
able to pay its debts as they mature; (c) it does not have unreasonably
small capital for the business in which it is engaged or for any business
or transaction in which it is about to engage; and (d) it is not
"insolvent" as such term is defined in Section 101 of the Bankruptcy Code.
"STANDBY LETTER OF CREDIT" means any Letter of Credit other than
a Merchandise Letter of Credit.
<PAGE>
<PAGE> EX-10.26-23
"SUBORDINATED DISCOUNT DEBENTURE INDENTURE" means the Indenture
dated as of December 27, 1985 between ICC and Midlantic National Bank, as
Trustee, as amended by the First Supplemental Indenture dated as of October
19, 1994 among ICC, Holdings and Midlantic National Bank.
"SUBORDINATED DISCOUNT DEBENTURES" means the Subordinated
Discount Debentures due January 1, 2006 issued pursuant to the Subordinated
Discount Debenture Indenture.
"SUBSIDIARY" means any corporation of which more than fifty
percent (50.0%) of the outstanding securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing
similar functions), is at the time, directly or indirectly through one or
more intermediaries, owned by any Borrower and/or one or more Subsidiaries
of any Borrower.
"SUCCESSION AGREEMENT" means the Succession Agreement dated as of
February 14, 1995 among the Lenders, the Borrowers and SPBC, pursuant to
which BankAmerica has been appointed as the successor Agent to SPBC under
the Original Agreement.
"TAX OPINION" means an opinion from counsel to GDT satisfactory
to the Agent, in form and substance satisfactory to the Agent, to the
effect that, after giving effect to any assignment or participation made
pursuant to SECTION 14.3, all Georgia Intangibles Tax required to be paid
to perfect, protect and continue the Liens intended to be granted under the
Loan Documents on GDT's property located in the State of Georgia have been
paid.
"TENDER OFFER" means an offer by Holdings to the holders of the
Debentures to purchase all or a portion of the Debentures for cash or for
cash and newly issued Securities.
"TENDER OFFER DOCUMENTS" means all documents transmitted to the
holders of the Debentures or the SEC in connection with a Tender Offer.
"TERM FUNDING" means each New Term Loan Funding of the Term
Loans.
"TERM FUNDING DATE" means the Initial Term Funding Date, the Real
Estate Term Funding Date or the Terre Haute Term Funding Date.
"TERM LOAN" has the meaning specified in SECTION 2.1.
"TERM LOAN COMMITMENT" means, with respect to each Lender, at any
time, the sum of the following:
(a) with respect to the Original Term Loans and the Term Loans to
be made on the Initial Term Funding Date, each Lender's Pro Rata Share
of $16,727,184.74, and
(b) with respect to the Term Loans to be made on the Real Estate
Term Funding Date, the lesser of (i) (A) the difference of the amount
set forth beside such Lender's name under the heading Term Loan
Commitment on the signature pages of this Agreement or, after an
assignment pursuant to SECTION 14.3, shown for such Lender in the
Register MINUS (B) such Lender's Pro Rata Share of the original
principal amount of the Original Term Loans and Term Loans made on the
Initial Term Funding Date and, in the event the Terre Haute Term
Funding
<PAGE>
<PAGE> EX-10.26-24
Date shall occur on or before the Real Estate Term Funding Date, such
Lender's Pro Rata Share of the Term Loans made or to be made on the
Terre Haute Term Funding Date, and (ii) such Lender's Pro Rata Share
of the fair market value of all Real Estate with respect to which the
Agent has received and reviewed appraisals on or after the Initial
Term Funding Date and before such Real Estate Term Funding Date and
which the Agent, in its sole discretion, deems to be eligible Real
Estate against which Term Loans may be made, and
(c) with respect to the Term Loans to be made on the Terre Haute
Term Funding Date, the lesser of (i) (A) the difference of the amount
set forth beside such Lender's name under the heading Term Loan
Commitment on the signature pages of this Agreement or, after an
assignment pursuant to SECTION 14.3, shown for such Lender in the
Register MINUS (B) such Lender's Pro Rata Share of the original
principal amount of the Original Term Loans and Term Loans made at the
Initial Term Funding Date and, in the event the Real Estate Term
Funding Date shall occur on or before the Terre Haute Term Funding
Date, such Lender's Pro Rata Share of the Term Loans made or to be
made on the Real Estate Term Funding Date and (ii) such Lender's Pro
Rata Share of the lesser of (x) seventy-five percent (75%) of hard
costs associated with the Terre Haute Equipment and (y) the orderly
liquidation value of the Terre Haute Equipment, in each case with
respect to which the Agent has received and reviewed appraisals on or
after the Initial Term Funding Date and before such Terre Haute Term
Funding Date and which, in the case of all Terre Haute Equipment, the
Agent, in its sole discretion, deems to be eligible Terre Haute
Equipment against which Term Loans may be made. For purposes of this
clause (c), "hard costs" shall mean the total cost of new Terre Haute
Equipment (which the Agent, in its sole discretion, deems to be
eligible Terre Haute Equipment against which Term Loans may be made)
LESS any freight, installation, software, insurance, taxes, duties and
other costs not directly related to the acquisition thereof.
"Term Loan Commitments" shall, collectively, mean the aggregate amount of
the Term Loan Commitments of all the Lenders, the maximum amount of which
shall not exceed at any time the lesser of (x) $50,000,000 and (y) the
aggregate Commitments with respect to all Lenders pursuant to clauses (a),
(b) and (c) above at such time.
"TERM LOAN" and "TERM LOANS" have the meaning specified in
SECTION 2.1(a).
"TERM NOTE" and "TERM NOTES" have the meanings specified in
SECTION 2.1(d).
"TERMINATION DATE" has the meaning specified in SECTION 13.1.
"TERMINATION EVENT" means: (a) a Reportable Event (other than a
Reportable Event not subject to the provision for 30-day notice to PBGC
under the regulations issued under Section 4043 of ERISA); or (b) the
withdrawal of any Borrower or any Related Company from a Benefit Plan
during a plan year in which such Borrower or Related Company was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations which results in the termination of employment of
twenty percent (20%) of Benefit Plan participants who are employees of such
Borrower or Related Company; or (c) providing to affected parties a notice
of intent to terminate a Benefit Plan or the treatment of a Benefit Plan
amendment as a termination under
<PAGE>
<PAGE> EX-10.26-25
Section 4041 of ERISA; or (d) the institution of proceedings by the PBGC to
terminate or have a trustee appointed to administer a Plan; or (e) any
other event or condition which might constitute grounds under Section 4042
of ERISA for the termination or the appointment of a trustee to administer,
any Benefit Plan; or (f) the partial or complete withdrawal of any Borrower
or any Related Company from a Multiemployer Plan.
"TERRE HAUTE EQUIPMENT" means Equipment located on the Real
Estate in Terre Haute, Indiana.
"TERRE HAUTE TERM FUNDING DATE" means the Term Funding Date which
shall occur after the Initial Term Funding Date and on which the Lenders
shall, subject to the terms and conditions of this Agreement, make all or a
portion of the New Term Funding available to GDT based on Terre Haute
Equipment appraisals received and reviewed by, and in form and substance
satisfactory to, the Agent and each Lender on or after the Initial Term
Funding Date and before such Term Funding Date.
"TITLE REPORTS" means, collectively, those certain title reports
regarding the Borrowers' Real Estate issued by Chicago Title Insurance
Company as of the applicable Term Funding Date known and referred to on
Exhibit B to each of the respective Mortgages.
"TRADEMARK AGREEMENT" means the Amended and Restated Trademark
Security Agreement dated of even date herewith, amending and restating the
Trademark Security Agreement dated as of March 21, 1990, executed and
delivered by GDT to the Agent pursuant to SECTION 7.2 to evidence and
perfect the Agent's security interest in GDT's trademarks and related
licenses and rights as provided therein.
"UCC" means the Uniform Commercial Code (or any successor
statute) of the State of New York or of any other state the laws of which
are required by Section 9-103 thereof to be applied in connection with the
issue of perfection of security interests.
"VOTING STOCK" means securities of any class or classes of a
corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
1.2 ACCOUNTING TERMS. Any accounting term used in this
Agreement shall have, unless otherwise specifically provided herein, the
meaning customarily given in accordance with GAAP, and all financial
computations hereunder shall be computed, unless otherwise specifically
provided herein, in accordance with GAAP as consistently applied and using
the same method for inventory valuation as used in the preparation of the
Financial Statements; PROVIDED, HOWEVER, that no change in GAAP that would
affect the method of calculation of any of the financial covenants,
restrictions or standards or definitions of terms used therein shall be
given effect in such calculations until such financial covenants,
restrictions or standards or definitions are amended in a manner reasonably
acceptable to the Borrowers and Majority Lenders, so as to reflect such
change in GAAP.
1.3 OTHER TERMS. All other undefined terms contained in this
Agreement shall, unless the context indicates otherwise, have the meanings
provided for by the UCC to the extent the same are used or defined therein.
Any references herein to any other agreement or instrument shall include
such other agreement or instrument as the same has been or may be amended,
<PAGE>
<PAGE> EX-10.26-26
restated, modified or supplemented from time to time. Any references
herein to exhibits, schedules, sections or articles are references to
exhibits, sections or articles of this Agreement, unless otherwise speci-
fied. Wherever appropriate in the context, terms used herein in the
singular also include the plural, and vice versa, and each masculine,
feminine, or neuter pronoun shall also include the other genders.
2. LOANS.
2.1 TERM LOANS.
(a) AMOUNT OF TERM LOANS. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties
of the Borrowers herein set forth, each Lender severally agrees to (i)
extend the maturities of Original Term Loans in an amount equal to each
Lender's Pro Rata Share of 16,727,184.74, which is equal to the aggregate
principal amount of Original Term Loans on the Initial Term Funding Date,
(ii) make a term loan to GDT in an amount of $11,272,815.26 on the Initial
Term Funding Date and (iii) make a term loan to GDT on each other Term
Funding Date in an amount equal to such Lender's Term Loan Commitment on
such date (such term loans to be made on each Term Funding Date, together
with any Original Term Loans under the Original Agreement, being
hereinafter referred to collectively as the "Term Loans" and each of such
term loans being hereinafter referred to individually as a "Term Loan").
The Term Loans constituting the New Term Loan Funding shall be available
for funding only on a Term Funding Date, and the Term Loans, when repaid or
prepaid, whether by voluntary or mandatory prepayment or otherwise, may not
be reborrowed. Each Borrowing of Term Loans shall, at the option of GDT,
consist of either Reference Rate Loans or Eurodollar Rate Loans, but not
both, as specified by GDT in the Notice of Borrowing requesting the same.
Notwithstanding anything in this Agreement to the contrary, in no event
shall there be more than three (3) Term Funding Dates, nor shall the Real
Estate Term Funding Date and Terre Haute Term Funding Date, if any, occur
later than May 31, 1995 and February 29, 1996, respectively.
(b) NOTICE OF BORROWING; NOTICE OF CONVERSION/CONTINUATION. (i)
When GDT desires to extend the maturities of Original Term Loans or borrow
any part of the New Term Loan Funding Amount under SECTION 2.1(a) or to
convert or continue any Term Loan bearing interest at a Eurodollar Rate
pursuant to this SECTION 2.1(b), GDT shall deliver to the Agent a Notice of
Borrowing or Notice of Conversion/Continuation, as the case may be, signed
by an authorized officer of GDT, not later than (a) 11:00 a.m. (New York
time) on the requested Funding Date of such proposed Borrowing, in the case
of a Borrowing of Reference Rate Loans or (b) 11:00 a.m. (New York time) on
the third Business Day before the date of such proposed Borrowing,
continuation or conversion, in the case of a Borrowing or continuation of
Eurodollar Rate Loans (or any Portion or Portions thereof) or a conversion
of Reference Rate Loans into Eurodollar Rate Loans. With respect to the
Original Term Loans and the Term Loans to be made on the Initial Term
Funding Date, GDT shall have the right to submit a single Notice of
Borrowing with respect to all such Term Loans. Notwithstanding any other
provision hereof to the contrary, no more than five (5) Portion(s) of
Eurodollar Rate Loans or Borrowing(s) of Revolving Loans consisting of
Eurodollar Rate Loans or any combination thereof may be outstanding at any
time.
(ii) GDT shall notify the Agent in writing of the names of the
officers authorized to request Term Loans on behalf of GDT, and shall
provide the Agent with a specimen signature of each such officer. The
Agent shall be
<PAGE>
<PAGE> EX-10.26-27
entitled to rely conclusively on such officer's authority to request Term
Loans on behalf of GDT, the proceeds of which are requested to be trans-
ferred to an account of GDT or issued for the account of GDT, until the
Agent receives written notice to the contrary. The Agent shall have no
duty to verify the authenticity of the signature appearing on any Notice of
Borrowing.
(iii) Any Notice of Borrowing and Notice of
Conversion/Continuation made pursuant to this SECTION 2.1(b) shall be
irrevocable.
(iv) Unless otherwise specified in a Notice of Borrowing, each
Term Loan to be made as part of a Borrowing shall be made as a Reference
Rate Loan. GDT may elect from time to time to convert all or any Portion
of the Term Loans constituting Reference Rate Loans and then outstanding
from Reference Rate Loans to Eurodollar Rate Loans by giving the Agent a
Notice of Conversion/Continuation as specified in SECTION 2.1(b)(i). If a
timely Notice of Conversion/Continuation as specified in SECTION 2.1(b)(i)
is not received from GDT prior to the expiration of any Interest Period for
any outstanding Eurodollar Rate Loan (or Portion or Portions thereof), GDT
shall be deemed to have elected to convert such Eurodollar Rate Loan (or
Portion or Portions thereof) into a Reference Rate Loan on the last day of
the expiring Interest Period; PROVIDED that if any Event or Event of
Default shall have occurred and be continuing, GDT shall be deemed to have
converted, on the last day of the applicable Interest Period, the
Eurodollar Rate Loan (or Portion or Portions thereof) with respect to which
the Interest Period is ending into a Reference Rate Loan in a principal
amount equal to the principal amount of such Eurodollar Rate Loan (or
Portion or Portions thereof).
(v) Subject to the terms and conditions hereof and in
accordance with the procedures for conversions and continuations and the
other provisions set forth in this SECTION 2.1(b) and, in the case of any
conversion into, or continuation of, a Eurodollar Rate Loan, provided that
no Default or Event of Default has occurred and is continuing, each Lender
agrees (i) to convert outstanding Term Loans that are Reference Rate Loans
into Eurodollar Rate Loans and (ii) to continue outstanding Term Loans that
are Eurodollar Rate Loans as Eurodollar Rate Loans, in each case in an
aggregate principal amount not to exceed the principal amount of the
Reference Rate Loans or Eurodollar Rate Loans, as the case may be, then
outstanding. Each Lender will make such conversion without an exchange of
funds; PROVIDED that GDT shall pay to the Agent for the account of each
Lender on the date of each such conversion accrued and unpaid interest on
the Eurodollar Rate Loans of such Lender converted on such date.
(c) MAKING OF TERM LOANS. Promptly after receipt of a Notice of
Borrowing or Notice of Conversion/Continuation under SECTION 2.1(b), the
Agent shall notify each Lender by telex, telecopy, telegram, telephone or
other similar means of transmission, of the proposed Borrowing or
conversion or continuation, as the case may be. With respect to the New
Term Loan Funding, each Lender shall make the amount of such Lender's Term
Loan available to the Agent in same day funds, to such account of the Agent
as the Agent may designate, not later than 12:00 noon (New York time) on
each Term Funding Date. After the Agent's receipt of the proceeds of such
Term Loan constituting the New Term Loan Funding, upon satisfaction of the
applicable conditions precedent set forth in ARTICLE 11, the Agent shall
make the proceeds of such Term Loans available to GDT by transferring same
day funds equal to the proceeds of all such Term Loans received by the
Agent to an
<PAGE>
<PAGE> EX-10.26-28
account of GDT designated in writing by GDT or as GDT shall otherwise
instruct in writing.
(d) TERM NOTES. (i) GDT shall execute and deliver to the Agent
(A) on the Effective Date, for the benefit of each Lender party hereto on
the Effective Date, an amendment, renewal and extension of term note
substantially in the form of EXHIBIT C-1 and (B) for the benefit of each
Lender party hereto on each Term Funding Date, on such Term Funding Date, a
promissory note, substantially in the form of EXHIBIT C-2 (all such amend-
ments to promissory notes and promissory notes described in clauses (A) and
(B) hereof, together with any new notes issued pursuant to SECTION 14.3(d)
upon the assignment of any portion of any Lender's Term Loan, being herein-
after referred to collectively as the "Term Notes" and each of such
promissory notes being hereinafter referred to individually as a "Term
Note"), to evidence such Lender's Term Loan, in an original principal
amount equal to the amount of such Lender's Pro Rata Share of the Original
Term Loans or the portion of the New Term Loan Funding to be made on such
Term Funding Date, as the case may be, and with other appropriate
insertions.
(ii) Each of the Term Notes delivered on the Initial Term
Funding Date to the Agent for the benefit of each Lender party hereto shall
be dated the Effective Date and shall be payable in sixty-one (61) consecu-
tive installments. The first sixty of such installments shall be payable
monthly on the first Business Day of each month, commencing March 1995, and
shall each be in an amount equal to such Lender's Pro Rata Share of
$11,272,815.26. The sixty-first (61st) installment shall be payable on the
fifth Anniversary Date and shall be in an amount equal to the then unpaid
principal balance of such Term Loan and all accrued and unpaid interest
thereon. Each such installment shall be payable to the Agent for the
account of such Lender.
(iii) Each of the Term Notes delivered to the Agent for the
benefit of each Lender party hereto on a Term Funding Date (other than the
Initial Term Funding Date) shall be dated such Term Funding Date and shall
be payable in a number of consecutive installments equal to the number of
regularly scheduled consecutive installments then remaining, without giving
effect to any prepayments made under this Agreement, as set forth in the
Term Notes delivered pursuant to SECTION 2.1(d)(ii) hereof. All such
installments (other than the final such installment) shall be payable
monthly on the first Business Day of each month, commencing on the month
next following such Term Funding Date, and shall each be in an amount equal
to such Lender's Term Loan Commitment on such Term Funding Date multiplied
by the Amortization Factor. The final installment shall be payable on the
fifth Anniversary Date and shall be in an amount equal to the then unpaid
principal balance of such Term Loan and all accrued and unpaid interest
thereon. Each such installment shall be payable to the Agent for the
account of such Lender. In the event the Real Estate Term Funding Date and
the Terre Haute Term Funding Date shall occur on the same date, the Lenders
shall have the right, but not the obligation, to direct GDT to deliver a
single Term Note to each of them in an aggregate amount equal to the Term
Loans to be made by such Lender on such date in lieu of separate Notes
representing the Term Loans to be made on the Real Estate Term Funding Date
and Terre Haute Term Funding Date.
(e) NOTATION AND ENDORSEMENT. The Agent shall record in the
Register the principal amount of the Term Loans owing to each Lender from
time to time. In addition, each Lender is authorized, at such Lender's
option, to note the date and amount of each payment or prepayment of
principal of such Lender's Term Loans in its books and records, such books
and records constituting rebuttably presumptive evidence of the accuracy of
<PAGE>
<PAGE> EX-10.26-29
the information contained therein. Prior to the transfer of a Term Note,
the applicable Lender shall endorse on the reverse side thereof the
outstanding principal balance of the Term Loans evidenced thereby. Failure
by such Lender to make such notation or endorsement shall not affect the
obligations of the Borrower under such Term Note or any of the other Loan
Documents.
2.2 REVOLVING LOANS.
(a) AMOUNTS OF REVOLVING LOANS. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of each of the Borrowers herein set forth, each Lender severally
agrees to make revolving loans to each of the Borrowers, from time to time
until, but not including the Revolving Credit Termination Date (such
revolving loans and such other financial accommodations made pursuant to
SECTION 2.3 being hereinafter referred to collectively as the "Revolving
Loans" and each of such revolving loans being hereinafter referred to
individually as a "Revolving Loan"), in an amount not to exceed, in the
aggregate at any time outstanding for all Borrowers, (i) such Lender's Pro
Rata Share of the Aggregate Maximum Revolver Amount at such time MINUS (ii)
such Lender's Pro Rata Share of the Letter of Credit Obligations of all
Borrowers MINUS (iii) such Lender's Pro Rata Share of the Banker's
Acceptance Obligations of all Borrowers. In no event shall any Lender be
required to make any Revolving Loan on any date if such Loan, when added to
any and all Loans outstanding or to be made on such date and any and all
Letters of Credit and Banker's Acceptances outstanding or to be issued on
such date, would exceed such Lender's Commitment. Each Borrowing shall
consist of the same type of Revolving Loans which shall, at the option of
GDT on behalf of the Borrower requesting such Borrowing, be either
Reference Rate Loans or Eurodollar Rate Loans, as specified by GDT in the
Notice of Borrowing requesting the same.
(b) NOTICE OF BORROWING; NOTICE OF CONVERSION/CONTINUATION. (i)
Whenever any Borrower desires to borrow Revolving Loans under SECTION
2.2(a) or to convert or continue any Revolving Loan pursuant to this
SECTION 2.2(b), GDT, on behalf of such Borrower, shall deliver to the Agent
a Notice of Borrowing or Notice of Conversion/Continuation, as the case may
be, signed by an authorized officer of GDT, on behalf of such Borrower, not
later than (a) 11:00 a.m. (New York time) on the requested Funding Date of
such proposed Borrowing, continuation or conversion, in the case of a
Borrowing of Reference Rate Loans, or (b) 11:00 a.m. (New York time) on the
third Business Day before the date of such proposed Borrowing, continuation
or conversion, in the case of a Borrowing or continuation of Eurodollar
Rate Loans or a conversion of Reference Rate Loans into Eurodollar Rate
Loans. Notwithstanding any other provision hereof to the contrary, no more
than the sum of five (5) Borrowing(s) of Revolving Loans consisting of
Eurodollar Rate Loans or Portions of Term Loans or any combination thereof
may be outstanding at any time, and no Borrowing(s) of Revolving Loans
consisting of Eurodollar Rate Loans shall be in an aggregate principal
amount of less than $5,000,000 or any greater amount which is an integral
multiple of $1,000,000. In lieu of delivering the above-described Notice
of Borrowing or Notice of Conversion/Continuation, as the case may be, the
Borrower may give the Agent telephonic notice of any requested Borrowing or
conversion or continuation, as the case may be, by the required time;
PROVIDED, HOWEVER, that such notice shall be confirmed in writing by
delivery to the Agent (A) immediately of a telecopy of a Notice of
Borrowing or Notice of Conversion/Continuation, as the case may be, which
has been signed by an authorized officer of the Borrower, and (B) promptly
(and in no event later than three (3) Business Days after the Funding Date
in respect of the applicable Revolving Loans) of
<PAGE>
<PAGE> EX-10.26-30
a Notice of Borrowing or Notice of Conversion/Continuation, as the case may
be, containing the original signature of an authorized officer of the
Borrower. In the event that the terms of any confirmatory Notice of
Borrowing or Notice of Conversion/Continuation, as the case may be,
referred to in the proviso contained in the immediately preceding sentence
shall conflict with the telephonic notice with respect to which it was
delivered, the terms of the telephonic notice, as understood by the Agent,
shall govern. Notwithstanding anything in this SECTION 2.2(b) to the
contrary, any Revolving Loans to be made to any Borrower on the Effective
Date shall initially be made as Reference Rate Loans. Each Borrower hereby
authorizes GDT to execute and deliver Notices of Borrowing and Notices of
Conversion/Continuation on its behalf and agrees to be bound by the same.
(ii) GDT shall notify the Agent in writing of the names of the
officers authorized to request Revolving Loans on behalf of each Borrower,
and shall provide the Agent with a specimen signature of each such officer.
The Agent shall be entitled to rely conclusively on such officer's
authority to request Revolving Loans on behalf of each Borrower, the
proceeds of which are requested to be transferred to an account of such
Borrower (which may be a joint account for the Borrowers administered by
GDT) or issued for the account of such Borrower, until the Agent receives
written notice to the contrary. The Agent shall have no duty to verify the
authenticity of the signature appearing on any Notice of Borrowing and,
with respect to an oral request for Revolving Loans, the Agent shall have
no duty to verify the identity of any individual representing himself as
one of the officers of GDT authorized to make such request on behalf of
such Borrower.
(iii) Neither the Agent nor any of the Lenders shall incur any
liability to any Borrower as a result of acting upon any telephonic notice
referred to in this SECTION 2.2(b) which notice the Agent believes in good
faith to have been given by a duly authorized officer of GDT or other
individual authorized to request Revolving Loans on behalf of such Borrower
or for otherwise acting in good faith under this SECTION 2.2(b), and, upon
the funding of Revolving Loans by the Lenders in accordance with this
Agreement, pursuant to any such telephonic notice, such Borrower shall be
deemed to have made a Borrowing of Revolving Loans hereunder.
(iv) Any Notice of Borrowing and Notice of
Conversion/Continuation (or telephonic notice in lieu thereof) made
pursuant to this SECTION 2.2(b) shall be irrevocable. Promptly after
receipt of a Notice of Conversion/Continuation under SECTION 2.2(b), the
Agent shall notify each Lender by telex, telecopy, telegram, telephone or
other similar means of transmission, of the proposed conversion or
continuation, as the case may be.
(v) Unless otherwise specified in a Notice of Borrowing, each
Loan to be made as part of a Borrowing shall be made as a Reference Rate
Loan. If a timely Notice of Conversion/Continuation as specified in
SECTION 2.2(b)(i) is not received from a Borrower prior to the expiration
of any Interest Period for any outstanding Eurodollar Rate Loan, such
Borrower shall be deemed to have elected to convert such Eurodollar Rate
Loan into a Reference Rate Loan on the last day of the expiring Interest
Period; PROVIDED that if any Default or Event of Default shall have
occurred and be continuing, such Borrower shall be deemed to have
converted, on the last day of the applicable Interest Period, the
Eurodollar Rate Loan with respect to which the Interest Period is ending
into a Reference Rate Loan in a principal amount equal to the principal
amount of such Eurodollar Rate Loan.
<PAGE>
<PAGE> EX-10.26-31
(vi) Subject to the terms and conditions hereof and in
accordance with the procedures for conversions and continuations and the
other provisions set forth in this SECTION 2.2(b) and, in the case of any
conversion into, or continuation of, a Eurodollar Rate Loan, provided that
no Event or Event of Default has occurred and is continuing, each Lender
agrees (i) to convert outstanding Revolving Loans that are Reference Rate
Loans into Eurodollar Rate Loans and (ii) to continue outstanding Revolving
Loans that are Eurodollar Rate Loans as Eurodollar Rate Loans, in each case
in an aggregate principal amount not to exceed the principal amount of the
Reference Rate Loans or Eurodollar Rate Loans, as the case may be, then
outstanding. Each Lender will make such conversion without an exchange of
funds; PROVIDED that the Borrowers shall jointly and severally pay to the
Agent for the account of each Lender on the date of each such conversion
accrued and unpaid interest on the Eurodollar Rate Loans of such Lender
converted on such date.
(c) AGENT'S ELECTION. Promptly after receipt of a Notice of
Borrowing pursuant to SECTION 2.2(b) (or telecopy or telex notice in lieu
thereof) the Agent shall elect, in its discretion, (i) to have the terms of
SECTION 2.2(d) apply to such requested Borrowing, or (ii) to request
BankAmerica to make a BA Revolving Loan pursuant to the terms of SECTION
2.2(e) in the amount of the requested Borrowing; PROVIDED, HOWEVER, that if
BankAmerica declines in its sole discretion to make a BA Revolving Loan
pursuant to SUBSECTION 2.2(e), the Agent shall elect to have the terms of
SUBSECTION 2.2(d) apply to such requested Borrowing.
(d) MAKING OF REVOLVING LOANS. (i) In the event the Agent
shall elect to have the terms of SECTION 2.2(d) apply to a requested
Borrowing as described in SECTION 2.2(c), then promptly after receipt of a
Notice of Borrowing pursuant to SECTION 2.2(b) (or telecopy or telex notice
in lieu thereof), the Agent shall notify the Lenders by telex, telecopy,
telegram, telephone or other similar form of transmission, of the requested
Borrowing. Each Lender shall make the amount of such Lender's Pro Rata
Share of the requested Borrowing available to the Agent in same day funds,
to such account of the Agent as the Agent may designate, not later than
12:00 noon (New York time) on the Funding Date applicable thereto. After
the Agent's receipt of the proceeds of such Revolving Loans, upon satisfac-
tion of the applicable conditions precedent set forth in ARTICLE 11, the
Agent shall make the proceeds of such Revolving Loans available to the
applicable Borrower on such Funding Date by transferring same day funds
equal to the proceeds of all such Revolving Loans received by the Agent to
an account of such Borrower (which may be a joint account for the Borrowers
administered by GDT), designated in writing by GDT on behalf of such
Borrower; PROVIDED, HOWEVER, that the requested Borrowing of such Revolving
Loans shall in no event exceed the amount of the Aggregate Availability or
the Availability of such Borrower on such date.
(ii) On any Funding Date in respect of a Borrowing of Revolving
Loans, the Agent shall be entitled to assume that each Lender has made the
amount of such Lender's Revolving Loans available to the Agent on such
Funding Date, unless such Lender shall have notified the Agent to the
contrary. The Agent, in its sole discretion, based upon such assumption,
may make available to the Borrowers a corresponding amount on such Funding
Date. If such corresponding amount had not in fact been made available to
the Agent by any Lender, such Lender and the Borrower requesting a
Revolving Loan severally agree to repay to the Agent forthwith, on demand,
such corresponding amount, together with interest thereon for each day
during the period commencing on the date such amount is made available to
such Borrower
<PAGE>
<PAGE> EX-10.26-32
and ending on the date such amount is repaid to the Agent, at (1) in the
case of a Borrower, the Interest Rate applicable to Revolving Loans made on
such Funding Date, and (2) in the case of a Lender, the Federal Funds Rate.
If such Lender repays to the Agent such corresponding amount, such amount
so repaid shall constitute a Revolving Loan, and if both such Lender and
the Borrowers shall have repaid such corresponding amount, the Agent shall
promptly return to such Borrower such corresponding amount in same day
funds. Nothing in this SECTION 2.2(d)(ii) shall be deemed to relieve any
Lender of its obligation, if any, hereunder to make a Revolving Loan on any
Funding Date.
(e) MAKING OF BA REVOLVING LOANS. (i) In the event the Agent
shall elect, with the consent of BankAmerica, to have the terms of this
SECTION 2.2(e) apply to a requested Borrowing as described in SECTION
2.2(c), BankAmerica shall make a Revolving Loan in the amount of such
Borrowing (any such Revolving Loan made solely by BankAmerica pursuant to
this SECTION 2.2(e) being referred to as a "BA Revolving Loan" and such
Revolving Loans being referred to collectively as "BA Revolving Loans")
available to a Borrower on the Funding Date applicable thereto by
transferring same day funds to an account of the Borrower requesting a
Revolving Loan (which may be a joint account for the Borrowers administered
by GDT), designated in writing by GDT on behalf of such Borrower. Each BA
Revolving Loan is a Revolving Loan hereunder and shall be subject to all
the terms and conditions applicable to other Revolving Loans except that
all payments thereon shall be payable to BankAmerica solely for its own
account (and for the account of any participation interests with respect to
such Revolving Loan created pursuant to clause (iii) of this
SECTION 2.2(e)). BankAmerica shall have no duty to make any BA Revolving
Loan, and the Agent shall not request BankAmerica to make a BA Revolving
Loan if the requested Borrowing would exceed the amount of the Aggregate
Availability or the Availability of such Borrower on the Funding Date
applicable thereto, or if the Agent shall have received written notice from
any Lender that one or more of the applicable conditions precedent set
forth in ARTICLE 11 will not be satisfied on the requested Funding Date for
the applicable Borrowing. BankAmerica shall not otherwise be required to
determine whether the applicable conditions precedent set forth in
ARTICLE 11 have been satisfied or the requested Borrowing would exceed the
amount of the Aggregate Availability or the Availability of such Borrower
on the Funding Date applicable thereto prior to making, in its sole
discretion, any BA Revolving Loan.
(ii) BankAmerica shall request settlement ("Settlement") with
the other Lenders with respect to each outstanding BA Revolving Loan at
least once a week by notifying such other Lenders by telex, telecopy,
telegram, telephone or other similar form of transmission, of such
requested Settlement, no later than 11:00 a.m. (New York time) on the date
of such requested Settlement (the "Settlement Date"). Each such Lender
shall make the amount of such Lender's Pro Rata Share of the outstanding
principal amount of the BA Revolving Loans with respect to which Settlement
is requested available to BankAmerica in same day funds, to such account of
BankAmerica as BankAmerica may designate, not later than 12:00 noon (New
York time) on the Settlement Date applicable thereto, regardless of
whether the applicable conditions precedent set forth in ARTICLE 11 have
then been satisfied. Such amounts made available to BankAmerica shall be
applied against the amount of the applicable BA Revolving Loan and,
together with the portion of such BA Revolving Loan representing
BankAmerica's Pro Rata Share thereof, shall constitute Revolving Loans of
such Lenders. If any such amount is not made available to BankAmerica by
any Lender on the Settlement Date applicable thereto, BankAmerica shall be
entitled to recover such amount
<PAGE>
<PAGE> EX-10.26-33
on demand from such Lender together with interest thereon at the Federal
Funds Rate for the first three (3) days from and after the Settlement Date
and thereafter at the Interest Rate applicable to the Revolving Loans.
(iii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by BankAmerica (whether before or after
the occurrence of a Default or an Event of Default and regardless of
whether BankAmerica has requested a Settlement with respect to any BA
Revolving Loan), each other Lender shall irrevocably and unconditionally
purchase and receive from BankAmerica, without recourse or warranty, an
undivided interest and participation in such BA Revolving Loan to the
extent of such other Lender's Pro Rata Share thereof by paying to
BankAmerica, in same day funds, an amount equal to such Lender's Pro Rata
Share of such BA Revolving Loan. If such amount is not in fact made
available to BankAmerica by any Lender, BankAmerica shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at the Federal Funds Rate for the first three (3) days from and
after such demand and thereafter at the Interest Rate applicable to the
Revolving Loans.
(iv) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any BA Revolving Loan
pursuant to subsection (iii) above, BankAmerica shall promptly distribute
to such Lender at such address as such Lender may request in writing, such
Lender's Pro Rata Share of all payments of principal and interest and all
proceeds of Collateral received by BankAmerica in respect of such BA
Revolving Loan.
(f) NOTATION. The Agent shall record in the Register the
principal amount of the Revolving Loans owing to each Lender, including BA
Revolving Loans owing to BankAmerica, from time to time. In addition, each
Lender is authorized, at such Lender's option, to note the date and amount
of each payment or prepayment of principal of such Lender's Revolving Loans
in its books and records, including computer records, such books and
records constituting rebuttably presumptive evidence of the accuracy of the
information contained therein.
2.3 OVER ADVANCES. The Agent, in its sole and absolute
discretion, may elect to make Revolving Loans and issue or permit to be
issued Letters of Credit and Banker's Acceptances in excess of any
Borrower's Availability or the Aggregate Availability on one or more
occasions (such financial accommodations are hereinafter referred to as
"Over Advances"), but if it does so, the Agent shall not be deemed thereby
to have changed the limits of the Maximum Revolver Amount for such Borrower
or the Aggregate Maximum Revolver Amount; PROVIDED, HOWEVER, that such Over
Advances shall not exceed at any time an amount equal to five percent (5%)
of the Aggregate Maximum Revolver Amount in effect from time to time;
PROVIDED FURTHER, that the Agent shall not be deemed to have breached the
provisions of this SECTION 2.3 if an Over Advance results from Collateral
deterioration or ineligibility or the return (uncollected) of checks or
other items applied to the reduction of Loans. Immediately upon demand by
the Agent for repayment of any Over Advance, the Borrowers shall make such
repayment, without penalty or fee. If, however, the repayment is not made
on or before the Business Day following the day on which such demand is
made, then the Borrowers agree to pay the Lenders a fee for Over Advances
in an amount acceptable to the Lenders and the Borrowers. If the aggregate
of the outstanding principal balance of the Revolving Loans, Letter of
Credit Obligations and Banker's Acceptance Obligations for all Borrowers
exceeds the Aggregate Maximum Revolver Amount, or if the aggregate of the
outstanding principal balance of
<PAGE>
<PAGE> EX-10.26-34
the Revolving Loans to any Borrower and the Letter of Credit Obligations
and Banker's Acceptance Obligations of such Borrower exceeds such
Borrower's Maximum Revolver Amount, the Agent may refuse to make or
otherwise restrict the making of Revolving Loans, Letters of Credit or
Banker's Acceptances on such terms as the Agent determines until such
excess has been eliminated. In the event the Agent elects to make an Over
Advance, or the aggregate outstanding principal balance of the Revolving
Loans, Letter of Credit Obligations and Banker's Acceptance Obligations for
all Borrowers shall exceed at any time for any reason the Aggregate Maximum
Revolver Amount, or the aggregate outstanding principal balance of the
Revolving Loans and Letter of Credit Obligations and Banker's Acceptance
Obligations of such Borrower shall exceed such Borrower's Maximum Revolver
Facility, such Over Advance or excess amount shall be immediately due and
payable upon demand therefor by the Agent. The Agent agrees to notify (in
writing or orally and promptly confirmed in writing) the applicable
Borrowers of any Over Advance, but the failure to give such notice shall
not affect the Agent's right to make Over Advances. All Over Advances
shall constitute Revolving Loans hereunder and shall be subject to all the
terms and conditions subject to other Revolving Loans.
2.4 LENDERS' FAILURE TO PERFORM. All Loans (other than BA
Revolving Loans) shall be made by each Lender simultaneously and in
accordance with its respective Pro Rata Share. It is understood that (a)
no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligation to make any Loans
hereunder, and (b) no failure by any Lender to perform its obligation to
make any Loans hereunder shall excuse any other Lender from its obligation
to make any Loans hereunder.
3A. LETTER OF CREDIT SUBFACILITY.
3A.1 AGREEMENT TO ISSUE. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
each of the Borrowers herein set forth, the Agent hereby agrees to cause
BOA to issue for the account of any Borrower, or if BOA is not acceptable
to the beneficiary thereof, the Agent agrees to cause to be issued for the
account of any Borrower by an issuer reasonably satisfactory to such
beneficiary, one or more Letters of Credit in accordance with this ARTICLE
3A, from time to time during the period commencing on the Effective Date
and ending on the date of termination of this Agreement pursuant to SECTION
13.1.
3A.2 AMOUNTS; TENOR. BOA shall not have any obligation to
issue, and the Agent shall not have any obligation to cause to be issued,
any Letter of Credit at any time:
(a) if, after giving effect to the issuance of the
requested Letter of Credit, (i) the aggregate Letter of Credit
Obligations of all Borrowers would exceed the L/C Subfacility
then in effect, or (ii) the sum of the aggregate Letter of Credit
Obligations of all Borrowers, PLUS the aggregate principal amount
of the Revolving Loans outstanding, PLUS the aggregate Banker's
Acceptance Obligations, would exceed the Aggregate Maximum
Revolver Amount, or the sum of the Letter of Credit Obligations
of a Borrower, PLUS the aggregate principal amount of the
Revolving Loans outstanding to such Borrower, PLUS the aggregate
Banker's Acceptance Obligations
<PAGE>
<PAGE> EX-10.26-35
issued for the benefit of such Borrower, would exceed such Borrower's
Maximum Revolver Amount; or
(b)(i)(A) with respect to any Merchandise Letter of Credit,
if such Letter of Credit has an expiration date of more than 180
days after the date of issuance thereof and (B) with respect to
any Standby Letter of Credit, if such Letter of Credit has an
expiration date of more than twelve months after the date of
issuance thereof and (ii) with respect to any Letter of Credit,
if such Letter of Credit has an expiration date, after giving
effect to any extensions or renewals thereof, later than ten (10)
Business Days prior to the Termination Date.
3A.3 CONDITIONS. In addition to being subject to the
satisfaction of the conditions precedent contained in ARTICLE 11, the
obligation of the Agent to cause to be issued any Letter of Credit is
subject to the following conditions precedent having been satisfied in a
manner satisfactory to the Agent:
(a) GDT, on behalf of the Borrower requesting the Letter of
Credit, shall have delivered to the proposed issuer of such
Letter of Credit at such times and in such manner as the proposed
issuer of such Letter of Credit may prescribe an application in
form and substance satisfactory to the proposed issuer of such
Letter of Credit for the issuance of the Letter of Credit, a
Letter of Credit Reimbursement Agreement and such other documents
as may be required pursuant to the terms thereof, and the form
and terms of the proposed Letter of Credit shall be satisfactory
to the Agent and the proposed issuer of such Letter of Credit;
(b) as of the date of issuance, no order of any court,
arbitrator or Public Authority having jurisdiction or authority
over the proposed issuer shall purport by its terms to enjoin or
restrain money center banks generally from issuing letters of
credit of the type and in the amount of the proposed Letter of
Credit, and no law, rule or regulation applicable to money center
banks generally and no request or directive (whether or not
having the force of law) from any Public Authority with
jurisdiction over money center banks generally shall prohibit, or
request that the proposed issuer of such Letter of Credit refrain
from, the issuance of letters of credit generally or the issuance
of such Letter of Credit; and
(c) GDT, on behalf of the Borrower requesting the Letter
of Credit, shall have appointed the Agent as its attorney, with
full power and authority: (i) to sign and/or endorse such
Borrower's name upon any warehouse or other receipts or Letter of
Credit applications; (ii) to sign such Borrower's name on bills
of lading; (iii) to clear Inventory through U.S. Customs in such
Borrower's name or the name of the Agent, and to sign and deliver
to U.S. Customs officials powers of attorney in such Borrower's
name for such purpose; (iv) to complete in Borrower's name or
Agent's name any order, sale or transaction, obtain the necessary
documents in connection therewith and collect the proceeds
thereof; and (v) to do such other acts and things as are
necessary to carry out the terms of this Agreement in order to
enable Agent to obtain payment of all Obligations. In addition,
such Borrower will, and Agent may, at its option, instruct all
suppliers, carriers, forwarders,
<PAGE>
<PAGE> EX-10.26-36
warehouses or others receiving or holding cash, checks, Inventory,
documents or instruments in which Agent, on behalf of the Lenders,
holds a security interest to deliver them to Agent and/or subject to
Agent's order, and if they shall come into the possession of Borrower,
Borrower will hold them in trust as trustee for Agent, and Borrower
will immediately deliver them to Agent in their original form,
together with any necessary endorsements thereto.
