<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
[X] SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
[ ] SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------ --------------
Commission File Number: 1-10883
-------------------------------------
WABASH NATIONAL CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 52-1375208
-------- ----------
(State of Incorporation) (IRS Employer
Identification Number)
1000 Sagamore Parkway South,
Lafayette, Indiana 47905
------------------ -----
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (765)448-1591
-------------
Indicate by check mark whether the registrant (1) has 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 and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
The number of shares of common stock outstanding at November 13, 1997 was
19,949,237.
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WABASH NATIONAL CORPORATION
INDEX
FORM 10-Q
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
September 30, 1997 and December 31, 1996 1
Condensed Consolidated Statements of Income
for the three and nine months ended
September 30, 1997 and 1996 2
Condensed Consolidated Statements of Cash
Flows for the nine months
ended September 30, 1997 and 1996 3
Notes to Condensed Consolidated Financial
Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
Item 3. Quantitative and Qualitative Disclosures
About Market Risk (Not Applicable) -
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
</TABLE>
<PAGE> 3
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
------------- ------------
1997 1996
---- ----
(Unaudited) (Note 1)
ASSETS
------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 10,864 $ 5,514
Accounts receivable, net 136,000 71,166
Current portion of finance contracts 6,233 6,128
Inventories 208,421 140,015
Prepaid expenses and other 19,302 13,087
--------- ---------
Total current assets 380,820 235,910
--------- ---------
PROPERTY, PLANT AND EQUIPMENT, net 117,486 81,782
--------- ---------
EQUIPMENT LEASED TO OTHERS, net 44,897 63,825
--------- ---------
FINANCE CONTRACTS, net of current portion 47,648 43,858
--------- ---------
OTHER ASSETS 15,074 14,696
--------- ---------
$ 605,925 $ 440,071
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,113 $ 3,942
Accounts payable 113,721 69,155
Accrued liabilities 38,400 14,101
--------- ---------
Total current liabilities 156,234 87,198
--------- ---------
LONG-TERM DEBT, net of current maturities 197,180 151,307
--------- ---------
DEFERRED INCOME TAXES 27,320 22,879
--------- ---------
OTHER NONCURRENT LIABILITIES 4,310 319
--------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value,
25,000,000 share authorized; no
shares issued --- ---
Series A Junior Participating
Preferred stock, $.01 par value,
300,000 shares authorized; no
shares issued --- ---
Series B Cumulative Convertible
Exchangeable Preferred stock,
352,000 and -0- shares
authorized and outstanding
at September 30, 1997 and
December 31, 1996 ($17.6 million 4 ---
aggregate liquidation value)
Common stock, $.01 par value,
75,000,000 shares authorized;
19,947,837 and 18,910,923 shares
issued and outstanding at
September 30, 1997 and
December 31, 1996, respectively 200 189
Additional paid-in capital 135,465 99,388
Retained earnings 86,491 80,070
Treasury stock, at cost, 59,600 and
59,600 shares, respectively (1,279) (1,279)
--------- ---------
220,881 178,368
--------- ---------
$ 605,925 $ 440,071
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
1
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WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
1997 1996 1997 1996
---- ---- ---- ----
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
NET SALES $246,403 $161,303 $577,897 $463,131
COST OF SALES 225,236 155,196 533,987 442,075
-------- -------- -------- --------
Gross Profit 21,167 6,107 43,910 21,056
GENERAL AND ADMINISTRATIVE
EXPENSES 5,538 2,304 12,130 6,624
SELLING EXPENSE 2,583 1,249 5,802 3,396
-------- -------- -------- --------
Income from operations 13,046 2,554 25,978 11,036
OTHER INCOME (EXPENSE):
Interest Expense (4,467) (2,567) (11,572) (7,561)
Other, net 223 147 461 459
-------- -------- -------- --------
Income before income taxes 8,802 134 14,867 3,934
PROVISION FOR INCOME TAXES 3,750 39 6,104 1,533
-------- -------- -------- --------
Net Income $ 5,052 $ 95 $ 8,763 $ 2,401
-------- -------- -------- --------
PREFERRED STOCK DIVIDENDS 264 --- 478 ---
-------- -------- -------- --------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS $ 4,788 $ 95 $ 8,285 $ 2,401
======== ======== ======== ========
NET INCOME PER COMMON SHARE $ 0.24 $ 0.01 $ 0.43 $ 0.13
======== ======== ======== ========
CASH DIVIDENDS PER SHARE $ 0.035 $ .03 $ 0.095 $ .09
======== ======== ======== ========
AVERAGE SHARES OUTSTANDING 19,939 18,908 19,463 18,914
======== ======== ======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
2
<PAGE> 5
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
-------------------
1997 1996
---- ----
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 8,763 $ 2,401
Adjustments to reconcile net income to net cash
provided by (used in) operating activities-
Depreciation and amortization 13,986 11,640
Bad debt provision 424 285
Deferred income taxes 2,302 1,234
Change in operating assets and liabilities,
excluding effects of the acquisition
Accounts receivable (51,302) (767)
Inventories (48,242) (16,746)
Prepaid expenses and other 743 (4,596)
Accounts payable 47,353 (22,051)
Accrued liabilities 12,360 2,806
Other assets (1,147) (1,898)
--------- ---------
Total adjustments (23,523) (30,093)
--------- ---------
Net cash used in operating activities (14,760) (27,692)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (16,696) (6,150)
Proceeds on disposal of leased equipment 58,778 17,124
Investment in equipment leased to others (34,987) (35,431)
Investments in finance contracts (19,343) (5,480)
Principal payments on finance contracts 3,897 3,654
Payments for RoadRailer technology (1,086) (1,759)
Payment for purchase of Fruehauf,
net of cash acquired (Note 5) (15,129) ---
Other 60 85
--------- ---------
Net cash used in investing activities (24,506) (27,957)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt (2,956) (11,739)
Borrowings under long-term revolver 272,500 310,300
Payments under long-term revolver (248,500) (304,700)
Proceeds from issuance of long-term debt 25,000 68,361
Proceeds from issuance of common stock, net of
expenses 742 92
Payment of common stock dividend (1,733) (1,705)
Payment of preferred stock dividend (437) ---
Purchase of treasury stock --- (774)
--------- ---------
Net cash provided by financing activities 44,616 59,835
--------- ---------
NET INCREASE IN CASH 5,350 4,186
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,514 2,097
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,864 $ 6,283
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 6
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 1. GENERAL
The consolidated financial statements included herein have been prepared
by Wabash National Corporation and Subsidiaries (the Company) without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations; however, the Company believes that the disclosures are adequate
to make the information presented not misleading. The condensed consolidated
financial statements included herein should be read in conjunction with the
financial statements and the notes thereto included in the Company's 1996
Annual Report on Form 10-K.
In the opinion of the registrant, the accompanying financial statements
contain all material adjustments (consisting only of normal recurring
adjustments), necessary to present fairly the consolidated financial position
of the Company at September 30, 1997 and December 31, 1996 and its results of
operations for the three and nine month periods ended September 30, 1997 and
1996 and cash flows for the nine month period ended September 30, 1997 and
1996.
NOTE 2. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---- ----
(Unaudited)
<S> <C> <C>
Raw material and components $ 90,355 $ 66,819
Work in process 18,687 16,344
Finished goods 54,240 27,608
Aftermarket parts 21,308 5,826
Used trailers 23,831 23,418
-------- --------
$208,421 $140,015
======== ========
</TABLE>
NOTE 3. LEASING OPERATIONS
Wabash National Finance Corporation (the Finance Company), a wholly-
owned subsidiary of the Company, provides leasing and finance programs to
customers for new and used trailers. The Finance Company's lease
revenues, excluding revenue from the sale of leased trailers of $3.5 million and
$17.6 million, were $16.1 million and $9.8 million during the nine months ended
September 30, 1997 and 1996 respectively. Income before income taxes was $0.6
million and $1.8 million during the nine months ended September 30, 1997 and
1996 respectively.
4
<PAGE> 7
At September 30, 1997 and December 31, 1996 respectively, the Finance
Company had $64.8 million and $80.9 million in long-term debt, comprised of
$48.0 million and $61.0 million in intercompany debt to the Company and $16.8
and $19.9 million in debt due to third parties, of which $10.6 million and $0
was guaranteed by the Company. Also at September 30, 1997 and December 31, 1996
respectively, the Finance Company had total assets of $105.2 million and $118.5
million, consisting primarily of Equipment Held for Lease of $44.9 million and
$63.8 million and Finance Contracts of $47.6 million and $43.9 million.
During September 1997, the Finance Company sold approximately $55.5
million of its equipment leased to others in three separate transactions with
large financial institutions. Simultaneously, the Finance Company leased the
equipment back and entered into sublease arrangements with its customers. Each
of these leases will be accounted for as an operating lease. The leases with
the financial institutions provide for approximately $4.6 million of end of
lease term residual value commitments.