3A.4 ISSUANCE OF LETTERS OF CREDIT.
(a) REQUEST FOR ISSUANCE. GDT, on behalf of the Borrower
requesting the Letter of Credit, shall give the Agent written notice no
later than six (6) Business Days prior to the proposed date of issuance of
the Letter of Credit, containing the original signature of an authorized
officer of GDT, on behalf of such Borrower, of such Borrower's request for
the issuance of a Letter of Credit. Such notice shall be irrevocable and
shall specify the Borrower for whose account such Letter of Credit is to be
issued, the original face amount of the Letter of Credit requested, the
effective date (which date shall be a Business Day) of issuance of such
requested Letter of Credit, whether such Letter of Credit may be drawn in a
single or in partial draws, the date on which such requested Letter of
Credit is to expire (which date shall be a Business Day), the purpose for
which such Letter of Credit is to be issued, whether such Letter of Credit
is to be issued to replace a letter of credit (including letters of credit
issued other than pursuant to this Agreement), and the beneficiary of the
requested Letter of Credit. GDT, on behalf of the Borrower requesting the
Letter of Credit, shall attach to such notice the form of the Letter of
Credit that such Borrower requests that the Agent cause to be issued.
(b) RESPONSIBILITIES OF THE AGENT; ISSUANCE. The Agent shall
determine, as of the Business Day immediately preceding the requested
effective date of issuance of the Letter of Credit set forth in the notice
from GDT, on behalf of the Borrower requesting the Letter of Credit
pursuant to SECTION 3A.4(a), the amount of the unused L/C Subfacility, such
Borrower's Availability and Aggregate Availability as of such date. If (i)
the form of the Letter of Credit delivered by GDT to the Agent is
acceptable to the Agent in its reasonable discretion, (ii) the undrawn face
amount of the requested Letter of Credit is less than or equal to each of
such unused L/C Subfacility, Aggregate Availability and such Borrower's
Availability, and (iii) the Agent has received a certificate from GDT, on
behalf of the Borrower requesting the Letter of Credit, stating that the
applicable conditions set forth in ARTICLE 11 have been satisfied, then the
Agent shall issue or cause to be issued such Letter of Credit for the
account of such Borrower.
(c) NO EXTENSION OR AMENDMENT. The Agent shall not cause any
Letter of Credit to be extended or amended unless the requirements of this
ARTICLE 3A are met as though a new Letter of Credit were being requested
and issued. With respect to any Letter of Credit which contains any
"evergreen" or automatic renewal provision, each Lender shall be deemed to
have consented to any such extension or renewal unless any such Lender
shall have provided to the Agent, not less than fifteen (15) days prior to
the last date on which the applicable issuer can in accordance with the
terms of the applicable Letter of Credit decline to extend or renew such
Letter of Credit, written notice that it declines to consent to any such
extension or renewal, PROVIDED, that if all of the requirements of this
ARTICLE 3A are met, no Lender shall decline to consent to any such
extension or renewal.
<PAGE>
<PAGE> EX-10.26-37
3A.5 LETTER OF CREDIT REIMBURSEMENT OBLIGATIONS; DUTIES OF
ISSUER.
(a) REIMBURSEMENT. Notwithstanding any provisions to the
contrary in any Letter of Credit Reimbursement Agreement, the Borrower
requesting a Letter of Credit shall reimburse BOA or any other issuer of
any Letter of Credit for any drawings (whether partial or full) under such
Letter of Credit in accordance with its terms immediately after the payment
by BOA or the other issuer of such Letter of Credit. Any drawings not paid
when due under the terms of such Letter of Credit or the Letter of Credit
Reimbursement Agreement pertaining thereto shall bear interest, payable on
demand, at the Reference Rate plus two percent (2%) per annum until BOA or
such other issuer of such Letter of Credit is reimbursed in full.
(b) DUTIES OF ISSUER. Any action taken or omitted to be taken
by BOA or any other issuer of any Letter of Credit under or in connection
with any Letter of Credit, if taken or omitted in the absence of gross
negligence or willful misconduct, shall not put BOA or the other issuer of
such Letter of Credit under any resulting liability to any Lender, or,
assuming that BOA or the other issuer of such Letter of Credit has complied
with the procedures specified in SECTION 3A.4, relieve any Lender of its
obligations hereunder to BOA or the other issuer of such Letter of Credit.
In determining whether to pay under any Letter of Credit, BOA or the other
issuer of such Letter of Credit shall have no obligation relative to any
Lender other than to confirm that any documents required to have been
delivered under such Letter of Credit appear to comply on their face with
the requirements of such Letter of Credit.
3A.6 PARTICIPATIONS.
(a) PURCHASE OF PARTICIPATIONS. Immediately upon issuance by
BOA or any other issuer of any Letter of Credit in accordance with SECTION
3A.4, each Lender shall be deemed to have irrevocably and unconditionally
purchased and received without recourse or warranty, an undivided interest
and participation in (i) in the case of a Letter of Credit issued by BOA,
such Letter of Credit, equal to such Lender's Pro Rata Share of the face
amount thereof, or (ii) in the case of a Letter of Credit issued by an
issuer other than BOA, the Agent's guaranty or reimbursement obligations to
such issuer in connection with the issuance of such Letter of Credit, equal
to such Lender's Pro Rata Share of the face amount of such Letter of Credit
(including, without limitation, in either case, all obligations of the
Borrower requesting the Letter of Credit with respect thereto, other than
amounts owing to BOA or any other issuer of such Letter of Credit under
SECTION 3A.8(b), and any security therefor or guaranty pertaining thereto).
(b) SHARING OF LETTER OF CREDIT PAYMENTS. In the event that BOA
or any other issuer of such Letter of Credit makes a payment under any
Letter of Credit and BOA or such other issuer of such Letter of Credit
shall not have been repaid such amount pursuant to SECTION 3A.7, the Agent
shall notify each Lender, and each Lender shall unconditionally pay to the
Agent for the account of BOA or such other issuer, as and when provided
hereinbelow, an amount equal to such Lender's Pro Rata Share of the amount
of such payment in Dollars and in same day funds. If the Agent so notifies
the Lenders by not later than 11:00 a.m. (New York time) on any Business
Day, each Lender shall make available to the Agent the amount of such
payment, as provided in the immediately preceding sentence, on such
Business Day. If the Agent so notifies the Lenders after 11:00 a.m. (New
York time) on any Business Day, each Lender shall make available to the
Agent the amount of such payment, as provided in the second preceding
sentence, together with interest thereon at
<PAGE>
<PAGE> EX-10.26-38
the Federal Funds Rate, by not later than 11:00 a.m. (New York time) on the
next Business Day. Such amounts paid by the Lenders to the Agent shall
constitute Revolving Loans which shall be deemed to have been requested by
the Borrower for whose account the Letter of Credit was issued pursuant to
SECTION 2.1.
(c) SHARING OF REIMBURSEMENT OBLIGATION PAYMENTS. Whenever the
Agent receives a payment from a Borrower for whose account a Letter of
Credit was issued on account of a Letter of Credit Reimbursement Obligation
as to which the Agent has previously received for the account of BOA or
such other issuer payment from a Lender pursuant to this SECTION 3A.6, the
Agent shall promptly pay to such Lender, such Lender's Pro Rata Share of
such payment from such Borrower in Dollars. Each such payment shall be
made by the Agent on the Business Day on which the Agent receives
immediately available funds paid to such Person pursuant to the immediately
preceding sentence, if received prior to 11:00 a.m. (New York time) on such
Business Day and otherwise on the next succeeding Business Day.
(d) DOCUMENTATION. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any Letter of Credit, Letter of
Credit Reimbursement Agreement, application for any Letter of Credit and
guaranty in connection with the issuance of any Letter of Credit by an
issuer other than BOA to which the Agent is party and such other
documentation as may reasonably be requested by such Lender.
(e) OBLIGATIONS IRREVOCABLE. The obligations of each Lender to
make payments to the Agent with respect to any Letter of Credit or with
respect to any guaranty or reimbursement obligation of the Agent with
respect to any Letter of Credit, and the obligations of each Borrower to
make payments to the Agent, for the account of the Lenders, shall be
irrevocable, not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
(assuming, in the case of the obligations of the Lenders to make such
payments, that the Agent has caused such Letter of Credit to be issued in
accordance with SECTION 3A.4), including, without limitation, any of the
following circumstances:
(i) Any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) The existence of any claim, set-off, defense or other
right which any Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of any
Letter of Credit (or any Person for whom any such transferee may
be acting), any Lender, BOA, the issuer of such Letter of Credit
issued by an issuer other than BOA, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between any Borrower or
any other Person and the beneficiary named in any Letter of
Credit) or any failure of the Agent to notify a Lender of the
issuance, extension or renewal of a Letter of Credit;
(iii) Any draft, certificate or any other document
presented under the Letter of Credit upon which payment has been
made in good faith and according to its terms proving to be
forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
<PAGE>
<PAGE> EX-10.26-39
(iv) The surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
(v) The occurrence of any Default or Event of Default.
3A.7 PAYMENT OF LETTER OF CREDIT REIMBURSEMENT OBLIGATIONS.
(a) PAYMENT TO ISSUER. The Borrowers agree, jointly and
severally, to pay to the Agent, in the case of a Letter of Credit issued by
BOA, or such other issuer of the Letter of Credit, in the case of a Letter
of Credit issued by an issuer other than BOA, the amount of all Letter of
Credit Reimbursement Obligations and other amounts payable to BOA or such
other issuer under or in connection with any Letter of Credit immediately
when due, irrespective of any claim, set-off, defense or other right which
any Borrower may have at any time against BOA or such other issuer or any
other Person.
(b) RECOVERY OR AVOIDANCE OF PAYMENTS. In the event any payment
by or on behalf of any of the Borrowers received by the Agent with respect
to any Letter of Credit (or any guaranty or reimbursement obligation
relating thereto) and distributed by the Agent to the Lenders on account of
their respective participations therein is thereafter set aside, avoided or
recovered from the Agent or BOA in connection with any receivership,
liquidation or bankruptcy proceeding, the Lenders shall, upon demand by the
Agent, pay to the Agent, for its account or the account of BOA, their
respective Pro Rata Shares of such amount set aside, avoided or recovered
together with interest at the rate required to be paid by the Agent or BOA
upon the amount required to be repaid by it.
3A.8 COMPENSATION FOR LETTERS OF CREDIT.
(a) LETTER OF CREDIT FEES. The Borrowers jointly and severally
agree to pay to the Agent with respect to each Letter of Credit, for the
account of each Lender, the Letter of Credit Fee in accordance with the
terms of SECTION 4.4.
(b) ISSUER FEES AND CHARGES. The Borrowers jointly and
severally agree to pay to the Agent, for the account of the issuer of such
Letters of Credit (whether BOA or another issuer), solely for such issuer's
account, such fees and other charges as are charged by BOA or such other
issuer for letters of credit issued by it, including, without limitation,
its standard fees for issuing, administering, amending, renewing, paying
and cancelling letters of credit, as and when assessed.
3A.9 INDEMNIFICATION; EXONERATION.
(a) INDEMNIFICATION. In addition to amounts payable as
elsewhere provided in this ARTICLE 3A, the Borrowers jointly and severally
agree to protect, indemnify, pay and save the Lenders and the Agent
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which any Lender or the Agent may incur or be subject to
as a consequence, directly or indirectly, of (i) the issuance of any Letter
of Credit other than, in the case of BOA (or, if any other Lender shall be
the issuer of a Letter of Credit, such other Lender), as a result of its
gross negligence or willful misconduct, as determined by a court of
competent jurisdiction, or (ii) the failure of BOA to honor a drawing under
any Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future
<PAGE>
<PAGE> EX-10.26-40
de jure or de facto Public Authority (all such acts or omissions being
hereinafter referred to collectively as "Government Acts").
(b) ASSUMPTION OF RISK BY THE BORROWERS. As among the
Borrowers, the Lenders and the Agent, the Borrowers assume all risks of the
acts and omissions of, or misuse of any of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not
in limitation of the foregoing, subject to the provisions of the
applications for the issuance of Letters of Credit, the Lenders and the
Agent shall not be responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any
Person in connection with the application for and issuance of and
presentation of drafts with respect to any of the Letters of Credit, even
if it should prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective
for any reason; (iii) the failure of the beneficiary of any Letter of
Credit to comply duly with conditions required in order to draw upon such
Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any Letter of Credit or the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences
arising from causes beyond the control of the Lenders or the Agent,
including, without limitation, any Government Acts. None of the foregoing
shall affect, impair or prevent the vesting of any of the Agent's rights or
powers under this SECTION 3A.9.
(c) EXONERATION. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action taken or
omitted by the Agent or BOA under or in connection with any of the Letters
of Credit or any related certificates, if taken or omitted in good faith,
shall not put any Lender or the Agent under any resulting liability to any
Borrower or relieve any Borrower of any of its obligations hereunder to any
such Person.
3A.10 SUPPORTING LETTER OF CREDIT; CASH COLLATERAL. If,
notwithstanding the provisions of SECTION 3A.2(b) or SECTION 3B.2(b), any
Letter of Credit or Banker's Acceptance is outstanding upon the termination
of this Agreement, then upon such termination, or upon the occurrence of an
Event of Default, the Borrowers shall, promptly on demand by the Agent,
deposit with the Agent, for the ratable benefit of the Secured Creditors,
with respect to each Letter of Credit or Banker's Acceptance then outstand-
ing, as the Agent shall specify, either (a) a standby letter of credit (a
"Supporting Letter of Credit") in form and substance satisfactory to the
Agent, issued by an issuer reasonably satisfactory to the Agent in an
amount equal to the face amount of such Banker's Acceptance or the greatest
amount for which such Letter of Credit may be drawn, as the case may be,
under which Supporting Letter of Credit the Agent is entitled to draw
amounts necessary to reimburse the Agent and the Lenders for payments made
by the Agent and the Lenders under such Letter of Credit or such Banker's
Acceptance, as the case may be, or under any reimbursement or guaranty
agreement with respect thereto, or (b) cash in amounts necessary to
reimburse the Agent and the Lenders for payments made by the Agent and the
Lenders under such Letter of Credit or
<PAGE>
<PAGE> EX-10.26-41
such Banker's Acceptance, as the case may be, or under any reimbursement or
guaranty agreement with respect thereto. Such Supporting Letter of Credit
or deposit of cash shall be held by the Agent for the benefit of the
Secured Creditors, as security for, and to provide for the payment of, any
outstanding Letter of Credit Reimbursement Obligations and Banker's
Acceptance Reimbursement Obligations. In addition, the Agent may at any
time apply any or all of such cash collateral to the payment of any or all
of the Obligations then due and payable. If the Agent elects, in its
reasonable discretion, to invest any cash collateral, any commissions,
expenses and penalties incurred by the Agent in connection with any invest-
ment and redemption of such cash collateral shall be Obligations hereunder
secured by the Collateral, shall bear interest at the Reference Rate and
shall be charged to one or more accounts established by the Agent on its
books in the Borrowers' names (each, a "Loan Account"), or, at the Agent's
option, shall be paid out of the proceeds of any interest earned and
received by the Agent from the investment of such cash collateral as
provided herein or out of such cash collateral itself. The Agent makes no
representation or warranty as to, and shall not be responsible for, the
rate of return earned on any cash collateral. The Agent and Borrower shall
agree in writing what amounts constitute cash collateral and interest shall
accrue only on such amounts. Any interest accruing on such cash collateral
shall be held as additional cash collateral on the terms set forth in this
SECTION 3A.10.
3B. BANKER'S ACCEPTANCE SUBFACILITY.
3B.1 AGREEMENT TO ISSUE. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
each of the Borrowers herein set forth, the Agent hereby agrees to cause
BOA to issue for the account of any Borrower, or if BOA is not acceptable
to the beneficiary thereof, the Agent agrees to cause to be issued for the
account of any Borrower by an issuer reasonably satisfactory to such
beneficiary, one or more Banker's Acceptances in accordance with this
ARTICLE 3B, from time to time during the period commencing on the Effective
Date and ending on the date of termination of this Agreement pursuant to
SECTION 13.1.
3B.2 AMOUNTS; TENOR. BOA shall not have any obligation to
issue, and the Agent shall not have any obligation to cause to be issued,
any Banker's Acceptance at any time:
(a) if, after giving effect to the issuance of the
requested Banker's Acceptance, (i) the aggregate Banker's
Acceptance Obligations of all Borrowers would exceed the Banker's
Acceptance Subfacility then in effect, or (ii) the sum of the
aggregate Banker's Acceptance Obligations of all Borrowers, PLUS
the aggregate principal amount of the Revolving Loans
outstanding, PLUS the aggregate Letter of Credit Obligations,
would exceed the Aggregate Maximum Revolver Amount, or the sum of
the Banker's Acceptance Obligations of a Borrower, PLUS the
aggregate principal amount of the Revolving Loans outstanding to
such Borrower, PLUS the Letter of Credit Obligations of a
Borrower, would exceed such Borrower's Maximum Revolver Amount;
or
(b) if the draft to which such Banker's Acceptance relates has
a maturity in excess of 180 days after the date of issuance thereof.
3B.3 CONDITIONS. In addition to being subject to the
satisfaction of the conditions precedent contained in ARTICLE 11, the
obligation of the
<PAGE>
<PAGE> EX-10.26-42
Agent to cause to be issued any Banker's Acceptance is subject to the
following conditions precedent having been satisfied in a manner
satisfactory to the Agent:
(a) GDT, on behalf of the Borrower requesting the Banker's
Acceptance, shall have delivered to the proposed accepting
institution at such times and in such manner as the proposed
accepting institution may prescribe an application in form and
substance satisfactory to the proposed accepting institution for
the issuance of the Banker's Acceptance, a Banker's Acceptance
Agreement and such other documents as may be required pursuant to
the terms thereof, and the form and terms of the proposed
Banker's Acceptance shall be satisfactory to the Agent and the
proposed accepting institution;
(b) as of the date of issuance, no order of any court,
arbitrator or Public Authority having jurisdiction or authority
over the proposed accepting institution shall purport by its
terms to enjoin or restrain money center banks generally from
issuing banker's acceptances of the type and in the amount of the
proposed Banker's Acceptance, and no law, rule or regulation
applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any
Public Authority with jurisdiction over money center banks
generally shall prohibit, or request that the proposed accepting
institution refrain from, the issuance of banker's acceptances
generally or the issuance of such Banker's Acceptance; and
(c) GDT, on behalf of the Borrower requesting the Banker's
Acceptance, shall have appointed the Agent as its attorney, with
full power and authority: (i) to sign and/or endorse such
Borrower's name upon any warehouse or other receipts or Banker's
Acceptance applications; (ii) to sign such Borrower's name on
bills of lading; (iii) to clear Inventory through U.S. Customs in
such Borrower's name or the name of the Agent, and to sign and
deliver to U.S. Customs officials powers of attorney in such
Borrower's name for such purpose; (iv) to complete in Borrower's
name or Agent's name any order, sale or transaction, obtain the
necessary documents in connection therewith and collect the
proceeds thereof; and (v) to do such other acts and things as are
necessary to carry out the terms of this Agreement in order to
enable Agent to obtain payment of all Obligations. In addition,
such Borrower will, and Agent may, at its option, instruct all
suppliers, carriers, forwarders, warehouses or others receiving
or holding cash, checks, Inventory, documents or instruments in
which Agent, on behalf of the Lenders, holds a security interest
to deliver them to Agent and/or subject to Agent's order, and if
they shall come into the possession of Borrower, Borrower will
hold them in trust as trustee for Agent, and Borrower will
immediately deliver them to Agent in their original form,
together with any necessary endorsements thereto.
3B.4 ISSUANCE OF BANKER'S ACCEPTANCES.
(a) REQUEST FOR ISSUANCE. GDT, on behalf of the Borrower
requesting the Banker's Acceptance, shall give the Agent written notice no
later than six (6) Business Days prior to the proposed date of issuance of
the Banker's Acceptance, containing the original signature of an authorized
<PAGE>
<PAGE> EX-10.26-43
officer of GDT, on behalf of such Borrower, of such Borrower's request for
the issuance of a Banker's Acceptance. Such notice shall be irrevocable
and shall specify the Borrower for whose account such Banker's Acceptance
is to be issued, the face amount of the instrument to which the requested
Banker's Acceptance relates, the effective date (which date shall be a
Business Day) of issuance of such requested Banker's Acceptance, the
maturity date of such requested Banker's Acceptance (which date shall be a
Business Day), the purpose for which such Banker's Acceptance is to be
issued, and the beneficiary of the instrument to which the requested
Banker's Acceptance relates.
(b) RESPONSIBILITIES OF THE AGENT; ISSUANCE. The Agent shall
determine, as of the Business Day immediately preceding the requested
effective date of issuance of the Banker's Acceptance set forth in the
notice from GDT, on behalf of the Borrower requesting the Banker's
Acceptance pursuant to SECTION 3B.4(a), the amount of the unused Banker's
Acceptance Subfacility, such Borrower's Availability and Aggregate
Availability as of such date. If (i) the terms of the proposed Banker's
Acceptance are acceptable to the Agent in its reasonable discretion, (ii)
the face amount of the requested Banker's Acceptance is less than or equal
to each of such unused Banker's Acceptance Subfacility, Aggregate
Availability and such Borrower's Availability, and (iii) the Agent has
received a certificate from GDT, on behalf of the Borrower requesting the
Banker's Acceptance, stating that the applicable conditions set forth in
Article 11 have been satisfied, then the Agent shall issue or cause to be
issued such Banker's Acceptance for the account of such Borrower.
3B.5 BANKER'S ACCEPTANCE REIMBURSEMENT OBLIGATIONS; DUTIES OF
ISSUER.
(a) REIMBURSEMENT. Notwithstanding any provisions to the
contrary in any Banker's Acceptance Agreement, the Borrower requesting a
Banker's Acceptance shall reimburse BOA or any other accepting institution
for any payments made by BOA or such other accepting institution under such
Banker's Acceptance in accordance with its terms immediately after the
payment by BOA or such other accepting institution. Any payments made by
BOA or such other accepting institution under a Banker's Acceptance not
reimbursed when due under the terms of such Banker's Acceptance or the
Banker's Acceptance Agreement pertaining thereto shall bear interest,
payable on demand, at the Reference Rate until BOA or such other accepting
institution is reimbursed in full.
(b) DUTIES OF ISSUER. Any action taken or omitted to be taken
by BOA or any other accepting institution under or in connection with any
Banker's Acceptance, if taken or omitted in the absence of gross negligence
or willful misconduct, shall not put BOA or such other accepting
institution under any resulting liability to any Lender, or, assuming that
BOA or such other accepting institution has complied with the procedures
specified in SECTION 3B.4, relieve any Lender of its obligations hereunder
to BOA or such other accepting institution.
3B.6 PARTICIPATIONS.
(a) PURCHASE OF PARTICIPATIONS. Immediately upon issuance by
BOA or any other accepting institution in accordance with SECTION 3B.4,
each Lender shall be deemed to have irrevocably and unconditionally
purchased and received without recourse or warranty, an undivided interest
and participation in (i) in the case of a Banker's Acceptance issued by
BOA, such
<PAGE>
<PAGE> EX-10.26-44
Banker's Acceptance, equal to such Lender's Pro Rata Share of the face
amount thereof, or (ii) in the case of a Banker's Acceptance issued by an
accepting institution other than BOA, the Agent's guaranty or reimbursement
obligations to such accepting institution in connection with the issuance
of such Banker's Acceptance, equal to such Lender's Pro Rata Share of the
face amount of such Banker's Acceptance (including, without limitation, in
either case, all obligations of the Borrower requesting the Banker's
Acceptance with respect thereto, other than amounts owing to BOA or any
other accepting institution under SECTION 3B.8(b), and any security
therefor or guaranty pertaining thereto).
(b) SHARING OF BANKER'S ACCEPTANCE PAYMENTS. In the event that
BOA or any other accepting institution pays the face amount of the draft to
which any Banker's Acceptance relates pursuant to the terms thereof, and
BOA or such other accepting institution shall not have been repaid such
amount pursuant to SECTION 3B.7, the Agent shall notify each Lender, and
each Lender shall unconditionally pay to the Agent for the account of BOA
or such other accepting institution, as and when provided hereinbelow, an
amount equal to such Lender's Pro Rata Share of the amount of such payment
in Dollars and in same day funds. If the Agent so notifies the Lenders by
not later than 11:00 a.m. (New York time) on any Business Day, each Lender
shall make available to the Agent the amount of such payment, as provided
in the immediately preceding sentence, on such Business Day. If the Agent
so notifies the Lenders after 11:00 a.m. (New York time) on any Business
Day, each Lender shall make available to the Agent the amount of such
payment, as provided in the second preceding sentence, together with
interest thereon at the Federal Funds Rate, by not later than 11:00 a.m.
(New York time) on the next Business Day. Such amounts paid by the Lenders
to the Agent shall constitute Revolving Loans which shall be deemed to have
been requested by the Borrower for whose account the Banker's Acceptance
was issued pursuant to SECTION 2.1.
(c) SHARING OF REIMBURSEMENT OBLIGATION PAYMENTS. Whenever the
Agent receives a payment from a Borrower for whose account a Banker's
Acceptance was issued on account of a Banker's Acceptance Reimbursement
Obligation as to which the Agent has previously received for the account of
BOA or such other accepting institution payment from a Lender pursuant to
this SECTION 3B.6, the Agent shall promptly pay to such Lender, such
Lender's Pro Rata Share of such payment from such Borrower in Dollars.
Each such payment shall be made by the Agent on the Business Day on which
the Agent receives immediately available funds paid to such Person pursuant
to the immediately preceding sentence, if received prior to 11:00 a.m. (New
York time) on such Business Day and otherwise on the next succeeding
Business Day.
(d) DOCUMENTATION. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any draft to which a Banker's
Acceptance relates, any Banker's Acceptance Agreement, any application for
any Banker's Acceptance and any guaranty in connection with the issuance of
any Banker's Acceptance by an accepting institution other than BOA to which
the Agent is party and such other documentation as may reasonably be
requested by such Lender.
(e) OBLIGATIONS IRREVOCABLE. The obligations of each Lender to
make payments to the Agent with respect to any Banker's Acceptance or with
respect to any guaranty or reimbursement obligation of the Agent with
respect to a Banker's Acceptance, and the obligations of each Borrower to
make payments to the Agent, for the account of the Lenders, shall be
irrevocable, not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
(assuming, in the
<PAGE>
<PAGE> EX-10.26-45
case of the obligations of the Lenders to make such payments, that the
Agent has caused such Banker's Acceptance to be issued in accordance with
SECTION 3B.4), including, without limitation, any of the following
circumstances:
(i) Any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) The existence of any claim, set-off, defense or other
right which any Borrower may have at any time against the payee
of any Banker's Acceptance or any holder of any Banker's
Acceptance (or any Person for whom any such holder may be
acting), any Lender, BOA, any accepting institution other than
BOA, or any other Person, whether in connection with this
Agreement, any Banker's Acceptance, the transactions contemplated
herein or any unrelated transactions (including any underlying
transactions between any Borrower or any other Person and the
beneficiary of any Banker's Acceptance) or any failure of the
Agent to notify a Lender of the issuance of a Banker's
Acceptance;
(iii) The surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
(iv) The occurrence of any Default or Event of Default.
3B.7 PAYMENT OF BANKER'S ACCEPTANCE REIMBURSEMENT OBLIGATIONS.
(a) PAYMENT TO ISSUER. The Borrowers agree, jointly and
severally, to pay to the Agent, in the case of a Banker's Acceptance issued
by BOA, or such accepting institution, in the case of a Banker's Acceptance
issued by an accepting institution other than BOA, the amount of all
Banker's Acceptance Reimbursement Obligations and other amounts payable to
BOA or such other accepting institution under or in connection with any
Banker's Acceptance immediately when due, irrespective of any claim, set-
off, defense or other right which any Borrower may have at any time against
BOA or such other accepting institution or any other Person.
(b) RECOVERY OR AVOIDANCE OF PAYMENTS. In the event any payment
by or on behalf of any of the Borrowers received by the Agent with respect
to any Banker's Acceptance (or any guaranty or reimbursement obligation
relating thereto) and distributed by the Agent to the Lenders on account of
their respective participations therein is thereafter set aside, avoided or
recovered from the Agent or BOA in connection with any receivership,
liquidation or bankruptcy proceeding, the Lenders shall, upon demand by the
Agent, pay to the Agent, for its account or the account of BOA, their
respective Pro Rata Shares of such amount set aside, avoided or recovered
together with interest at the rate required to be paid by the Agent or BOA
upon the amount required to be repaid by it.
3B.8 COMPENSATION FOR BANKER'S ACCEPTANCES.
(a) BANKER'S ACCEPTANCE FEES. The Borrowers jointly and
severally agree to pay to the Agent with respect to each Banker's
Acceptance, for the account of each Lender, the Banker's Acceptance Fee in
accordance with the terms of SECTION 4.4A.
(b) ACCEPTING INSTITUTION FEES AND CHARGES. The Borrowers
jointly and severally agree to pay to the Agent, for the account of the
<PAGE>
<PAGE> EX-10.26-46
accepting institution with respect to any Banker's Acceptance (whether BOA
or another accepting institution), solely for such accepting institution's
account, such fees and other charges as are charged by BOA or such other
accepting institution for banker's acceptances issued by it, including,
without limitation, its standard fees for issuing, administering, paying
and cancelling banker's acceptances, as and when assessed.
3B.9 INDEMNIFICATION; EXONERATION.
(a) INDEMNIFICATION. In addition to amounts payable as
elsewhere provided in this ARTICLE 3B, the Borrowers jointly and severally
agree to protect, indemnify, pay and save the Lenders and the Agent
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which any Lender or the Agent may incur or be subject to
as a consequence, directly or indirectly, of (i) the issuance of any
Banker's Acceptance other than, in the case of BOA (or, if any other Lender
shall be the accepting institution with respect to any Banker's Acceptance,
such other Lender), as a result of its gross negligence or willful
misconduct, as determined by a court of competent jurisdiction, or (ii) the
failure of BOA to pay the face amount of the obligation to which any
Banker's Acceptance relates as a result of any Government Act.
(b) ASSUMPTION OF RISK BY THE BORROWERS. As among the
Borrowers, the Lenders and the Agent, the Borrowers assume all risks of the
acts and omissions of, or misuse of any of the Banker's Acceptances by, the
respective holders of such Banker's Acceptances. In furtherance and not in
limitation of the foregoing, subject to the provisions of the applications
for the issuance of Banker's Acceptances, the Lenders and the Agent shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any Person in
connection with the application for and issuance of instruments with
respect to any of the Banker's Acceptances, even if it should prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (ii) the validity or sufficiency of any transfer or assignment or
purported transfer or assignment of any Banker's Acceptance or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (iv) errors in interpretation of technical terms; (v) any loss or
delay in the transmission or otherwise of any payment under a Banker's
Acceptance; (vi) the misapplication by the beneficiary of any Banker's
Acceptance or the proceeds of any payment under such Banker's Acceptance;
or (vii) any consequences arising from causes beyond the control of the
Lenders or the Agent, including, without limitation, any Government Acts.
None of the foregoing shall affect, impair or prevent the vesting of any of
the Agent's rights or powers under this SECTION 3B.9.
(c) EXONERATION. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action taken or
omitted by the Agent or BOA under or in connection with any of the Bankers
Acceptances, if taken or omitted in good faith, shall not put any Lender or
the Agent under any resulting liability to any Borrower or relieve any
Borrower of any of its obligations hereunder to any such Person.
<PAGE>
<PAGE> EX-10.26-47
4. INTEREST AND FEES.
4.1 INTEREST. (a) The Borrowers agree, jointly and severally,
to pay the Agent for the account of the Lenders interest on the unpaid
principal balance of the (i) Reference Rate Loans at a fluctuating per
annum rate equal to one percent (1.0%) PLUS the Reference Rate and (ii)
Eurodollar Rate Loans at a fluctuating per annum rate equal to two and one-
half percent (2.5%) PLUS the applicable Eurodollar Rate. Each change in
the Reference Rate shall be reflected in the foregoing interest rate as of
the effective date of such change. Interest charges (whether in respect of
Loans, Letters of Credit or Banker's Acceptances) shall be computed on the
basis of a year of 360 days and actual days elapsed and will be payable to
the Lenders on each applicable Interest Payment Date, in the case of Loans,
and as otherwise provided herein, in the case of Letters of Credit and
Banker's Acceptances.
(b) Notwithstanding anything to the contrary contained in
SECTION 4.1(a), if any Default or Event of Default occurs, then, while any
such Default or Event of Default is continuing, the Obligations will bear
interest at the Default Rate applicable thereto.
4.2 MAXIMUM INTEREST RATE. In no event shall any interest rate
exceed the maximum rate permissible for corporate borrowers by applicable
law (the "Maximum Rate"). If, in any month, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate
for that month shall be the Maximum Rate, and, if in future months, that
interest rate would otherwise be less than the Maximum Rate, then that
interest rate shall remain at the Maximum Rate until such time as the
amount of interest paid hereunder equals the amount of interest which would
have been paid if the same had not been limited by the Maximum Rate. In the
event that, upon payment in full of the Obligations under this Agreement,
the total amount of interest paid or accrued under the terms of this
Agreement is less than the total amount of interest which would have been
paid or accrued if the interest rates set forth in this Agreement had at
all times been in effect, then the Borrowers jointly and severally agree,
to the extent permitted by applicable law, to pay to the Lenders an amount
equal to the difference between (a) the lesser of (i) the amount of inter-
est which would have been charged if the Maximum Rate had, at all times,
been in effect or (ii) the amount of interest which would have accrued had
the interest rates set forth in this Agreement, at all times, been in
effect and (b) the amount of interest actually paid or accrued under this
Agreement. In the event that the Agent and/or Lenders receive, collect or
apply as interest any sum in excess of the Maximum Rate, such excess amount
shall be applied to the reduction of the principal balance of the
Obligations, in the inverse order of maturity, and any funding indemnities
in connection therewith under SECTION 4.8, and, if no such principal or
such funding indemnity is then outstanding, such excess or part thereof
remaining shall be paid to the Borrowers.
4.3 CLOSING FEES. In connection with the establishment of the
Commitments, in consideration of the making of Loans under this Agreement
and in order to compensate the Agent for costs and expenses (other than
expenses for which the Borrowers have agreed to reimburse the Agent or the
Lenders or both) associated with structuring, processing, approving,
closing and monitoring the Loans, the Borrowers jointly and severally agree
to pay to the Agent on the Effective Date, for the account of the Lenders,
a non-refundable closing fee (the "Closing Fee") in the amount of
$1,500,000, of which amount the Borrower has heretofore paid the Agent
$100,000.
<PAGE>
<PAGE> EX-10.26-48
4.4 LETTER OF CREDIT FEE. In connection with the establishment
of the L/C Subfacility, the Borrowers jointly and severally agree to pay to
the Agent, for the benefit of the Lenders, for each Letter of Credit, a fee
("Letter of Credit Fee") equal to one and one-half percent (1.50%) per
annum of the undrawn face amount of each such Letter of Credit, in addition
to all out-of-pocket costs, fees and expenses incurred by the Lenders or
the Agent in connection with the application for issuance of or amendment
to any Letter of Credit. The Letter of Credit Fee shall be payable in
advance (i) upon the issuance of each Letter of Credit for the number of
days remaining in the month during which such Letter of Credit was issued
and (ii) thereafter, monthly, on the first day of each month or part
thereof during which each such Letter of Credit remains outstanding. The
Letter of Credit Fee shall be computed on the basis of a 360-day year for
the actual number of days elapsed.
4.4A BANKER'S ACCEPTANCE FEES. In connection with the
establishment of the Banker's Acceptance Subfacility, the Borrowers
jointly and severally agree to pay to the Agent monthly, for the benefit of
the Lenders, for each Banker's Acceptance, a fee ("Banker's Acceptance
Fee"), equal to two and one-half percent (2.50%) per annum of the face
amount of each Banker's Acceptance issued pursuant to this Agreement. In
addition, the Borrowers jointly and severally agree to pay to the Agent for
the account of a Lender or the Agent, as the case may be, all associated
charges (including without limitation any charges associated with the
discount of any Banker's Acceptance) incurred by such Lender or the Agent,
as the case may be, in connection therewith. The Banker's Acceptance Fee
shall be payable monthly in arrears on the first day of each month
following the month during which any Banker's Acceptance remains
outstanding. The Banker's Acceptance Fee shall be computed on the basis of
a 360-day year for the actual number of days elapsed.
4.5 COMMITMENT FEE. In connection with and as consideration
for holding available for the use of the Borrowers under this Agreement the
unused Aggregate Maximum Revolver Amount, the Maximum Revolver Amount and
the Term Loan Commitment, the Borrowers jointly and severally agree to pay
to the Agent, for the account of each Lender, a facility fee ("Facility
Fee") accruing at the rate of one-half of one percent (.50%) per annum from
and after the Effective Date until the Revolving Credit Termination Date,
upon the average daily amount of the difference, if any, of (i) (x) the
amount of such Lender's Commitment MINUS (y) an amount equal to the amount
of reserves established by the Agent multiplied by such Lender's Pro Rata
Share, MINUS (ii) such Lender's Pro Rata Share of the daily average
outstanding amount of Term Loans (or, if greater, such Lender's Pro Rata
Share of $50,000,000) PLUS such Lender's Pro Rata Share of the daily
average outstanding amount of Revolving Loans PLUS the daily average face
amount of all issued and outstanding Letters of Credit and Banker's
Acceptances. All Facility Fees shall be payable monthly, in arrears, on
the first Business Day of each calendar month beginning after the Effective
Date. All Facility Fees shall be calculated on the basis of a year of 360
days and actual days elapsed.
4.6 INCREASED CAPITAL; INCREASED COSTS. (a) If any Lender
determines that compliance with any law or regulation or with any guideline
or request from any central bank or other governmental authority (whether
or not having the force of law) applicable to banks organized under the
laws of the United States of America or any political subdivision thereof,
has or would have the effect of reducing the rate of return on the capital
of such Lender or any corporation controlling such Lender as a consequence
of, or with reference to, such Lender's Commitment, its making or
maintaining Loans or issuing Letters of Credit or Banker's Acceptances
hereunder below the rate
<PAGE>
<PAGE> EX-10.26-49
which the Lender or such other corporation could have achieved but for such
compliance (taking into account the policies of such Lender or such
corporation with regard to capital), then the Borrowers agree, jointly and
severally, from time to time, upon demand by such Lender (with a copy of
such demand to the Agent), immediately to pay to such Lender or other
corporation, an additional amount sufficient to compensate such Lender or
such other corporation for such reduction.
(b) If any law, treaty, order, directive, rule or regulation
adopted, issued or becoming effective after the Effective Date or any
change in any law or regulation or in the interpretation thereof by any
court or administrative or governmental authority charged with the
administration thereof (in any case, whether or not having the force of
law) or compliance by the Agent, any issuer of a Letter of Credit or
Banker's Acceptance or any Lender with respect thereto from that in effect
as of the Effective Date shall either (i) impose, modify or deem applicable
any reserve (other than any reserve factored into the Eurodollar Reserve
Percentage with respect to a Eurodollar Rate Loan), special deposit or
similar requirement against loans, letters of credit or banker's
acceptances generally, or participation in any of the foregoing or (ii)
impose on the Agent, such issuer or such Lender any other condition
regarding loans, letters of credit or banker's acceptances generally, or
participation in any of the foregoing, and the result of any event referred
to in the preceding clause (i) or (ii) shall be to increase the cost to the
Agent, such issuer or such Lender of issuing or maintaining, or, in the
case of such Lender, having a participation in, Letters of Credit or
Banker's Acceptances, or making or maintaining, or in the case of such
Lender, having a participation in, any Loans, then, upon demand by the
Agent, such issuer or such Lender (with a copy to the Agent in the case of
any demand by any such issuer or by any such Lender), the Borrowers,
jointly and severally, shall promptly pay to the Agent for the benefit of
the Agent, such issuer or such Lender from time to time as specified by the
Agent, such issuer or such Lender (with a copy to the Agent if so specified
by any such issuer or by any such Lender), additional amounts which shall
be sufficient to compensate the Agent, such issuer or such Lender for such
increased cost.
(c) If any law, treaty, order, directive, rule or regulations
shall be adopted, issued or become effective after the Effective Date or if
any change in any law, treaty, order, directive, rule or regulation from
that in effect on the Effective Date or in the interpretation thereof by
any governmental or other regulatory authority charged with the
administration thereof (in any case, whether or not having the force of
law) and including in any event, all risk-based capital guidelines
heretofore adopted by the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") or
any other banking regulatory agency, domestic or foreign, to the extent
that any provision contained therein does not have to be complied with as
of the date hereof, shall, or if the compliance by the Agent, any issuer of
a Letter of Credit or Banker's Acceptance or any Lender with any guideline
or request from any central bank or other governmental authority, shall
affect or would affect the amount of capital required or expected to be
maintained by the Agent, such issuer or such Lender or any affiliate of the
Agent, such issuer or such Lender, and the Agent, such issuer or such
Lender determines that the amount of such capital is increased by or based
upon the existence of loans, banker's acceptances or letters of credit
generally, or participation in any of the foregoing (or similar contingent
obligations), then, upon demand by the Agent, such issuer or such Lender,
as the case may be (with a copy to the Agent in the case of any demand by
such issuer or by any such Lender), the
<PAGE>
<PAGE> EX-10.26-50
Borrowers, jointly and severally, shall pay to the Agent for the benefit of
the Agent, such issuer or such Lender from time to time such additional
amounts as may be specified by the Agent, such issuer or such Lender as may
be sufficient to compensate it in light of such circumstances, to the
extent that the Agent, such issuer or such Lender determines such increase
in capital to be allocable to the issuance or maintenance of the Banker's
Acceptances or Letters of Credit, or, in the case of such Lender, to its
participation in the Letters of Credit or Banker's Acceptance, or to the
making or maintenance, or in the case of such Lender, to its participation
in, any Loans.
(d) A certificate as to the calculation of any amounts payable
by the Borrowers pursuant to this SECTION 4.6 shall be submitted to GDT, on
behalf of the Borrowers, by the Agent or any affected Lender and shall,
absent manifest error, be conclusive and binding for all purposes. Each
Lender agrees promptly to notify GDT and the Agent, and the Agent, if and
to the extent it claims any amounts under this SECTION 4.6, agrees promptly
to notify GDT, of any circumstances that would cause the Borrowers to pay
additional amounts pursuant to this SECTION 4.6; PROVIDED that the failure
to give such notice shall not affect the Borrower's obligations to pay such
additional amounts as otherwise provided herein.
4.7 FEES NOT INTEREST; FULLY EARNED. All fees are for
compensation for services and are not, and shall not be deemed to be,
interest or a charge for the use of money. The fees provided for in
SECTIONS 4.3, 4.4, 4.4A and 4.5 shall be fully earned when due and payable,
and no such fee shall be refundable or rebatable by reason of any
prepayment, acceleration upon an Event of Default or any other
circumstance.
4.8 FUNDING INDEMNITIES. The Borrowers will jointly and
severally indemnify the Agent and each Lender (including, without
limitation, BankAmerica in respect of BA Revolving Loans) against, and on
demand reimburse each Lender, BankAmerica and the Agent for, any loss,
premium, penalty or expense which such Lender, BankAmerica or the Agent may
pay or incur (including, without limitation, any loss or expense incurred
by reason of the relending, depositing or other employment of funds
acquired by such Lender, BankAmerica or the Agent to fund a Eurodollar Rate
Loan) as a result of (i) any prepayment or repayment of a Eurodollar Rate
Loan on a date prior to the last day of the Interest Period applicable
thereto or (ii) any failure by any Borrower to borrow any Eurodollar Rate
Loan on a date specified therefor in a Notice of Borrowing, except to the
extent such failure results from a default by such Lender, BankAmerica or
the Agent in making the requisite funds available to any Borrower
hereunder, or to convert any Reference Rate Loan to a Eurodollar Rate Loan
or continue a Eurodollar Rate Loan as such on a date specified therefor in
a Notice of Conversion/Continuation. Each Lender, BankAmerica and/or the
Agent, as the case may be, shall furnish GDT with a certificate setting
forth the basis for determining any additional amount to be paid to it
hereunder, and such certificate shall be conclusive, absent manifest error,
as to the contents thereof.
4.9 ILLEGALITY. (a) If, after the date of this Agreement, the
introduction of, or any change in, any applicable law, rule or regulation
or in the interpretation or administration thereof by any governmental
authority shall, in the opinion of counsel to any Lender, BankAmerica or
the Agent, make it unlawful for such Lender, BankAmerica or the Agent to
make or maintain any Eurodollar Rate Loan, then such Lender, BankAmerica or
the Agent may, by notice to the Borrower and, in the case of any notice by
a Lender or
<PAGE>
<PAGE> EX-10.26-51
BankAmerica, the Agent, declare that such Eurodollar Rate Loan shall be due
and payable. The Borrowers shall repay any Eurodollar Rate Loan declared
so due and payable in full on the last day of the Interest Period
applicable thereto, unless such Eurodollar Rate Loan is required by law to
be sooner repaid, in which case the Borrowers shall repay such Eurodollar
Rate Loan on the date required by law. Repayment shall, in any case, be
made together with accrued interest and any additional amount owing under
SECTION 4.6 hereof. Each Lender, BankAmerica or the Agent will promptly
notify the Borrower of any event of which such Lender, BankAmerica and/or
the Agent, as the case may be, has knowledge which will entitle it to
prepayment pursuant to this SECTION 4.9(a); PROVIDED that the failure to
give such notice shall not affect the Borrowers' obligations to pay any
amount required hereunder as provided herein.
(b) If any Borrower is required as provided in SECTION 4.9(a)
above to prepay any Eurodollar Rate Loan prior to the last day of the
Interest Period applicable thereto, the Agent shall have the right, but not
the obligation, to convert such Eurodollar Rate Loan to a Reference Rate
Loan in the amount of such prepayment and shall, promptly after such
conversion, notify the affected Lender or BankAmerica, as the case may be,
and GDT of such conversion. Such Reference Rate Loan shall be considered
to be part of the same Borrowing as the Eurodollar Rate Loan that was
prepaid and the Borrowers shall jointly and severally be obligated to repay
the principal of and interest on such Reference Rate Loan at the same time
or times as required for the other Eurodollar Rate Loans comprising such
Borrowing.
(c) If, after the date of this Agreement, the introduction of,
or any change in, any applicable law, rule or regulation or in the
interpretation or administration thereof by any governmental authority
shall, in the opinion of counsel to any Lender, BankAmerica or the Agent,
make it unlawful for such Lender, BankAmerica or the Agent to issue or
maintain any portion of a Letter of Credit or Banker's Acceptance, then
such Lender, BankAmerica or the Agent may notify GDT and, in the case of
any notice given by a Lender or BankAmerica, the Agent of such illegality.
Notwithstanding anything to the contrary contained in the Agreement,
neither BankAmerica, the Agent nor any Lender shall be under any obligation
to issue any Letter of Credit or Banker's Acceptance unless BankAmerica,
the Agent or such Lender, as the case may be, determines in its sole
discretion that the circumstances giving rise to such illegality no longer
exist.
4.10 UNAVAILABILITY OF EURODOLLAR RATE LOANS. If, with respect
to any Borrowing consisting of Eurodollar Rate Loans requested on behalf of
any Borrower, the Agent or the Majority Lenders shall have determined in
good faith (which determination shall, save for manifest error, be
conclusive and binding upon the Borrowers) that (a) deposits of sufficient
amount and maturity for funding such Borrowing are not available to the
Lenders in the relevant market in the ordinary course of business or (b) by
reason of circumstances affecting the relevant market, adequate and fair
means do not exist for ascertaining the rate of interest to be applicable
to such Borrowing, then (i) the Agent shall promptly give notice thereof to
GDT, (ii) the notice requesting such Borrowing shall, unless GDT otherwise
notifies the Agent, automatically be amended to request a Reference Rate
Loan instead of a Eurodollar Rate Loan and (iii) no Lender shall be under
any obligation to make additional Eurodollar Rate Loans to any Borrower,
unless and until the Agent shall have notified GDT that Eurodollar Rate
Loans are again available hereunder.
<PAGE>
<PAGE> EX-10.26-52
4.11 TAXES. (a) Subject to SECTIONS 4.11(b) and 4.11(c), each
payment or prepayment hereunder and under the other Loan Documents shall be
made without set-off or counterclaim and free and clear of, and without
deduction for, any present or future withholding or other taxes, duties or
charges and all liabilities with respect thereto, of any nature imposed on
such payments or prepayments by or on behalf of any government or any
political subdivision or agency thereof or therein, except for Excluded
Taxes (all such taxes, levies, duties, imposts, deductions, charges and
liabilities, except Excluded Taxes, being hereinafter referred to as
"Taxes"). If any such Taxes are so levied or imposed on any payment or
prepayment to any Lender or the Agent or paid by such Lender or the Agent,
the Borrowers will make additional payments to the Agent in such amounts as
may be necessary so that the net amount received by such Lender or the
Agent after withholding or deduction for or on account of such Taxes,
including deductions applicable to additional sums payable under this
SECTION 4.11(a) (other than Excluded Taxes), will be equal to the amount
provided for herein. Whenever any Taxes are payable by the Borrowers with
respect to any payments or prepayments hereunder, GDT, on behalf of the
Borrowers, shall furnish promptly to the Agent for the account of the
applicable Lender official receipts (to the extent that the relevant
governmental authority delivers such receipts) evidencing payments of any
such Taxes so withheld or deducted. If the Borrowers fail to pay any such
Taxes when due to the appropriate taxing authority or fail to remit to the
Agent for the account of the applicable Lender or the Agent, as applicable,
the required receipts evidencing payment of any such Taxes so withheld or
deducted, the Borrowers shall jointly and severally indemnify the affected
Lender or the Agent, as applicable, for any incremental Taxes and any
incremental Excluded Taxes or interest or penalties that may become payable
by such Lender or the Agent, as applicable, as a result of any such
failure.
(b) (i) Except as provided in SECTION 4.11(b)(ii) below, each
Lender that is not a "United States person" (as such term is defined in
Section 7701(a)(30) of the Code) shall submit to GDT, on behalf of the
Borrowers, and the Agent on or before the Effective Date (or, in the case
of a Person that becomes a Lender after the Effective Date by assignment,
promptly upon such assignment), two duly completed and signed copies of
either (1) Form 1001 of the United States Internal Revenue Service
entitling such Lender to a complete exemption from withholding for all
amounts to be received by such Lender pursuant to this Agreement or (2)
Form 4224 of the United States Internal Revenue Service relating to all
amounts to be received by such Lender pursuant to this Agreement. Each
such Lender shall, from time to time after submitting either such form,
submit to GDT, on behalf of the Borrowers, and the Agent such additional
duly completed and signed copies of one or the other such forms (or such
successor forms or other documents as shall be adopted from time to time by
the relevant United States taxing authorities) as may be (1) reasonably
requested in writing by GDT, on behalf of the Borrowers, or the Agent and
(2) appropriate under then current United States law or regulations to
avoid United States withholding taxes on payments in respect of any amounts
to be received by such Lender pursuant to this Agreement. Upon the
reasonable request of GDT, on behalf of the Borrowers, or the Agent, each
Lender that has not provided the forms or other documents, as provided
above, on the basis of being a United States person shall submit to GDT, on
behalf of the Borrowers, and the Agent a certificate to the effect that it
is such a "United States person."
(ii) If any Lender which is not a "United States person"
determines that it is unable to submit to GDT, on behalf of the Borrowers,
or the Agent any form or certificate that such Lender is requested to
submit
<PAGE>
<PAGE> EX-10.26-53
pursuant to the preceding paragraph, or that it is required to withdraw or
cancel any such form or certificate, or that any such form or certificate
previously submitted has otherwise become ineffective or inaccurate, such
Lender shall promptly notify GDT, on behalf of the Borrowers, and the Agent
of such fact.
(iii) Except as provided in SECTION 4.11(c) below, the
Borrowers shall not be required to pay any additional amount in respect of
Taxes to any Lender if and only to the extent that (A) such Lender is
subject to such Taxes (in such case, only to the extent of the tax rate
then in effect) on the date this Agreement is executed by such Lender (or
in the case of a Person that becomes a Lender after the Effective Date by
assignment, on the date of such assignment) or would be subject to such
Taxes on such date if a payment hereunder had been received by it on such
date; (B) such Lender becomes subject to such Taxes subsequent to the date
referred to in clause (A) above as a result of a change in the
circumstances of such Lender, other than a change in applicable law
(including without limitation an increase in any applicable tax rate),
including without limitation a change in the residence, place of
incorporation or principal place of business of the Lender, a change in the
branch or lending office of the Lender participating in the transactions
set forth herein or as a result of the sale by the Lender of participating
interests in such Lender's creditor position(s) hereunder; PROVIDED,
HOWEVER, that the Borrowers will be jointly and severally required to pay
any additional amount in respect of Taxes to any Lender to the extent that
after a change in the circumstances (as described above) of such Lender a
subsequent change in any applicable law results in an additional amount
that such Lender is subject to with respect to Taxes; or (C) such Taxes
would not have been incurred but for the failure of such Lender to file
with the appropriate tax authorities and/or provide to GDT, on behalf of
the Borrowers, or the Agent any form or certificate that it was required so
to do pursuant to this SECTION 4.11(b) and entitled so to do under
applicable law.
(c) In addition, the Borrowers agree, jointly and severally, to
pay any present or future stamp or documentary taxes, any intangibles tax
or any other sales, excise or property taxes, charges or similar levies now
or hereafter assessed that arise from and are attributable to the
execution, delivery of, or otherwise with respect to, this Agreement or the
other Loan Documents and any and all recording fees relating to any Loan
Documents securing the Obligations (hereinafter referred to as "Other
Taxes").
(d) The Borrowers will, jointly and severally, indemnify and
pay to each Lender and the Agent the full amount of Taxes or Other Taxes
which the Borrowers are required to pay to any Lender or the Agent pursuant
to this SECTION 4.11, including, without limitation, any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this SECTION
4.11 duly paid or payable by such Lender or the Agent and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. Indemnification payments shall be made within 30 days
from the date such Lender or the Agent makes written demand therefor.
(e) Without prejudice to the survival of any other agreements
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this SECTION 4.11 shall survive the payment in full of
principal and interest hereunder indefinitely.
<PAGE>
<PAGE> EX-10.26-54
5. PAYMENTS AND PREPAYMENTS.
5.1 REVOLVING LOANS. The Borrowers jointly and severally agree
to repay the outstanding principal balance of the Revolving Loans, PLUS all
accrued but unpaid interest thereon, PLUS all accrued but unpaid fees
payable pursuant to ARTICLE 4, on the Termination Date. The Borrowers may
prepay Revolving Loans at any time, and reborrow subject to the terms of
this Agreement. In addition, and without limiting the generality of the
foregoing, the Borrowers agree, jointly and severally, to pay to the
Lenders on demand the amount by which outstanding Revolving Loans PLUS the
Letter of Credit Obligations and Banker's Acceptance Obligations of all
Borrowers exceeds the Aggregate Maximum Revolver Amount, and the amount by
which outstanding Revolving Loans to any Borrower PLUS the Letter of Credit
Obligations and Banker's Acceptance Obligations of such Borrower issued for
such Borrower's account exceeds such Borrower's Maximum Revolver Amount.
5.2 REDUCTION OR TERMINATION OF REVOLVING CREDIT COMMITMENTS.
The Borrowers shall have the right, at any time, to terminate in whole, or
at any time to permanently reduce in part, the Revolving Credit Commitments
up to an amount equal to the Aggregate Availability at such time. GDT, on
behalf of the Borrowers, shall give not less than five (5) Business Days'
prior written notice to the Agent designating the date (which shall be a
Business Day) of such termination or reduction and the amount of any
partial reduction. Promptly after receipt of a notice of such termination
or reduction, the Agent shall notify each Lender of the proposed termina-
tion or reduction. Such termination or partial reduction of the Revolving
Credit Commitments shall be effective on the date specified in the
Borrowers' notice and shall reduce the Revolving Credit Commitment of each
Lender proportionately in accordance with its Pro Rata Share. Any such
partial reduction of the Revolving Credit Commitments shall be in an
aggregate minimum amount of $1,000,000, and integral multiples of
$1,000,000 in excess of that amount. If the Revolving Credit Commitments
are terminated in whole or permanently reduced in part at any time prior to
the third Anniversary Date pursuant to this Section, the Borrowers jointly
and severally shall pay to the Agent for the account of each Lender an
early termination fee equal to such Lender's Pro Rata Share of the amount
determined in accordance with the following table:
Period in which Early
early termination Termination
occurs Fee
----------------- -----------
On or prior to second 2% of amount
Anniversary Date terminated or
permanently
reduced
After second Anniver- 1% of amount
sary Date but on or terminated or
prior to third permanently
Anniversary Date reduced
5.3 REPAYMENT OF TERM LOANS. GDT shall repay the principal of
the Term Loans in accordance with the terms of the Term Notes as described
in SECTION 2.1(a).
<PAGE>
<PAGE> EX-10.26-55
5.4 VOLUNTARY PREPAYMENTS OF TERM LOANS. GDT may prepay the
principal of the Term Loans in whole or in part at any time and from time
to time upon at least five (5) Business Days' prior written notice to the
Agent and the Lenders and upon payment of a prepayment premium in an amount
equal to the percentage (determined in accordance with the following table)
of the principal amount to be prepaid:
Period in which
prepayment occurs Prepayment Premium
----------------- ------------------
On or prior to second 2% of principal
Anniversary Date amount prepaid
After second 1% of principal
Anniversary Date but amount prepaid
on or prior to third
Anniversary Date
All voluntary prepayments of the principal of the Term Loans shall be
accompanied by the payment of all accrued but unpaid interest on the Term
Loans to the date of prepayment. Any voluntary prepayment under this
SECTION 5.4 of less than all of the outstanding principal of a Term Loan
shall be in an aggregate minimum amount of $1,000,000, and integral
multiples of $1,000,000 in excess of that amount, and shall be applied to
reduce the amount of each of the remaining installments of principal of
such Term Loan in inverse order of maturity.
5.5 MANDATORY PREPAYMENTS OF THE TERM LOANS. GDT shall prepay
the entire unpaid principal balance of the Term Loans, and all accrued but
unpaid interest thereon, (a) upon the termination of this Agreement for any
reason and (b) if any Borrower makes a Distribution to Holdings by any
means other than those described in clauses (a) and (b) of the definition
of "Distribution" in SECTION 1.1. GDT shall also be required to make
prepayments on the Term Loans as provided in SECTIONS 7.10, 10.5 and 10.6.
Any prepayment under this SECTION 5.5 of less than all of the outstanding
principal amount of the Term Loans shall be applied either (a) to the
remaining installments of principal of the Term Loans in the inverse order
of maturity if the proceeds (together with the value of any property
acceptable to the Majority Lenders which is substituted as Collateral) are
less than the Net Collateral Value of the property the loss, damage,
destruction or other disposition of which resulted in the prepayment or (b)
ratably to each of the remaining installments of principal of the Term
Loans if the proceeds (together with the value of any property acceptable
to the Majority Lenders which is substituted as Collateral) exceed or equal
the Net Collateral Value of the property the loss, damage, destruction or
other disposition of which resulted in the prepayment. GDT shall pay a
prepayment premium in accordance with SECTION 5.4 of the principal amount
prepaid upon any prepayment of Term Loans required or permitted under this
Agreement except for prepayments required or permitted under CLAUSE (b) of
the first sentence of this SECTION 5.5, SECTIONS 7.10, 10.5 and 10.6 or
upon termination pursuant to SECTION 12.2.
5.6 MANNER, TIME AND APPORTIONMENT OF PAYMENTS.
(a) PLACE AND FORM OF PAYMENTS. All payments of principal,
interest, fees, premiums and other sums payable hereunder to the Agent
and/or any Lender shall be made without condition or reservation of right
and
<PAGE>
<PAGE> EX-10.26-56
(except for proceeds of Collateral received directly by the Agent) in same
day funds and delivered to the Agent not later than 12:00 noon (New York
time) on the date due to such account of the Agent as the Agent may
designate, for the account of the Agent and/or such Lender, as the case may
be. Funds received by the Agent after that time shall be deemed to have
been paid on the next succeeding Business Day. If any payment of
principal, interest, fees, premiums or other sums payable hereunder becomes
due and payable on a day other than a Business Day, the due date of such
payment shall be extended to the next succeeding Business Day and interest
thereon shall be payable at the applicable Interest Rate during such
extension.
(b) PAYMENTS AS REVOLVING LOANS. All payments of principal,
interest, fees, premiums and other sums due and payable hereunder,
including all Letter of Credit Reimbursement Obligations, Banker's
Acceptance Reimbursement Obligations and reimbursements for expenses
pursuant to SECTION 16.6, may, at the option of the Agent, in its sole dis-
cretion, subject only to the terms of this SECTION 5.6, be paid from the
proceeds of Revolving Loans made hereunder, whether made following a
request by a Borrower pursuant to SECTION 2.2 or a deemed request as
provided in this SECTION 5.6(b) Each of the Borrowers hereby irrevocably
authorizes and directs the Agent to make, and subject to the limitations of
SECTION 2.2(a) the Agent acknowledges that it will make, Revolving Loans in
an amount sufficient to pay principal and interest due the Agent or the
Lenders under this Agreement. Each of the Borrowers hereby irrevocably
authorizes the Lenders to make Revolving Loans upon notice from the Agent
as described in the next succeeding sentence, for the purpose of paying
fees, premiums and other sums payable hereunder, including Letter of Credit
Reimbursement Obligations and Banker's Acceptance Reimbursement
Obligations, and, after notice (either in writing or orally and promptly
confirmed in writing) to GDT and failure to pay, reimbursing expenses
pursuant to SECTION 16.6, and agrees that all such Revolving Loans so made
shall be deemed to have been requested by it pursuant to SECTION 2.1, as of
the date of the aforementioned notice. The Agent shall request Revolving
Loans on behalf of the Borrowers as described in the immediately preceding
sentence by notifying the Lenders by telex, telecopy, telegram, telephone
or other similar form of transmission, of the amount and Funding Date of
the requested Borrowing and that such Borrowing is being requested on the
Borrowers' behalf pursuant to this SECTION 5.6(b). On the requested
Funding Date, as applicable, the Lenders will make the requested Revolving
Loans in accordance with the procedures and subject to the conditions
specified in SECTION 2.2. Any Revolving Loan deemed requested as provided
in this SECTION 5.6(b) shall be a Reference Rate Loan.
(c) CREDIT FOR PAYMENTS. All payments received by the Agent as
proceeds of Accounts or other Collateral whether through deposit into the
BABC Account or otherwise will be the sole property of the Agent, for the
benefit of the Secured Creditors, and will be credited to the BABC Account
as follows: (i) all cash payments received by the Agent at the BABC
Account in New York, New York, including, without limitation, payments made
by wire transfer of immediately available funds, received by the Agent at
or prior to 4:00 p.m. (New York time) on any Business Day will be credited
to the BABC Account as of the date received; (ii) all cash payments
received by the Agent at the BABC Account in New York, New York, including,
without limitation, payments made by wire transfer of immediately available
funds received by the Agent after 4:00 p.m. (New York time) on any Business
Day will be credited to the BABC Account as of the next succeeding Business
Day; and (iii) all payments in the form of checks and other instruments
received by the Agent at
<PAGE>
<PAGE> EX-10.26-57
the BABC Account in New York, New York will be credited to the BABC Account
upon collection of immediately available funds in connection therewith.
(d) APPORTIONMENT OF PAYMENTS. Aggregate principal and interest
payments (other than principal and interest payments with respect to BA
Revolving Loans prior to the related Settlement Date or with respect to
Over Advances) and payments with respect to participations in Letters of
Credit and Banker's Acceptances shall be apportioned ratably among all
Lenders holding outstanding Loans or participations in Letters of Credit or
Banker's Acceptances to which such payments relate (according to the unpaid
principal balance thereof or participation therein held by each such
Lender) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders. All payments shall be remitted to the Agent and
all such payments not relating to principal or interest of specific Loans
or participations in Letters of Credit or Banker's Acceptances, or not
constituting payment of specific fees, and all proceeds of Accounts or
other Collateral received by the Agent from or as to the Borrowers, shall
be applied, ratably, subject to the provisions of this Agreement, FIRST, to
pay any fees, expense reimbursements or indemnities then due to the Agent
from the Borrowers; SECOND, to pay any fees, expense reimbursements or
indemnities then due to the Lenders from the Borrowers; THIRD, to pay
interest due in respect of Over Advances; FOURTH, to pay or prepay
principal of Over Advances; FIFTH, to pay interest in respect of the BA Re-
volving Loans; SIXTH, to pay or prepay principal of BA Revolving Loans;
SEVENTH, to pay interest due in respect of all Loans (other than the BA
Revolving Loans) and Letter of Credit Obligations and Banker's Acceptance
Obligations; EIGHTH, to pay or prepay principal of the Revolving Loans
(other than the BA Revolving Loans) and to pay, prepay or provide cash
collateral in respect of Letter of Credit Obligations and Banker's
Acceptance Obligations; NINTH, to pay or prepay principal of the Term
Loans; and TENTH, to the payment of any other Obligation due to any Secured
Creditor by the Borrowers. The Agent shall promptly distribute to each
Lender at its address set forth on the appropriate signature page hereof,
or at such other address as such Lender may request in writing, such funds
as it may be entitled to receive.
5.7 INDEMNITY FOR RETURNED PAYMENTS. If after receipt of, or
proceeds applied to, the payment of, all or any part of the Obligations,
the Agent or any Lender is compelled to surrender such payment or proceeds
to any Person, because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or
voidable as a preference, impermissible set off, or a diversion of trust
funds, or for any other reason, then the Obligations or part thereof
intended to be satisfied shall be revived and continue and this Agreement
shall continue in full force as if such payment or proceeds had not been
received by the Agent or such Lender and the Borrowers shall be jointly and
severally liable to pay to the Agent or such Lender, and hereby indemnify
the Agent or such Lender and hold the Agent or such Lender harmless for,
the amount of such payment or proceeds surrendered. The provisions of this
SECTION 5.7 shall be and remain effective notwithstanding any contrary
action which may have been taken by the Agent or such Lender in reliance
upon such payment or application of proceeds, and any such contrary action
so taken shall be without prejudice to the Agent or such Lender's rights
under this Agreement and shall be deemed to have been conditioned upon such
payment or application of proceeds having become final and irrevocable.
The provisions of this SECTION 5.7 shall survive the termination of this
Agreement.
<PAGE>
<PAGE> EX-10.26-58
6. AGENT'S AND LENDERS' BOOKS AND RECORDS;
MONTHLY STATEMENTS.
6.1 AGENT'S AND LENDERS' BOOKS AND RECORDS; MONTHLY STATEMENTS.
Each of the Borrowers agrees that the Agent's books and records showing the
Obligations and the transactions pursuant to this Agreement and the other
Loan Documents shall be admissible in any action or proceeding arising
therefrom, and shall constitute prima facie proof thereof, irrespective of
whether any Obligation is also evidenced by a promissory note or other in-
strument. The Agent will provide to the Borrowers a monthly statement of
Loans, Letters of Credit, Banker's Acceptances, payments, and other trans-
actions pursuant to this Agreement. Such statement shall be deemed
correct, accurate and binding upon the Borrowers and an account stated
(except for returned payments as provided in SECTION 5.7 and corrections of
errors discovered by the Agent), unless GDT, on behalf of the Borrowers,
notifies the Agent in writing to the contrary within forty-five (45) days
after such statement is received by GDT. Notwithstanding the foregoing,
each of the Borrowers acknowledges that the Agent may charge the BABC
Account with all customary fees, charges and expenses (including any
increases in such fees and charges which occur after the Effective Date)
owing to or incurred by the Agent in connection with the administration of
this Agreement, the Loans, Letters of Credit, Banker's Acceptances or the
Loan Documents and that the Borrowers shall not object to the monthly
statements on the basis of the amount, frequency or timing of such charges.
In the event a timely written notice of objections is given by the
Borrowers, only the items to which exception is expressly made will be
considered to be disputed by the Borrowers.
7. COLLATERAL.
7.1 GRANT OF SECURITY INTEREST. (a) To secure the prompt,
complete payment and performance of all Obligations, each of the Borrowers
hereby grants to the Agent, and reaffirms its grant under the Original
Agreement to the Agent of, for the ratable benefit of the Secured
Creditors, a continuing security interest in, lien on, and to the extent
necessary to grant a security interest or lien against, a collateral
assignment of, and right of set off against all of the following property
of such Borrower, whether now owned or existing or hereafter acquired or
arising and regardless of where located:
(i) all Accounts, contract rights, chattel paper, instru-
ments, notes, documents, and documents of title;
(ii) General Intangibles;
(iii) Inventory;
(iv) Equipment;
(v) all moneys, securities and other property of any kind
of such Borrower in the possession or under the control of any
Lender, the Agent or a bailee or affiliate of any Lender or the
Agent;
(vi) all of such Borrower's deposit accounts, credits, and
balances with and other claims against any Lender, the Agent or
any of their respective affiliates or any other financial
institution with which such Borrower maintains deposits;
<PAGE>
<PAGE> EX-10.26-59
(vii) all books, records and other property relating to or
referring to any of the foregoing, including, without limitation,
all books, records, ledger cards, data processing records, com-
puter software and other property and general intangibles at any
time evidencing or relating to any of the foregoing; and
(viii) all accessions to, substitutions for and replacements,
products and proceeds of any of the foregoing, including, but not
limited to, proceeds of any insurance policies, claims against
third parties, and condemnation or requisition payments with
respect to all or any of the foregoing.
All of the foregoing, together with all other Property in which the Agent,
for the ratable benefit of the Secured Creditors, may at any time be
granted a Lien, is herein collectively referred to as the "Collateral";
PROVIDED, HOWEVER, that the grant of security interest, lien and assignment
to the Agent for the ratable benefit of the Secured Creditors does not and
shall not include: (i) a security interest in any property described on
SCHEDULE 7.1(a) (all such property being hereinafter referred to
collectively as the "Excluded Property") and (ii) any and all rights,
interests, claims and other intangible property of GDT under that certain
Sale, Installation and Technical Assistance Agreement among GDT, GDTI and
Graaf KG, dated November 14, 1983.
(b) As additional security for the Obligations, GDT (i) pursuant
to the Original Agreement executed and delivered to SPBC, as Agent under
the Original Agreement, the Mortgages pursuant to which GDT granted to the
Agent, for the ratable benefit of the Secured Creditors, continuing and
perfected mortgage liens on the Real Estate described in Part I of SCHEDULE
1.1-E, (ii) shall, on or prior to the Initial Term Funding Date or, in the
event that the Agent or any Lender has not received appraisals in form and
substance satisfactory to it with respect to any Real Estate on or before
the Initial Term Funding Date, on or prior to the Real Estate Term Funding
Date (or, in the event that the Real Estate Term Funding Date shall not
occur with respect to any Real Estate, on or prior to May 15, 1995),
execute and deliver to the Agent (x) the Mortgages pursuant to which GDT
shall grant to the Agent, for the ratable benefit of the Secured Creditors,
continuing and perfected mortgage liens on the Real Estate described in
Part II of SCHEDULE 1.1-E and (y) amendments to, and other documents and
instruments in connection with, the Mortgages delivered in connection with
the Original Agreement (collectively, the "Mortgage Amendment Documents"),
as the Agent may, in its sole discretion, deem necessary or proper,
PROVIDED however that in the event that the Real Estate Term Funding Date
shall not occur with respect to any Real Estate, GDT shall not be required
to deliver environmental reports with respect to any such Real Estate and
(iii) shall, promptly at the request of the Agent, execute and deliver to
the Agent (x) a Mortgage with respect to the Real Estate in Terre Haute,
Indiana, PROVIDED, however, THAT in the event that any Person other than
the Lenders provides any financing with respect to the Equipment located on
any such Real Estate, GDT shall not be required to deliver any such
Mortgage, and a Mortgage with respect to the Real Estate described in
SCHEDULE 7.1(b) hereof and (y) such other documents and instruments
(including without limitation a survey and title insurance policy) with
respect to such Real Estate, as the Agent, in its sole discretion may
request.
(c) All of the Obligations are and shall be secured by all of
the Collateral; PROVIDED, HOWEVER, that the Revolving Loans shall not be
secured
<PAGE>
<PAGE> EX-10.26-60
by the Mortgages executed with respect to the Real Estate in the States of
Florida, Georgia, Ohio and Alabama.
7.2 PERFECTION AND PROTECTION OF SECURITY INTEREST. Each of the
Borrowers shall, at its expense, perform, or cause to be performed by SPBC
or any other Person, all steps reasonably requested by the Agent at any
time to perfect, maintain, protect, and enforce its Liens in the Collateral
including, without limitation: (a) executing and recording of the Patent
Agreement and Trademark Agreement and executing and filing financing or
continuation statements, and amendments thereof, in form and substance
satisfactory to the Agent; (b) delivering to the Agent the original
certificates of title for Equipment consisting of motor vehicles and trail-
ers with the Agent's security interest properly endorsed thereon, and
taking any action required to have the Agent's security interest noted on
any such certificate of title; (c) delivering to the Agent the originals of
all instruments, documents, and chattel paper, and all other Collateral of
which the Agent determines it should have physical possession in order to
perfect and protect the Agent's security interest therein, duly endorsed or
assigned to the Agent without restriction; (d) delivering to the Agent
warehouse receipts covering any portion of the Collateral located in
warehouses and for which warehouse receipts are issued; (e) placing
notations on the Borrowers' books of account to disclose the Agent's
security interest; (f) delivering to the Agent all letters of credit on
which any Borrower is named beneficiary; (g) executing and delivering the
Borrower Pledge Agreement, accompanied by the stock certificates and stock
powers referred to therein; (h) executing and delivering the Mortgages or
Mortgage Amendment Documents, as the case may be; (i) executing and
delivering the Trademark Agreement and (j) taking such other steps as are
deemed necessary by the Agent to maintain and protect its Liens. To the
extent permitted by applicable law, the Agent may file, without the
signature of any Borrower, one or more financing statements disclosing its
Liens. The Borrowers agree that a carbon, photographic, photostatic, or
other reproduction of this Agreement or of a financing statement is suffi-
cient as a financing statement.
If any Collateral in excess of $500,000 in the aggregate is at
any time in the possession or control of any warehouseman, bailee or any
agents or processors of any Borrower, then such Borrower shall notify the
Lender thereof and shall notify such Person of the Agent's security
interest in such Collateral and, upon the Agent's request, instruct such
Person to hold all such Collateral for the Agent's account subject to the
Agent's instructions. If at any time any Collateral is located on any
premises that are not owned by any Borrower, then the Borrowers shall
obtain, at the request of the Agent, written waivers, in form and substance
satisfactory to the Agent, of all present and future Liens to which the
owner or lessor or any mortgagee of such premises may be entitled to assert
against the Collateral. In the event the Borrower fails to deliver such
written waivers the Agent may establish reasonable reserves based upon
rentals due under the applicable lease and the likelihood that the
Collateral may not be accessible to the Agent.
From time to time, each of the Borrowers shall, upon the Agent's
request, execute and deliver confirmatory written instruments pledging to
the Agent, for the benefit of the Secured Creditors, the Collateral, but
any Borrower's failure to do so shall not affect or limit the Agent's
security interest or the Agent's or any Lender's other rights in and to the
Collateral. So long as this Agreement is in effect and until all
Obligations have been fully satisfied, the Agent's Liens shall continue in
full force and effect in all Collateral.
<PAGE>
<PAGE> EX-10.26-61
7.3 LOCATION OF COLLATERAL. Each of the Borrowers represents
and warrants to the Agent and the Lenders that: (a) SCHEDULE 7.3-A is a
correct and complete list of each Borrower's chief executive office, the
location of its books and records, the locations of the Collateral (except
for not more than $500,000 in the aggregate of used Inventory and $500,000
in the aggregate for Collateral used in trade shows and demonstrations),
and the locations of all of its other places of business; and (b)
SCHEDULE 7.3-B correctly identifies any of such facilities and locations
that are not owned by a Borrower and sets forth the names of the owners and
lessors or sublessors of, and, to the best of the Borrowers' knowledge, the
holders of any mortgages on, such facilities and locations. Each of the
Borrowers covenants and agrees that it will not maintain any Collateral at
any location other than those listed on SCHEDULE 7.3-A, (except for not
more than $500,000 in the aggregate for all Borrowers of used Inventory and
$500,000 in the aggregate for all Borrowers for Collateral used in trade
shows and demonstrations) and it will not otherwise change or add to any of
such locations, unless it gives the Agent at least thirty (30) days' prior
written notice thereof and executes any and all financing statements and
other documents that the Agent requests in connection therewith.
7.4 TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL. Each
of the Borrowers represents and warrants to the Agent and the Lenders and
agrees with the Agent and the Lenders that: (a) all Collateral is and will
continue to be owned by the Borrowers free and clear of all Liens
whatsoever, except for Permitted Liens; (b) the Agent's Liens in the
Collateral will not be subject to any prior Lien except for Permitted
Liens; (c) each of the Borrowers will use, store, and maintain the
Collateral with all reasonable care and will use the Collateral for lawful
purposes only; (d) upon the Agent's reasonable request, Accounts due from
the United States or any agency or department of the United States shall be
duly assigned to the Agent, for the ratable benefit of the Secured
Creditors, in full compliance with the Federal Assignment of Claims Act (31
U.S.C.A. Section 3727 et seq.); and (e) none of the Borrowers will, without
the Majority Lenders' prior written approval, sell, or dispose of or permit
the sale or disposition of any Collateral, except for sales of Inventory in
the ordinary course of business, and sales of Equipment as permitted by
SECTION 7.10. The inclusion of proceeds in the Collateral shall not be
deemed to constitute any Lender's consent to any sale or other disposition
of the Collateral except as expressly permitted herein.
7.5 APPRAISALS. Whenever a Default or Event of Default exists,
each of the Borrowers shall, at its expense and upon the Agent's request,
provide the Agent with appraisals (or updates thereof) of any or all of the
Collateral from an appraiser, and prepared on a basis, satisfactory to the
Agent.
7.6 ACCESS AND EXAMINATION. The Agent and the Lenders may
during the Borrowers' normal business hours (and at any time when a Default
or Event of Default exists) have access to, examine, audit, make extracts
from and inspect the Borrowers' records, files, and books of account and
the Collateral, and discuss the Borrowers' affairs with the Borrowers'
officers and management. Each of the Borrowers will deliver to the Agent
and the Lenders any instrument necessary for the Agent and the Lenders to
obtain records from any service bureau maintaining records for such
Borrower. The Agent and the Lenders may, at any time when a Default or
Event of Default exists, and at the Borrowers' expense, make copies of all
of the Borrowers' books and records, or require any Borrower to deliver
such copies to the Lenders. The Agent and the Lenders may, without expense
to the Agent or any
<PAGE>
<PAGE> EX-10.26-62
Lender, use such of the Borrowers' personnel, supplies, and premises as may
be reasonably necessary for maintaining or enforcing the Agent's Liens.
7.7 COLLATERAL REPORTING. Each of the Borrowers will provide
the Agent with the following documents at the following times in such form
and in such detail as requested by the Agent: (a) on a weekly basis, a
schedule of Accounts created, collected or credited since the last such
schedule, and, at the Agent's reasonable request, copies of invoices and/or
contracts therefor; (b) at the Agent's reasonable request, copies of
customer statements and credit memos, remittance advices and reports, and
copies of deposit slips; (c) upon the Agent's reasonable request, copies of
shipping and delivery documents; (d) monthly inventory reports by category;
(e) monthly agings of accounts payable (excluding any accounts payable on
behalf of GDT's branch system or the Wayne, Nebraska plant); (f) upon the
Agent's reasonable request, copies of purchase orders, invoices and
delivery documents for Inventory and Equipment acquired by such Borrower;
(g) on a weekly basis, an aging of Accounts; (h) such other reports as to
the Collateral as the Lenders shall reasonably request from time to time;
and (i) with the delivery of each of the foregoing, a certificate of the
chief financial officer of each of the Borrowers certifying as to the accu-
racy and completeness in all material respects of the foregoing; PROVIDED,
HOWEVER, that notwithstanding anything to the contrary contained herein,
each of the Borrowers shall provide the reports described in this Section
7.7 on a daily basis at any time upon the Agent's request if, and for so
long as, the Aggregate Availability shall be less than $5,000,000 at such
time. If any of the Borrowers' records or reports of the Collateral are
prepared by an accounting service or other agent, each of the Borrowers
hereby authorizes such service or agent to deliver such records, reports,
and related documents to the Agent and the Lenders. GDT will upon the
Agent's request also provide to the Agent the reports required by any Floor
Plan Financing Agreements.
7.8 COLLECTIONS AND CONCENTRATION ACCOUNT ARRANGEMENTS. (a)
The Agent reserves the right to, or to have Agent's designee, at any time
after the occurrence of an Event of Default, notify Account Debtors that
the Accounts have been assigned to the Agent and of the Agent's security
interest therein, and to collect Accounts directly. Any collection costs
and expenses incurred by the Agent shall be Obligations hereunder secured
by the Collateral, shall bear interest at the rates provided herein for
Reference Rate Loans and shall be charged to the Loan Account as Revolving
Loans. At the Agent's request after the occurrence of an Event of Default,
each of the Borrowers shall execute and deliver to the Agent such documents
as the Agent shall require to establish lock boxes and to grant the Agent
access to any post office box in which collections of Accounts are
received.
(b) All collections of Accounts of the Borrowers and other
proceeds of Collateral of the Borrowers shall be deposited into a Con-
centration Account, either directly or following the deposit thereof in a
Depositary Account, under arrangements established by the Borrowers and
acceptable to the Agent. If sales of Inventory are made for cash, the
Borrowers shall immediately deposit into a Depositary Account or
Concentration Account the identical checks, cash, or other forms of payment
which the Borrowers received. Each Borrower shall direct each of the banks
at which Depositary Accounts are established to transfer, by same-day
depositary transfer credit, ACH Transfer or Fed Wire transfer, on a daily
basis all amounts on deposit in such Depositary Account to a Concentration
Account. The Concentration Accounts shall be maintained on terms
acceptable to the Agent, subject to agreements ("Restricted Account
Agreements") among such Borrower, the Agent and the relevant financial
institution, to the
<PAGE>
<PAGE> EX-10.26-63
effect that such financial institution shall remit all amounts deposited in
the applicable Concentration Account to the Agent or as the Agent may
direct. All funds in the Concentration Account shall be subject to the
sole dominion and control of the Agent. On or before the Effective Date,
the Borrower shall deliver to the Agent a Restricted Account Agreement
relating to all Concentration Accounts then in existence and with respect
to which no Restricted Account Agreement had previously been delivered.