NOTE 4. ACQUISITION
On April 16, 1997, the Company acquired substantially all of the
remaining assets of Fruehauf Trailer Corporation (Fruehauf), a
manufacturer and marketer of truck trailers and related parts. The purchase
included assets consisting of the Fruehauf and Pro Par(R) names, all patents and
trademarks, retail outlets in 31 major metropolitan markets, the aftermarket
parts distribution business based in Grove City, Ohio, a specialty trailer
manufacturing plant in Huntsville, Tennessee and a van manufacturing plant in
Ft. Madison, Iowa.
For financial statement purposes the acquisition was accounted for as a
purchase and accordingly, Fruehauf's results are included in the consolidated
financial statements since the date of acquisition. The retail outlets will
operate under the name of Fruehauf Trailer Services, Inc., a wholly owned
subsidiary of Wabash National Corporation. Aggregate consideration for this
transaction was approximately $50.5 million consisting of $15.1 million in cash
from credit facilities, $17.8 million in common stock and $17.6 million in
preferred stock. The fair value of the assets acquired was approximately $63.5
million and approximately $13.0 million of liabilities were assumed in
connection with this acquisition.
The following table reflects unaudited pro forma combined results of
operations of the Company and the acquired assets as if the acquisition had
occurred January 1, 1997 and January 1, 1996.
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
1997 1996
(Millions except per share amounts) (Unaudited)
- -------------------------------------------------------------------------
<S> <C> <C>
Net Sales $607.6 $617.6
Net Income $ 8.3 $ .7
Net Income per common share $ 0.42 $ 0
- -------------------------------------------------------------------------
</TABLE>
5
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In management's opinion, the unaudited pro forma combined results of operations
are not indicative of the actual results that would have occurred had the
acquisition been consummated at the beginning of 1996 or at the beginning of
1997 or of future operations of the combined companies under the ownership
and management of the Company.
NOTE 5. SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
(In thousands) 1997 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
Cash paid during the period for:
Interest, net of amounts capitalized $ 13,248 $ 6,668
Income taxes 845 713
- -------------------------------------------------------------------------------
Noncash investing and financing activities:
Finance contracts converted to operating leases $ 1,882 $ 3,201
Operating leases converted to finance contracts 1,876 998
Used trailers transferred from inventory to
operations --- 2,198
Preferred stock issued for acquisition 17,600 ---
Common stock issued for acquisition 17,750 ---
- -------------------------------------------------------------------------------
Purchase of Fruehauf assets, net of cash acquired:
Accounts receivable, net $ 13,955 $ ---
Inventory 20,163 ---
Prepaid expenses and other 4,072 ---
Property, plant and equipment 25,269 ---
Current liabilities (8,980) ---
Non-current liabilities (4,000) ---
Stock issued (35,350) ---
- -------------------------------------------------------------------------------
Net cash paid to acquire Fruehauf $(15,129) $ ---
- -------------------------------------------------------------------------------
</TABLE>
NOTE 6. LONG-TERM DEBT
On September 30, 1997, the Company replaced its revolving credit
facility. The new unsecured revolving bank line of credit permits the Company
to borrow up to $125 million. Under this facility, the Company has the right to
borrow until September 30, 2002, at which time the principal amount then
outstanding will be due and payable. Interest payable on such borrowings is
variable based upon the London interbank rate (LIBOR) plus 25 to 55 basis
points, as defined, or a prime rate of interest, as defined. The Company pays a
quarterly commitment fee on the unused portion of this facility at rates of 8.5
to 17.5 basis points per annum, as defined. Covenants under the new facility
include a minimum level of net worth and a limitation on indebtedness.
NOTE 7. SUBSEQUENT EVENT
On November 4, 1997, the Company purchased a 25.1% ownership in a
European RoadRailer operation for approximately $6 million. The ownership
interest is in the ETZ-Europaische Trailerzug Beteiligungsgessellschaft mbH
("ETZ"), based in Munich, Germany, the majority shareholder of the BTZ
Bayersriche Trailerzug Gesellschaft fur JBimodalen Guterverkehr mbH ("BTZ").
Also, on October 1, 1997, the Finance Company entered into a five year operating
lease arrangement with BTZ for approximately $13 million of RoadRailer(R)
equipment.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
NOTE: This document contains various forward-looking comments. These
comments should be viewed in connection with the risk factors
disclosed in the Company's Form 8-K as filed with the Securities
and Exchange Commission on January 21, 1997.