The Borrowers jointly and severally agree to indemnify each Lender and the
Agent against, and reimburse each on demand for, all costs (without
duplication) incurred by the Agent or any Lender in connection with any
Restricted Account Agreement. Notwithstanding the termination of this
Agreement, until all of the Obligations shall have been fully paid and
satisfied, the Borrower shall continue to deposit, or cause to be depos-
ited, into a Concentration Account all collections of Accounts and other
proceeds of Collateral. The Agent shall apply, or cause to be applied, all
amounts on deposit in the Concentration Accounts to the repayment or
prepayment of any Obligations (other than Eurodollar Rate Loans) and, in
the event GDT on behalf of any Borrower fails to reborrow any excess
amount, shall cause such excess to be held on behalf of the Agent in a
Concentration Account or other cash collateral account on terms and
conditions acceptable to the Agent.
(c) In the event the Borrowers repay all of the Obligations and
have complied with SECTION 3A.10, upon termination of this Agreement or
after acceleration by the Agent, any amounts in excess of the amount
necessary to pay the Obligations in full and comply with SECTION 3A.10
shall be returned to the Borrowers one (1) Business Day after the Agent's
unconditional and final collection of such funds.
7.9 ACCOUNTS; INVENTORY. Each of the Borrowers represents and
warrants to the Agent and the Lenders and agrees with the Agent and the
Lenders with respect to each of the Accounts scheduled pursuant to SECTION
7.7 that (i) it is genuine and in all respects what it purports to be, and
not evidenced by a judgment; (ii) it represents a bona fide transaction
completed in accordance with the terms and provisions contained in the
documents maintained by the Borrowers and any documents delivered to the
Agent with respect thereto; (iii) except as disclosed on the schedule of
Accounts delivered to the Agent pursuant to SECTION 7.7, there are no
setoffs, counterclaims or disputes existing or asserted with respect
thereto and the Borrowers have not made any agreement with any Account
Debtor for any deduction therefrom except a discount or allowance made in
the ordinary course of the Borrowers' business as conducted on the
Effective Date; (iv) except as disclosed on the schedule of Accounts
delivered to the Agent pursuant to SECTION 7.7, there are no facts, events
or occurrences which in any way impair the validity or enforcement thereof
or tend to reduce the amount payable thereunder; (v) the services furnished
and/or goods sold giving rise thereto are not subject to any Lien other
than a lien in favor of the Agent.
Each of the Borrowers represents and warrants to the Agent and
the Lenders and agrees with the Agent and the Lenders that all of the
Inventory is and will be held for sale or lease, or to be furnished in
connection with the rendition of services, in the ordinary course of such
Borrower's business, and is and will be fit for such purposes. Each of the
Borrowers will keep the Inventory in good and marketable condition, at its
own expense. None of the Borrowers will, without prior written notice to
the Agent, acquire or accept any Inventory on consignment or approval. The
Borrowers agree that all Inventory will be produced in accordance with the
Federal Fair Labor Standards Act of 1938, as amended, and all rules,
regulations, and
<PAGE>
<PAGE> EX-10.26-64
orders thereunder. Each Borrower will maintain a perpetual inventory
reporting system at all times and will report finished goods to the Agent
and each Lender on a monthly physical basis. Each Borrower will maintain
inventory monitoring systems in accordance with its customary business
practice on the Effective Date, including, without limitation, a "constant
cycle count" of raw materials. No Borrower will (i) redate any invoice or
(ii) sell any Inventory on a bill-and-hold (other than Permitted Bill and
Hold Sales), guaranteed sale, sale and return, sale on approval,
consignment, or other repurchase or return basis; PROVIDED, HOWEVER, that
the Borrowers may (a) make sales on consignment the total of which at any
one time shall not exceed $250,000 in the aggregate for all Borrowers, (b)
make sales on a repurchase basis in the ordinary course of their business
as conducted on the Effective Date, and (c) make sales described in SECTION
10.12(c)(i). The Borrowers have informed the Agent and the Lenders, and
the Agent and the Lenders agree and acknowledge, that the Borrowers from
time to time issue manufacturer's statements of origin to their customers
prior to the commencement or completion of their manufacturing process and
that for purposes of determining eligibility of raw materials under this
Agreement the mere issuance of manufacturer's statements of origin shall
not make otherwise Eligible Inventory consisting of raw materials
ineligible. Each Borrower represents and warrants to, and agrees with, the
Agent and Lenders that, except as to those transactions where such Borrower
has issued its manufacturer's statement of origin as described in this
SECTION 7.9 above, at no time shall any of such Borrower's Inventory
consisting of new completed trailers be or become the subject of a
certificate of title or other similar title document issued by any Public
Authority, or of any application therefor.
7.10 EQUIPMENT. Each of the Borrowers represents and warrants
to the Agent and Lenders and agrees with the Agent and the Lenders that all
of the Equipment is and will be used or held for use in such Borrower's
business, and is and will be fit for such purposes. Each of the Borrowers
shall keep and maintain its Equipment in good operating condition and
repair (ordinary wear and tear excepted) and shall make all necessary
replacements thereof. Each of the Borrowers shall promptly inform the
Agent of any additions to or deletions from its Equipment in excess of
$100,000 individually, and $500,000 in the aggregate for all Borrowers in
any Fiscal Year. None of the Borrowers shall permit at any time Equipment
having an aggregate value in excess of $100,000 to become a fixture to real
property or an accession to other personal property, unless the Agent has a
valid, perfected, and first priority Lien in such real or personal
property. None of the Borrowers will, without the Agent's prior written
consent, alter or remove any identifying symbol or number on the Equipment.
None of the Borrowers shall, without the Lenders' prior written consent,
sell, lease as a lessor, or otherwise dispose of any of the Equipment;
PROVIDED, HOWEVER, that the Borrowers may dispose of obsolete or unusable
Equipment having an orderly liquidation value no greater than $100,000
individually, and $500,000 in the aggregate for all Borrowers in any Fiscal
Year, without the Majority Lenders' consent, so long as, (a) if such sale,
transfer or disposition is effected without replacement of such Equipment,
or such Equipment is replaced by Equipment leased by a Borrower or by
Equipment purchased by a Borrower subject to a Lien, then such Borrower
shall deliver the net cash proceeds of any such sale, transfer or
disposition to the Agent, which proceeds shall be applied to the repayment
of the Term Loans as provided under SECTION 5.5, or (b) if such sale,
transfer or disposition is made in connection with the purchase by such
Borrower of comparable Equipment (other than Equipment subject to a Lien),
then such Borrower shall use the proceeds of such sale, transfer or dis-
position to finance the purchase by such Borrower of such comparable
Equipment and shall
<PAGE>
<PAGE> EX-10.26-65
deliver to the Agent written evidence of the use of the proceeds for such
purchase. All replacement Equipment purchased by such Borrower shall be
free and clear of all Liens, claims and encumbrances, except for Permitted
Liens.
7.11 DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER. Each of the
Borrowers represents and warrants to the Lender and agrees with the Lender
that (a) all documents, instruments, and chattel paper describing,
evidencing, or constituting Collateral, and all signatures and endorsements
thereon, are and will be complete, valid, and genuine and (b) all goods
evidenced by such documents, instruments, and chattel paper are and will be
owned by a Borrower free and clear of all Liens other than Permitted Liens.
Each of the Borrowers warrants the value, quantities, sound condition,
grades and qualities of the goods described in such documents, instruments,
and chattel paper.
7.12 RIGHT TO PERFORM OR CURE. The Agent may, in its reasonable
discretion and at any time, for any Borrower's account and at the
Borrowers' expense, pay any amount or do any act required of any Borrower
hereunder or reasonably requested by the Agent to preserve, protect,
maintain or enforce the Obligations or the Collateral or the Agent's Liens
therein, and which any Borrower fails to pay or do, including, without
limitation, payment of any judgment against any Borrower, any insurance
premium, any warehouse charge, any finishing or processing charge, any
landlord's claim, any other Lien upon or with respect to the Collateral;
PROVIDED, THAT, if no Default or Event of Default exists and the Borrowers
(a) are contesting the tax, charge, assessment, fee or other expense in
good faith and by appropriate proceedings diligently pursued, (b) have
established adequate reserves with respect to such taxes, charges,
assessments, fees or other expenses required by GAAP, if any, and (c) no
Lien, other than a Permitted Lien, results from such non-payment, the
Borrower shall have the right to contest such expenses and the Agent shall
not pay such expenses. Notwithstanding the limitations set forth in the
immediately preceding sentence, the Agent may, in its reasonable discretion
and at any time, for any Borrower's account and at the Borrowers' expense,
pay insurance premiums due and payable relating to insurance policies
covering the Real Estate, the Collateral or both. The Agent may make all
such payments according to any bill, statement or estimate received without
inquiring into the accuracy of such bill, statement or estimate or into the
validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof. All payments that the Agent makes under this SECTION 7.12
and all reasonable out-of-pocket costs and expenses that the Agent pays or
incurs in connection with any action taken by it hereunder shall be
Obligations hereunder secured by the Collateral, shall bear interest at the
rates provided herein for Reference Rate Loans and shall be charged to the
Borrowers' Loan Account as a Revolving Loan. Any payment made or other
action taken by the Agent under this SECTION 7.12 shall be without
prejudice to any right to assert an Event of Default hereunder and to
proceed thereafter as herein provided.
7.13 POWER OF ATTORNEY. Each of the Borrowers hereby appoints
the Agent and the Agent's designees as such Borrower's attorney, with
power: (a) when an Event of Default exists, to endorse such Borrower's
name on any checks, notes, acceptances, money orders, or other forms of
payment or security that come into the Agent's possession; (b) when an
Event of Default exists, to sign such Borrower's name on any invoice, bill
of lading, or other document of title relating to any Collateral, on drafts
against customers, on assignments of Accounts, on notices of assignment,
financing statements and other public records; (c) to notify the post
office authorities, when an
<PAGE>
<PAGE> EX-10.26-66
Event of Default exists, to change the address for delivery of such
Borrower's mail to an address designated by the Agent and to receive, open
and dispose of all mail addressed to such Borrower; (d) to send requests
for verification of accounts to customers or Account Debtors; and (e) when
an Event of Default exists, to do all things necessary to carry out this
Agreement. Each of the Borrowers ratifies and approves all acts of such
attorney. Neither the Agent nor the attorney will be liable for any acts
or omissions or for any error of judgment or mistake of fact or law. This
power, being coupled with an interest, is irrevocable until this Agreement
has been terminated and the Obligations have been fully satisfied.
7.14 THE AGENT'S AND THE LENDERS' RIGHTS, DUTIES AND
LIABILITIES. Each of the Borrowers assumes all responsibility and liabil-
ity arising from or relating to the use, sale or other disposition of the
Collateral except for liability resulting from the Agent's, any Lender's or
any of their respective attorneys' gross negligence or willful misconduct.
Neither the Agent nor any Lender and none of their respective officers,
directors, employees, and agents shall be liable or responsible in any way
for the safekeeping of any of the Collateral except to the extent of the
Agent's or any Lender's gross negligence or willful misconduct with respect
thereto, or for any loss or damage thereto, or for any diminution in the
value thereof, or for any act of default of any warehouseman, carrier,
forwarding agency or other person whomsoever, all of which shall be at the
Borrowers' sole risk. The Obligations shall not be affected by any failure
of the Agent to take any steps to perfect its Liens or to collect or
realize upon the Collateral, nor shall loss of or damage to the Collateral
release any Borrower from any of the Obligations. The Agent may (but shall
not be required to), without notice to or consent from any Borrower, sue
upon or otherwise collect, extend the time for payment of, modify or amend
the terms of, compromise or settle for cash, credit, or otherwise upon any
terms, grant other indulgences, extensions, renewals, compositions, or re-
leases, and take or omit to take any other action with respect to the
Collateral, any security therefor, any agreement relating thereto, any
insurance applicable thereto, or any Person liable directly or indirectly
in connection with any of the foregoing, without discharging or otherwise
affecting the liability of any Borrower for the Obligations or under this
Agreement or any other agreement now or hereafter existing between the
Agent and/or any Lender and any of the Borrowers.
8. BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES.
8.1 BOOKS AND RECORDS. Each of the Borrowers shall maintain,
at all times, correct and complete books, records and accounts in which
complete, correct and timely entries are made of its transactions in a
manner necessary to insure that the audited Financial Statements required
to be delivered pursuant to SECTION 8.2(a) shall be prepared in accordance
with GAAP, consistently applied. Each Borrower shall, by means of appro-
priate entries, reflect in such accounts and in all Financial Statements
liabilities and reserves for all taxes and provision for depreciation and
amortization of Property and bad debts, all in accordance with GAAP. Each
Borrower shall maintain at all times books and records pertaining to the
Collateral in such detail, form and scope as the Agent or the Majority
Lenders shall reasonably require, including, but not limited to, records of
(a) all payments received and all credits and extensions granted with re-
spect to the Accounts; (b) the return, rejections, repossession, stoppage
in transit, loss, damage, or destruction of any Inventory; and (c) all
other dealings affecting the Collateral. Each Borrower shall maintain at
all times books and records pertaining to the payment or making of
Distributions and the payment of all
<PAGE>
<PAGE> EX-10.26-67
taxes in such detail, form and scope as the Agent or the Majority Lenders
shall reasonably require.
8.2 FINANCIAL INFORMATION. Each of the Borrowers shall
promptly furnish to the Lenders all such financial information as the
Lenders shall reasonably request. Upon the Agents' or Lenders' request to
the Borrowers, the Agent and Lenders shall have the right to contact the
Borrowers' auditors and accountants, regarding (i) the audit report
delivered to the Lenders under SECTION 8.2(a), and (ii) with respect to
such audit report, the methodology used in preparing the audit report. The
Borrowers agree not to unreasonably withhold or delay their consent to the
Agent's or the Lenders' request to contact the Borrowers' auditors and
accountants; PROVIDED, THAT, nothing contained herein shall be deemed to
obligate the Borrowers to authorize their auditors and accountants to
disclose to the Agent or any Lender information regarding pending or
prospective matters to the extent that an accountants' privilege exists
with respect to such matters and such privilege has not otherwise been
waived by the Borrowers. Without limiting the foregoing, each of the
Borrowers will furnish or cause to be furnished to the Lenders, in such
detail as the Lenders shall request, the following:
(a) ANNUAL. As soon as available, but in any event not
later than one hundred-five (105) days after the close of each
Fiscal Year, (i) consolidated audited balance sheets, and
statements of income and expense, and cash flow statements and
statements of stockholders' investment for GDT and its Subsid-
iaries for such Fiscal Year, and the accompanying notes thereto,
and (ii) consolidating unaudited balance sheets, and statements
of income and expense for GDT and its Subsidiaries for such
Fiscal year, setting forth in each case in comparative form
figures for the previous Fiscal Year, all in reasonable detail,
fairly presenting the financial position and the results of
operations of GDT and its Subsidiaries as at the date thereof and
for the Fiscal Year then ended, and prepared in accordance with
GAAP. Such audited statements shall be examined in accordance
with generally accepted auditing standards by and accompanied by
a report thereon unqualified as to scope of independent certified
public accountants selected by GDT and reasonably satisfactory to
the Agent (it being expressly agreed that any nationally
recognized firm of independent public accountants which was a
former member of what was recognized as the "big eight"
accounting firms is acceptable to the Agent).
(b) MONTHLY. As soon as available, but in any event not
later than thirty (30) days after the end of each month, consol-
idated unaudited balance sheets of GDT and its Subsidiaries as at
the end of such month, and consolidated unaudited statements of
income and expenses and cash flow statements and statements of
stockholders' investment for GDT and its Subsidiaries for such
month and for the period from the beginning of the Fiscal Year to
the end of such month, all in reasonable detail, fairly
presenting the financial position and results of operations of
GDT and its Subsidiaries as at the date thereof and for such
periods, and prepared in accordance with GAAP applied consis-
tently with the audited Financial Statements required to be
delivered pursuant to SECTION 8.2(a). Such statements shall be
certified to be correct by the chief financial or accounting
officer of GDT, subject to normal year-end adjustments. In
addition, such statements shall be accompanied by a written
narrative prepared by GDT's chief financial officer explaining
and reconciling the material
<PAGE>
<PAGE> EX-10.26-68
variances, if any, in the performance of the Borrowers for the period
covered by such statements from the financial performance of the
Borrowers for such period projected in the projected financial
statements furnished by the Borrower pursuant to SECTION 8.2(e), which
such written narrative shall be in form and substance satisfactory to
the Agent.
(c) ACCOUNTANT'S CERTIFICATE. With each of the audited
Financial Statements delivered pursuant to SECTION 8.2(a), (i) a
certificate of the independent certified public accountants that
examined such statement to the effect that they have reviewed and
are familiar with this Agreement and that, in examining such
Financial Statements, they did not become aware of any fact or
condition which then constituted a Default or Event of Default,
except for those, if any, described in reasonable detail in such
certificate and (ii) a copy of each communication received by the
Borrowers or any of them from such independent certified public
accountants indicating any weaknesses in the internal control of
the Borrowers or any of them.
(d) OFFICER'S CERTIFICATE. With each of the annual audited
and monthly unaudited Financial Statements delivered pursuant to
SECTIONS 8.2(a) and 8.2(b) except with respect to CLAUSE
(d)(ii)(A) of this SECTION 8.2 which delivery shall be made on a
quarterly basis with the monthly unaudited Financial Statements
delivered pursuant to SECTION 8.2 (b), a certificate of the chief
executive or chief financial officer of GDT or, in the case of
the chief financial officer, his designee (i) setting forth in
reasonable detail the calculations required to establish that the
Borrowers were in compliance with the covenants set forth in
SECTION 10.24 and SECTION 10.25 during the period covered in such
Financial Statements and as at the end thereof, and (ii) stating
that, except as explained in reasonable detail in such cer-
tificate, (A) to the best of such officer's knowledge, all of the
representations and warranties of each of the Borrowers contained
in this Agreement and the other Loan Documents are correct and
complete as at the date of such certificate as if made at such
time, (B) each of the Borrowers is, at the date of such
certificate, in compliance with all of the covenants and agree-
ments in this Agreement and the other Loan Documents, and (C) no
Default or Event of Default then exists or existed during the
period covered by such Financial Statements. If such certificate
discloses that a representation or warranty is not correct or
complete, or that a covenant has not been complied with, or that
a Default or Event of Default existed or exists, such certificate
shall set forth what action the Borrowers have taken or proposes
to take with respect thereto.
(e) PROJECTIONS. No sooner than ninety (90) days and no
less than fifteen (15) days prior to the beginning of each Fiscal
Year, consolidated projected balance sheets, statements of income
and expense, and statements of cash flow for GDT and its
Subsidiaries as at the end of and for each month of such Fiscal
Year and the next succeeding Fiscal Year prepared on an annual
basis.
(f) EXPENDITURES AND CASH FLOW. Within forty-five (45)
days after the end of each fiscal quarter, a report of the
Capital Expenditures of the Borrowers for such quarter itemizing
expenditures in excess of $100,000 and showing the aggregate total
<PAGE>
<PAGE> EX-10.26-69
of all Capital Expenditures for such quarter and a statement of cash
flow for the Borrowers for the period from the beginning of the then
current Fiscal Year to the end of such quarter, prepared in accordance
with GAAP applied consistently with the audited Financial Statements
required to be delivered pursuant to SECTION 8.2(a).
(g) OTHER REPORTS. Simultaneously with the filing of such
documents with the SEC, Holdings' Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, and promptly after its
preparation, the Borrowers' monthly report delivered to Holdings.
(h) ERISA. Promptly after filing with the IRS, a copy of
each annual report (IRS Form 5500, with attachments) filed with
respect to each Benefit Plan of each of the Borrowers or any
Related Company.
(i) TAX RETURNS. Promptly after filing with the IRS, a
copy of each tax return filed by Holdings and each of the
Borrowers.
(j) ADDITIONAL INFORMATION. Such additional information as
the Lenders may from time to time reasonably request regarding
the financial and business affairs of GDT or any of Subsidiaries,
including, without limitation, projections of future operations
on a consolidated basis.
8.3 NOTICES TO THE AGENT. Each of the Borrowers shall notify
the Agent in writing of the following matters and deliver any information
or notices described therein at the following times:
(a) Immediately after becoming aware thereof, any Default
or Event of Default.
(b) Immediately after becoming aware thereof, the assertion
by the holder of any Debt in an outstanding principal amount in
excess of $250,000 that a default exists with respect thereto or
that the applicable Borrower is not in compliance with the terms
thereof, or the threat or commencement by such holder of any
enforcement action because of such asserted default or non-
compliance.
(c) Immediately after becoming aware thereof, any material
adverse change in any Borrower's or Guarantor's property,
business, operations, or condition (financial or otherwise).
(d) Immediately after becoming aware thereof, any pending
or threatened action, suit, proceeding, or counterclaim by any
Person, or any pending or threatened investigation by a Public
Authority, which could reasonably be expected to have a Material
Adverse Effect.
(e) Immediately after becoming aware thereof, any pending
or threatened strike, work stoppage, material unfair labor
practice claim, or other material labor dispute affecting any
Borrower.
(f) Immediately after becoming aware thereof, any violation
of any law, statute, regulation, or ordinance of Public Authority
applicable to GDT or any of its Subsidiaries or their respective
<PAGE>
<PAGE> EX-10.26-70
properties which could reasonably be expected to have a Material
Adverse Effect.
(g) Immediately after becoming aware thereof, any material
violation by any Borrower or Guarantor of any Environmental Law
or, immediately upon its receipt thereof, any notice that any
Borrower or Guarantor receives asserting that any Borrower or
Guarantor is or may be (i) liable to any Person in an amount in
excess of $100,000 as a result of the Release or threatened
Release of any Contaminant into the environment; or (ii) subject
to investigation by a Public Authority evaluating whether any
Remedial Action is needed to respond to the Release or threatened
Release of any Contaminant into the environment which could
reasonably be expected to result in liability to the Borrowers or
any of them in excess of $100,000; or (iii) subject to any
judicial or administrative proceeding alleging a material viola-
tion of any Environmental Law which could reasonably be expected
to result in liability to the Borrowers or any of them in excess
of $100,000; or (iv) subject to any new or proposed changes to
any Environmental Law which could reasonably be expected to
result in liability to the Borrowers or any of them in excess of
$100,000 or have a Material Adverse Effect; or (v) in violation
in any material respect of any Environmental Law; or (vi) that
its compliance with any Environmental Law, the noncompliance with
which could reasonably be expected to result in liability to the
Borrowers or any of them in excess of $100,000, is being investi-
gated by a Public Authority.
(h) Any change in any Borrower's or Guarantor's name, state
of incorporation, or form of organization, at least thirty (30)
days prior thereto.
(i) Any Termination Event with respect to a Plan within ten
(10) days after any Borrower or any Related Company knows or has
reason to know thereof, and, promptly after filing thereof, any
materials required to be filed with the PBGC with respect
thereto; immediately after the receipt by any Borrower or any
Related Company of any notice concerning the imposition of any
withdrawal liability under Title IV of ERISA with respect to a
Multiemployer Plan, a notification of such imposition of
withdrawal liability; within ten (10) days after any Borrower or
any Related Company fails to make a required installment or any
other required payment under Section 412 of the Code of a
material amount on or before the due date for such installment or
payment or any such failure that could result in the imposition
of a lien under Section 412(n) of the Code, a notification of
such failure; the establishment of any Benefit Plan or Plan
providing welfare benefits to terminated employees not required
by Section 601 of ERISA not existing at the Effective Date, or
any material increase in the benefits of any existing Plan or the
commencement of contributions by any Borrower to any
Multiemployer Plan to which such Borrower was not contributing at
the Effective Date, within forty-five (45) days after the end of
the fiscal quarter in which such event occurs; within
fifteen (15) days after any Borrower or a Related Company knows
or has reason to know (A) a Multiemployer Plan has been
terminated, (B) the administration or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan,
(C) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan or (D)
any Benefit Plan is
<PAGE>
<PAGE> EX-10.26-71
substantially likely to be terminated; within thirty (30) days after
any Borrower or a Related Company knows or has reason to know that a
prohibited transaction (defined in Section 406 of ERISA and Sec-
tion 4975 of the Code) has occurred that could result in the
imposition of a material penalty or tax under Section 4975 of the Code
or Section 502(i) of ERISA; immediately after filing with the IRS a
funding waiver request for any Plan, in each case accompanied by a
copy of such request and, subsequent thereto, copies of all communica-
tions received by any Borrower or a Related Company with respect to
such request; or immediately after becoming aware thereof, any other
event or condition regarding a Plan or any Borrower's or a Related
Company's compliance with ERISA or the employee benefit provisions of
the Code which could reasonably be expected to result in a lien upon
any property of any Borrower or any Related Company or to have a
Material Adverse Effect.
(j) If an Event of Default has occurred and is continuing
or would result therefrom, any proposed payment or declaration of
Dividends, at least three (3) days prior thereto.
Each notice given under this SECTION 8.3 shall describe the subject matter
thereof in reasonable detail, and shall set forth the action that the
applicable Borrower, Guarantor or Related Company has taken or proposes to
take with respect thereto. For purposes of this Section, each of the
Borrowers and any Related Company shall be deemed to know all facts known
by the administrator of any Plan of which any Borrower or any Related
Company is the plan sponsor.
9. GENERAL WARRANTIES AND REPRESENTATIONS.
Each of the Borrowers warrants and represents to the Lenders and
the Agent that:
9.1 AUTHORIZATION, VALIDITY, AND ENFORCEABILITY OF THIS
AGREEMENT AND THE LOAN DOCUMENTS. Each of the Borrowers had, in connection
with the Loan Documents executed and delivered, and the security interests
granted, pursuant to the Original Agreement, and has the corporate power
and authority to execute, deliver and perform this Agreement and the other
Loan Documents, to incur the Obligations, and to grant to the Agent
(whether SPBC as initial Agent under the Original Agreement, BankAmerica as
successor Agent under the Original Agreement or BankAmerica as Agent under
this Amended and Restated Agreement), for the ratable benefit of the
Secured Creditors, Liens upon, and security interests in, the Collateral.
Each of the Borrowers had, in connection with the Loan Documents executed
and delivered, and the security interests granted, pursuant to the Original
Agreement, and has taken all necessary corporate action (including, without
limitation, obtaining approval of its stockholders, if necessary) to
authorize its execution, delivery, and performance of this Agreement and
the other Loan Documents. No consent, approval, or authorization of, or
declaration or filing with, any Public Authority, and no consent of any
other Person was, in connection with Loan Documents executed and delivered
pursuant to the Original Agreement, or is required in connection with any
Borrower's execution, delivery, and performance of this Agreement and the
other Loan Documents, except for those already duly obtained. Each of this
Agreement and the other Loan Documents has been duly executed and delivered
by each of the Borrowers (other than the Term Notes and Mortgage Amendments
as to which this representation shall apply on and after the applicable
Term Funding Date), and constitutes the legal, valid and binding obligation
of each of the Borrowers parties thereto, enforceable against them in
accordance with its terms. The Borrowers'
<PAGE>
<PAGE> EX-10.26-72
execution, delivery, and performance of this Agreement and the other Loan
Documents did not, in connection with the Loan Documents executed and
delivered pursuant to the Original Agreement, do not and will not conflict
with, or constitute a violation or breach of, or constitute a default
under, or result in the creation or imposition of any Lien upon the
property of any Borrower or any of its or their respective Subsidiaries by
reason of the terms of (a) any contract, mortgage, Lien, lease, agreement,
indenture, or instrument to which such Borrower or such Subsidiary is a
party or which is binding upon it, (b) any Requirements of Law applicable
to such Borrower or such Subsidiary, or (c) the Certificate or Articles of
Incorporation or By-laws of such Borrower or such Subsidiary.
9.2 VALIDITY AND PRIORITY OF SECURITY INTEREST. The provisions
of this Agreement, the Mortgages and the other Loan Documents create legal
and valid Liens on all the Collateral in the Agent's favor for the ratable
benefit of the Secured Creditors, and such Liens constitute perfected and
continuing Liens on all the Collateral, having priority over all other
Liens on the Collateral except those Permitted Liens specifically
identified on SCHEDULE 1.1-D, securing all the Obligations, and enforceable
against each of the Borrowers and all third parties.
9.3 ORGANIZATION AND QUALIFICATION. Each of the Borrowers
(a) is duly incorporated and organized and validly existing in good stand-
ing under the laws of the state specified on SCHEDULE 9.3-A, (b) is
qualified to do business as a foreign corporation and is in good standing
in the jurisdictions set forth opposite its name on SCHEDULE 9.3-B, which
are the only jurisdictions in which qualification is necessary in order for
the applicable Borrower to own or lease its property and conduct its
business, and (c) has all requisite power and authority to conduct its
business and to own its property.
9.4 CORPORATE NAME; PRIOR TRANSACTIONS; BUSINESS CONDUCTED. No
Borrower has, during the past five (5) years, been known by or used any
other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any
Person, or acquired any of its property outside of the ordinary course of
business, except as set forth on SCHEDULE 9.4. The Borrowers are in the
business of manufacturing, selling and leasing trailers, selling parts for
trailers and servicing trailers.
9.5 SUBSIDIARIES AND AFFILIATES. SCHEDULE 9.5 is a correct and
complete list of the name and relationship to each of the Borrowers of each
of the Borrowers' Subsidiaries and other Affiliates. Each Subsidiary is
(a) duly incorporated and organized and validly existing in good standing
under the laws of its state of incorporation set forth on SCHEDULE 9.5-A,
and (b) qualified to do business as a foreign corporation and in good
standing in the jurisdictions set forth opposite its name on SCHEDULE 9.5-
B, which are the only states in which such qualification is necessary in
order for it to own or lease its property and conduct its business.
9.6 FINANCIAL STATEMENTS AND PROJECTIONS. (a) The Borrowers
have delivered to the Agent (i) audited consolidated balance sheets of GDT
and its Subsidiaries as of December 31, 1993, and the related consolidated
statements of operations and retained earnings and cash flows for the years
then ended, together with the notes thereto and (ii) unaudited consolidated
balance sheets of GDT and its Subsidiaries as at December 31, 1994
(collectively, the "Financial Statements"). True and complete copies of
the Financial Statements are attached hereto as SCHEDULE 1.1-A. As soon as
<PAGE>
<PAGE> EX-10.26-73
possible, but in any event no later than April 15, 1995, the Borrowers
shall deliver to the Agent the audited consolidated balance sheets of GDT
and its Subsidiaries as of December 31, 1994. The Financial Statements
have been prepared in accordance with GAAP (except as noted thereon)
consistently applied throughout the period involved, and fairly present the
consolidated financial position, results of operations, retained earnings
and cash flows of GDT and its Subsidiaries as at each of the dates and for
each of the periods covered thereby.
(b) The Latest Projections, attached hereto as SCHEDULE 1.1-C,
represent each of the Borrowers' best estimate of the Borrowers' future
financial performance for the periods set forth therein. The Latest Pro-
jections have been prepared on the basis of the assumptions set forth
therein, which the Borrowers believe are reasonable in light of current and
reasonably foreseeable business conditions.
(c) The pro forma consolidated balance sheet of GDT and its
Subsidiaries as at December 31, 1994, attached hereto as SCHEDULE 1.1-B,
fairly presents the financial condition of GDT and its Subsidiaries as at
such date as if the transactions contemplated by this Agreement (including
without limitation any transfer of funds by any Borrower to Holdings to be
made, in whole or in part, from proceeds of any Loan within thirty (30)
days after the Initial Term Funding Date) had occurred on such date and
each of the Effective Date and the Initial Term Funding Date had been such
date, and has been prepared in accordance with GAAP.
9.7 CAPITALIZATION. The authorized and outstanding capital
stock of GDT and each of its Subsidiaries is described on SCHEDULE 9.7-A,
and all such stock of GDT and each of its Subsidiaries is validly issued
and outstanding, fully paid and non-assessable, and is owned beneficially
and of record by the Persons set forth on SCHEDULE 9.7-B.
9.8 SOLVENCY. (a) Each of the Borrowers is Solvent prior to
and after giving effect to the transactions contemplated by this Agreement
to occur on the Effective Date, the extension of the Original Term Loans
and making of the Revolving Loans to be made and issuance of the Letters of
Credit and Banker's Acceptances to be issued on the Effective Date and the
Distributions, if any, to be made on the Effective Date or contemplated on
the Effective Date to be made within thirty (30) days thereafter from
proceeds of Revolving Loans.
(b) Each of the Borrowers will be Solvent prior to and after
giving effect to the transactions contemplated by this Agreement and the
making of the Term Loans and Revolving Loans to be made and the issuance of
the Letters of Credit and Banker's Acceptances to be issued on each Term
Funding Date and the Distributions, if any, to be made on each Term Funding
Date or contemplated on such Term Funding Date to be made within thirty
(30) days thereafter from proceeds of Revolving Loans or Term Loans.
9.9 DEBT. After giving effect to the making of the Revolving
Loans to be made and the issuance of the Letters of Credit and Banker's
Acceptances to be issued on the Effective Date and the Term Loans to be
made on each Term Funding Date, the Borrowers have no Debt, except (a) the
Obligations, (b) Debt set forth on the pro forma consolidated balance sheet
of each of the Borrowers, attached hereto as SCHEDULE 1.1-B, or the notes
thereto and (c) to the extent not included within SECTION 9.9(b), Debt set
forth on the audited consolidated balance sheets or the accompanying notes
<PAGE>
<PAGE> EX-10.26-74
thereto of GDT and its Subsidiaries as of December 31, 1993, attached
hereto as SCHEDULE 1.1-A.
9.10 TITLE TO PROPERTY. With respect to those locations listed
as Premises owned by such Borrower on SCHEDULE 1.1-E such Borrower has good
and marketable title in fee simple to such Premises except as may be set
forth on the Title Reports, and such Borrower and each of its Subsidiaries
has good, indefeasible, and merchantable title to all of its other Property
(including, without limitation, the assets reflected on the December 31,
1993 Financial Statements delivered to the Lenders, except as disposed of
in the ordinary course of business since the date thereof or as otherwise
expressly permitted hereby), free of all Liens except Permitted Liens.
9.11 REAL PROPERTY; LEASES. SCHEDULE 7.3-B sets forth a correct
and complete list of all real property owned by such Borrower, all leases
and subleases of real or personal property by such Borrower as lessee or
sublessee, and all leases and subleases of real or personal property by
such Borrower as lessor, lessee, sublessor or sublessee. Each of such
leases and subleases is valid and enforceable in accordance with its terms
and is in full force and effect, and no default by any Borrower and, to the
best of the Borrowers' knowledge, any other party to any such lease or
sublease which is material to the business or operations of such Borrower
exists.
9.12 PROPRIETARY RIGHTS. SCHEDULE 1.1-F sets forth a correct
and complete list of all of the Proprietary Rights. None of the
Proprietary Rights is subject to any licensing agreement or similar
arrangement except as set forth on SCHEDULE 1.1-F or as entered into in the
sale or distribution of the Borrower's Inventory in the ordinary course of
business. To the best of the Borrowers' knowledge, none of the Proprietary
Rights infringes on or conflicts with any other Person's property, and no
other Person's property infringes on or conflicts with the Proprietary
Rights. The Proprietary Rights described on SCHEDULE 1.1-F constitute all
of the property of such type necessary to the current and anticipated
future conduct of the Borrowers' business.
9.13 TRADE NAMES. All trade names or styles under which any
Borrower will sell Inventory or Equipment or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on
SCHEDULE 1.1-F.
9.14 LITIGATION. Except as set forth on SCHEDULE 9.14, there is
no pending or (to the best of the Borrowers' knowledge) threatened, action,
suit, proceeding, or counterclaim by any Person, or investigation by any
Public Authority, or (to the best of the Borrowers' knowledge) any basis
for any of the foregoing, which could reasonably be expected to have a
Material Adverse Effect.
9.15 RESTRICTIVE AGREEMENTS. No Borrower was, in connection
with any Loan Document executed and delivered pursuant to the Original
Agreement, or is a party to any contract or agreement, and no Borrower was,
in connection with any Loan Document executed and delivered pursuant to the
Original Agreement, or is subject to any charter or other corporate
restriction, which affects any of the Borrowers' ability to execute,
deliver, and perform the Loan Documents and repay the Obligations or which
could reasonably be expected to have a Material Adverse Effect.
9.16 LABOR DISPUTES. Except as set forth on SCHEDULE 9.16,
(a) there is no collective bargaining agreement or other labor contract
<PAGE>
<PAGE> EX-10.26-75
covering employees of GDT or any of its Subsidiaries, (b) no such
collective bargaining agreement or other labor contract is scheduled to
expire during the term of this Agreement, (c) no union or other labor
organization is seeking to organize, or to be recognized as, a collective
bargaining unit of employees of GDT or any of its Subsidiaries or for any
similar purpose, and (d) there is no pending or (to the best of any
Borrower's knowledge) threatened, strike, work stoppage, material unfair
labor practice claim, or other material labor dispute against or affecting
GDT or any of its Subsidiaries or their respective employees.
9.17 ENVIRONMENTAL, HEALTH AND SAFETY LAWS. Except with
respect to matters which could not reasonably be expected to (i) have in
the aggregate a Material Adverse Effect or (ii) result in aggregate
liability to the Borrowers or any of them in excess of $500,000:
(a) The operations of each of the Borrowers comply in all
material respects with all applicable environmental, health and safety
Requirements of Law;
(b) Each Borrower has obtained all environmental, health and
safety permits necessary for its operation, and all such permits are in
good standing and each Borrower is in compliance in all material respects
with all terms and conditions of such permits;
(c) No Borrower nor any of its present Property or operations,
nor its past Property or operations, is subject to any order from or
agreement with any Public Authority or private party respecting (i) any
environmental, health or safety Requirements of Law, (ii) any Remedial
Action or (iii) any liabilities and costs arising from the Release or
threatened Release of a Contaminant into the environment;
(d) None of the operations of the Borrowers is subject to any
judicial or administrative proceeding alleging a violation of any
environmental, health or safety Requirement of Law;
(e) To the best of the Borrowers knowledge based upon
reasonable inquiry, none of the present nor past operations of any of the
Borrowers is the subject of any investigation by any Public Authority
evaluating whether any Remedial Action is needed to respond to a Release or
threatened Release of a Contaminant into the environment;
(f) None of the Borrowers has filed any notice under any
Requirement of Law indicating past or present treatment, storage or
disposal of a hazardous waste, as that term is defined under 40 CFR Part
261 or any state equivalent;
(g) None of the Borrowers has filed any notice under any
applicable Requirement of Law reporting a Release of a Contaminant into the
environment;
(h) During the course of the Borrowers' operations on the
Property, there may have been (i) generation, treatment, recycling, storage
or disposal of hazardous waste, as that term is defined under 40 CFR Part
261 or any state equivalent, (ii) use of underground storage tanks or
surface impoundments, (iii) periodic use of asbestos containing materials
or (iv) periodic use of polychlorinated biphenyls (PCB) used in hydraulic
oils, electrical transformers or other equipment; however, to the best of
the Borrowers' knowledge based upon reasonable inquiry, all of the above
listed
<PAGE>
<PAGE> EX-10.26-76
uses have been undertaken in accordance with all current standards and
practices governing such uses and in such a manner that such uses do not
violate any applicable Requirements of Law.
(i) None of the Borrowers has entered into any negotiations or
agreements with any Person (including, without limitation, the prior owner
of such Borrower's property) relating to any Remedial Action or
environmental related claim;
(j) None of the Borrowers has received any notice or claim to
the effect that it is or may be liable to any Person as a result of the
Release or threatened Release of a Contaminant into the environment;
(k) None of the Borrowers has any material contingent liability
in connection with any Release or threatened Release of any Contaminants
into the environment; and
(l) Having made due inquiry, each Borrower represents that no
Environmental Lien has attached to the Property of any of the Borrowers.
(m) The presence and condition of all asbestos-containing
material which is on or part of the Property (excluding any raw materials
used in the manufacture of products or products themselves) do not violate
in any material respect any currently applicable or proposed Requirement of
Law.
(n) To the best of the Borrowers' knowledge based upon
reasonable inquiry, none of the Borrowers manufactures, distributes or
sells, or ever has manufactured, distributed or sold, products which
contain asbestos-containing material, with the exception of brake linings
which may have been incorporated into the Borrowers' products.
9.18 NO VIOLATION OF LAW. None of the Borrowers is in violation
of any Requirement of Law applicable to it which violation could reasonably
be expected to have a Material Adverse Effect.
9.19 NO DEFAULT. None of the Borrowers is in default with
respect to any note, indenture, loan agreement, mortgage, lease, deed, or
other agreement to which such Borrower is a party or by which it is bound,
which default could reasonably be expected to have a Material Adverse
Effect.
9.20 ERISA. (a) Neither any Borrower nor any Related Company
maintains or contributes to any Benefit Plan other than those listed on
SCHEDULE 9.20-A.
(b) No Benefit or Multiemployer Plan has been terminated or par-
tially terminated or is insolvent or in reorganization, nor have any
proceedings been instituted to terminate or reorganize any Benefit or
Multiemployer Plan.
(c) Neither any Borrower nor any Related Company has withdrawn
from any Benefit Plan, nor has a condition occurred which if continued
would result in a withdrawal.
(d) Neither any Borrower nor any Related Company has incurred
any withdrawal liability, including contingent withdrawal liability, to any
Benefit Plan pursuant to Title IV of ERISA.
<PAGE>
<PAGE> EX-10.26-77
(e) Neither any Borrower nor any Related Company has incurred
any liability to the PBGC other than for required insurance premiums which
have been paid when due.
(f) No Reportable Event (other than a Reportable Event not
subject to the provision for 30-day notice to PBGC under the regulations
issued under Section 4043 of ERISA) has occurred with respect to a Plan.
(g) No Benefit Plan has an "accumulated funding deficiency"
(whether or not waived) as defined in Section 302 of ERISA or in
Section 412 of the Code.
(h) Each Plan is in substantial compliance with (i) ERISA and
(ii) the provisions of the Code, compliance with which is necessary for any
intended favorable tax treatment, and neither any Borrower nor any Related
Company has received any notice asserting that a Plan is not in compliance
with ERISA or such provisions of the Code.