Fruehauf Acquisition
On April 16, 1997, the Company acquired substantially all of the
remaining assets of Fruehauf Trailer Corporation (Fruehauf), a
manufacturer and marketer of truck trailers and related parts. The purchase
included assets consisting of the Fruehauf and Pro Par(R) names, all patents and
trademarks, retail outlets in 31 major metropolitan markets, the aftermarket
parts distribution business, a specialty trailer manufacturing plant and a van
manufacturing plant. The acquisition was accounted for as a purchase and
accordingly, Fruehauf's results are included in the consolidated financial
statements since the date of acquisition.
Net Sales
Net sales for the three and nine month periods ended September 30, 1997
increased $85.1 million or 53% and $114.8 million or 25%, respectively,
compared to the same periods in 1996. The increased sales for the three and
nine month period were primarily attributable to an increase in new trailer
sales of $55.6 million and $65.2 million, respectively, and an increase in
aftermarket parts and service revenues of $20.5 million and $41.4 million,
respectively. The increases in new trailer sales of $55.6 million and $65.2
million for the three and nine month periods, respectively, were caused by a
37% and 19% increase, respectively, in units sold as a result of increased
production levels at the Company's existing manufacturing facility and the two
new manufacturing facilities acquired. The Company's product mix for the three
month period ended September 30, 1997 was favorably impacted by an increasing
supply of composite material for the Company's newly introduced composite plate
trailer. During the third quarter 1997, the Company completed construction of
its own composite material manufacturing facility in Lafayette, Indiana. As a
result, production start up of the new facility contributed to the increased
supply of composite material during the quarter. The average sales price per
new trailer sold increased 1.6% for the three month period compared to the
corresponding period in 1996. For the nine month period ended September 30,
1997, the average sales price per new trailer sold decreased 2.2% compared to
the corresponding period in 1996.
7
<PAGE> 10
The increase in aftermarket parts and service revenues reflects an
increase in aftermarket parts sales through the Company's existing parts
distribution business as well as the aftermarket parts distribution business
and 31 retail outlets acquired during the second quarter. Beginning in 1998,
the Company plans to begin the expansion of its retail distribution network
from its current level of 31 retail outlets to approximately 50 retail outlets
within 24 to 36 months.
Gross Profit
Gross profit as a percentage of net sales totaled 8.6% for the three
month period ended September 30, 1997 compared to 3.8% for the same period in
1996. The gross profit margin for the nine month period ended September 30, 1997
as a percentage of sales was 7.6% versus 4.5% for the same period in 1996. The
increase in the gross profit percentage in 1997 reflects the increase in
production levels and higher levels of aftermarket parts sales and service
revenues, which are generally characterized by higher margins.
Income From Operations
Income from operations for the three and nine month periods ended
September 30, 1997 as a percentage of net sales was 5.3% and 4.5% compared to
1.6% and 2.4% for the same periods in 1996. Income from operations in 1997 was
impacted primarily by the increase in the gross profit margins previously
discussed offset somewhat by increased selling, general and administrative
expenses. The increase in selling, general and administrative expenses
primarily reflects higher levels of expense associated with the retail outlets
acquired.
Interest Expense
Interest expense for the three and nine month period ended September 30,
1997 totaled $4.5 million and $11.6 million compared to $2.6 million and $7.6
million for the same periods in 1996. The increase in interest expense
primarily reflects new term and bank line of credit debt associated with the
growth in the leasing operations and working capital requirements.
Taxes
The provision for income taxes for the three and nine month periods
ended September 30, 1997 of $3.8 million and $6.1 million, respectively,
represents 42.6% and 41.1% of pre-tax income for the periods compared to the
provision of $.1 million and $1.5 million, or 29.1% and 39.0% of pretax income,
respectively, for the same periods in 1996. The effective tax rates are higher
than the Federal statutory rates of 35% due primarily to state income taxes.
8
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LIQUIDITY AND CAPITAL RESOURCES
As presented in the Condensed Consolidated Statements of Cash Flows, net
cash used in operating activities was $14.8 million during the first nine
months of 1997 primarily as a result of changes in working capital resulting
from increases in accounts receivable and inventory offset somewhat by an
increase in accounts payable. The changes in working capital were primarily
the result of increased production levels and the establishment of inventory at
the retail outlets acquired in the second quarter.
During September, 1997, the Finance Company sold and leased back
approximately $55.5 million of its equipment leased to others in three separate
transactions with financial institutions. Net of these transactions, the
Finance Company's lease portfolio (finance contracts and equipment leased to
others) increased $40.4 million as the Company continues to expand its leasing
operation. In addition, the Company used $16.7 million of cash for capital
expenditures during the first nine months of 1997, principally for the
construction of its composite material facility.