(i) Each Plan which is intended to be a qualified Plan has been
determined by the IRS to be qualified under Section 401(a) of the Code as
currently in effect or will be submitted to the IRS for such determination
prior to the end of the remedial amendment period under Section 401(b) of
the Code and the regulations promulgated thereunder and neither any Borrow-
er nor any Related Company knows or has reason to know why each such Plan
should not continue to be so qualified, and each trust related to such Plan
has been determined to be exempt from federal income tax under
Section 501(a) of the Code.
(j) Except as provided on SCHEDULE 9.20-J, neither any Borrower
nor any Related Company maintains or contributes to any employer welfare
benefit plan within the meaning of Section 3(1) of ERISA which provides
benefits to employees after termination of employment other than as
required by Section 601 of ERISA.
(k) Schedule B to the most recent annual report filed with the
IRS with respect to each Benefit Plan and furnished to the Lenders is
complete and accurate. Since the date of each such Schedule B, there has
been no adverse change in funding status or financial condition of the
Benefit Plan relating to such Schedule B.
(l) Neither any Borrower nor any Related Company has failed to
make a required installment under subsection (m) of Section 412 of the Code
or any other payment required under Section 412 of the Code on or before
the due date for such installment or other payment.
(m) Neither any Borrower nor any Related Company is required to
provide security to a Benefit Plan under Section 401(a)(29) of the Code due
to a Benefit Plan amendment that results in an increase in current
liability for the plan year.
(n) Neither any Borrower, nor any Related Company, nor any other
"party-in-interest" or "disqualified person" has engaged in a nonexempt
"prohibited transaction," as such terms are defined in Section 4975 of the
Code and Section 406 of ERISA, in connection with any Plan or has taken or
failed to take any action which would constitute or result in a Termination
Event.
<PAGE>
<PAGE> EX-10.26-78
(o) Neither any Borrower nor any Related Company has failed to
comply with the health care continuation coverage requirements of Section
4980B of the Code in respect of employees and former employees of such
Borrower or such Related Company and their dependents and beneficiaries
which alone or in the aggregate would subject such Borrower or such Related
Company to any material liability.
(p) Neither any Borrower nor any Related Company has (i) failed
to make a required contribution or payment to a Multiemployer Plan or (ii)
made a complete or partial withdrawal under Sections 4203 or 4205 of ERISA
from a Multiemployer Plan. Except as provided on SCHEDULE 9.20-P, to the
best knowledge of the Borrowers after due inquiry, neither any Borrower nor
any Related Company shall have any obligation to (i) make contributions to
any Multiemployer Plan on or after the Effective Date, or (ii) pay
withdrawal liability to any Multiemployer Plan in an amount in excess of a
"de minimis amount" as such term is defined in Section 4209 of ERISA.
9.21 TAXES. Each of the Borrowers has filed all tax returns and
other reports which it was required by law to file on or prior to the
Effective Date and has paid all taxes, assessments, fees, and other
governmental charges, and penalties and interest, if any, against it or its
property, income, or franchise, that are due and payable as shown on such
return except for such taxes, assessments, fees and other governmental
charges, and penalties and interest which are being contested in good faith
by appropriate proceedings diligently pursued, and for which adequate
reserves are maintained, and no Lien, other than a Permitted Lien, results
from such non-payment.
9.22 INVESTMENT COMPANY ACT. None of the Borrowers is an
"investment company" nor 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 (15 U.S.C.
Section 80(a)(l), et seq.). The making of the Loans and other financial
accommodations hereunder by the Lenders, the application of the proceeds
and repayment thereof by the Borrowers and the consummation of the other
transactions contemplated by this Agreement and the Loan Documents do not
violate any provisions of such Act or any rule, regulation or order issued
by the Securities and Exchange Commission (the "SEC") thereunder.
9.23 MARGIN STOCK. None of the Borrowers owns any "margin
stock," as that term is defined in Regulations G, U and X of the Federal
Reserve Board, and the proceeds of the Loans and the other financial
accommodations made pursuant to this Agreement will be used only for the
purposes contemplated hereunder. None of the Loans or the other financial
accommodations hereunder will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin stock. None of the Borrowers
will take or permit any agent acting on its behalf to take any action which
might cause any transaction, obligation or right created by this Agreement,
or any document or instrument delivered pursuant hereto, to violate any
regulation of the Federal Reserve Board.
9.24 BROKER'S FEES. No broker or finder is entitled to receive
compensation for services rendered with respect to the transactions
described in this Agreement.
9.25 NO MATERIAL ADVERSE CHANGE. No material adverse change has
occurred in the property, business operations, or conditions (financial or
otherwise) of any of GDT or any of its Subsidiaries since December 31,
1993.<PAGE>
<PAGE> EX-10.26-79
9.26 USE OF PROCEEDS. The Borrowers' uses of the proceeds of
the Loans and uses of the Letters of Credit and Banker's Acceptances are,
and will continue to be, legal and proper uses, duly authorized by the
applicable Borrower's Board of Directors; such uses are, and will continue
to be, consistent with all applicable laws and statutes, as in effect from
time to time; and such uses are, and will continue to be, permitted
pursuant to the terms of SECTION 10.30 and the other provisions of this
Agreement.
9.27 DISCLOSURE. Neither this Agreement nor any document or
statement furnished to the Agent or any of the Lenders by or on behalf of
any Borrower hereunder contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
contained herein or therein not materially misleading.
10. AFFIRMATIVE AND NEGATIVE COVENANTS.
Each of the Borrowers covenants that, so long as any of the
Obligations remain outstanding or this Agreement is in effect:
10.1 TAXES AND OTHER OBLIGATIONS. Such Borrower shall, and
shall cause each of its Subsidiaries to (i) file when due, after any
extension, all tax returns and other reports which it is required to file,
(ii) pay, or provide for the payment, when due, of all taxes, fees,
assessments and other governmental charges against it or upon its property,
income and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such
items, and provide to the Lenders, upon request, satisfactory evidence of
its timely compliance with the foregoing and (iii) pay when due all trade
liabilities and claims of materialmen, mechanics, carriers, warehousemen,
landlords and other like Persons, and all other indebtedness owed by it and
perform and discharge in a timely manner all other obligations undertaken
by it; PROVIDED, HOWEVER, that such Borrower and its Subsidiaries need not
pay any tax, fee, assessment, governmental charge, or Debt, or discharge
any other obligation, that any of them is contesting in good faith by
appropriate proceedings diligently pursued, and for which adequate reserves
are maintained, so long as no Lien, other than a Permitted Lien, results
from such non-payment.
The Borrowers shall not, nor shall they permit any of their
Subsidiaries to, file or consent to the filing of any consolidated tax
return with any Person (other than the Borrowers or any of their
Subsidiaries or such other Person as may be reasonably acceptable to the
Lenders); PROVIDED, HOWEVER, so long as the Borrowers and their
Subsidiaries are members of an "affiliated group" (as defined in Section
1504 of the Code) with Holdings (the "Affiliated Group"), for all taxable
years in which the Borrowers are a member of the Affiliated Group and for
which Holdings files consolidated federal income tax returns and
consolidated state income tax returns or state income tax returns based on
combined reporting where such returns are required under or permitted under
applicable state rules and regulations for the Affiliated Group, the
Borrowers may file consolidated tax returns with Holdings and pay to
Holdings, the amount of the consolidated federal and the state income tax
liabilities of the Affiliated Group as set forth below:
(a) DETERMINATION OF FEDERAL INCOME TAX LIABILITY. For each "Year"
(as defined below) or part thereof with respect to which Holdings files a
consolidated federal income tax return and the Borrowers are members of the
Affiliated Group, the Borrowers shall determine their consolidated federal
income tax liability for such Year as if the Borrowers had filed their own
separate consolidated federal income tax return, such determination
<PAGE>
<PAGE> EX-10.26-80
to include any benefit resulting from the carry-forward of ordinary losses,
capital losses and tax credits of the Borrowers (regardless of whether such
losses or credits have been utilized by the Affiliated Group to offset
taxable income or taxes of the Affiliated Group) from the current or a
prior year. For purposes of this SECTION 10.1, "Year" shall mean the
taxable year adopted by the Affiliated Group for federal income tax
purposes.
(b) PAYMENT OF THE BORROWERS' TAX LIABILITY TO HOLDINGS. The
Borrowers may pay the lesser of (a) their federal income tax liability
determined under SECTION 10.1(a) (or, until such time as final numbers are
available, estimates thereof) or (b) the amount of federal income tax
expense Holdings must pay in cash as shown on IRS form 1120 (or, until such
time as final numbers are available, estimates thereof), at such times as
shall be requested by Holdings, but not more frequently than quarterly,
PROVIDED, THAT, with respect to the second quarter the Borrowers may pay
two installments in accordance with their past practices. If, as a result
of estimated payments, the Borrowers pay to Holdings or directly to the
taxing authority for a Year an amount in excess of the lesser of (a) the
amount determined under SECTION 10.1(a) plus $100,000 and (b) the amount
permitted to be paid by this SECTION 10.1(b), Holdings has agreed to refund
to the Borrowers the amount of such excess no later than the date upon
which Holdings files the consolidated federal income tax return for the
Affiliated Group. The Borrowers shall deliver such documents as the Agent
shall reasonably require to demonstrate compliance with SECTION 10.1.
(c) STATE OR LOCAL INCOME TAX. For each Year with respect to
which Holdings files one or more state or local income tax returns
requiring the payment of a tax, whether on the basis of a unitary return or
a single return based upon a combined report, and the operations of the
Borrowers are included in such return or returns, the Borrowers' state
income tax liability shall be computed in the manner provided in SECTION
10.1(a) and payment shall be made in the manner provided in SECTION
10.1(b).
(d) ADJUSTMENTS TO THE BORROWERS' FEDERAL AND STATE INCOME TAX
LIABILITY.
(i) In the event that there is an increase or decrease in the
amount determined under SECTIONS 10.1(a) or 10.1(c) for any Year (whether
by amended return, examination by the IRS, carryback or net operating loss
or unused credits, or otherwise), the Borrowers shall, and Holdings has
agreed to, (a) in the case of an increase in the tax payable by the
Borrowers, the Borrowers shall make a payment to Holdings in an amount
equal to the lesser of (1) the amount of such increase or (2) the cash
amount payable by Holdings to the IRS or any state or local taxing
authority as a result of such increase (together with any interest and
penalties imposed by the IRS or any state or local taxing authority), and
(b) in the case of a decrease in the tax payable by the Borrowers, Holdings
has agreed to make a payment to the Borrowers in an amount equal to the
lesser of (1) the amount of such decrease or (2) the cash amount of the
refund received from the IRS or any state or local taxing authority by
Holdings.
(ii) The Agent and a representative of the Borrowers shall have
the right to review any adjustments determined by a taxing authority which
would increase or decrease the amount determined under SECTION 10.1(a) or
10.1(c).
(e) REFUNDS. In the event the calculation under SECTION 10.1(a) or
10.1(c) reflects that the Borrowers would be entitled to a refund for such
<PAGE>
<PAGE> EX-10.26-81
Year, Holdings has agreed to pay such amount to the Borrowers promptly but
in any event no later than the date upon which Holdings files the income
tax return for the Affiliated Group.
10.2 CORPORATE EXISTENCE AND GOOD STANDING. Such Borrower
shall, and shall cause each of its Subsidiaries to, maintain its corporate
existence and its qualification and good standing in all jurisdictions
necessary to conduct its business and own its property, and shall obtain
and maintain all material licenses, permits, franchises and governmental
authorizations necessary to conduct its business and own its property.
10.3 COMPLIANCE WITH LAW AND AGREEMENTS. Such Borrower shall,
and shall cause each of its Subsidiaries to, comply with the terms and
provisions of each Requirement of Law applicable to it and each contract,
mortgage, lien, lease, indenture, order, instrument, agreement, or document
to which it is a party or by which it is bound if the failure to do so
could reasonably be expected to have a Material Adverse Effect.
10.4 MAINTENANCE OF PROPERTY. Such Borrower shall, and shall
cause each of its Subsidiaries to, maintain all of its property necessary
and useful in its business in good operating condition and repair, ordinary
wear and tear excepted.
10.5 INSURANCE. Such Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, with financially sound and reputable
insurers, insurance against loss or damage by fire with extended coverage;
theft, burglary, pilferage and loss in transit; public liability and third
party property damage; larceny, embezzlement or other criminal liability;
business interruption; and such other hazards or of such other types as is
customary for persons engaged in the same or similar business, as the Agent
shall reasonably specify, in amounts, and under policies reasonably accept-
able to the Agent. Without limiting the foregoing, the Borrower shall also
maintain flood insurance, in the event of a designation of the area in
which any Real Property is located as "flood prone" or a "flood risk area,"
as defined by the Flood Disaster Protection Act of 1973, in an amount to be
reasonably determined by the Agent, and shall comply with the additional
requirements of the National Flood Insurance Program as set forth in said
Act.
The Borrowers shall cause the Agent to be named in each such
policy as secured party or mortgagee and loss payee or additional insured,
in a manner acceptable to the Agent. Each policy of insurance shall
contain a clause or endorsement requiring the insurer to give not less than
thirty (30) days' prior written notice to the Agent in the event of
cancellation of the policy for any reason whatsoever and a clause or
endorsement stating that the interest of the Agent shall not be impaired or
invalidated by any act or neglect of any Borrower or the owner of any
premises for purposes more hazardous than are permitted by such policy.
All premiums for such insurance shall be paid by the applicable Borrower or
Subsidiary when due, and certificates of insurance and, if requested,
photocopies of the policies shall be delivered to the Agent. If any
Borrower fails to procure such insurance or to pay the premiums therefor
when due, the Agent may (but shall not be required to) do so from the
proceeds of the Revolving Loans as described in SECTION 5.6(b).
Each of the Borrowers shall promptly notify the Agent of any
loss, damage, or destruction to the Collateral or arising from its use,
whether or not covered by insurance, in excess of $250,000 per occurrence.
The Agent is
<PAGE>
<PAGE> EX-10.26-82
hereby authorized to collect all insurance proceeds directly. After
deducting from such proceeds the expenses, if any, incurred by the Agent in
the collection or handling thereof, the Agent shall apply such proceeds to
the reduction of the Obligations, in accordance with SECTION 5.5; PROVIDED,
THAT, the Agent shall, at the Borrowers' election, permit the Borrowers to
use such money, or any part thereof, to replace, repair, restore or rebuild
the Collateral (the "Collateral Restoration") in a diligent and expeditious
manner with materials and workmanship of substantially the same quality as
existed before the loss, damage or destruction if each of the following
conditions are met:
(i) no Default or Event of Default exists under this
Agreement;
(ii) the Borrowers shall have delivered to the Agent
(a) a budget of all costs of the Collateral Restoration and
(b) a schedule for the Collateral Restoration;
(iii) (a) the amount of insurance proceeds is
$7,500,000 or less and (b) the Agent shall have
received evidence reasonably satisfactory to the Agent
that the insurance proceeds are sufficient to complete
the Collateral Restoration.
The insurance proceeds shall be disbursed to the Borrowers from time to
time, but at least monthly, as the Collateral Restoration proceeds upon the
submission to the Agent of proof that the Collateral Restoration is
proceeding in accordance with the requirements hereof. Pending release of
the insurance proceeds to the Borrowers the Agent shall, at its option,
either (i) apply any or all of such insurance proceeds to the payment of
the Revolving Loans and establish a reserve in the amount of such insurance
proceeds or (ii) invest such insurance proceeds for the account of the
Borrowers. If the Agent, in its sole discretion, elects to invest the
insurance proceeds, any commissions, expenses and penalties incurred by the
Agent in connection with any investment and redemption of such insurance
proceeds shall be Obligations hereunder secured by the Collateral, shall
bear interest at the rates provided herein for Reference Rate Loans and
shall be charged to the Loan Account, or, at the Agent's option, shall be
paid out of the proceeds of any interest earned and received by the Agent
from the investment of such insurance proceeds as provided herein or out of
such insurance proceeds. The Agent makes no representation or warranty as
to, and shall not be responsible for, the rate of return earned on any
insurance proceeds. Any interest accruing on such insurance proceeds shall
be held on the terms set forth in this SECTION 10.5.
Notwithstanding the foregoing, in the event of any loss, damage
or destruction to the Collateral of less than $250,000 per occurrence not
to exceed $750,000 in the aggregate in any Fiscal Year then, if no Default
or Event of Default exists under this Agreement, the Agent shall, at the
Borrowers election, permit the Borrowers to use such money or any part
thereof (after deducting from such proceeds the expenses, if any, incurred
by the Agent in the collection or handling thereof) to replace, repair,
restore or rebuild the Collateral in a diligent and expeditious manner with
materials and workmanship of substantially the same quality as existed
before the loss, damage or destruction without the necessity to provide to
the Agent a budget of all costs of the Collateral Restoration or a schedule
for the Collateral Restoration.
<PAGE>
<PAGE> EX-10.26-83
10.6 CONDEMNATION. The Borrowers shall, immediately upon
learning of the institution of any proceeding for the condemnation or other
taking of any of their property, having a value in excess of $250,000,
notify the Agent of the pendency of such proceeding, and agree that the
Agent may participate in any such proceeding, and the Borrowers from time
to time will deliver to the Agent all instruments reasonably requested by
the Agent to permit such participation. The Agent is authorized to collect
the proceeds of any condemnation claim or award and apply them to the
reduction of the Term Loans (applying such proceeds to the installments of
the Term Loans as set forth in SECTION 5.5 or to any of the other
Obligations then due); PROVIDED, THAT, if the Agent shall have received
reasonably satisfactory evidence that such claim or award is sufficient to
construct a commercially viable structure for its intended use, the Agent,
shall, at the Borrowers' election, permit the Borrowers to use such claim
or award, or any part thereof, to replace the condemned property in
accordance with the terms specified in SECTION 10.5 for the Borrowers' use
of insurance proceeds; and PROVIDED FURTHER THAT, in the event of any
condemnation claim or award having a value in excess of $250,000, the Agent
shall have received the approval of the Majority Lenders prior to any
application of the proceeds of such claim or award described in this
proviso.
10.7 ENVIRONMENTAL, HEALTH AND SAFETY LAWS. Each of the Bor-
rowers shall, and shall cause each of its Subsidiaries to, conduct its
business in compliance in all material respects with all Environmental Laws
applicable to it, including, without limitation, those relating to the
generation, handling, use, storage, and disposal of hazardous and toxic
wastes and substances. Each Borrower shall, and shall cause each of its
Subsidiaries to, obtain all necessary environmental and health and safety
permits, licenses or other governmental approvals or authorizations
necessary for its operations and maintain such licenses, permits and
approvals in good standing. Each of the Borrowers shall, and shall cause
each of its Subsidiaries to, take prompt and appropriate action to respond
to any noncompliance with Environmental Laws which relates to secondary
containment or which could reasonably be expected to result in liability to
the Borrowers or any of them in excess of $500,000 in the aggregate and
shall regularly report to the Lenders on such response. Each of the
Borrowers shall provide the Agent, immediately upon its receipt thereof,
any notice that any Borrower receives from a Public Authority asserting
that such Borrower is not in compliance with any Environmental Law or that
its compliance is being investigated, which violation or suspected
noncompliance could reasonably be expected to result in liability to
Borrowers or any of them in excess of $100,000. Without limiting the gen-
erality of the foregoing, whenever any Borrower gives notice to the Lenders
pursuant to this SECTION 10.7 with respect to a matter which could
reasonably be expected to result in liability to the Borrowers or any of
them in excess of $500,000 in the aggregate, such Borrower shall, at the
Lenders' request and such Borrower's expense (a) cause an independent
environmental engineer acceptable to the Lenders to conduct such tests of
the site where the noncompliance or alleged non-compliance with Environ-
mental Laws has occurred and prepare and deliver to the Lenders a report
setting forth the results of such tests, a proposed plan for responding to
any environmental problems described therein, and an estimate of the costs
thereof and (b) provide to the Lenders a supplemental report of such
engineer whenever the scope of the environmental problems, or the response
thereto or the estimated costs thereof, shall materially change. The
Borrowers shall complete, within a reasonable time, but in no event more
than 30 days from receipt, in a manner substantially satisfactory to the
Agent, any Environmental Questionnaire and Disclosure Statement forms
delivered to the Borrowers by the Agent from time to time. In furtherance
and not in
<PAGE>
<PAGE> EX-10.26-84
limitation of the provisions of this SECTION 10.7, GDT agrees to use its
best efforts to cause the applicable utility to replace any utility-owned
transformer containing PCBs located at the Real Estate at 600 Lathrop
Avenue in Savannah, Georgia with a transformer that complies with Legal
Requirements.
10.8 ERISA. (a) For each Plan adopted by such Borrower, such
Borrower shall (i) use its best efforts to seek and receive a determination
letter from the IRS that such Plan is qualified under Section 401(a) of the
Code, and (ii) from and after the adoption of any such Plan, use its best
efforts to cause such Plan to be qualified under Section 401(a) of the Code
and to be administered in all material respects in accordance with the
requirements of ERISA and Section 401(a) of the Code, and (iii) not take
any action which would cause such Plan not to be qualified under Section
401(a) of the Code or not to be administered in all material respects in
accordance with the requirements of ERISA and Section 401(a) of the Code.
(b) Such Borrower shall not, and shall not permit any Subsidiary
of such Borrower to, do any of the following to the extent such act or
failure to act would singly or in the aggregate, after taking into account
all other such acts or failures to act, have a Material Adverse Effect:
(i) Engage in any prohibited transaction for which an
exemption is not available or has not been previously obtained
from the DOL in connection with which such Borrower or any
Subsidiary could be subject to either a civil penalty assessed
pursuant to Section 502(i) of ERISA or tax imposed by Section
4975 of the Code;
(ii) Permit to exist any accumulated funding deficiency
(whether or not waived), as defined in Section 302 of ERISA and
Section 412 of the Code;
(iii) Fail to pay timely required contributions or
installments due with respect to any waived funding deficiency to
any Plan;
(iv) Fail to make any contribution or payment to any Multi-
employer Plan which Borrower or any Subsidiary may be required to
make under any agreement relating to such Multiemployer Plan, or
any law pertaining thereto;
(v) Terminate, or permit a Subsidiary to terminate, any
Benefit Plan which would result in any liability of such Borrower
or a Subsidiary under Title IV of ERISA;
(vi) Fail to pay any required installment under section (m)
of Section 412 of the Code or any other payment required under
Section 412 of the Code on or before the due date for such
installment or other payment; or
(vii) Amend any Benefit Plan resulting in an increase in
current liability for the plan year such that such Borrower or a
Subsidiary is required to provide security to such Plan under
Section 401(a)(29) of the Code.
10.9 MERGERS, CONSOLIDATIONS OR SALES. Such Borrower shall not,
and shall not permit any of its Subsidiaries to, enter into any transaction
of merger, reorganization, or consolidation, or transfer, sell, assign,
<PAGE>
<PAGE> EX-10.26-85
lease, or otherwise dispose of all or any part of its property, or wind up,
liquidate or dissolve, or agree to do any of the foregoing, except:
(i) For sales of Inventory in the ordinary course of its
business;
(ii) Dispositions of obsolete or unusable Equipment to the
extent permitted by, and in accordance with the provisions of,
SECTION 7.10;
(iii) For mergers or consolidations of any Subsidiary of
GDT into GDT or any other wholly-owned Subsidiary of GDT
occurring after 30 days prior written notice thereof to the
Lenders, PROVIDED that in any merger or consolidation involving
GDT, GDT shall be the surviving corporation; and
(iv) As otherwise expressly permitted hereby.
10.10 CAPITAL CHANGES. Such Borrower shall not, and shall not
permit any of its Subsidiaries to, make any change in its capital structure
which could adversely affect the repayment of the Obligations or the
Solvency of the Borrowers (or any of them).
10.11 TRANSACTIONS AFFECTING COLLATERAL, REAL ESTATE OR
OBLIGATIONS. Such Borrower shall not, and shall not permit any of its
Subsidiaries to, (a) enter into any transaction which could reasonably be
expected to have a Material Adverse Effect, (b) enter into any Floor Plan
Financing Agreement, other than the Operating Agreements in effect on the
date hereof to which Associates is a party, (c) maintain in the State of
Tennessee at any time property, including, without limitation, Receivables,
Inventory and Equipment having an aggregate fair market value in excess of
the value stated by the Agent in or in connection with any UCC financing
statement on file in such state with respect to such property and in effect
at such time, (d) acquire, directly or indirectly, any interest in any real
property having a value, individually or in the aggregate, in excess of
$100,000 in any calendar year (such amount to include any and all liabili-
ties or claims, whether actual or potential, with respect to such real
property), as determined by the Agent in its sole discretion; PROVIDED,
however, that GDT shall have the right to lease an interest in the real
property in the general vicinity of and in the general configuration of the
0.474 acre parcel shown on the attached SCHEDULE 10.11 so long as no
buildings, improvements (other than fencing) and fixtures are thereafter
constructed thereon by any Person, or (e) obtain a refund of any Taxes
required to be paid in connection with the perfection of the Liens intended
to be granted to the Agent under this Agreement or any of the other Loan
Documents unless the Borrowers shall have delivered to the Agent an opinion
of counsel acceptable to the Agent, in form and substance acceptable to the
Agent, to the effect that, after giving effect to such refund, all Taxes
required to be paid to perfect the Liens intended to be granted under the
Loan Documents in the property located in the jurisdiction from which the
refund is sought have been paid.
10.12 GUARANTIES. Such Borrower shall not, and shall not permit
any of its Subsidiaries to, make, issue, or become liable on any Guaranty,
except:
(a) Guaranties in favor of the Agent;
<PAGE>
<PAGE> EX-10.26-86
(b) Endorsements of negotiable instruments for collection
in the ordinary course of business;
(c) Guaranties by GDT and/or Subsidiaries of GDT of (i)
conditional sale contracts or chattel paper representing the sale and
financing of GDT's Inventory as long as such transactions are entered
into in the ordinary course of the Borrowers' business and such
documents are sold to third party lenders within thirty (30) days and
(ii) retail financing or leasing by third parties of GDT's Inventory;
PROVIDED HOWEVER, that the aggregate amount guaranteed under this
CLAUSE (c) of SECTION 10.12 shall not exceed at any time for GDT and
such Subsidiaries more than $15,000,000 in the aggregate and expressly
prohibiting in all cases the employment of funds for such purposes;
and
(d) Guaranties by GDT of the trade accounts payable of its
Subsidiaries and its dealers; PROVIDED, HOWEVER, that the aggregate
liability of GDT under all such guaranties permitted by this CLAUSE
(d) shall not exceed $500,000 at any one time outstanding.
10.13 DEBT. Such Borrower shall not, and shall not permit any of
its Subsidiaries to, incur or maintain any Debt, other than: (a) the
Obligations; (b) trade payables and contractual obligations to suppliers,
customers and others incurred in the ordinary course of business; (c) Debt
incurred to finance the purchase of Equipment constituting Capital
Expenditures so long as, with respect to all Capital Expenditures, the
principal amount of Debt for any such purchase of Equipment does not exceed
the purchase price of such Equipment; (d) other Debt existing on the
Effective Date and reflected in the pro forma balance sheet and the
accompanying notes thereto attached as SCHEDULE 1.1-B and the audited
consolidated balance sheets and the accompanying notes thereto of GDT and
its Subsidiaries as of December 31, 1993 delivered to the Agent pursuant to
SECTION 9.6; (e) the unmatured contingent liability of GDT to Associates
under the Floor Plan Financing Agreements to which Associates is a party;
(f) Debt of a Borrower owing to any other Borrower; and (g) additional Debt
not contemplated by clauses (a) - (f) above, so long as such Debt shall not
exceed $2,500,000 in the aggregate for all Borrowers and all of their
Subsidiaries at any time outstanding.
10.14 PREPAYMENT. Such Borrower shall not, and shall not permit
any of its Subsidiaries to, voluntarily prepay any indebtedness for
borrowed money, except (i) the Obligations in accordance with their
respective terms and (ii) other indebtedness not to exceed $100,000 in the
aggregate in any Fiscal Year for all Borrowers.
10.15 TRANSACTIONS WITH AFFILIATES. Except as set forth below,
such Borrower shall not, and shall not permit any of its Subsidiaries to,
sell, transfer, distribute, or pay any money or property, including, but
not limited to, any fees or expenses of any nature (including, but not
limited to, any fees or expenses for management services), except actual
expenses incurred and approved in advance in writing by the Agent, to any
Affiliate, or lend or advance money or property to any Affiliate, or invest
in (by capital contribution or otherwise) or purchase or repurchase any
stock or indebtedness, or any property, of any Affiliate, or become liable
on any Guaranty of the indebtedness, dividends, or other obligations of any
Affiliate. Notwithstanding the foregoing, (a) if no Default or Event of
Default has occurred and is continuing or would result from any of the
events described in clauses (i) through (iv), inclusive, below, such
Borrower and its Subsidiaries may (i) engage in any transaction exclusively
among Borrowers, (ii) make Distributions not otherwise restricted by SEC-
TION 10.26,
<PAGE>
<PAGE> EX-10.26-87
provided that the excess of (A) the Aggregate Availability immediately
prior to and after giving effect to such Distribution over (B) trade
payables of any and all Borrowers which are more than 45 days past due as
of the date of such Distribution shall be at least $10,000,000, (iii) make
guarantees permitted by and in accordance with SECTION 10.12, and (iv)
engage in transactions in the ordinary course of business, in amounts and
upon terms fully disclosed to the Agent, and no less favorable to such
Borrower or such Subsidiary than would be obtained in a comparable arm's-
length transaction with a third party who is not an Affiliate, and (b)
notwithstanding the foregoing, nothing contained in this Agreement shall
prohibit the Borrowers from paying Dividends to Holdings from funds legally
available to pay such dividends or from paying federal or state taxes upon
their income.
10.16 INVESTMENT BANKING AND FINDER'S FEES. Such Borrower shall
not, and shall not permit any of its Subsidiaries to, pay or agree to pay,
or reimburse any other party (other than the Agent and the Lenders) with
respect to, any investment banking or similar or related fee, underwriter's
fee, finder's fee, or broker's fee to any Person in connection with this
Agreement. Such Borrower shall defend and indemnify the Lenders and the
Agent against and hold them harmless from all claims of any Person for any
such fees, and all costs and expenses (including without limitation,
attorneys fees) incurred by the Lenders or the Agent in connection
therewith.
10.17 BUSINESS CONDUCTED. Such Borrower shall not, and shall not
permit any of its Subsidiaries to, engage, directly or indirectly, in any
line of business other than the businesses in which such Borrower is and
its Subsidiaries are engaged on the Effective Date or the businesses in
which such Borrower and its Subsidiaries were engaged on the date of the
Original Agreement.
10.18 LIENS. Such Borrower shall not, and shall not permit any
of its Subsidiaries to, create, incur, assume, or permit to exist any Lien
on any property now owned or hereafter acquired by any of them, except
Permitted Liens and Liens with respect to the Equipment located on the Real
Estate in Terre Haute, Indiana and such Real Estate in favor of Persons,
other than the Lenders, providing any financing with respect to the
Equipment on such Real Estate.
10.19 SALE AND LEASEBACK TRANSACTIONS. Such Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly,
enter into any arrangement with any Person providing for such Borrower or
Subsidiary to lease or rent property that such Borrower or Subsidiary has
sold or transferred or will sell or otherwise transfer to such Person;
PROVIDED, HOWEVER, the Borrowers may enter into sale leaseback transactions
in the ordinary course of the Borrowers' business as conducted on the
Effective Date which do not exceed $1,500,000 in aggregate for all
Borrowers in any Fiscal Year.
10.20 NEW SUBSIDIARIES. Such Borrower shall not, directly or
indirectly, organize or acquire any Subsidiary of such Borrower unless such
Subsidiary shall execute a guaranty and security agreement in form and
substance satisfactory to the Agent, together with such other instruments,
documents and agreements (including, without limitation, UCC financing
statements) as the Agent may reasonably request, in form and substance
satisfactory to the Agent.
10.21 RESTRICTED INVESTMENTS. Such Borrower shall not, and shall
not permit any of its Subsidiaries to, make any Restricted Investment.
<PAGE>
<PAGE> EX-10.26-88
10.22 [Intentionally Omitted]
10.23 [Intentionally Omitted]
10.24 MINIMUM INTEREST COVERAGE. The Borrowers will maintain a
ratio of (a)(i) EBITDA as determined at the end of each calendar month for
the preceding three-month period minus (ii) any Distributions made to
Holdings during such preceding three-month period to the extent NOT
included in calculating EBITDA to (b) interest expense (excluding in the
determination of interest expense the Closing Fee, and all other fees and
expenses incurred by the Borrowers in connection with the closing of this
transaction contemplated by this Agreement) net of interest income for such
preceding three-month period, of not less than 1.1 to 1.0.
For the purpose of this SECTION 10.24, "Distributions made to
Holdings" shall exclude the following Distributions made or to be made by
GDT to Holdings: $30,000,000 in December 1994, $7,000,000 in January,
1995, $15,000,000 on the Effective Date and up to $8,000,000 not later than
June 30, 1995.
10.25 FIXED MATURITY COVERAGE. The Borrowers will maintain a
ratio of (a)(i) EBITDA as determined at the end of each calendar month for
the immediately preceding twelve-month period minus (ii) any Distributions
made to Holdings to the extent NOT included in calculating EBITDA MINUS
(iii) Capital Expenditures (excluding up to $7,000,000 of Capital
Expenditures with respect to Terre Haute Equipment financed by any Person
including the Lenders but excluding a Borrower or Affiliate thereof through
February 29, 1996) minus (iv) federal or state income taxes paid or
deferred (unless included in clause (ii) above) minus (v) the amount of
cash expended with respect to extraordinary gains or losses, in each case
during such preceding twelve-month period to (b) principal payments which
the Borrowers were required to make on Borrowed Money, PLUS principal
payments made or required to be made on Capital Expenditures financed by
any Person including the Lenders, PLUS interest expense on any of the
foregoing, during such preceding twelve-month period, of not less than 1.1
to 1.0.
For the purpose of this SECTION 10.25 "Distributions made to
Holdings" shall exclude the following Distributions made or to be made by
GDT to Holdings: $30,000,000 in December 1994, $7,000,000 in January,
1995, $15,000,000 on the Effective Date and up to $8,000,000 not later than
June 30, 1995.
10.26 INTERCOMPANY LOANS. No Borrower shall make any loan,
advance or other financial accommodation for the purpose, directly or
indirectly, of financing any Redemption pursuant to a Tender Offer or an
Exchange Offer unless:
(i) simultaneously with the making of such loan, advance or
other financial accommodation and Redemption, GDT shall have delivered
to the Agent, for the benefit of the Lenders and in form and substance
reasonably satisfactory to the Agent,
(x) written representations and warranties of Holdings to
the Lenders and the Agent to the effect that (1) as of the date
of such loan, advance or other financial accommodation and
Redemption, each of the Tender Offer Documents or Exchange Offer
Documents, as applicable, if required to be filed with the SEC or
other securities authority complied in all material respects with
the
<PAGE>
<PAGE> EX-10.26-89
provisions of the Securities Exchange Act and the rules and
regulations thereunder and all other Requirements of Law; and (2)
the Tender Offer Documents or Exchange Offer Documents, as
applicable, as of the time they were distributed to security
holders and all times subsequent thereto, did not and do not
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were
made, not misleading; in each case together with the written
indemnity of Holdings for damages, costs and expenses incurred by
any Secured Creditor resulting from the breach, in any material
respect, of any such representation and warranty of Holdings; and
(y) a favorable opinion of counsel for Holdings addressed
to the Lenders and the Agent to the effect that (1) the
representations, warranties and indemnity referred to in CLAUSE
(x) above were duly authorized, executed and delivered and are
(subject to (x) customary creditors' rights and equitable
remedies exceptions and (y) with respect to such indemnity,
considerations of public policy) enforceable against Holdings in
accordance with their terms; (2) to such counsel's knowledge, no
action has been taken by any competent authority which restrains,
prevents or imposes any material adverse condition upon, or seeks
to restrain, prevent or impose any material adverse condition
upon, such Tender Offer or Exchange Offer, as applicable; (3) the
Tender Offer Documents or Exchange Offer Documents, as
applicable, if required to be filed by Holdings with the SEC in
connection with the Tender Offer or Exchange Offer, as
applicable, and other relevant documents required thereby (except
for the financial and statistical data contained or incorporated
by reference therein, as to which such counsel expresses no
opinion), at all relevant times complied as to form in all
material respects with the applicable requirements of the
Securities Exchange Act and Securities Act and the rules and
regulations thereunder; (4) such Tender Offer Documents or
Exchange Offer Documents, as applicable, if required to be filed
with the SEC, have been duly filed by Holdings with the SEC; and
(5) during the course of the preparation of the Tender Offer
Documents or Exchange Offer Documents, as applicable, such
counsel participated in conferences and discussions with various
officers and other representatives of Holdings and its
Affiliates, at which the contents of the Tender Offer Documents
or Exchange Offer Documents, as applicable, were discussed;
although such counsel has made no special investigation of
representations made by officers and other representatives of
Holdings and its Affiliates and has not verified and is not
passing upon and assumes no responsibility for the accuracy,
completeness or fairness of the statements contained in the
Tender Offer Documents or Exchange Offer Documents, as
applicable, based upon such counsel's participation in such
conferences and discussions, and relying as to materiality upon
officers and other representatives of Holdings and its
Affiliates, such counsel advises the Lenders and Agent that no
facts have come to such counsel's attention which lead such
counsel to believe that, at any relevant time, the Tender Offer
Documents or Exchange Offer Documents, as applicable, contained
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel
expresses no
<PAGE>
<PAGE> EX-10.26-90
view with respect to the financial statements and related notes,
statistical and accounting data contained or incorporated by
reference in the Tender Offer Documents or Exchange Offer
Documents, as applicable); and such opinion shall also cover such
other matters with respect to Holdings' corporate organization,
existence, good standing and related issues as the Agent may
reasonably require; and
(z) such other documents and instruments as the Agent may
reasonably require; and
(ii) the representations and warranties of Holdings made pursuant
to SUBSECTION (b)(i)(x) of this SECTION 10.26 shall be true and
correct in all material respects.
10.27 FISCAL YEAR. Such Borrower will not change its Fiscal Year
from a fiscal year ending on the last day of December.
10.28 NO AMENDMENT OF CHARTER, BY-LAWS. Such Borrower will not,
and will not permit any of its Subsidiaries to, without the prior written
consent of the Agent, amend or modify its Certificate of Incorporation or
By-Laws in any manner which would adversely affect the ability of the
Borrowers to perform their Obligations hereunder and under the Loan
Documents.
10.29 FURTHER ASSURANCES. Such Borrower shall execute and
deliver, or cause to be executed and delivered, to the Lenders and the
Agent such documents and agreements, and shall take or cause to be taken
such actions, as the Lenders and the Agent may, from time to time,
reasonably request to carry out the terms and conditions of this Agreement
and the other Loan Documents.
10.30 USE OF PROCEEDS FOR SHAREHOLDER LOANS. In the event any
proceeds of a Loan are advanced or distributed by a Borrower to Holdings in
the form of a Distribution or otherwise, in each case for the purpose of
enabling Holdings to repay indebtedness owed by Holdings to any of its
shareholders, such Borrower shall deliver, or cause Holdings to deliver, to
the Agent evidence, in form and substance satisfactory to the Agent, of the
repayment of such indebtedness. The requirements of this SECTION 10.30
shall be in addition to, and not in lieu of, any other covenants and
obligations of the Borrowers under this Agreement.
10.31 DELIVERY OF ACKNOWLEDGEMENT COPIES OF UCC-3'S. The
Borrowers shall, within 30 days after the filing thereof, deliver to the
Agent all acknowledgement copies of amendments to the UCC-1s filed in
connection with the Original Agreement.
10.32 REVENUE DEPARTMENT RULING AND TAX OPINION. GDT shall (a)
promptly employ its best efforts to apply for and cause to be issued by the
Georgia Department of Revenue a ruling (the "Ruling") to the effect that no
further Georgia Intangibles Tax is payable with respect to the Term Notes
by reason of the issuance of the Term Notes issued to the Lenders parties
hereto on each Term Funding Date or any new Term Notes issued pursuant to
the provisions of SECTION 14.3(d), and (b) promptly after the issuance of
the Ruling, cause the Tax Opinion to be delivered to the Agent.
<PAGE>
<PAGE> EX-10.26-91
11. CONDITIONS OF LENDING.
11.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT, MAKING
OF INITIAL REVOLVING LOANS AND ISSUANCE OF LETTERS OF CREDIT AND BANKER'S
ACCEPTANCES ON THE EFFECTIVE DATE AND MAKING OF TERM LOANS ON THE INITIAL
TERM LOAN FUNDING DATE. The effectiveness of this Agreement, the
obligation of each Lender to make the initial Revolving Loans on the
Effective Date, the obligation of each Lender to make the initial portion
of the New Term Loan Funding on the Initial Term Loan Funding Date, the
obligation of the Agent to cause to be issued any Letter of Credit or
Banker's Acceptance on the Effective Date or of BOA to issue any such
Letter of Credit or Banker's Acceptance, and the obligation of the Lenders
to participate in Letters of Credit or Banker's Acceptances issued on the
Effective Date, are subject to the Initial Term Loan Funding Date and the
Effective Date occurring on the same date and the following conditions
precedent having been satisfied in a manner satisfactory to the Lenders:
(a) Each Borrower shall have performed and complied with
all covenants, agreements and conditions contained herein which
are required to be performed or complied with by such Borrower
before or on such Effective Date and Initial Term Loan Funding
Date.
(b) The Lenders shall have received a certificate dated the
Effective Date and signed by the president or a vice president
and the chief financial officer or treasurer of such Borrower
certifying that the conditions specified in SECTION 11.1(a) have
been fulfilled and that the representations and warranties
contained in this Agreement are true and correct on such date and
no Default or Event of Default has occurred and is continuing on
such date or would result from such extension of credit.
(c) The Lenders shall have received all items on the List
of Closing Documents attached hereto as EXHIBIT D which are not
elsewhere identified in this ARTICLE 11, such items to be in form
and substance reasonably satisfactory to the Lenders, and to be
executed by all parties thereto when the nature of such items so
requires.
(d) All proceedings taken in connection with the execution
of this Agreement, all other Loan Documents and all documents and
papers relating thereto shall be satisfactory to the Lenders.
The Lenders shall have received copies of such documents and
papers as the Lenders may reasonably request in connection
therewith, all in form and substance reasonably satisfactory to
the Lenders.
(e) The excess of (i) the Aggregate Availability after
giving effect to the Revolving Loans made or outstanding and the
Letters of Credit or Banker's Acceptances issued or outstanding
on the Effective Date OVER (ii) trade payables of any and all
Borrowers which are more than 45 days past due as of the
Effective Date and any Distributions to be made within thirty
(30) days after the Effective Date shall be at least $15,000,000.
(f) The Borrowers shall have delivered to the Lenders a pro
forma consolidated balance sheet of GDT and its Subsidiaries as
of December 31, 1994, prepared on a going concern basis,
reflecting (i) the fair market values of the Borrowers' real
property, machinery and equipment, and (ii) the fair values of
the Borrowers'
<PAGE>
<PAGE> EX-10.26-92
other assets, and (iii) the portion of the New Term Loan Funding
amount to be made on the Initial Term Funding Date determined based on
such reported fair values (as the same may have been adjusted downward
by the Agent), eliminating as an asset any amount of "goodwill" stated
as a line item on such balance sheet and taking into account the
effect of any Distributions made after December 31, 1994 or
contemplated, as of the Initial Term Funding Date, to be made on or
within thirty (30) days after the Initial Term Funding Date. Such
adjusted pro forma balance sheet shall show that GDT and its
Subsidiaries are solvent (to the extent that the definition "Solvent"
depends on balance sheet measures).
(g) The Agent shall have received the Closing Fee.
The acceptance by a Borrower of any Loans made on the Effective Date, and
the request for the issuance of any Letter of Credit or Banker's Acceptance
on the Effective Date, shall be deemed to be a representation and warranty
made by such Borrower to the effect that all of the conditions to the
making of such Loans or the issuance of such Letter of Credit or Banker's
Acceptance set forth in this SECTION 11.1 have been satisfied, with the
same effect as delivery to the Lenders of a certificate signed by the
president and chief financial officer of such Borrower, dated the Effective
Date, to such effect.
11.2 CONDITIONS PRECEDENT TO MAKING OF TERM LOANS ON EACH TERM
FUNDING DATE. The obligation of each Lender to make the Term Loans
constituting the New Term Loan Funding on each Term Funding Date is subject
to the following conditions precedent having been satisfied in a manner
satisfactory to the Lenders:
(a) Each Borrower shall have performed and complied with
all covenants, agreements and conditions contained herein which
are required to be performed or complied with by such Borrower
before or on such Term Funding Date and the Effective Date shall
have occurred.
(b) The Lenders shall have received a certificate dated the
applicable Term Funding Date signed by the president or a vice
president and the chief financial officer or treasurer of GDT
certifying that the conditions specified in SECTION 11.2(a) have
been fulfilled and that the representations and warranties
contained in this Agreement are true and correct on such date and
no Default or Event of Default has occurred and is continuing on
such date or would result from such extension of credit.
(c) The Lenders shall have received all items on the List
of Closing Documents attached hereto as EXHIBIT D which are not
elsewhere identified in this ARTICLE 11, such items to be in form
and substance satisfactory to the Lenders, and to be executed by
all parties thereto when the nature of such items so requires.
(d) All proceedings taken in connection with the execution
of this Agreement, the Term Notes, all other Loan Documents and
all documents and papers relating thereto shall be satisfactory
to the Lenders. The Lenders shall have received copies of such
documents and papers as the Lenders may reasonably request in
connection therewith, all in form and substance satisfactory to
the Lenders.
(e) Nothing shall have come to the attention of the Lenders
after the Effective Date in connection with their continuing review
<PAGE>
<PAGE> EX-10.26-93
of all business and legal issues pertaining to the transactions
contemplated by this Agreement which, in the reasonable judgment of
the Lenders, constitutes a Material Adverse Effect.
(f) The excess of (i) the Aggregate Availability after
giving effect to the Loans made or outstanding and the Letters of
Credit or Banker's Acceptances issued or outstanding on such Term
Funding Date OVER (ii) trade payables of any and all Borrowers
which are more than 45 days past due as of such Term Funding Date
and any Distributions to be made within thirty (30) days after
such Term Funding Date shall be at least $20,000,000.
The acceptance by GDT of any Term Loans made on each Term Funding Date
shall be deemed to be a representation and warranty made by GDT to the
effect that all of the conditions to the making of such Term Loans set
forth in this SECTION 11.2 have been satisfied, with the same effect as
delivery to the Lenders of a certificate signed by the president or chief
financial officer of GDT, dated such Term Funding Date, to such effect.
11.3 CONDITIONS PRECEDENT TO EACH LOAN, LETTER OF CREDIT AND
BANKER'S ACCEPTANCE. The obligation of each Lender to make Term Loans on
each Term Funding Date and to make Revolving Loans, including the initial
Loans made on the Effective Date, and the obligation of the Agent to cause
to be issued (or of any Lender to issue) any Letter of Credit or Banker's
Acceptance and of the Lenders to participate in Letters of Credit or
Banker's Acceptances, shall be subject to the further conditions precedent
that on the date of any such extension of credit:
(a) With respect to a request for Loans, the Agent shall
have received, on or before the applicable Funding Date, an
original and duly executed Notice of Borrowing, or telecopy or
telex notice in lieu thereof, as and when required pursuant to
SECTION 2.2;
(b) The acceptance by a Borrower of any extension of credit
shall be deemed to be a statement to the effect set forth in
clauses (i) and (ii) below (which statement shall be true), with
the same effect as the delivery to the Lenders of a certificate
signed by the president and chief financial officer of such
Borrower, dated the date of such extension of credit, stating
that:
(i) The representations and warranties contained
in this Agreement, other than those set forth in
SECTIONS 9.4 (except to the extent that SECTION 9.4
relates to the business conducted by the Borrowers),
9.5, and 9.13, are correct in all material respects on
and as of the date of such extension of credit as
though made on and as of such date, except to the
extent the Lenders have been notified by such Borrower
that any such representation or warranty is not correct
and the Majority Lenders have explicitly waived in
writing compliance with such representation or war-
ranty; and
(ii) No event has occurred and is continuing, or
would result from such extension of credit, which
constitutes a Default or an Event of Default; and
(c) the Agent shall have received such other approvals,
opinions or documents as the Agent may reasonably request.
<PAGE>
<PAGE> EX-10.26-94
Each submission by GDT to the Agent of a Notice of Borrowing or telephonic
request with respect to a Revolving Loan and the acceptance by a Borrower
of the proceeds of each such Loan, or the request for the issuance of a
Letter of Credit or Banker's Acceptance and the issuance of such Letter of
Credit or Banker's Acceptance, shall constitute a representation and
warranty by the Borrowers as of the Funding Date in respect of such
Revolving Loan and the date of issuance of such Letter of Credit or
Banker's Acceptance that all of the conditions contained in this ARTICLE 11
have been satisfied.
12. DEFAULT; REMEDIES.
12.1 EVENTS OF DEFAULT. It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for
any reason:
(a) any failure to pay the principal of or interest or
premium on any of the Obligations when due, whether upon demand
or otherwise;
(b) any representation or warranty made by any Borrower or
any of its Subsidiaries in this Agreement, any of the other Loan
Documents, any Financial Statement, or any certificate furnished
by any such Borrower or Subsidiary at any time to the Agent or
any Lender shall prove to be untrue in any material respect as of
the date on which made and such Borrowers shall fail to cause or
render immaterial the fact or condition causing such
representation or warranty to be untrue in any material respect
within (i) ten (10) days after notice of such failure by the
Agent to such Borrower, (ii) thirty (30) days after the date that
such Borrower discovers, or reasonably should have discovered,
such failure, or (iii) if such failure shall have existed for
more than forty-five (45) days, five (5) days after the earlier
of (A) written notice thereof from the Agent to such Borrower or
(B) such Borrower's discovery of such failure;
(c) any failure by (i) any Borrower to comply with any of
the covenants set forth in ARTICLE 10 of this Agreement; or (ii)
any failure by any Borrower or Holdings to comply with any of the
covenants set forth in the Holdings Stock Agreement;
(d) any failure by any Borrower to comply with any of the
other covenants and agreements contained in this Agreement, the
Term Notes, the other Loan Documents, or any other agreement
entered into at any time to which any Borrower or any Subsidiary
of any Borrower and the Agent or any of the Lenders are party,
for more than (i) ten (10) days after notice of such failure by
the Agent to such Borrower, (ii) thirty (30) days after the date
that such Borrower discovers, or reasonably should have dis-
covered, such failure, or (iii) if such failure shall have
existed for more than forty-five (45) days, five (5) days after
the earlier of (A) written notice thereof from the Agent to such
Borrower or (B) such Borrower's discovery of such failure; or if
any such agreement, instrument or document shall terminate (other
than in accordance with its terms or the terms hereof or with the
written consent of the Majority Lenders and the Agent);
(e) any default in the payment of any principal, interest
or premium with respect to any Debt for borrowed money or any
<PAGE>
<PAGE> EX-10.26-95
indebtedness for borrowed money of any Borrower or of any Subsidiary
of such Borrower (other than the Obligations) in an outstanding prin-
cipal amount in excess of $500,000 or under any agreement or instru-
ment under or pursuant to which any such Debt or indebtedness may have
been issued, created, assumed, or guaranteed by such Borrower or Sub-
sidiary, and such default shall continue for more than the period of
grace, if any, therein specified, or any such Debt or indebtedness
shall be declared due and payable prior to the stated maturity
thereof;
(f) Holdings, any Borrower or any Subsidiary of any
Borrower shall (i) file a voluntary petition in bankruptcy or
file a voluntary petition or an answer or otherwise commence any
action or proceeding seeking reorganization, arrangement or
readjustment of its debts or for any other relief under the Bank-
ruptcy Code, as amended, or under any other bankruptcy or
insolvency act or law, state or federal, now or hereafter
existing, or consent to, approve of or acquiesce in, any such
petition, action or proceeding; (ii) apply for or acquiesce in
the appointment of a receiver, assignee, liquidator,
sequestrator, custodian, trustee or similar officer for it or for
all or any part of its property; (iii) make an assignment for the
benefit of creditors; or (iv) be unable generally to pay its
debts as they become due;
(g) an involuntary petition shall be filed or an action or
proceeding otherwise commenced seeking reorganization,
arrangement or readjustment of Holdings', any Borrower's or any
Borrower's Subsidiary's debts or for any other relief under the
Bankruptcy Code, as amended, or under any other bankruptcy or
insolvency act or law, state or federal, now or hereafter
existing and such petition, action or proceeding is not
controverted by appropriate proceedings diligently pursued within
thirty (30) days and is not dismissed within sixty (60) days;
(h) a receiver, assignee, liquidator, sequestrator,
custodian, trustee or similar officer for Holdings, any Borrower
or any Subsidiary of any Borrower or for all or any part of their
respective property shall be appointed; or a warrant of
attachment, execution or similar process shall be issued against
any part of the property of Holdings, any Borrower or any
Subsidiary of any Borrower and is not controverted by appropriate
proceedings diligently pursued within thirty (30) days and is not
dismissed within sixty (60) days;
(i) Holdings or any Borrower or any Subsidiary of any
Borrower shall file a certificate of dissolution under applicable
state law or shall be liquidated, dissolved or wound-up, or shall
commence any action or proceeding for dissolution, winding-up or
liquidation, or shall take any corporate action in furtherance of
any of the foregoing, or shall have commenced against it any such
action or proceeding which is not controverted by appropriate
proceedings diligently pursued within thirty (30) days and is not
dismissed within sixty (60) days;
(j) all or substantially all of the property of Holdings or
any Borrower or any Subsidiary of any Borrower shall be national-
ized, expropriated or condemned, seized or otherwise appro-
priated, or custody or control of such property or of Holdings or
any Borrower or any Subsidiary of any Borrower shall be assumed
by any
<PAGE>
<PAGE> EX-10.26-96
Public Authority or any court of competent jurisdiction at the
instance of any Public Authority except where contested in good faith
by proper proceedings diligently pursued where a stay of enforcement
is in effect;
(k) any guaranty of the Obligations shall be terminated,
revoked or declared void or invalid or any Guarantor attempts to
terminate or revoke its guaranty of the Obligations or contests
in any proceeding the validity thereof;
(l) one or more final judgments for the payment of money
aggregating in excess of $1,000,000 (net of insurance with
respect to which the insurer has not denied coverage) shall be
rendered against any Borrower or any Subsidiary of any Borrower
which is not discharged in full or stayed within thirty (30) days
after the date of entry thereof;
(m) any loss, theft, damage or destruction of any item or
items of Collateral occurs which has a Material Adverse Effect;
(n) Holdings shall default in the payment when due, whether
by acceleration or otherwise, or in the performance or observance
of the Debentures or any other event or condition shall occur
which results in the acceleration of the maturity of any of the
Debentures or enables the holder or holders thereof or any agent
or trustee for such holders (with or without the giving of notice
or passage of time or both) to accelerate the maturity of any of
the Debentures;
(o) the Holdings Controlling Shareholders (or any estate
of, or trust created by, any Holdings Controlling Shareholder for
tax or estate planning purposes) shall cease to own sufficient
shares of the capital stock of Holdings to elect a majority of
the Board of Directors of Holdings, or the Holdings Controlling
Shareholders shall cease to take all corporate action or shall
cease to have the power to direct and cause the direction of the
management and policies of Holdings, or Holdings shall cease to
own one hundred percent (100%) of the outstanding capital stock
of GDT or cease to have the power to direct and cause the
direction of the management of policies of GDT or to take all
corporate action;
(p) there occurs any material adverse change in the
business, assets or other properties, liabilities, or condition
(financial or otherwise), results of operations or prospects of
Holdings or any Borrower since December 31, 1993;
(q) any Termination Event occurs which the Lenders
reasonably believe could have a Material Adverse Effect;
(r) any plan administrator of any Benefit Plan applies
under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and the Lender
believes that the business hardship which is the basis of such
application could have a Material Adverse Effect; or
(s) (i) on or after the date of the execution and delivery
thereof, any of the Loan Documents shall for any reason, except
to the extent permitted by the terms hereof or thereof and other
than as a result of any default or agreement of the Agent, fail
or cease
<PAGE>
<PAGE> EX-10.26-97
to create or constitute a valid, perfected and first priority lien on
or security interest in any Collateral or any Real Estate purported to
be covered thereby or (ii) the Obligations shall be subordinated or
shall not have the priority contemplated by the Loan Documents, for
any reason.
12.2 REMEDIES. (a) If an Event of Default exists, the Agent
may, and at the direction of the Majority Lenders shall, without notice to
or demand on any of the Borrowers, do one or more of the following at any
time or times and in any order: (i) reduce each Borrower's Maximum
Revolver Amount, or the amount of the Revolving Credit Commitments, or the
advance rates against Eligible Accounts and/or Eligible Inventory used in
computing the Maximum Revolver Amounts, or reduce or increase one or more
of the other elements used in computing the Maximum Revolver Amounts and
(ii) restrict the amount of or refuse to make Revolving Loans or to issue
Letters of Credit or Banker's Acceptances. If an Event of Default exists,
the Agent may, and at the direction of the Majority Lenders shall, without
notice to or demand on any Borrower, do one or more of the following, in
addition to the actions described in the preceding sentence, at any time or
times and in any order: (i) terminate the Commitments and this Agreement
and (ii) declare any or all Obligations to be immediately due and payable;
PROVIDED, HOWEVER, that upon the occurrence of any Event of Default
described in SECTIONS 12.1(f), 12.1(g), 12.1(h), or 12.1(i), all Obliga-
tions shall automatically become immediately due and payable without notice
or demand of any kind; and pursue its other rights and remedies under the
Loan Documents and applicable law.
(b) If an Event of Default exists: (i) the Agent and the
Lenders shall have, in addition to all other rights, the rights and
remedies of a secured party under the UCC; (ii) the Agent may, at any time,
take possession of the Collateral and keep it on any of the Borrower's
premises, at no cost to the Lenders or the Agent, or remove any part of it
to such other place or places as the Agent may desire, or each of the
Borrowers shall, upon the Agent's demand, at the Borrowers' cost, assemble
the Collateral and make it available to the Agent at a place reasonably
convenient to the Agent; and (iii) the Agent may sell and deliver any
Collateral at public or private sales, for cash, upon credit or otherwise,
at such prices and upon such terms as the Agent deems advisable, in its
sole discretion, and may, if the Agent deems it reasonable, postpone or
adjourn any sale of the Collateral by an announcement at the time and place
of sale or of such postponed or adjourned sale without giving a new notice
of sale. Without in any way requiring notice to be given in the following
manner, each of the Borrowers agrees that any notice by the Agent of sale,
disposition or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, shall constitute reasonable
notice to the Borrower if such notice is mailed by registered or certified
mail, return receipt requested, postage prepaid, or is delivered personally
against receipt, at least ten (10) days prior to such action to the
Borrowers' address specified in or pursuant to Section 16.7. If any
Collateral is sold on terms other than payment in full at the time of sale,
no credit shall be given against the Obligations until the Agent receives
payment, and if the buyer defaults in payment, the Agent may resell the
Collateral without further notice to any of the Borrowers. In the event
the Agent seeks to take possession of all or any portion of the Collateral
by judicial process, each of the Borrowers irrevocably waives: (a) the
posting of any bond, surety or security with respect thereto which might
otherwise be required; (b) any demand for possession prior to the
commencement of any suit or action to recover the Collateral; and (c) any
requirement that the Agent retain possession and not dispose of any Collat-
eral until after trial or final judgment. Each of the Borrowers agrees
that
<PAGE>
<PAGE> EX-10.26-98
the Agent has no obligation to preserve rights to the Collateral or
marshall any Collateral for the benefit of any Person. The Agent is hereby
granted a license or other right to use, without charge, each of the
Borrower's labels, patents, copyrights, name, trade secrets, trade names,
trademarks, and advertising matter, or any similar property, in completing
production of, advertising or selling any Collateral, and the rights of
each of the Borrowers under all licenses and all franchise agreements shall
inure to the Agent's benefit. The proceeds of sale shall be applied first
to all expenses of sale, including attorneys' fees, and second, in whatever
order the Agent elects, to all Obligations. The Agent will return any
excess to the applicable Borrower or such other Person as shall be legally
entitled thereto and the Borrowers shall remain liable for any deficiency.
(c) If an Event of Default occurs, each of the Borrowers hereby
waives all rights to notice and hearing prior to the exercise by the Agent
of the Agent's rights to repossess the Collateral without judicial process
or to replevy, attach or levy upon the Collateral without notice or
hearing.
(d) If an Event of Default occurs, the Agent shall have the
right to enter upon the premises of the Borrower where the Collateral is
located (or is believed to be located) without any obligation to pay rent
to the Borrowers, or any other place or places where the Collateral is
believed to be located and kept, and render the Collateral unusable or
remove the Collateral therefrom to the premises of the Agent or any agent
of the Agent, for such time as the Agent may desire, in order to
effectively collect or liquidate the Collateral, and/or the Agent may
require the Borrower to assemble the Collateral and make it available to
the Agent at a place or places to be designated by the Agent. If an Event
of Default occurs, the Agent shall have the right to obtain access to the
Borrowers' data processing equipment, computer hardware and software
relating to the Collateral or the Real Estate and to use all of the
foregoing and the information contained therein in any manner the Agent
deems appropriate; and the Agent shall have the right to notify post office
authorities to change the address for delivery of the Borrowers' mail to an
address designated by the Agent and to receive, open and deal with all mail
addressed to the Borrowers.
13. TERMINATION.
13.1 TERM AND TERMINATION. This Agreement shall terminate on
the fifth Anniversary Date unless terminated on such earlier date as
provided below (the "Termination Date"). The Majority Lenders may also
terminate this Agreement at any time without notice upon an Event of
Default. Upon the termination of this Agreement for any reason whatsoever,
all Obligations (including, without limitation, all accrued and unpaid fees
under Article 4 and all unpaid principal of, accrued interest on and
prepayment penalties, if any, with respect to the Term Loans) shall become
immediately due and payable. Notwithstanding the termination of this
Agreement, until all Obligations are paid and performed in full, the
Lenders and the Agent shall retain all of their respective rights and
remedies hereunder (including, without limitation, the Agent's security
interest, for the benefit of the Secured Creditors, in and all rights and
remedies with respect to all then existing and after-arising Collateral).
14. WAIVER; AMENDMENTS; ASSIGNMENTS; SUCCESSORS.
14.1 NO WAIVER. Failure by the Agent or any Lender to exercise
any right, remedy or option under this Agreement or any present or future
supplement thereto, or in any other agreement between or among any Borrower
<PAGE>
<PAGE> EX-10.26-99
and the Agent and/or any Lender, or delay by the Agent or any Lender in
exercising the same, will not operate as a waiver thereof. No waiver by
the Agent or any Lender will be effective unless it is in writing, and then
only to the extent specifically stated. No waiver by the Agent or any
Lender on any occasion shall affect or diminish the Agent's or any Lender's
right thereafter to require strict performance by the Borrowers of any
provision of this Agreement. The Agent's and each Lender's rights and
remedies under this Agreement will be cumulative and not exclusive of any
other right or remedy which the Agent or any Lender may have.
14.2 AMENDMENTS AND WAIVERS. No amendment or modification of
any provision of this Agreement shall be effective without the written
agreement of the Majority Lenders and the Borrowers, and no termination or
waiver of any provision of this Agreement, or consent to any departure by
any Borrower therefrom, shall in any event be effective without the written
concurrence of the Majority Lenders, which the Majority Lenders shall have
the right to grant or withhold at their sole discretion. Notwithstanding
the immediately preceding sentence, any release of any Guaranty made by a
Guarantor or any amendment, modification, or waiver of (a) any provision of
ARTICLE 2, 3 or 4, which amendment, modification or waiver relates to any
increase of the Commitments, any forgiveness of the principal amount of any
Loan or increase in the principal amount of the Term Loans, any extension
or waiver of the time for payment of any installments of principal or
interest on any Term Loans or any provision of SECTION 2.3, the reduction
of the interest rates applicable to any Loans and/or the amount of fees
payable hereunder, shall be effective if, and only if, evidenced by a
writing signed by all Lenders, (b) the definitions of "Aggregate Maximum
Revolver Amount", "Distribution", "Dividend", "Eligible Accounts",
"Eligible Inventory", "Initial Term Funding Date", "Majority Lenders", "Net
Collateral Value", "Pro Rata Share", "Real Estate Term Funding Date",
"Termination Date" and "Terre Haute Term Funding Date", shall be effective
only if evidenced by a writing signed by all Lenders or (c) the provisions
contained in SECTIONS 10.9, 10.15, 10.24, 10.25, 10.26, 11.1(e), 11.2(f),
this SECTION 14.2 and in SECTION 15.8(b)(v), shall be effective only if
evidenced by a writing signed by all Lenders. No amendment, modification,
termination, or waiver of any provision of ARTICLE 15 or any other
provision referring to the Agent or BOA shall be effective without the
written concurrence of the Agent. The Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any
Borrower in any case shall entitle such Borrower to any other or further
notice or demand in similar or other circumstances. Any amendment,
modification, waiver or consent effected in accordance with this SECTION
14.2 shall be binding on each Secured Creditor, each future Secured
Creditor, and, if signed by a Borrower, on such Borrower.
14.3 ASSIGNMENTS; PARTICIPATIONS. (a) Each Lender shall have
the right, with the Agent's consent, at any time to assign to one or more
commercial banks or other financial institutions all or a portion of its
Commitment, the Loans owing to it and Term Notes held by it and its rights
and obligations with respect to Letters of Credit and Banker's Acceptances;
PROVIDED, HOWEVER, that (i) each such assignment shall be of a constant,
and not a varying, percentage of all of the assigning Lender's
corresponding rights and obligations under this Agreement and the
assignment shall apply the same percentage to the Lender's Commitment and
Loans, (ii) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in
<PAGE>
<PAGE> EX-10.26-100
substantially the form of EXHIBIT E ("Assignment and Acceptance"), together
with the Term Notes subject to such assignment and with a processing and
recordation fee of $2,000, and (iii) any assignee shall be (x) a Lender or
Affiliate of a Lender or (y) a commercial bank or other financial
institution which has combined capital, surplus and undivided profits of
not less than $100,000,000 or Affiliates thereof. Upon such execution,
delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
at least two (2) Business Days after the execution thereof, (A) the as-
signee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations (including, but
not limited to, the obligation to participate in Letters of Credit pursuant
to SECTION 3A.6 and the obligation to participate in Banker's Acceptances
pursuant to SECTION 3B.6) and (B) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other Loan Document furnished pursuant hereto; (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Borrower or the performance or
observance by any Borrower of any of its obligations under this Agreement
or any other Loan Document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with such
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance
upon the Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vi)
such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to
be performed by it as a Lender.
(c) The Agent shall maintain at its address set forth in SECTION
16.7 a copy of each Assignment and Acceptance delivered to and accepted by
it and books and records, including computer records, in which it shall
promptly record the names and addresses of the Lenders and the Commitment
of, and principal amount of the Loans owing to, each Lender from time to
time (the "Register"). The entries in the Register shall constitute rebut-
tably presumptive evidence, absent manifest error but subject to the
Borrowers' right to review the Agent's monthly statement and to object to
any entries therein under SECTION 6.1, of the accuracy of the information
contained therein, and the Borrowers, the Agent and the Lenders may treat
each Person
<PAGE>
<PAGE> EX-10.26-101
the name of which is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection
by the Borrowers or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, together with the Term Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of EXHIBIT E, (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt notice thereof to the
Borrowers. Within five (5) Business Days after the Borrowers' receipt of
such notice, the Borrowers, at their own expense, will execute and deliver
to the Agent in exchange for the surrendered Term Notes, new Term Notes to
the order of such assignee in amounts corresponding to the interest in the
assigning Lender's rights and obligations under this Agreement acquired by
such assignee pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained an interest in such rights and obligations
hereunder, new Term Notes to the order of the assigning Lender in amounts
corresponding to such interest retained by it hereunder. Such new Term
Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Term Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of EXHIBIT C. Upon delivery of such new Term Notes,
the surrendered Term Notes shall be cancelled by the Agent and returned to
the applicable Borrower. Notwithstanding the foregoing provisions of this
SECTION 14.3(d), the Agent shall not be obligated to obtain, and no Lender
shall be entitled to the issuance of, new Term Notes following an
assignment under this SECTION 14.3, unless and until either (i) the Ruling
has been issued in form and substance satisfactory to the Agent and the
Agent has received the Tax Opinion, or (ii) the Agent is satisfied that all
Georgia Intangibles Tax payable in connection therewith has been fully paid
or provided for.
(e) Each Lender may grant participations in all or any part of
its rights and obligations under this Agreement (including, without
limitation, all or any part of its Commitment, the Loans, the Letters of
Credit or the Banker's Acceptances, as applicable) to one or more other
Persons; PROVIDED, HOWEVER, that (i) any such disposition shall not,
without the consent of the Borrowers, require any Borrower to file a
registration statement with the SEC or apply to qualify the Loans under the
blue sky law of any state; (ii) such Lender shall make and receive all
payments for the account of its participant and shall retain exclusively,
and shall continue to exercise exclusively, all rights of approval and
administration available hereunder with respect to such Lender's Commitment
and Pro Rata Share of the Loans, Letters of Credit and Banker's
Acceptances, as applicable, even after giving effect to the sale of any
such participation, and such Lender shall make such arrangements with its
participants as may be necessary to accomplish the foregoing and (iii) any
such disposition shall be to (x) a Lender or an Affiliate of a Lender, or
(y) a commercial bank or other financial institution which has combined
capital, surplus and undivided profits of not less than $100,000,000 or
Affiliates thereof. Notwithstanding anything to the contrary in the
foregoing sentence, any participant may be given the right to require the
Lender granting such participant's participation to vote against (1) the
release of all or substantially all of the Collateral, and (2) any
amendment, modification or waiver of any provision of ARTICLE 2, 3 or 4
relating to the principal amount of the Loans, Letter of Credit Obligations
or Banker's Acceptance Obligations, the maturity dates of the Loans,
interest and fees payable hereunder, the interest rates borne by the Loans
and the amounts of
<PAGE>
<PAGE> EX-10.26-102
any fees payable under SECTIONS 4.4, 4.4A and 4.5. No holder of a
participation in all or any part of the Loans shall be a "Lender" for any
purpose under this Agreement; PROVIDED, HOWEVER, that each holder of a
participation shall have the rights of a Lender (including any right to
receive payment) under SECTIONS 4.6, 15.5 and 16.6; PROVIDED, FURTHER, that
all requests for any such payments shall be made by a participant through
the Lender granting such participation. The right of each holder of a
participation to receive payment under SECTIONS 4.6, 15.5 and 16.6 shall be
limited to the lesser of (i) the amounts actually incurred by such holder
for which payment is provided under such Sections and (ii) the amounts that
would have been payable under such Sections by the Borrowers to the Lender
granting the participation to such holder had such participation not been
granted.
(f) It is expressly agreed that, in connection with prospective
offers for the sale and transfer of any assignment or any participation
pursuant to this SECTION 14.3, each Lender may provide to such prospective
assignees and participants such information pertaining to the Borrowers as
such Lender may deem appropriate.
(g) Notwithstanding the foregoing provisions of this SECTION
14.3, each Lender may at any time sell, assign, transfer, or negotiate all
or any part of its rights and obligations under this Agreement to any
Affiliate of such Lender.
(h) Notwithstanding the other provisions of this SECTION 14.3,
the obligations of the Borrowers to pay or reimburse the Lenders for
additional amounts of the Georgia Intangibles Tax payable in connection
with the issuance of new Term Notes pursuant to the provisions of SECTION
14.3(d) as a result of an assignment by a Lender shall be limited to
$50,000 in the aggregate in the case of BankAmerica and its assigns, and
$25,000 in the aggregate in the case of each other Lender party hereto on
the Effective Date and its respective assigns; PROVIDED, HOWEVER, that the
limitation on the obligation of the Borrowers set forth in this SUBSECTION
14.3(h) shall terminate and become null and void upon the issuance of the
Ruling and the receipt by the Agent of the Tax Opinion.
14.4 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns (including, without limitation, a receiver, trustee
or debtor-in-possession of a Borrower) and shall inure to the benefit of
the parties hereto and the successors and permitted assigns of the Lenders.
In the event of any such transfer or assignment, the rights and privileges
conferred upon the Lenders shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions
hereof. No Borrower's rights or any interest therein hereunder may be
assigned without the written consent of all of the Lenders.
15. THE AGENT.
15.1 APPOINTMENT. Each Lender hereby ratifies and confirms the
appointment of BankAmerica, pursuant to the terms of the Succession
Agreement, as its Agent under this Agreement and the other Loan Documents,
and each Lender hereby irrevocably authorizes the Agent to take such action
on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers as are set forth herein or therein,
together with such other powers as are reasonably incidental thereto. The
Agent agrees to act as such on the express conditions contained in this
ARTICLE 15. The provisions of this ARTICLE 15 are solely for the benefit
of
<PAGE>
<PAGE> EX-10.26-103
the Secured Creditors, and no Borrower shall have any rights as a third
party beneficiary of any of the provisions hereof (other than as expressly
set forth in SECTION 15.7). In performing its functions and duties under
this Agreement, the Agent shall act solely as agent of the Lenders and does
not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Borrower. The Agent may
perform any of its duties under this Agreement, or under the other Loan
Documents, by or through its agents or employees.
15.2 NATURE OF DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in
the other Loan Documents. Except as expressly provided herein, the duties
of the Agent shall be mechanical and administrative in nature. The Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or
assert under this Agreement and the other Loan Documents, including,
without limitation the right to elect remedies under Section 12.2, and any
action so taken or not taken shall be deemed consented to by the Lenders.
The Agent shall not have by reason of this Agreement a fiduciary relation-
ship in respect of any Lender. Nothing in this Agreement or any of the
other Loan Documents, express or implied, is intended to or shall be con-
strued to impose upon the Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein. Each Lender shall make its own independent investiga-
tion of the financial condition and affairs of each Borrower in connection
with the making and the continuance of the Loans hereunder and with the
issuance of the Letters of Credit and Banker's Acceptances, and shall make
its own appraisal of the creditworthiness of each Borrower, and the Agent
shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the date of this
Agreement or at any time or times thereafter. If the Agent seeks the
consent or approval of the Majority Lenders to the taking or refraining
from taking any action hereunder, the Agent shall send notice thereof to
each Lender. Without limitation of the foregoing, the Agent shall obtain
the consent of the Majority Lenders before approving the expenses described
in the first sentence of SECTION 10.15. The Agent shall promptly notify
each Lender any time that the Majority Lenders have instructed the Agent to
act or refrain from acting pursuant hereto. The Agent may employ agents,
co-agents and attorneys-in-fact and shall not be responsible to the Lenders
or the Borrowers, except as to money or securities received by it or its
authorized agents, for the gross negligence or willful misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care.
15.3 RIGHTS, EXCULPATION, ETC. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable to any Lender for
any action taken or omitted by it or any of them under this Agreement or
under any of the other Loan Documents, or in connection herewith or
therewith, except that the Agent shall be obligated on the terms set forth
herein for performance of its express obligations under this Agreement and
except that no Person shall be relieved of any liability imposed by law for
intentional tort. The Agent shall not be liable for any apportionment or
distribution of payments made by it in good faith pursuant to SECTION
5.6(d), and if any such apportionment or distribution is subsequently
determined to have been made in error, the sole recourse of any Secured
Creditor to whom payment was due but not made shall be to recover from
other Secured Creditors any payment in excess of the amount to which they
are determined to have been entitled. The Agent shall not be responsible
to any Lender for any recitals,
<PAGE>
<PAGE> EX-10.26-104
statements, representations or warranties contained in this Agreement or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any of the other Loan
Documents or any of the transactions contemplated thereby, or for the
financial condition of any Borrower. The Agent shall not be required to
make any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Agreement or any of the other
Loan Documents or the financial condition of any Borrower, or the existence
or possible existence of any Default or Event of Default. The Agent may at
any time request instructions from the Lenders with respect to any actions
or approvals which by the terms of this Agreement or of any of the other
Loan Documents the Agent is permitted or required to take or to grant, and
if such instructions are promptly requested, the Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval and
shall not be under any liability whatsoever to any Person for refraining
from any action or withholding any approval under any of the Loan Documents
until it shall have received such instructions from the Majority Lenders.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining
from acting under this Agreement or any of the other Loan Documents in
accordance with the instructions of the Majority Lenders.
15.4 RELIANCE. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person, and with
respect to all matters pertaining to this Agreement or any of the other
Loan Documents and its duties hereunder or thereunder, upon advice of
counsel selected by it.
15.5 INDEMNIFICATION. To the extent that the Agent is not
reimbursed and indemnified by the Borrowers, the Lenders will reimburse and
indemnify the Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses,
advances or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way relating
to or arising out of this Agreement or any of the other Loan Documents or
any action taken or omitted by the Agent under this Agreement or any of the
other Loan Documents, in proportion to each Lender's Pro Rata Share,
including, without limitation, Agent Advances made pursuant to SECTION 15.8
in accordance with the terms of SECTION 15.8; PROVIDED, HOWEVER, that no
Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses,
advances or disbursements resulting from the Agent's gross negligence or
willful misconduct. The obligations of the Lenders under this SECTION 15.5
shall survive the payment in full of the Loans, Letter of Credit
Reimbursement Obligations, Banker's Acceptance Reimbursement Obligations
and the termination of this Agreement.
15.6 BANKAMERICA INDIVIDUALLY. With respect to its Pro Rata
Share of the Commitments hereunder and the Loans made by it and the Letters
of Credit and Banker's Acceptances issued by it, BankAmerica shall have and
may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for
any other Lender. The terms "Lenders" or "Majority Lenders" or any similar
terms shall, unless the context clearly otherwise indicates, include
BankAmerica in its individual capacity as a Lender or one of the Majority
Lenders.
<PAGE>
<PAGE> EX-10.26-105
15.7 SUCCESSOR AGENT.
(a) The Agent may resign from the performance of all of its
functions and duties under this Agreement at any time by giving at least
thirty (30) Business Days' prior written notice to the Borrowers and each
Lender. Such resignation shall take effect upon the acceptance by a
successor Agent of appointment pursuant to clause (b) or (c) below.
(b) Upon any such notice of resignation, the Majority Lenders
shall appoint a successor Agent who shall be reasonably satisfactory to the
Borrowers.
(c) If a successor Agent shall not have been so appointed within
such thirty (30) Business Day period, the retiring Agent, with the consent
of the Borrowers, shall then appoint a successor Agent who shall serve as
Agent until such time, if any, as the Majority Lenders, with the consent of
the Borrowers, shall appoint a successor Agent as provided above.
15.8 COLLATERAL MATTERS.
(a) The Agent is hereby authorized by the Borrowers and the
Lenders, from time to time, before or after the occurrence of an Event of
Default, to make such disbursements and advances ("Agent Advances") pur-
suant to this Agreement and the other Loan Documents which the Agent
reasonably deems necessary or desirable to preserve or protect the
Collateral, or any portion thereof, in order to enhance the likelihood of,
or maximize the amount of, repayment by any Borrower, or any guarantor or
other Person, of the Loans and other Obligations or to pay any other amount
chargeable to either Borrower pursuant to the terms of this Agreement,
including, without limitation, costs, fees and expenses as described in
SECTION 16.5. The Agent Advances shall be repayable on demand and be
secured by the Collateral. The Agent Advances shall not constitute
Revolving Loans but shall otherwise constitute Obligations hereunder and
shall bear interest at the rate applicable to the Reference Rate Loans.
The Agent shall notify each Lender in writing of each such Agent Advance,
which notice shall include a description of the purpose of such Agent
Advance. Without limitation to its obligations pursuant to SECTION 15.5,
each Lender agrees that it shall make available, to the Agent, upon the
Agent's demand, immediately available funds, an amount equal to such
Lender's Pro Rata Share of each such Agent Advance. If such funds are not
made available to the Agent by such Lender within one (1) Business Day
after the Agent's demand therefor, the Agent will be entitled to recover
any such amount from such Lender together with interest thereon at the
Federal Funds Rate for each day during the period commencing on the date of
such demand and ending on the date such amount is received.
(b) The Lenders hereby irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Agent, for the benefit of the Secured Creditors, upon any Collateral
(i) upon termination of the Commitments and payment and satisfaction of all
Loans, Letter of Credit Reimbursement Obligations, other Letter of Credit
Obligations, Banker's Acceptance Reimbursement Obligations and other
Banker's Acceptance Obligations (in each case whether or not due) and all
other Obligations which have matured and which the Agent has been notified
in writing are then due and payable; (ii) constituting property being sold
or disposed of if the applicable Borrower certifies to the Agent that the
sale or disposition is made in compliance with this Agreement (and the
Agent may rely conclusively on any such certificate, without further
inquiry);
<PAGE>
<PAGE> EX-10.26-106
(iii) constituting property in which the applicable Borrower owned no
interest at the time the Lien was granted or at any time thereafter; (iv)
constituting property leased to the applicable Borrower under a lease which
has expired or been terminated in a transaction permitted under this Agree-
ment or which will expire imminently and which has not been, and is not
intended by such Borrower to be, renewed or extended; or (v) if approved,
authorized or ratified in writing by the Lenders. Upon request by the
Agent or the Borrowers at any time, the Lenders will confirm in writing the
Agent's authority to release any Lien granted to or held by the Agent, for
the benefit of the Secured Creditors, upon particular types or items of
Collateral pursuant to this SUBSECTION 15.8(b).
(c) So long as no Event of Default has occurred and is then
continuing, upon receipt by the Agent of confirmation from the Majority
Lenders of its authority to release any Lien granted to or held by the
Agent, for the benefit of the Secured Creditors, upon particular types or
items of Collateral, and upon at least five (5) Business Days' prior
written request by the applicable Borrower, the Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Agent, for
the benefit of the Secured Creditors, herein or pursuant hereto upon such
Collateral; PROVIDED, HOWEVER, that (i) the Agent shall not be required to
execute any such document on terms which, in the Agent's opinion, would
expose the Agent to liability or create any obligation or entail any conse-
quence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair
the Obligations or any Liens (other than those expressly being released)
upon (or obligations of the applicable Borrower in respect of) all inter-
ests retained by such Borrower, including (without limitation) the proceeds
of any sale, all of which shall continue to constitute part of the
Collateral.
(d) The Agent shall have no obligation whatsoever to any Secured
Creditor to assure that the Collateral exists or is owned by any Borrower
or is cared for, protected or insured or has been encumbered or that the
Liens granted to the Agent, for the benefit of the Secured Creditors,
herein or pursuant hereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any
duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Agent pursuant
to this SECTION 15.8 or pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may
deem appropriate, in its sole discretion, given the Agent's own interest in
the Collateral in its capacity as one of the Lenders and that the Agent
shall have no duty or liability whatsoever to any Secured Creditor as to
any of the foregoing. It is further understood and agreed that this
SECTION 15.8(d) is not intended, nor shall it be construed, to diminish or
relieve the Agent of its obligations and responsibilities to the Secured
Creditors specified in other sections of this Agreement.
15.9 AGENCY FOR PERFECTION. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting the Lenders' security
interest in assets which, in accordance with Article 9 of the UCC can be
perfected only by possession. Should any Lender (other than the Agent)
obtain possession of any such Collateral, such Lender shall notify the
Agent thereof, and, promptly upon the Agent's request therefor shall
deliver such Collateral to the Agent or in accordance with the Agent's in-
structions.
<PAGE>
<PAGE> EX-10.26-107
16. MISCELLANEOUS.
16.1 CUMULATIVE REMEDIES; NO PRIOR RECOURSE TO COLLATERAL. The
enumeration herein of the rights and remedies of the Lenders and the Agent
is not intended to be exclusive, and such rights and remedies are in
addition to and not by way of limitation of any other rights or remedies
that the Lenders and the Agent may have under the UCC or other applicable
law. The Lenders and the Agent shall have the right, in their sole dis-
cretion, to determine which rights and remedies are to be exercised and in
which order. The exercise of one right or remedy shall not preclude the
exercise of any others, all of which shall be cumulative. The Lenders and
the Agent may, without limitation, proceed directly against any Borrower to
collect the Obligations without any prior recourse to the Collateral.
16.2 SEVERABILITY. If any provision of this Agreement shall be
prohibited or invalid under applicable law, it shall be ineffective only to
such extent, without invalidating the remainder of this Agreement.
16.3 GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY
TRIAL WAIVER. (a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.
(b) SUBJECT ONLY TO THE EXCEPTION IN THE NEXT SENTENCE, THE
BORROWERS, THE LENDERS AND THE AGENT HEREBY AGREE TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK SITTING IN THE CITY AND COUNTY OF NEW YORK AND WAIVE ANY
OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION
INSTITUTED THEREIN, AND AGREE THAT ANY DISPUTE CONCERNING THE RELATIONSHIP
AMONG THE LENDERS AND THE AGENT AND ANY BORROWER OR THE CONDUCT OF ANY
PARTY IN CONNECTION WITH THIS AGREEMENT OR OTHERWISE SHALL BE HEARD ONLY IN
THE COURTS DESCRIBED ABOVE. NOTWITHSTANDING THE FOREGOING, THE LENDERS AND
THE AGENT SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST
THE BORROWERS OR THEIR RESPECTIVE PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION THE LENDERS AND THE AGENT DEEM NECESSARY OR APPROPRIATE IN
ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS.
(c) EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE
BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO SUCH BORROWER AT
ITS ADDRESS SET FORTH IN SECTION 16.7 AND SERVICE SO MADE SHALL BE DEEMED
TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED
IN THE U.S. MAILS, OR, AT THE LENDERS' AND/OR AGENT'S OPTION, BY SERVICE
UPON HUTTON INGRAM YUZEK GAINEN CARROLL & BERTOLOTTI, AT ITS NOTICE ADDRESS
SET FORTH IN SECTION 16.7 WHICH EACH BORROWER IRREVOCABLY APPOINTS AS SUCH
BORROWER'S AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN THE
STATE OF NEW YORK. IN ADDITION, THE LENDERS AND THE AGENT AGREE PROMPTLY
TO FORWARD BY REGISTERED MAIL ANY PROCESS SO SERVED UPON SAID AGENT TO ANY
BORROWER AT ITS ADDRESS SET FORTH IN SECTION 16.7. EACH BORROWER HEREBY
CONSENTS TO SERVICE OF PROCESS AS AFORESAID.
(d) THE BORROWERS, THE LENDERS AND THE AGENT EACH HEREBY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(i) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR (ii) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM IN RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT
<PAGE>
<PAGE> EX-10.26-108
OR AGREEMENT EXECUTED OR DELIVERED, IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. THE
BORROWERS, THE LENDERS AND THE AGENT EACH HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY AND THAT ANY OF THEM MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
(e) NOTHING IN THIS SECTION 16.3 SHALL AFFECT THE RIGHTS OF THE
LENDERS OR THE AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR AFFECT THE RIGHTS OF THE LENDERS OR THE AGENT TO BRING ANY ACTION
OR PROCEEDING AGAINST ANY BORROWER OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTION.
16.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of each
Borrower's representations and warranties contained in this Agreement shall
survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Lenders or the Agent or their
respective agents.
16.5 OTHER SECURITY AND GUARANTIES. The Agent may, without
notice or demand and without affecting any Borrower's obligations
hereunder, from time to time: (a) take from any Person and hold collateral
(other than the Collateral) for the payment of all or any part of the
Obligations and exchange, enforce or release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment of
all or any part of the Obligations and release or substitute any such
endorser or guarantor, or any Person who has given any Lien in any other
collateral as security for the payment of all or any part of the Obliga-
tions, or any other Person in any way obligated to pay all or any part of
the Obligations.
16.6 FEES AND EXPENSES. Each Borrower shall pay to the Agent,
for its benefit and/or the benefit of the Lenders, on demand, all costs and
expenses that any Lender and/or the Agent or SPBC pays or incurs in con-
nection with the negotiation, preparation, consummation, administration,
enforcement and/or termination of this Agreement and the other Loan
Documents, including, without limitation: (a) reasonable in-house and
outside attorneys' and paralegals' fees and disbursements of counsel to
such Lender and/or the Agent and any Participant; (b) costs and expenses
(including reasonable in-house and outside attorneys' and paralegals' fees
and disbursements) for any amendment, supplement, waiver, consent, or
subsequent closing in connection with this Agreement or any Loan Document
and the transactions contemplated thereby; (c) costs and expenses of lien
and title searches, surveys and title insurance; (d) taxes, fees and other
charges for recording the mortgages, filing financing statements and
continuations, and other actions to perfect, protect, and continue the
Agent's Liens for the benefit of the Secured Creditors; (e) sums paid or
incurred to pay any amount or take any action required of any Borrower
under the Loan Documents that such Borrower fails to pay or take; (f) costs
of appraisals required under SECTION 7.5, inspections, and verifications of
the Collateral, including, without limitation, standard per diem fees
charged by the Agent or the Lenders, travel, lodging, and meals for
inspections of the Collateral and any Borrower's operations by the Agent's
and/or the Lenders' agents up to four (4) times per year and whenever an
Event of Default exists; (g) costs and expenses of forwarding loan
proceeds, collecting checks and other items of payment, and establishing
and maintaining the Concentration Accounts; (h) all amounts payable under
Letter of Credit Reimbursement
<PAGE>
<PAGE> EX-10.26-109
Agreements and Banker's Acceptance Agreements; (i) costs and expenses of
preserving and protecting the Collateral; and (j) costs and expenses
(including reasonable in-house and outside attorneys' and paralegals' fees
and disbursements) paid or incurred to obtain payment of the Obligations,
enforce the Agent's Liens, for the benefit of the Secured Creditors, sell
or otherwise realize upon the Collateral, and otherwise enforce the
provisions of the Loan Documents, or to defend any claims made or
threatened against the Agent or any Lender arising out of the transactions
contemplated hereby (including without limitation, preparations for and
consultations concerning any such matters). The foregoing shall not be
construed to limit any other provisions of the Loan Documents regarding
costs and expenses to be paid by any Borrower. All of the foregoing costs
and expenses may be paid from the proceeds of Revolving Loans as described
in SECTION 5.6(b).
16.7 NOTICES. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any
other shall be in writing, or by a telecommunications device capable of
creating a written record, and any such notice shall become effective (a)
upon personal delivery thereof, including, but not limited to, delivery by
overnight mail and courier service, (b) five (5) days after it shall have
been mailed by United States mail, first class, certified or registered,
with postage prepaid, or (c) in the case of notice by such a
telecommunications device, when properly transmitted, in each case
addressed to the party to be notified as follows:
If to the Agent: BankAmerica Business Credit, Inc.
40 East 52nd Street, 2nd Floor
New York, New York 10022
Attention: Division Manager
Telephone No.: 212/836-5241
Telecopier No.: 212/836-5167
with a copy to: Bank of America National Trust and Savings
Association
10124 Old Grove Road
San Diego, California 92131
Attention: Legal Department
Telephone No.: 619/549-7510
Telecopier No.: 619/549-7518
and with a copy to: Rogers & Wells
200 Park Avenue
New York, New York 10166
Attention: Alan M. Christenfeld, Esq.
Telephone No.: 212/878-8000
Telecopier No.: 212/878-8375
If to any Borrower: Great Dane Trailers, Inc.
600 East Lathrop Avenue
Savannah, Georgia 31402
Attention: President
Telephone No.:
Telecopier No.: 912/236-0647
<PAGE>
<PAGE> EX-10.26-110
with a copy to: Great Dane Holdings, Inc.
2016 North Pitcher Street
Kalamazoo, Michigan 49007
Attention: President
Telephone No.:
Telecopier No.: 616/343-6823
and with copies to: Hutton Ingram Yuzek Gainen
Carroll & Bertolotti
250 Park Avenue, 6th Floor
New York, New York 10177
Attention: Paulette Kendler, Esq.
Telephone No.: 212/907-9615
Telecopier No.: 212/907-9681
Hunter, Maclean, Exley & Dunn, P.C.
P.O. Box 9848
Savannah, Georgia 31412-0048
Attention: John M. Hewson, III, Esq.
Telephone No.: 912/236-0261
Telecopier No.: 912/236-4936
or to such other address as each party may designate for itself by like
notice. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the
Persons designated above to receive copies shall not adversely affect the
effectiveness of such notice, demand, request, consent, approval, declara-
tion or other communication.
16.8 INDEMNITY. Each Borrower agrees to (i) reimburse the Agent
and the Lenders for any costs and expenses (including, without limitation,
reasonable attorneys' and paralegals' fees and expenses) incurred by the
Agent or any Lender in defending any suit brought against it by such
Borrower or any other Person in connection with the transactions
contemplated by this Agreement, and (ii) indemnify and hold the Agent and
the Lenders and their respective officers, directors, employees, attorneys
and agents (collectively, the "Indemnitees") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever incurred by the Indemnitees, whether direct or indirect, as a
result of or arising from or relating to any proceeding by any Person,
whether threatened or initiated, asserting any claim for legal or equitable
remedy against any Person under any statute or regulation (including,
without limitation, any federal or state securities or commercial laws or
under any common law or equitable cause or otherwise, including any
liability and costs under Environmental Laws or common law principles
arising from or in connection with the past, present or future operations
of such Borrower or its predecessors in interest, or the past, present or
future environmental condition of such Borrower's Property, the presence of
asbestos-containing materials at or on such Property, or the Release or
threatened Release of any contaminant into the environment from such
property), in any way arising from or in connection with the negotiation,
preparation, execution, delivery, enforcement, performance and
administration of this Agreement or any other document executed in
connection herewith, provided that such Borrower shall have no obligation
hereunder with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of any Indemnitee seeking such
indemnification or with respect to a matter determined by a court of
competent jurisdiction in a final judgment against the Agent and the
Lenders
<PAGE>
<PAGE> EX-10.26-111
as to which the Borrowers have prevailed. To the extent that the indemnity
set forth in this SECTION 16.8 may be unenforceable because it is violative
of any law or public policy, the applicable Borrower shall pay the maximum
portion which it is permitted to pay under applicable law. Any Indemnitee
will promptly notify the applicable Borrower of the commencement of any
legal proceeding which may give rise to any indemnified liability under the
foregoing indemnity and shall permit such Borrower to participate in the
defense of such Indemnitee in any such proceeding. The foregoing indemnity
shall survive the payment of the Obligations and the termination of this
Agreement. All of the foregoing fees, costs and expenses shall be part of
the Obligations, payable upon demand, and secured by the Collateral.
16.9 WAIVER OF NOTICES. Unless otherwise expressly provided
herein, each Borrower waives presentment, protest and notice of demand or
dishonor and protest as to any instrument, as well as any and all other
notices to which it might otherwise be entitled. No notice to or demand on
either Borrower which the Agent or any Lender may elect to give shall
entitle such Borrower to any or further notice or demand in the same,
similar or other circumstances.
16.10 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and by the Agent, the Lenders and/or the Borrowers in
separate counterparts, each of which shall be an original, but all of which
shall together constitute one and the same agreement.
16.11 CAPTIONS. The captions contained in this Agreement are for
convenience only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
16.12 PARTICIPANT'S SECURITY INTERESTS. If a Participant shall
at any time with the Borrowers' knowledge participate with any Lender in
such Lender's Commitment and Loans and participations in Letters of Credit
and Banker's Acceptances, each Borrower hereby grants to the Agent, for the
benefit of the Secured Creditors, and to such Participant, and the Agent,
for the benefit of the Secured Creditors, and such Participant shall have,
and is hereby given, a continuing Lien on and security interest in any
money, securities and other property of such Borrower in the custody or
possession of the Participant, including the right of set-off, to the
extent of the Participant's participation in the Obligations, and such
Participant shall be deemed to have the same right of set-off to the extent
of such Participant's participation in the Obligations under this Agreement
as it would have if it were a Lender.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the express
consent of the Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of the Agent, set-off against the
Obligations, any amounts owing by such Lender to either Borrower or any ac-
counts of either Borrower now or hereafter maintained with such Lender.
Each of the Lenders further agrees that it shall not, unless specifically
requested to do so by the Agent, take or cause to be taken any action,
including, without limitation, the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral, the purpose of which is, or could be,
to give such Lender any preference or priority against the other Lenders
with respect to the Collateral.
(b) Subject to SECTION 5.6(d), if, at any time or times any
Lender shall receive (i) by payment, foreclosure, set-off or otherwise, any
proceeds
<PAGE>
<PAGE> EX-10.26-112
of Collateral or any payments with respect to the Obligations of any
Borrower to such Lender arising under, or relating to, this Agreement or
the other Loan Documents, except for any such proceeds or payments received
by such Lender from the Agent pursuant to the terms of this Agreement, or
(ii) payments from the Agent in excess of such Lender's ratable portion of
all such distributions by the Agent, such Lender shall promptly (1) turn
the same over to the Agent, in kind, and with such endorsements as may be
required to negotiate the same to the Agent, or in same day funds, as
applicable, for the benefit of all of the Secured Creditors and for applica-
tion to the Obligations in accordance with the applicable provisions of this
Agreement or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so
that such excess payment received shall be applied ratably as among the
Lenders in accordance with their Pro Rata Shares; PROVIDED, HOWEVER, that if
all or part of such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party,
but without interest except to the extent that such purchasing party is re-
quired to pay interest in connection with the recovery of the excess payment.
16.14 CONCERNING THE COLLATERAL AND THE RELATED LOAN DOCUMENTS.
Each Lender authorizes and directs the Agent to enter into this Agreement
and the other Loan Documents relating to the Collateral for the benefit of
the Secured Creditors. Each Lender agrees that any action taken by the
Agent or Majority Lenders in accordance with the terms of this Agreement or
the other Loan Documents relating to the Collateral, and the exercise by
the Agent or the Majority Lenders of their respective powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be authorized and binding upon all of the
Lenders.
16.15 JOINT AND SEVERAL LIABILITY. The liability of the
Borrowers for all of the Obligations shall be joint and several regardless
of which Borrower actually receives loans or other extensions of credit
hereunder or the amount of such loans received or the manner in which
Lender accounts for such loans or other extensions of credit or on its
books and records. Each Borrower's Obligations with respect to Term Loans
or Revolving Loans made to it or Letters of Credit or Banker's Acceptances
issued for its account, and related fees, costs and expenses, and each
Borrower's Obligations arising as a result of the joint and several
liability of the Borrowers hereunder, with respect to Term Loans or
Revolving Loans made to the other Borrowers hereunder or Letters of Credit
or Banker's Acceptances issued for the account of the other Borrowers
hereunder, together with the related fees, costs and expenses, shall be
separate and distinct obligations, all of which are primary obligations of
each Borrower.
Each Borrower's Obligations arising as a result of the joint and
several liability of the Borrowers hereunder with respect to loans or other
extensions of credit made to the other Borrowers hereunder shall, to the
fullest extent permitted by law, be unconditional irrespective of (i) the
validity of enforceability, avoidance or subordination of the Obligations
of the other Borrowers or of any promissory note or other document evidenc-
ing all of any part of the Obligations of the other Borrowers, (ii) the
absence of any attempt to collect the Obligations from any of the other
Borrowers, any other guarantor, or any other security therefor, or the
absence of any other action to enforce the same, (iii) the waiver, consent,
extension, forbearance or granting of any indulgence by the Lenders with
respect to any provision of any instrument evidencing the Obligations of
the other
<PAGE>
<PAGE> EX-10.26-113
Borrowers, or any part thereof, or any other agreement now or hereafter
executed by the other Borrowers and delivered to the Lenders, (iv) the
failure by the Agent to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for
the Obligations of the other Borrowers, (v) the Lenders' election, in any
proceeding instituted under the Bankruptcy Code, of the application of
Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or grant of a
security interest by the other Borrowers, as debtor-in-possession under
Section 364 of the Bankruptcy Code, (vii) the disallowance of all or any
portion of the Lenders' claim(s) for repayment of the Obligations of the
other Borrowers under Section 502 of the Bankruptcy Code, or (viii) any
other circumstance which might constitute a legal or equitable discharge or
defense of a guarantor or of the other Borrowers.
Each Borrower hereby irrevocably agrees that it will not bring
any "claims" (as defined in Section 101(5) of the Bankruptcy Code) against
any other Borrower to which such Borrower is or would at any time be
otherwise entitled by virtue of its obligations under this Agreement or
under any of the Loan Documents, including, without limitation, any right
of subrogation (whether contractual, under Section 509 of the Bankruptcy
Code or otherwise), reimbursement, contribution, exoneration or other
similar right against such other Borrowers, until such time as all of the
Obligations have been satisfied in full and this Agreement shall have
terminated in accordance with its terms.
Upon any Event of Default, the Agent may, at its sole election,
proceed directly and at once, without notice, against any Borrower to
collect and recover the full amount, or any portion of the Obligations,
without first proceeding against any other Borrower or any other Person, or
against any security or collateral for the Obligations. Each Borrower
consents and agrees that neither the Agent nor any Lender shall be under
any obligation to marshall any assets in favor of such Borrower or against
or in payment of any or all of the Obligations.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE> EX-10.26-114
IN WITNESS WHEREOF, the parties have entered into this Agreement
as of the date first above written.
GREAT DANE TRAILERS, INC.
By: /s/ Thomas W. Horan
---------------------------------
Senior Vice President, Finance
GREAT DANE LOS ANGELES, INC.
By: /s/ Thomas W. Horan
-------------------------------
Senior Vice President, Finance
GREAT DANE TRAILERS TENNESSEE, INC.
By: /s/ Thomas W. Horan
-------------------------------
Senior Vice President, Finance
BANKAMERICA BUSINESS CREDIT, INC.,
as the Agent
By: /s/ Ira Mermelstein
-------------------------------
Vice President
Term Loan Commitment BANKAMERICA BUSINESS CREDIT, INC.,
$25,000,000 as a Lender
(subject to the provisions
of the definition of "Term By: /s/ Ira Mermelstein
Loan Commitment" contained -------------------------------
in SECTION 1.1) Vice President
Revolving Credit
Commitment $75,000,000
(subject to the provisions 40 East 52nd Street, 2nd Fl.
of the definition of New York, New York 10022
"Revolving Credit Commitmen Attention: Division Manager
contained in SECTION 1.1) Telephone No.: (212) 836-5241
Pro Rata Share 50% Telecopy No.: (212) 836-5167
<PAGE>
<PAGE> EX-10.26-115
Term Loan Commitment NATIONSBANK OF GEORGIA, N.A.
$16,666,650
(subject to the provisions
of the definition of "Term
Loan Commitment" contained By: /s/ Robert Moore
in SECTION 1.1) -------------------------------
Revolving Credit Vice President
Commitment $50,000,000
(subject to the provisions 600 Peachtree Street
of the definition of 13th Floor
"Revolving Credit Commitmen Atlanta, Georgia 30308
contained in SECTION 1.1) Attention: Jeff Guldner
Pro Rata Share 33.3333% Telephone No.: (404) 607-5377
Telecopy No.: (404) 607-6437
<PAGE>
<PAGE> EX-10.26-115
Term Loan Commitment SANWA BUSINESS CREDIT CORPORATION
$8,333,350
(subject to the provisions
of the definition of "Term
Loan Commitment" contained By: /s/ Peter Skavla
in SECTION 1.1) -------------------------------
Revolving Credit Vice President
Commitment $25,000,000
(subject to the provisions 500 Glenpointe Centre West
of the definition of Teaneck, New Jersey 07666-6802
"Revolving Credit Commitment" Attention: Oleh Szczupak,
contained in SECTION 1.1) Account Manager
Pro Rata Share 16.6667% Telephone No.: (201) 836-4006
Telecopy No.: (201) 836-4744
<PAGE>
<PAGE> EX-10.26-117
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Dated as of February 14, 1995
Among
GREAT DANE TRAILERS, INC.
GREAT DANE LOS ANGELES, INC.
GREAT DANE TRAILERS TENNESSEE, INC.
AS BORROWERS
and
THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS LENDERS
and
BANKAMERICA BUSINESS CREDIT, INC.
AS AGENT
<PAGE>
<PAGE> EX-10.26-118
TABLE OF CONTENTS
Page
----
1. INTERPRETATION OF THIS AGREEMENT . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . . 30
1.3 Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2. LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.1 Term Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.2 Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . 34
2.3 Over Advances . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.4 Lenders' Failure to Perform . . . . . . . . . . . . . . . . . . 41
3A. LETTER OF CREDIT SUBFACILITY . . . . . . . . . . . . . . . . . . . . 41
3A.1 Agreement to Issue. . . . . . . . . . . . . . . . . . . . . . . 41
3A.2 Amounts; Tenor. . . . . . . . . . . . . . . . . . . . . . . . . 41
3A.3 Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3A.4 Issuance of Letters of Credit . . . . . . . . . . . . . . . . . 43
3A.5 Letter of Credit Reimbursement Obligations; Duties
of Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3A.6 Participations. . . . . . . . . . . . . . . . . . . . . . . . . 44
3A.7 Payment of Letter of Credit Reimbursement
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3A.8 Compensation for Letters of Credit. . . . . . . . . . . . . . . 47
3A.9 Indemnification; Exoneration. . . . . . . . . . . . . . . . . . 47
3A.10 Supporting Letter of Credit; Cash Collateral . . . . . . . . . 48
3B. BANKER'S ACCEPTANCE SUBFACILITY. . . . . . . . . . . . . . . . . . . 49
3B.1 Agreement to Issue. . . . . . . . . . . . . . . . . . . . . . . 49
3B.2 Amounts; Tenor. . . . . . . . . . . . . . . . . . . . . . . . . 49
3B.3 Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3B.4 Issuance of Banker's Acceptances. . . . . . . . . . . . . . . . 51
3B.5 Banker's Acceptance Reimbursement Obligations;
Duties of Issuer. . . . . . . . . . . . . . . . . . . . . . . . 52
3B.6 Participations. . . . . . . . . . . . . . . . . . . . . . . . . 52
3B.7 Payment of Banker's Acceptance Reimbursement
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3B.8 Compensation for Banker's Acceptances . . . . . . . . . . . . . 55
3B.9 Indemnification; Exoneration. . . . . . . . . . . . . . . . . . 55
4. INTEREST AND FEES. . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.1 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.2 Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . 56
4.3 Closing Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.4 Letter of Credit Fee. . . . . . . . . . . . . . . . . . . . . . 57
4.4A Banker's Acceptance Fees. . . . . . . . . . . . . . . . . . . . 58
4.5 Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . . 58
4.6 Increased Capital; Increased Costs. . . . . . . . . . . . . . . 58
4.7 Fees Not Interest; Fully Earned . . . . . . . . . . . . . . . . 60
4.8 Funding Indemnities . . . . . . . . . . . . . . . . . . . . . . 60
4.9 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.10 Unavailability of Eurodollar Rate Loans . . . . . . . . . . . . 62
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5. PAYMENTS AND PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . 65
5.1 Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . 65
<PAGE>
<PAGE> EX-10.26-119
5.2 Reduction or Termination of Revolving Credit
Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.3 Repayment of Term Loans . . . . . . . . . . . . . . . . . . . . 66
5.4 Voluntary Prepayments of Term Loans . . . . . . . . . . . . . . 66
5.5 Mandatory Prepayments of the Term Loans . . . . . . . . . . . . 66
5.6 Manner, Time and Apportionment of Payments. . . . . . . . . . . 67
5.7 Indemnity for Returned Payments . . . . . . . . . . . . . . . . 69
6. AGENT'S AND LENDERS' BOOKS AND RECORDS; . . . . .
MONTHLY STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.1 Agent's and Lenders' Books and Records; Monthly
Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . 69
7. COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
7.1 Grant of Security Interest. . . . . . . . . . . . . . . . . . . 70
7.2 Perfection and Protection of Security Interest. . . . . . . . . 72
7.3 Location of Collateral. . . . . . . . . . . . . . . . . . . . . 73
7.4 Title to, Liens on, and Sale and Use of Collateral. . . . . . . 73
7.5 Appraisals. . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.6 Access and Examination. . . . . . . . . . . . . . . . . . . . . 74
7.7 Collateral Reporting. . . . . . . . . . . . . . . . . . . . . . 74
7.8 Collections and Concentration Account Arrangements. . . . . . . 75
7.9 Accounts; Inventory . . . . . . . . . . . . . . . . . . . . . . 76
7.10 Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.11 Documents, Instruments, and Chattel Paper . . . . . . . . . . . 78
7.12 Right to Perform or Cure. . . . . . . . . . . . . . . . . . . . 78
7.13 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . 79
7.14 The Agent's and the Lenders' Rights, Duties and
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 79
8. BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES. . . . . . . . . . 80
8.1 Books and Records . . . . . . . . . . . . . . . . . . . . . . . 80
8.2 Financial Information . . . . . . . . . . . . . . . . . . . . . 80
8.3 Notices to the Agent. . . . . . . . . . . . . . . . . . . . . . 83
9. GENERAL WARRANTIES AND REPRESENTATIONS . . . . . . . . . . . . . . . 86
9.1 Authorization, Validity, and Enforceability of this
Agreement and the Loan Documents. . . . . . . . . . . . . . . . 86
9.2 Validity and Priority of Security Interest. . . . . . . . . . . 87
9.3 Organization and Qualification. . . . . . . . . . . . . . . . . 87
9.4 Corporate Name; Prior Transactions; Business
Conducted . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.5 Subsidiaries and Affiliates . . . . . . . . . . . . . . . . . . 87
9.6 Financial Statements and Projections. . . . . . . . . . . . . . 87
9.7 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . 88
9.8 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.9 Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
9.10 Title to Property . . . . . . . . . . . . . . . . . . . . . . . 89
9.11 Real Property; Leases . . . . . . . . . . . . . . . . . . . . . 89
9.12 Proprietary Rights. . . . . . . . . . . . . . . . . . . . . . . 89
9.13 Trade Names . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.14 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.15 Restrictive Agreements. . . . . . . . . . . . . . . . . . . . . 90
9.16 Labor Disputes. . . . . . . . . . . . . . . . . . . . . . . . . 90
9.17 Environmental, Health and Safety Laws . . . . . . . . . . . . . 90
<PAGE>
<PAGE> EX-10.26-120
9.18 No Violation of Law . . . . . . . . . . . . . . . . . . . . . . 92
9.19 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.20 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.21 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.22 Investment Company Act. . . . . . . . . . . . . . . . . . . . . 94
9.23 Margin Stock. . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.24 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . . . 95
9.25 No Material Adverse Change. . . . . . . . . . . . . . . . . . . 95
9.26 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 95
9.27 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10. AFFIRMATIVE AND NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . 95
10.1 Taxes and Other Obligations . . . . . . . . . . . . . . . . . . 95
10.2 Corporate Existence and Good Standing . . . . . . . . . . . . . 97
10.3 Compliance with Law and Agreements. . . . . . . . . . . . . . . 98
10.4 Maintenance of Property . . . . . . . . . . . . . . . . . . . . 98
10.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.6 Condemnation. . . . . . . . . . . . . . . . . . . . . . . . . .100
10.7 Environmental, Health and Safety Laws . . . . . . . . . . . . .100
10.8 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
10.9 Mergers, Consolidations or Sales. . . . . . . . . . . . . . . .102
10.10 Capital Changes. . . . . . . . . . . . . . . . . . . . . . . .103
10.11 Transactions Affecting Collateral, Real Estate or
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . .103
10.12 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . .103
10.13 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
10.14 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . .104
10.15 Transactions with Affiliates . . . . . . . . . . . . . . . . .104
10.16 Investment Banking and Finder's Fees . . . . . . . . . . . . .105
10.17 Business Conducted . . . . . . . . . . . . . . . . . . . . . .105
10.18 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . .105
10.19 Sale and Leaseback Transactions. . . . . . . . . . . . . . . .105
10.20 New Subsidiaries . . . . . . . . . . . . . . . . . . . . . . .106
10.21 Restricted Investments . . . . . . . . . . . . . . . . . . . .106
10.22 [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . .106
10.23 [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . .106
10.24 Minimum Interest Coverage. . . . . . . . . . . . . . . . . . .106
10.25 Fixed Maturity Coverage. . . . . . . . . . . . . . . . . . . .106
10.26 Intercompany Loans . . . . . . . . . . . . . . . . . . . . . .107
10.27 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . .109
10.28 No Amendment of Charter, By-Laws . . . . . . . . . . . . . . .109
10.29 Further Assurances . . . . . . . . . . . . . . . . . . . . . .109
10.30 Use of Proceeds for Shareholder Loans. . . . . . . . . . . . .109
10.31 Delivery of Acknowledgement Copies of UCC-3's. . . . . . . . .109
10.32 Revenue Department Ruling and Tax Opinion. . . . . . . . . . .109
11. CONDITIONS OF LENDING. . . . . . . . . . . . . . . . . . . . . . . .109
11.1 Conditions Precedent to Effectiveness of Agreement,
Making of Initial Revolving Loans and Issuance of Letters
of Credit and Banker's Acceptances on the Effective Date
and Making of Term Loans on the Initial Term Loan Funding
Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
11.2 Conditions Precedent to Making of Term Loans on each
Term Funding Date . . . . . . . . . . . . . . . . . . . . . . .111
<PAGE>
<PAGE> EX-10.26-121
11.3 Conditions Precedent to Each Loan, Letter of Credit
and Banker's Acceptance . . . . . . . . . . . . . . . . . . . .112
12. DEFAULT; REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . .113
12.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . .113
12.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . .117
13. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
13.1 Term and Termination. . . . . . . . . . . . . . . . . . . . . .119
14. WAIVER; AMENDMENTS; ASSIGNMENTS; SUCCESSORS. . . . . . . . . . . . .119
14.1 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . .119
14.2 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . .120
14.3 Assignments; Participations . . . . . . . . . . . . . . . . . .120
14.4 Successors and Assigns. . . . . . . . . . . . . . . . . . . . .124
15. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124
15.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . .124
15.2 Nature of Duties. . . . . . . . . . . . . . . . . . . . . . . .125
15.3 Rights, Exculpation, Etc. . . . . . . . . . . . . . . . . . . .125
15.4 Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . . .126
15.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . .126
15.6 BankAmerica Individually. . . . . . . . . . . . . . . . . . . .127
15.7 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . .127
15.8 Collateral Matters. . . . . . . . . . . . . . . . . . . . . . .127
15.9 Agency for Perfection . . . . . . . . . . . . . . . . . . . . .129
16. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . .129
16.1 Cumulative Remedies; No Prior Recourse to Collateral
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .129
16.2 Severability. . . . . . . . . . . . . . . . . . . . . . . . . .130
16.3 Governing Law; Choice of Forum; Service of Process;
Jury Trial Waiver . . . . . . . . . . . . . . . . . . . . . . .130
16.4 Survival of Representations and Warranties. . . . . . . . . . .131
16.5 Other Security and Guaranties . . . . . . . . . . . . . . . . .131
16.6 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . .131
16.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .132
16.8 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . .133
16.9 Waiver of Notices . . . . . . . . . . . . . . . . . . . . . . .134
16.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . .134
16.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . .134
16.12 Participant's Security Interests . . . . . . . . . . . . . . .135
16.13 Restrictions on Actions by Lenders; Sharing of
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . .135
16.14 Concerning the Collateral and the Related Loan
Documents. . . . . . . . . . . . . . . . . . . . . . . . . . .136
16.15 Joint and Several Liability. . . . . . . . . . . . . . . . . .136
<PAGE>
<PAGE> EX-10.26-122
EXHIBITS
Exhibit A -- Form of Notice of Borrowing of
Revolving Loans
Exhibit B -- Form of Notice of Borrowing of Term
Loans
Exhibit C-1 -- Form of Amendment to Term Note
Exhibit C-2 -- Form of Term Note - Term Funding Dates
Exhibit D -- List of Closing Documents
Exhibit E -- Form of Assignment and Acceptance
Exhibit F -- Form of Notice of Conversion/Continuation
<PAGE>
<PAGE> EX-10.26-123
SCHEDULES
Schedule 1.1-A -- Financial Statements (Sections 1.1 and 9.6(a))
Schedule 1.1-B -- Pro Forma Balance Sheet (Sections 1.1, 9.6(c)
and 9.9)
Schedule 1.1-C -- Borrowers' Latest Projections (Sections 1.1
and 9.6(b))
Schedule 1.1-D -- Permitted Liens (Sections 1.1 and 7.4)
Schedule 1.1-E -- Mortgaged Property (Sections 1.1 and 9.10)
Schedule 1.1-F -- Borrowers' Proprietary Rights (Sections 1.1
and 9.12)
Schedule 1.1-G -- Certain Work-in-Process
Schedule 7.1(a) -- Excluded Property
Schedule 7.1(b) -- Indianapolis Parcel
Schedule 7.3-A -- Location of Borrowers' Offices and
Collateral (Sections 7.3 and 9.11)
Schedule 7.3-B -- Locations Leased or Subleased by
Borrowers (Sections 7.3 and 9.11)
Schedule 9.3-A -- Borrowers' States of Incorporation
Schedule 9.3-B -- States Where Borrowers are Qualified to do
Business
Schedule 9.4 -- Prior Corporate Names Used and
Participation in any Merger,
Consolidation or Acquisition
Transactions
Schedule 9.5 -- Borrowers' Subsidiaries and Other Affiliates
Schedule 9.5-A -- Subsidiaries' States of Incorporation
Schedule 9.5-B -- States Where Subsidiaries are Qualified to do
Business
Schedule 9.7-A -- Capitalization of Borrowers
Schedule 9.7-B -- Ownership of Borrowers' Stock
Schedule 9.14 -- Pending or Threatened Litigation
Schedule 9.16 -- Labor Contracts and Disputes
Schedule 9.20-A -- ERISA Plans
<PAGE>
<PAGE> EX-10.26-124
Schedule 9.20-J -- Employer Welfare Benefit Plans
Schedule 9.20-P -- Multiemployer Plans
Schedule 10.11 -- Colonial Parcel
<PAGE> EX-10.27-1
AMENDED AND RESTATED PLEDGE AGREEMENT
between
GREAT DANE TRAILERS, INC.
a Georgia Corporation
and
BANKAMERICA BUSINESS CREDIT, INC.,
a Delaware corporation, as Agent
This Amended and Restated Pledge Agreement") is made and entered
into as of February 14, 1995, by Great Dane Trailers, Inc., a Georgia
corporation ("Pledgor"), in favor of BankAmerica Business Credit, Inc., a
Delaware corporation, as Agent ("Pledgee").
PRELIMINARY STATEMENT.
A. Pledgor is the owner of 100% of the issued and outstanding
capital stock of Great Dane Trailers Tennessee, Inc., a Tennessee corporation
("GDTT"), and Great Dane Los Angeles, Inc., a Georgia corporation ("GDLA")
(each, a "Company", and together, the "Companies").
B. Pledgor, such subsidiaries of Pledgor indicated on the title
page thereto (together with the Pledgor, the "Original Borrowers"), Security
Pacific Business Credit Inc. ("SPBC"), in its capacity as agent, and the
Lenders from time to time parties thereto entered into that certain Loan and
Security Agreement dated as of March 21, 1990 (as the same has been amended
from time to time, the "Original Loan Agreement"), pursuant to which the
Lenders advanced monies and made other extensions of credit to the Original
Borrowers.
C. Simultaneously with the execution and delivery of the Original
Loan Agreement, Pledgor and SPBC, as agent, entered into that certain Pledge
Agreement dated as of March 21, 1990, as amended by First Amendment to Pledge
Agreement dated as of November 29, 1993 (as so amended, the "Original Pledge
Agreement"), pursuant to which Pledgor delivered, pledged and granted
security interests to SPBC as agent in 100% of the issued and outstanding
common stock of GDTT, GDLA, Great Dane Trailers Indiana, Inc. ("GDTI") and
Great Dane Trailers Nebraska, Inc. ("GDTN").
D. On April 3, 1990, GDTI was merged with and into Pledgor, with
the Pledgor being the surviving corporation. As of December 1, 1994, GDTN
was merged with and into Pledgor, with the Pledgor being the surviving
corporation.
E. On March 3, 1993, Pledgor acquired all of the issued and
outstanding voting stock of GDLA. GDLA became a party to the Original Loan
Agreement under and pursuant to the tenth amendment thereof.
F. As of February 14, 1995, SPBC, Lenders, Pledgor, the Companies
and BankAmerica entered into a Succession Agreement pursuant to which the
Lenders have appointed, and the Pledgor and the Companies have consented to
the appointment of, BankAmerica as successor Agent under the Original Loan
Agreement and as Pledgee under the Original Pledge Agreement.
<PAGE>
<PAGE> EX-10.27-2
G. Pledgor, such subsidiaries of Pledgor indicated on the title
page thereto (together with the Pledgor, the "Borrowers"), Pledgee and the
Lenders from time to time parties thereto are entering into that certain Loan
and Security Agreement of even date herewith (as the same may be further
amended, restated, modified or supplemented from time to time, the "Loan
Agreement"), pursuant to which the Lenders may hereafter advance monies and
make other extensions of credit to the Borrowers.
H. The Lenders have required as a condition to the Lenders'
advancement of funds under the Loan Agreement that Pledgor execute and
deliver to Pledgee this Agreement.
NOW, THEREFORE, for and in consideration of the foregoing and of
any financial accommodations or extensions of credit (including, without
limitation, any loan or advance by renewal, refinancing or extension of the
Loan Agreement or otherwise) heretofore, now or hereafter made to or for the
benefit of Pledgor by Pledgee, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. PLEDGE. (a) Pledgor hereby delivers, pledges and grants
security interests to Pledgee, and reconfirms its delivery, pledge and grant
of security interest to Pledgee under the Original Pledge Agreement, in (i)
255 shares of common stock of GDLA, representing 100% of the issued and
outstanding capital stock of GDLA, which stock is evidenced by the stock
certificate identified on SCHEDULE 1 attached hereto and made a part hereof,
(ii) 850 shares of common stock of GDTT representing 100% of the issued and
outstanding capital stock of GDTT and 1000 shares of preferred stock of GDTT
which stock is evidenced by the stock certificates identified on SCHEDULE 1
hereto and (iii) all options and warrants for the purchase of shares of the
stock of the Companies now or hereafter held in the name of Pledgor (all of
said stock, options and warrants and all stock held in the name of Pledgor as
a result of the exercise of such options or warrants being hereinafter
collectively referred to as the "Stock"), herewith delivered to Pledgee
accompanied by stock powers for each respective Company ("Powers") duly
executed in blank, in the form attached hereto as SCHEDULE 2 and made a part
hereof, and the proceeds thereof and (b) (i) Pledgor hereby pledges and
grants security interests to Pledgee, and reconfirms its delivery, pledge and
grant of security interests to Pledgee under the Original Pledge Agreement,
in all of Pledgor's right, title and interest in and to any and all
promissory notes from time to time delivered to Pledgor and evidencing
obligations (x) in the original principal amount of $250,000 or more
individually or (y) which, when added to the obligations evidenced by all
promissory notes, other than promissory notes described in clause (x) hereof,
would exceed $1,000,000 in the aggregate (each a "Note" and collectively, the
"Notes") and (ii) all right and interest of the Pledgor, now existing and
hereafter arising and however and wherever arising, and all payments
delivered in connection with the foregoing in respect of any and all the
preceding listed in CLAUSE (b) hereof, herewith delivered to the Pledgee
accompanied by separate instruments of endorsement for each respective Note
("Endorsement"), duly executed in blank in the form attached hereto as
SCHEDULE 3 and made a part hereof, and the proceeds thereof (all such
proceeds and rights, the "Proceeds") (said Stock, Powers, Endorsements and
Proceeds together with the property and interests in property described in
PARAGRAPHS 3, 6 and 7, being hereinafter collectively referred to as the
<PAGE>
<PAGE> EX-10.27-3
"Collateral"), as security for the payment and performance of the
"Obligations" (under and as defined in the Loan Agreement). Pledgor hereby
appoints Pledgee as Pledgor's attorney-in-fact to arrange, at Pledgee's
option, for the transfer, upon or at any time after the existence or
occurrence of an Event of Default under and as defined in the Loan Agreement
(hereinafter an "Event of Default"), of the Collateral on the books of the
Company to the name of Pledgee or to the name of Pledgee's nominee.
2. VOTING RIGHTS. During the term of this Agreement, and so long
as there shall not occur or exist an Event of Default and Pledgee has not
delivered the written notice referred to in clause (b) below, Pledgor shall
have the right to vote the Stock on all corporate questions for all purposes
not inconsistent with the terms of this Agreement and the Loan Agreement.
Pledgee shall be entitled to exercise all voting powers pertaining to the
Collateral from and after (a) the occurrence of an Event of Default and (b)
Pledgee's delivery of written notice to Pledgor of Pledgee's intention to
exercise such voting powers.
3. DIVIDENDS AND DISTRIBUTIONS. (a) During the term of this
Agreement, and so long as there shall not occur or exist an Event of Default,
Pledgor shall be entitled to receive and retain any and all dividends,
principal and interest paid in respect of the Collateral, PROVIDED, HOWEVER,
that from and after (a) the occurrence of an Event of Default and (b) (except
in the case of the occurrence of an Event of Default described in SECTIONS
12.1(f), 12.1(g), 12.1(h) or 12.1(i) of the Loan Agreement) Pledgee's
delivery of written notice to Pledgor to do so any and all:
(i) dividends and interest paid or payable other than in cash in
respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Collateral;
(ii) dividends and other distributions paid or payable in cash in
respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in surplus; and
(iii) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Collateral;
shall be, and shall be forthwith delivered to the Pledgee to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for
the benefit of the Pledgee, be segregated from the other property or funds of
the Pledgor, and be forthwith delivered to the Pledgee as Collateral in the
same form as so received (with any necessary endorsement).
(b) Pledgee shall execute and deliver (or cause to be executed and
delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends or interest
payments which it is authorized to receive and retain pursuant to paragraph
(ii) of subparagraph (a) above.
(c) Upon the occurrence and during the continuance of an Event of
Default:
<PAGE>
<PAGE> EX-10.27-4
(i) All rights of the Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive and
retain pursuant to PARAGRAPH 3(a) shall cease and all such rights shall
thereupon become vested in the Pledgee which shall thereupon have the
sole right to receive and hold as Collateral such dividends and interest
payments; and
(ii) All dividends and interest paid which are received by the
Pledgor contrary to the provisions of paragraph (i) of this PARAGRAPH
3(c) shall be received in trust for the benefit of the Pledgee, shall be
segregated from other funds of the Pledgor and shall be forthwith paid
over to the Pledgee as Collateral in the same form as so received (with
any necessary endorsement).
4. REPRESENTATIONS AND COVENANTS. Pledgor warrants and
represents that Pledgor is (or, in the case of Notes delivered after the date
hereof, will be) the sole owner, free and clear of all liens, claims security
interests and encumbrances, of the Notes, and of 100% of the issued and
outstanding capital stock of each Company, the voting rights associated
therewith and that Pledgor has full power and authority to enter into this
Agreement. Pledgor covenants that Pledgor will continue to be the sole
owner, free and clear of all liens, claims, security interests and
encumbrances (except those held by Pledgee) of 100% of the issued and
outstanding capital stock of each Company and the voting rights associated
therewith. Pledgor covenants to deliver any and all Notes, each accompanied
by a separate instrument of Endorsement, promptly, but no later than five
Business Days after the Pledgor's receipt thereof (or, in the case of Notes
described in clause (y) of PARAGRAPH 1(a)) within five Business Days after
the Pledgor receives the Note, the original principal obligation of which
would cause the aggregate original principal obligations evidenced by all
Notes described in such clause (y) of PARAGRAPH 1(a) to equal or exceed
$1,000,000. Notwithstanding the foregoing, Pledgee shall have the right at
any time and from time to time to (i) request the Pledgor to prepare and send
to Pledgee a schedule of each Note, which shall include, among other items,
the principal amount and maturity thereof and any other matters requested by
Pledgee and (ii) request the Pledgor to deliver any Note, accompanied by a
separate instrument of Endorsement, described in such clause (y) of PARAGRAPH
1(a) in substitution for any Note (irrespective of the obligations evidenced
by such Note) then held by Pledgee or to be delivered to Pledgee, in each
case pursuant to clause (y) of PARAGRAPH 1(a).
Pledgor warrants and represents that (a) there are no restrictions
upon the voting rights or upon the transfer of any of the Collateral other
than those which may appear on the face of the certificates evidencing the
Collateral, (b) there are no warrants or other rights or options issued or
outstanding in connection with any of the Collateral, (c) the stock
identified on SCHEDULE 1 hereto represents all the stock of wholly-owned
subsidiaries of Pledgor, (d) Pledgor has the right to vote, pledge and grant
a security interest in or otherwise transfer such Collateral free of any
liens, claims or encumbrances, (e) the Powers are duly executed and give
Pledgee the authority such Powers purport to confer, (f) to the best of
Pledgor's knowledge, each Note has been (or, in the case of Notes delivered
after the date hereof, will be) duly authorized, issued and delivered, and is
the legal, valid, and binding obligation of the issuer thereof and (g) each
payor party to any of the Notes has no right of set off or defense or
<PAGE>
<PAGE> EX-10.27-5
counterclaim which would inhibit the collection of all amounts outstanding
under such Note.
5. SUBSEQUENT CHANGES AFFECTING COLLATERAL. Pledgor represents
to Pledgee that Pledgor has made Pledgor's own arrangements for keeping
informed of changes or potential changes affecting the Collateral (including,
but not limited to, rights to convert, rights to subscribe, payment of
dividends, reorganization or other exchanges, tender offers and voting
rights), and Pledgor agrees that Pledgee shall have no responsibility or
liability for informing Pledgor of any such changes or potential changes or
for taking any action or omitting to take any action with respect thereto.
Pledgee may, upon or at any time after the occurrence of an Event of Default,
and after written notice and at Pledgee's option, transfer or register the
Collateral or any part of the Collateral into Pledgee's or Pledgee's
nominee's name with or without any indication that such Collateral is subject
to the security interest under this Agreement.
6. STOCK ADJUSTMENTS. In the event that during the term of this
Agreement any stock dividend, reclassification, readjustment or other change
is declared or made in the capital structure of any Company (including,
without limitation, the issuance of additional shares of preferred or common
stock of any Company of whatever class to the Pledgor), or any option
included within the Stock is exercised, or both, then all new, substituted
and additional shares, or other securities, issued to the Pledgor by reason
of any such change or exercise shall be delivered to and held by Pledgee
under the terms of this Agreement in the same manner as the Collateral
originally pledged under this Agreement.
7. WARRANTS, OPTIONS AND OTHER RIGHTS. In the event that during
the term of this Agreement subscription warrants or any other rights or
options shall be issued in connection with any of the Collateral, then such
warrants, rights and options shall be immediately assigned to Pledgee and all
new stock or other securities so acquired by Pledgor shall be immediately
assigned to Pledgee to be held under the terms of this Agreement in the same
manner as the Collateral originally pledged hereunder.
8. REGISTRATION. Upon or at any time after the occurrence of an
Event of Default, in the event the Pledgee determines that it is advisable to
register under or otherwise comply in any way with the Securities Act or any
similar federal or state law, or if such registration or compliance is
required with respect to the securities included in any of the Collateral
prior to the sale thereof by Pledgee, Pledgor will use Pledgor's best efforts
to cause such registration to be effectively made, at no expense to Pledgee,
and to continue such registration effective for such time as may be
reasonably necessary in the opinion of Pledgee, and will reimburse Pledgee
for any expenses incurred by Pledgee, including reasonable in-house and
outside attorneys' and accountants' fees and expenses, in connection
therewith. Upon or at any time after the occurrence of an Event of Default,
should Pledgee determine that, prior to any public offering of any securities
contained in any of the Collateral, such securities should be registered
under the Securities Act and/or registered or qualified under any other
federal or state law, and that such registration and/or qualification is not
practical, then Pledgor agrees that it will be commercially reasonable if a
private sale, upon at least 10 days' prior notice to Pledgor, is arranged so
as to avoid a public offering even though the sales price established and/or
<PAGE>
<PAGE> EX-10.27-6
obtained may be substantially less than prices quoted for such security on
any market or exchange.
9. WAIVERS; SUBROGATION. The Pledgor irrevocably agrees that it
will not bring any "claims" (as defined in Section 105(5) of the Bankruptcy
Code) against the Companies to which the Pledgor is or would at any time be
otherwise entitled by virtue of its obligations under this Agreement,
including, without limitation, any right of subrogation (whether contractual,
under Section 509 of the Bankruptcy Code or otherwise) and all contractual,
statutory or common law rights of reimbursement, contribution, or indemnity
from the Companies which may otherwise have arisen in connection with this
Agreement, until such time as all of the Obligations have been satisfied in
full and this Agreement shall have terminated in accordance with its terms.
The Pledgor waives presentment and demand for payment of any of the
Obligations, protest and notice of dishonor or default with respect to any or
all of the Obligations, and all other notices to which Pledgor might
otherwise be entitled, except as otherwise expressly provided in this
Agreement or the Loan Agreement.
10. DEFAULT. (a) Upon the occurrence or existence of an Event of
Default, Pledgee shall have, in addition to any other rights given by law or
the rights given under this Agreement or the Loan Agreement, all of the
rights and remedies with respect to the Collateral of a secured party under
the Uniform Commercial Code.
(b) In addition, with respect to the Collateral, or any part of
the Collateral, which shall then be or shall thereafter come into the
possession or custody of Pledgee:
(i) Pledgee may sell or cause the same to be sold at any broker's
board or at public or private sale, in one or more sales or lots, at
such price as Pledgee may deem best, and for cash or on credit or for
future delivery, without assumption of any credit risk, and the
purchaser of any or all of the Collateral so sold shall thereafter hold
the same absolutely, free from any claim, encumbrance or right of any
kind whatsoever. Unless any of the Collateral threatens to decline
speedily in value or is or becomes of a type sold on a recognized
market, Pledgee will give Pledgor reasonable notice of the time and
place of any public sale of the Collateral, or of the time after which
any private sale or other intended disposition is to be made. Any sale
of any of the Collateral conducted in conformity with reasonable
commercial practices of banks, commercial finance companies, insurance
companies or other financial institutions disposing of property similar
to such Collateral, including any sale made pursuant to PARAGRAPH 8
hereof, shall be deemed to be commercially reasonable. Notwithstanding
any provision to the contrary contained in this Agreement, any
requirements of reasonable notice shall be met if such notice is
deposited in the United States mails, addressed to Pledgor as provided
in PARAGRAPH 17, at least 10 days before the time of the sale or
disposition. Any other requirement of notice, demand or advertisement
for sale is, to the extent permitted by law, waived. Pledgee may, in
Pledgee's own name, or in the name of a designee or nominee, buy at any
public sale of any of the Collateral and, if permitted by applicable
law, buy at any private sale of any of the Collateral. Pledgor will pay
to Pledgee all expenses (including court costs and reasonable attorneys'
<PAGE>
<PAGE> EX-10.27-7
and paralegals' fees and expenses) of, or incident to, the enforcement
of any of the provisions of this Agreement. Since federal and state
securities laws may impose certain restrictions on the method by which
a sale of any or all of the Collateral may be effected after the
occurrence of an Event of Default, Pledgor agrees that upon the
occurrence or existence of an Event of Default, Pledgee may, from time
to time, attempt to sell all or any part of the Collateral by means of
a private placement, restricting the bidder and prospective purchasers
to those who will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, Pledgee may
solicit offers to buy the Collateral, or any part of it, for cash, from
a limited number of investors deemed by Pledgee, in Pledgee's reasonable
judgment, to be financially responsible parties who might be interested
in purchasing such Collateral, and if Pledgee solicits such offers from
not less than four such investors, then the acceptance by Pledgee of the
highest offer obtained therefrom shall be deemed to be a commercially
reasonable method of disposition of such Collateral; and
(ii) Pledgee, or its nominee, may without notice to the Pledgor,
notify any payor of the Notes of this Agreement, direct that all sums
then and thereafter payable pursuant to the Notes be paid solely to the
Pledgee, and collect and retain all sums payable pursuant to the Notes
as they become due and payable and apply the same to the Obligations in
accordance with the terms of the Loan Agreement.
11. TERM. This Agreement shall remain in full force and effect
until all of the Obligations have been fully paid and satisfied, and the Loan
Agreement has been terminated. Upon termination of this Agreement as
provided in this PARAGRAPH 11, Pledgee agrees to return any Collateral in its
possession to Pledgor at the address set forth in PARAGRAPH 17.
12. DEFINITIONS. Any capitalized terms used herein and not
otherwise defined are used herein as defined in the Loan Agreement. The
singular shall include the plural and vice versa.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Pledgor, Pledgee and their respective successors
and assigns. Pledgor's successors and assigns shall include, without
limitation, a receiver, trustee or debtor in possession of or for Pledgor.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be held to
be prohibited or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
15. FURTHER ASSURANCES. Pledgor agrees that Pledgor will
cooperate with Pledgee and will execute and deliver, or cause to be executed
and delivered, all such other stock powers, proxies, instruments, documents,
endorsements and resignations of officers and directors, and will take all
such other action, including, without limitation, the filing of UCC financing
<PAGE>
<PAGE> EX-10.27-8
statements, as Pledgee may reasonably request from time to time in order to
carry out the provisions and purposes of this Agreement. In furtherance, and
not in limitation of the foregoing, Pledgor agrees to take all action
necessary or that Pledgee may reasonably request to maintain the continued
perfection of the security interests granted to SPBC as initial Pledgee under
the Original Pledge Agreement and to transfer possession and control of any
and all Collateral not delivered by SPBC to Pledgee on the date of the
Succession Agreement and held by SPBC on the date hereof to the Pledgee.
16. PLEDGEE'S DUTY OF CARE. Pledgee shall have no duty with
respect to any Collateral other than as set forth in the Loan Agreement.
Without limiting the generality of the foregoing, Pledgee shall be under no
obligation to take any steps necessary to preserve rights in any of the
Collateral against any other parties but may do so at Pledgee's option, but
all expenses incurred in connection therewith shall be for the sole account
of Pledgor.
17. NOTICES. Any notice, request or other communication required
or desired to be served, given or delivered under this Agreement shall be in
writing and shall be given in the manner and to the addresses set forth in
the Loan Agreement
18. SECTION HEADINGS. The section headings in this Agreement are
for convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions of this Agreement.
IN WITNESS WHEREOF, Pledgor and Pledgee have executed this
Agreement as of this 14th day of February 1995.
GREAT DANE TRAILERS, INC.
By /s/ Thomas W. Horan
-------------------------------------
Thomas Horan
Senior Vice President
BANKAMERICA BUSINESS
CREDIT, INC., as Agent
By /s/ Ira Mermelstein
-------------------------------------
Vice President
<PAGE>
<PAGE> EX-10.27-9
Schedule 1
to
Amended and Restated Pledge Agreement
STOCK CERTIFICATES
Great Dane Los Angeles, Inc. 255 shares of common stock
Great Dane Trailers Tennessee, Inc. 850 shares of common
stock
1000 shares of preferred
stock
<PAGE>
<PAGE> EX-10.27-10
Schedule 2
to
Amended and Restated Pledge Agreement
FORM OF STOCK POWER:
Attached.
<PAGE>
<PAGE> EX-10.27-11
Schedule 3
to
Amended and Restated Pledge Agreement
FORM OF ENDORSEMENT SEPARATE FROM NOTE
ENDORSEMENT
FOR VALUE RECEIVED, Great Dane Trailers, Inc. ("GDT") hereby
assigns and transfers unto BankAmerica Business Credit, Inc., as Agent
("Agent") under that certain Amended and Restated Loan and Security Agreement
dated as of February 14, 1995 entered into among Great Dane Trailers, Inc.,
Great Dane Los Angeles, Inc., Great Dane Trailers Tennessee, Inc., the
Lenders from time to time party thereto and the Agent one note of [payor] for
[principal amount] herewith, standing in GDT's name and does hereby
irrevocably constitute and appoint the Agent as GDT's attorney to transfer
said Note with full power of substitution in the premises.
Dated February 14, 1995
GREAT DANE TRAILERS, INC.
By: /s/ Thomas W. Horan
--------------------------------
Thomas Horan
Senior Vice President
In presence of:
_________________________
<PAGE> EX-10.28-1
R&W DRAFT
2/10/95
AMENDED AND RESTATED AGREEMENT REGARDING
STOCK AND OTHER MATTERS
THIS AMENDED AND RESTATED AGREEMENT REGARDING STOCK AND OTHER
MATTERS ("Agreement") is entered into as of February 14, 1995 by and between
GREAT DANE HOLDINGS INC., a Delaware corporation ("Holdings") and BANKAMERICA
BUSINESS CREDIT, INC., a Delaware corporation ("BABC"), as "Agent" under and
as defined in the Loan and Security Agreement referred to below.
PRELIMINARY STATEMENT
A. Great Dane Trailers, Inc., a Georgia corporation ("GDT"), is
the legal and beneficial owner of all of the issued and outstanding capital
stock of Great Dane Los Angeles, Inc., a Georgia corporation ("GDLA") and
Great Dane Trailers Tennessee, Inc., a Tennessee corporation ("GDTT") (GDT,
GDLA and GDTT are hereinafter sometimes collectively referred to as the
"Borrowers").
B. GDT, GDTT and certain other former subsidiaries of GDT
(collectively, the "Original Borrowers"), the financial institutions signa-
tory thereto (the "Lenders") and Security Pacific Business Credit ("SPBC"),
as agent for the Lenders, entered into that certain Loan and Security
Agreement dated as of March 21, 1990 (as amended or otherwise modified from
time to time, the "Original Loan Agreement") pursuant to which the Agent and
the Lenders agreed to make certain loans, extensions of credit and other
financial accommodations to the Original Borrowers.
C. Simultaneously with the execution and delivery of the Original
Loan Agreement, International Controls Corp., a Florida corporation ("ICC"),
and the legal and beneficial holder of all of the issued and outstanding
stock of GDT, entered into that certain Agreement Regarding Stock and Other
Matters (the "Original Stock Agreement"), pursuant to which ICC acknowledged,
among other things, that it derived direct and indirect economic benefit from
the financial accommodations made to the Original Borrowers under the
Original Loan Agreement.
D. In October, 1994, ICC was reincorporated in the State of
Delaware through a merger with its wholly-owned subsidiary, Holdings, with
Holdings being the surviving corporation.
E. As of February 14, 1995, SPBC, Lenders, Borrowers and BABC
entered into a Succession Agreement pursuant to which the Lenders have
appointed, and the Borrowers have consented to the appointment of, BABC as
successor Agent under the Original Loan Agreement and the other Loan
Documents (as defined in the Original Loan Agreement).
F. Simultaneously with the execution and delivery of this
Agreement, the Borrowers, the Lenders and BABC as Agent for the Lenders are
<PAGE>
<PAGE> EX-10.28-2
entering into that certain Amended and Restated Loan and Security Agreement
dated as of even date herewith (as it may be amended or otherwise modified
from time to time, the "Loan Agreement") pursuant to which the Agent and
Lenders agree to make or renew, extend and amend, as applicable, certain
loans, extensions of credit and other financial accommodations to the
Borrowers. All capitalized terms used herein and not otherwise defined
herein are used herein as defined in the Loan Agreement.
G. Holdings will derive direct and indirect economic benefit from
the loans, extensions of credit and other financial accommodations made to
the Borrowers under the Loan Agreement.
NOW, THEREFORE, in consideration of the premises set forth above
and in order to induce the Agent and the Lenders to make loans and other
financial accommodations under the Loan Agreement, the parties hereby agree
as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. Holdings hereby
represents and warrants to the Lenders and the Agent that:
1.1 AUTHORIZATION, VALIDITY AND ENFORCEABILITY. Holdings has the
corporate power and authority to execute, deliver and perform the Loan
Documents to which Holdings is a party. Holdings has taken all necessary
corporate action (including, without limitation, obtaining approval of its
stockholders, if necessary) to authorize its execution, delivery and
performance of the Loan Documents to which it is a party. No consent,
approval, or authorization of, or declaration or filing with, any Public
Authority and no consent of any other Person is required in connection with
the execution, delivery and performance by Holdings of the Loan Documents to
which Holdings is a party. The Loan Documents to which Holdings is a party
have been duly executed and delivered by Holdings and constitute the legal,
valid and binding obligations of Holdings enforceable against Holdings in
accordance with their respective terms. The execution, delivery and
performance by Holdings of the Loan Documents to which Holdings is a party
and, in the case of CLAUSE (a) below, the Loan Documents by each of the
Borrowers which is a party thereto, do not and will not conflict with, or
constitute a violation or breach of, or constitute a default under, or result
in the creation or imposition of any Lien upon the property of Holdings by
reason of the terms of (a) any contract, indenture, mortgage, lease,
agreement or instrument to which Holdings is a party or which is binding upon
Holdings, (b) any Requirements of Law applicable to Holdings or (c) the
Certificate or Articles of Incorporation or By-laws of Holdings.
1.2 ORGANIZATION AND QUALIFICATION. Holdings (a) is duly
incorporated and organized and validly existing in good standing under the
laws of the State of Delaware, (b) is qualified to do business as a foreign
corporation and is in good standing in Florida and Michigan which are the
only jurisdictions in which qualification is necessary in order for Holdings
to own or lease its property and conduct its business and (c) has all
requisite power and authority to conduct its business and to own its
property.
1.3 RESTRICTIVE AGREEMENTS. Holdings is not a party to any
contract or agreement which restricts Holdings' or any of the Borrowers'
ability to execute, deliver and perform the Loan Documents to which Holdings
or any Borrower is a party, or which restricts the Borrowers' ability to
repay the Obligations or which could reasonably be expected to have a
Material Adverse Effect.
<PAGE>
<PAGE> EX-10.28-3
1.4 TAXES. Holdings and its Subsidiaries have filed all tax
returns and other reports which Holdings and its Subsidiaries were required
by law to file on or prior to the Closing Date and have paid all taxes,
assessments, fees and other governmental charges, and penalties and interest,
if any, against any of them or their respective property, income, or
franchise, that are due and payable as shown on such return except for such
taxes, assessments, fees and other governmental charges, and penalties and
interest which are being contested in good faith by appropriate proceedings
diligently pursued, and for which adequate reserves are maintained, and no
Lien, other than a Permitted Lien, results from such non-payment.
1.5 DISCLOSURE. Neither this Agreement nor any document or
statement furnished to the Agent or any of the Lenders by or on behalf of
Holdings contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements contained herein
or therein not materially misleading.
1.6 CAPITAL STOCK OF GDT.
(a) Holdings is the sole, direct, legal and beneficial owner
of the shares of capital stock of GDT set forth on SCHEDULE 1.6
attached hereto and the voting rights associated therewith. Such
shares constitute all of the issued and outstanding shares of
capital stock of GDT (such shares, together with any shares of GDT
hereafter acquired by Holdings, are hereinafter collectively
referred to as the "Restricted Shares");
(b) The Restricted Shares are free and clear of all Liens;
(c) The Restricted Shares have been duly authorized and
validly issued and are fully paid and nonassessable;
(d) There are no restrictions upon the voting rights
associated with any of the Restricted Shares; and
(e) There are no warrants or other rights or options issued
or outstanding in connection with any of the Restricted Shares.
SECTION 2. GENERAL COVENANTS. Holdings covenants and agrees that:
2.1 TRANSFERS AND LIENS. Holdings will not (a) sell, assign,
transfer, convey or otherwise dispose of, or grant any option with respect
to, any of the Restricted Shares, or enter into an agreement to do any of the
foregoing, without the prior written consent of the Agent and the Majority
Lenders; or (b) create or permit to exist any Lien with respect to all or any
part of the Restricted Shares, without the prior written consent of the Agent
and the Majority Lenders.
2.2 PERMITTED TRANSFERS AND LIENS. In the event any sale,
assignment, transfer, conveyance or other disposition under SECTION 2.1(a)
above is consented to by the Agent and the Majority Lenders, as a condition
to any such disposition, each transferee shall, prior to such disposition,
agree in writing to be bound by the terms of this Agreement.
2.3 LEGEND. Each certificate representing shares of the
Restricted Shares shall at all times contain a legend in the form of EXHIBIT
A attached hereto.
<PAGE>
<PAGE> EX-10.28-4
2.4 INTERCOMPANY LOANS. Prior to or simultaneously with its
receipt, directly or indirectly, of the proceeds of any loan, advance or
other financial accommodation made for the purpose, directly or indirectly,
of financing any Redemption pursuant to a Tender Offer or an Exchange Offer,
Holdings will deliver or cause to be delivered to the Agent the following,
each in form and substance reasonably satisfactory to the Agent:
(a) written representations and warranties of Holdings to the
Lenders and the Agent to the effect that (1) as of the date of such
loan, advance or other financial accommodation and Redemption, each of
the Tender Offer Documents or Exchange Offer Documents, as applicable,
if required to be filed with the Securities and Exchange Commission
("SEC") or other securities authority complied in all material respects
with the provisions of the Securities Exchange Act and the rules and
regulations thereunder and all other Requirements of Law; and (2) the
Tender Offer Documents or Exchange Offer Documents, as applicable, as of
the time they were distributed to security holders and all times
subsequent thereto, did not and do not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under
which they were made, not misleading; in each case together with the
written indemnity of Holdings for damages, costs and expenses incurred
by any Secured Creditor resulting from the breach, in any material
respect, of any such representation and warranty of Holdings; and
(b) a favorable opinion of counsel for Holdings addressed to the
Lenders and the Agent to the effect that (1) the representations,
warranties and indemnity referred to in SECTION 2.4(a) were duly
authorized, executed and delivered and are (subject to (x) customary
creditors' rights and equitable remedies exceptions and (y) with respect
to such indemnity, considerations of public policy) enforceable against
Holdings in accordance with their terms; (2) to such counsel's know-
ledge, no action has been taken by any competent authority which
restrains, prevents or imposes any material adverse condition upon, or
seeks to restrain, prevent or impose any material adverse condition
upon, such Tender Offer or Exchange Offer, as applicable; (3) the Tender
Offer Documents or Exchange Offer Documents, as applicable, if required
to be filed by Holdings with the SEC in connection with the Tender Offer
or Exchange Offer, as applicable, and other relevant documents required
thereby (except for the financial and statistical data contained or
incorporated by reference therein, as to which such counsel expresses no
opinion) at all relevant times complied as to form in all material
respects with the applicable requirements of the Securities Exchange Act
and Securities Act and the rules and regulations thereunder; (4) such
Tender Offer Documents or Exchange Offer Documents, as applicable, if
required to be filed with the SEC, have been duly filed by Holdings with
the SEC; and (5) during the course of the preparation of the Tender
Offer Documents or Exchange Offer Documents, as applicable, such counsel
participated in conferences and discussions with various officers and
other representatives of Holdings and its Affiliates, at which the
contents of the Tender Offer Documents or Exchange Offer Documents, as
applicable, were discussed; although such counsel has made no special
investigation of representations made by officers and other
representatives of Holdings and its Affiliates and has not verified and
is not passing upon and assumes no responsibility for the accuracy,
completeness or fairness of the statements contained in the Tender Offer
Documents or Exchange Offer Documents, as applicable, based upon such
counsel's participation in such conferences and discussions, and relying
<PAGE>
<PAGE> EX-10.28-5
as to materiality upon officers and other representatives of Holdings
and its Affiliates, such counsel advises the Lenders and Agent that no
facts have come to such counsel's attention which lead such counsel to
believe that, at any relevant time, the Tender Offer Documents or
Exchange Offer Documents, as applicable, contained any untrue statement
of a material fact or omitted to state any material fact necessary in
order to make the statements made therein, in light of the circumstances
under which they were made, not misleading (it being understood that
such counsel expresses no view with respect to the financial statements
and related notes, statistical and accounting data contained or incorpo-
rated by reference in the Tender Offer Documents or Exchange Offer
Documents, as applicable); and such opinion shall also cover such other
matters with respect to Holdings' corporate organization, existence,
good standing and related issues as the Agent may reasonably require;
and
(c) such other documents and instruments as the Agent may
reasonably require.
2.5 TRANSFER OF FUNDS. Holdings acknowledges and agrees that the
ability of Borrower to transfer any funds to Holdings, whether in a
Distribution or otherwise, is subject to the terms and provisions of the Loan
Agreement.
2.6 NOTICE; PROJECTIONS. In the event that any required sinking
fund payments due prior to the Termination Date are not paid in full by
February 14, 1996, Holdings shall, no later than February 15, 1996, deliver
to the Agent consolidated projected balance sheets, statements of income and
expenses, and statements of cash flow for Holdings and its Subsidiaries as at
the end of and for each month of 1996. In addition, in the event that
Holdings reasonably believes that it will not be able to make any required
sinking fund payment in any Fiscal Year, it shall notify the Agent of the
same promptly, and in no event later than the earlier of (a) two (2) months
(or, if earlier, the date on which such information is made available to
Holdings by its independent certified public accountants) prior to the first
day of such Fiscal Year or (b) in the event any sinking fund payment is due
or any other day other than August 1, nine (9) months prior to such date. In
the event such notice is given, Holdings shall, no later than February 15 of
the Fiscal Year during which it believes it will not be able to make the
sinking fund payment, deliver the same projected statements described in the
preceding sentence for such Fiscal Year.
SECTION 3. TAX COVENANTS.
Holdings covenants and agrees that:
Holdings shall not permit the Borrowers or any of their
Subsidiaries to file or consent to the filing of any consolidated tax return
with any Person (other than the Borrowers or any of their Subsidiaries or
such other Person as may be reasonably acceptable to the Lenders); PROVIDED,
HOWEVER, so long as the Borrowers and their Subsidiaries are members of an
"affiliated group" (as defined in Section 1504 of the Code) with Holdings
(the "Affiliated Group"), for all taxable years in which the Borrowers are a
member of the Affiliated Group and for which Holdings files consolidated
federal income tax returns and consolidated state income tax returns or state
income tax returns based on combined reporting where such returns are
required under or permitted under applicable state rules and regulations for
the Affiliated Group, the Borrowers may file consolidated tax returns with
<PAGE>
<PAGE> EX-10.28-6
Holdings and pay to Holdings, the amount of the consolidated federal and the
state income tax liabilities of the Affiliated Group as set forth below:
(a) DETERMINATION OF FEDERAL INCOME TAX LIABILITY. For each
"Year" (as defined below) or part thereof with respect to which Holdings
files a consolidated federal income tax return and the Borrowers are members
of the Affiliated Group, the Borrowers have agreed to determine their
consolidated federal income tax liability for such Year as if the Borrowers
had filed their own separate consolidated federal income tax return, such
determination to include any benefit resulting from the carry-forward of
ordinary losses, capital losses and tax credits of the Borrowers (regardless
of whether such losses or credits have been utilized by the Affiliated Group
to offset taxable income or taxes of the Affiliated Group) from the current
or a prior year. For purposes of this SECTION 3(a) "Year" shall mean the
taxable year adopted by the Affiliated Group for federal income tax purposes.
(b) PAYMENT OF THE BORROWERS' TAX LIABILITY TO HOLDINGS. The
Borrowers may pay the lesser of (a) their federal income tax liability deter-
mined under SECTION 3(a) (or, until such time as final numbers are available,
estimates thereof) or (b) the amount of federal income tax expense Holdings
must pay in cash as shown on IRS form 1120 (or, until such time as final
numbers are available, estimates thereof), at such times as shall be
requested by Holdings, but not more frequently than quarterly; PROVIDED THAT,
with respect to the second quarter of any year the Borrowers may pay two
installments in accordance with their past practices. If, as a result of
estimated payments, the Borrowers pay to Holdings or directly to the taxing
authority for a Year an amount in excess of the lesser of (a) the amount
determined under SECTION 3(a) plus $100,000, or (b) the amount permitted to
be paid by this SECTION 3(b), Holdings shall refund to the Borrowers the
amount of such excess no later than the date upon which Holdings files the
consolidated federal income tax return for the Affiliated Group. Holdings
shall deliver such documents as the Agent shall reasonably require to
demonstrate compliance with this SECTION 3.
(c) FILING OF CONSOLIDATED RETURNS. Holdings shall be responsible
for the filing of all consolidated federal income tax returns for the
Affiliated Group and for the timely payment or collection of any tax or
refund in connection with such consolidated returns. Holdings shall also be
responsible for computing the Borrowers' federal income tax liability under
SECTION 3(a) and for giving timely notice to the Borrowers of any amounts
payable pursuant to this SECTION 3.
(d) STATE OR LOCAL INCOME TAX. For each Year with respect to
which Holdings files one or more state or local income tax returns requiring
the payment of a tax, whether on the basis of a unitary return or a single
return based upon a combined report, and the operations of the Borrowers are
included in such return or returns, Holdings shall compute the Borrowers'
state income tax liability in the manner provided in SECTION 3(a) and payment
shall be made in the manner provided in SECTION 3(b).
(e) ADJUSTMENTS TO THE BORROWERS' FEDERAL AND STATE INCOME TAX
LIABILITY.
(i) In the event that there is an increase or decrease in the
amount determined under SECTIONS 3(a) or 3(d) for any Year (whether by
amended return, examination by the IRS, carryback or net operating loss or
unused credits, or otherwise), (a) in the case of an increase in the tax
payable by the Borrowers, the Borrowers have agreed to promptly make a
<PAGE>
<PAGE> EX-10.28-7
payment to Holdings in an amount equal to the lesser of (1) the amount of
such increase or (2) the cash amount payable by Holdings to the IRS or any
state or local taxing authority as a result of such increase (together with
interest and penalties imposed by the IRS or any state or local taxing
authority), and (b) in the case of a decrease in the tax payable by the
Borrowers, Holdings shall promptly make a payment to the Borrowers in an
amount equal to the lesser of (1) the amount of such decrease or (2) the cash
amount of the refund from the IRS or any state or local taxing authority
received by Holdings.
(ii) The Agent and a representative of the Borrowers shall have the
right to review any adjustments determined by a taxing authority which would
increase or decrease the amount determined under SECTION 3(a) or 3(d).
(f) REFUNDS. In the event the calculation under SECTION 3(a) or
3(d) reflects that the Borrowers would be entitled to a refund for such Year,
Holdings shall pay such amount to the Borrowers promptly but in any event no
later than the date upon which Holdings files the income tax return for the
Affiliated Group.
SECTION 4. ERISA. Holdings shall not, and shall not permit any
Related Company of any Borrower to, do any of the following to the extent
such act or failure to act would singly or in the aggregate, after taking
into account all other such acts or failures to act, have a Material Adverse
Effect:
(i) Engage in any prohibited transaction for which an exemp-
tion is not available or has not been previously obtained from the
DOL in connection with which any Borrower or any Related Company
could be subject to either a civil penalty assessed pursuant to
Section 502(i) of ERISA or tax imposed by Section 4975 of the Code;
(ii) Permit to exist any accumulated funding deficiency
(whether or not waived), as defined in Section 302 of ERISA and
Section 412 of the Code;
(iii) Fail to pay timely required contributions or
installments due with respect to any waived funding deficiency to
any Plan;
(iv) Fail to make any contribution or payment to any Multi-
employer Plan which Borrower or any Related Company may be required
to make under any agreement relating to such Multiemployer Plan, or
any law pertaining thereto;
(v) Terminate, or permit a Related Company to terminate, any
Benefit Plan which would result in any liability of any Borrower or
a Related Company under Title IV of ERISA;
(vi) Fail to pay any required installment under section (m)
of Section 412 of the Code or any other payment required under
Section 412 of the Code on or before the due date for such
installment or other payment; or
(vii) Amend any Benefit Plan resulting in an increase in
current liability for the plan year such that any Borrower or a
Related Company is required to provide security to such Plan under
Section 401(a)(29) of the Code.
<PAGE>
<PAGE> EX-10.28-8
SECTION 5. TERM. This Agreement shall remain in full force and
effect until the later of (i) the payment in full and discharge of all
Obligations and (ii) the termination of all financing arrangements under and
in connection with the Loan Agreement (including, without limitation, any
refinancing thereof).
SECTION 6. GENERAL.
6.1 AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of
any provision of this Agreement or consent to any departure by Holdings
herefrom shall in any event be effective unless the same shall be in writing
and signed by the Agent and Majority Lenders, and then such amendment, waiver
or consent shall be effective only in the specific instance and for the
specific purpose given.
6.2 ADDRESSES FOR NOTICE. All notices and other communications
hereunder shall be given in the manner set forth in the Loan Agreement and,
in the case of the Agent, to its address set forth in the Loan Agreement or,
in the case of Holdings, to its address set forth below.
6.3 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability, without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
6.4 SUCCESSORS. This Agreement shall be binding upon the parties
hereto and their respective successors (including, without limitation, a
receiver, transferor or debtor-in-possession of Holdings) and assigns, and
shall inure to the benefit of the successors and permitted assigns of the
Lenders; PROVIDED, HOWEVER, that Holdings shall not voluntarily assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Agent and the Majority Lenders.
6.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
6.6 SECTION HEADINGS AND COUNTERPARTS. The section headings
herein are for convenience of reference only and shall not affect in any way
the interpretation of any of the provisions hereof. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
6.7 (A) THE PARTIES HERETO AGREE TO THE EXCLUSIVE JURISDICTION OF
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK
SITTING IN THE CITY AND COUNTY OF NEW YORK AND WAIVE ANY OBJECTION BASED ON
VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN,
AND AGREE THAT ANY DISPUTE CONCERNING THE RELATIONSHIP AMONG THE PARTIES
HERETO OR THE CONDUCT OF ANY PARTY IN CONNECTION WITH THIS AGREEMENT OR
OTHERWISE SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE.
(B) EACH OF THE BORROWERS AND HOLDINGS HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO<PAGE>
<PAGE> EX-10.28-9
HOLDINGS OR SUCH BORROWER AT ITS ADDRESS FOR NOTICE DESIGNATED HEREIN AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME
SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS, OR, AT THE AGENT'S OPTION BY
SERVICE UPON HUTTON INGRAM YUZEK GAINEN CARROLL & BERTOLOTTI, 250 PARK
AVENUE, 6TH FLOOR, NEW YORK, NEW YORK 10177, ATTENTION: PAULETTE KENDLER,
ESQ., WHICH HOLDINGS IRREVOCABLY APPOINTS AS ITS AGENT FOR THE PURPOSE OF
ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF NEW YORK. IN ADDITION, THE
AGENT AGREES PROMPTLY TO FORWARD BY REGISTERED MAIL ANY PROCESS SO SERVED
UPON SAID AGENT TO HOLDINGS, AS THE CASE MAY BE, AT ITS ADDRESS DESIGNATED
HEREIN. HOLDINGS HEREBY CONSENTS TO SERVICE OF PROCESS AS AFORESAID.
(C) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM IN RESPECT TO THIS AGREEMENT, IN CONNECTION HEREWITH OR IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE. HOLDINGS AND THE AGENT EACH HEREBY AGREES AND CONSENTS
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECLARED BY
COURT TRIAL WITHOUT A JURY AND THAT ANY OF THEM MAY FILE AN ORIGINAL COUNTER-
PART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) NOTHING IN THIS SECTION 6.7 SHALL AFFECT THE RIGHT OF THE
AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OF AFFECT
THE RIGHT OF THE AGENT TO BRING ANY ACTION OR PROCEEDING AGAINST HOLDINGS IN
THE COURTS OF ANY JURISDICTION.
<PAGE>
<PAGE> EX-10.28-10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of
the date first written above.
GREAT DANE HOLDINGS INC.
2016 North Pitcher Street
Kalamazoo, Michigan 49007
Attention: President
Telecopier No.: 616/343-6823
By: /s/ Jay H. Harris
-------------------------------------
with a copy of any notice to:
Hutton Ingram Yuzek Gainen
Carroll & Bertolotti
250 Park Avenue, 6th Floor
New York, New York 10177
Attention: Paulette Kendler, Esq.
Telecopier No.: 212/907-9681
Agreed and Accepted as
of February 14, 1995:
BANKAMERICA BUSINESS
CREDIT, INC., as Agent
By: /s/ Ira Mermelstein
----------------------------
Vice President
<PAGE>
<PAGE> EX-10.28-11
SCHEDULE 1.6
TO
AMENDED AND RESTATED AGREEMENT REGARDING
STOCK AND OTHER MATTERS
100 shares of no par value common stock of GDT evidenced by
certificate No. 1.
<PAGE>
<PAGE> EX-10.28-12
EXHIBIT A
TO
AMENDED AND RESTATED AGREEMENT REGARDING
STOCK AND OTHER MATTERS
LEGEND FOR GREAT DANE TRAILERS, INC.
STOCK CERTIFICATE
"The shares represented by this certificate are subject to the terms and
provisions of an Amended and Restated Agreement Regarding Stock and Other
Matters, dated as of February 7, 1995, between Great Dane Holdings Inc., and
BankAmerica Business Credit, Inc., as Agent, a copy of which is on file with
the Secretary of the Company, and each holder of this certificate, by
acceptance of this certificate, agrees to be bound by the terms of said
Agreement."
<PAGE> EX-21.1-1
EXHIBIT 21.1
SUBSIDIARIES OF
GREAT DANE HOLDINGS INC.
Jurisdiction
of
Company Name <F1> Incorporation
- ----------------- -------------
Checker Motors Corporation Delaware
Yellow Cab Company Delaware
Chicago AutoWerks Inc. Delaware
CMC Kalamazoo Inc. Delaware
South Charleston Stamping & Manufacturing Company West Virginia
American Country Insurance Company Illinois
American Country Financial Services Corp. Illinois
Parmelee Transportation Company Illinois
City Wide Towing, Inc. Illinois
Great Dane Trailers, Inc. Georgia
Great Dane Trailers Tennessee, Inc. Tennessee
Great Dane Los Angeles, Inc. Georgia
Trailer Rental Company, Inc. Georgia
- ---------------
[FN]
<F1> Other than SCSM which is 10% owned by Executive Life Insurance Company,
the voting securities of each company whose name is indented are owned
by the company set forth immediately above whose name is not indented.
[ARTICLE] 5
[CIK] 0000051200
[NAME] GREAT DANE HOLDINGS INC.
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31 - 1994
[PERIOD-END] DEC-31 - 1994
[CASH] 34,875
[SECURITIES] 0
[RECEIVABLES] 91,418
[ALLOWANCES] 1,342
[INVENTORY] 96,580
[CURRENT-ASSETS] 241,260
[PP&E] 217,112
[DEPRECIATION] 103,164
[TOTAL-ASSETS] 522,051
[CURRENT-LIABILITIES] 192,411
[BONDS] 274,652
[COMMON] 1
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] (127,303)
[TOTAL-LIABILITY-AND-EQUITY] 522,051
[SALES] 1,016,657
[TOTAL-REVENUES] 1,096,477
[CGS] 870,656
[TOTAL-COSTS] 929,232
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 40,165
[INCOME-PRETAX] 42,997
[INCOME-TAX] 18,649
[INCOME-CONTINUING] 24,348
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 24,348
[EPS-PRIMARY] 24,348
[EPS-DILUTED] 24,348
</TABLE>