At September 30, 1997, the Company's total debt was $201.3 million
compared to $155.2 million at December 31, 1996. The net increase in the
Company's debt primarily reflects new term and bank line of credit debt
associated with the increased working capital requirements. On September 30,
1997, the Company replaced its revolving credit facility with an unsecured
revolving bank line of credit permitting the Company to borrow up to $125
million. Under this facility, the Company has the right to borrow until
September 30, 2002. Interest payable on such borrowings is variable based upon
the London interbank rate (LIBOR) plus 25 to 55 basis points, as defined, or a
prime rate of interest, as defined. The Company pays a quarterly commitment
fee on the unused portion of this facility of 8.5 to 17.5 basis points per
annum as defined.
Other sources of funds for capital expenditures, continued expansion of
businesses, dividends, principal repayments on debt, stock repurchase and
working capital requirements are expected to be cash from operations,
additional borrowings under the credit facilities and term borrowings and
equity offerings. The Company believes that these funding sources will be
adequate for its anticipated requirements.
BACKLOG
The Company's backlog of orders was approximately $657 million at
September 30, 1997 and $462 million at December 31, 1996. The Company's backlog
represents the amount of orders the Company believes to be firm. Such orders
may be subject to extension, delay or cancellation under certain circumstances.
NEW ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board (FASB)
9
<PAGE> 12
recently released a new accounting rule (SFAS No. 128) on the calculation of
earnings per share that is effective at year-end 1997. This rule, which does
not permit early adoption, is not expected to have a material effect on the
Company's reported earnings per share.
In addition, in June 1997 the FASB issued SFAS No. 130, "Reporting
Comprehensive Income". This Statement is effective for fiscal periods
beginning after December 15, 1997 with early adoption permitted. The Company
is evaluating the effect this Statement will have on its financial reporting
and disclosures; however, the Statement will have no effect on the Company's
results of operations, financial position, capital resources or liquidity.
10
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.44 Revolving Credit Loan Agreement dated September 30, 1997, between NBD
Bank, N.A. and Wabash National Corporation
10.45 Investment Agreement and Shareholders Agreement dated November 4, 1997,
between ETZ (Europaische Trailerzug Beteiligungsgesellschaft MBH) and
Wabash National Corporation
15.1 Report of Independent Public Accountants
(b) Reports on Form 8-K:
The Company did not file any current reports on Form 8-K during the
quarter ended September 30, 1997
11
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WABASH NATIONAL CORPORATION
Date: November 13, 1997 By: /s/ Mark R. Holden
----------------- ----------------------------------
Mark. R. Holden
Vice President - Chief
Financial Officer
(Principal Financial
Officer and Principal
Accounting Officer)
12
<PAGE> 1
Execution Copy
CREDIT AGREEMENT
Dated as of September 30, 1997
among
WABASH NATIONAL CORPORATION,
as Borrower,
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO, as Lenders
and
NBD BANK, N.A.
as Administrative Agent
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I: DEFINITIONS...........................................................................1
1.1 Certain Defined Terms................................................................1
ARTICLE II: THE CREDITS.........................................................................20
2.1 Syndicated Loans....................................................................20
2.2 Rate Options for Syndicated Advances................................................21
2.3 Payments of Syndicated Loans........................................................21
(A) Optional Payments...........................................................21
(B) Mandatory Prepayments.......................................................22
2.4 Reduction of Commitments............................................................22
2.5 Method of Borrowing Syndicated Advances.............................................22
2.6 Method of Selecting Types and Interest Periods for Syndicated Advances;
Determination of Applicable Margins..............................................23
(a) Method of Selecting Types and Interest Periods for Advances.................23
(b) Determination of Applicable Margin, Applicable Letter of Credit Fee and
Applicable Commitment Fee................................................23
2.7 Minimum Amount of Each Syndicated Advance...........................................25
2.8 Method of Selecting Types and Interest Periods for Conversion and Continuation of
Syndicated Advances.............................................................25
(A) Right to Convert............................................................25
(B) Automatic Conversion and Continuation.......................................25
(C) No Conversion Post-Default or Post-Unmatured Default........................25
(D) Conversion/Continuation Notice..............................................26
2.9 Swing Line Loans...................................................................26
2.10 The Bid Rate Advances.............................................................27
2.11 Default Rate......................................................................31
2.12 Method of Payment.................................................................31
2.13 Notes, Telephonic Notices ........................................................32
2.14 Promise to Pay; Interest and Fees; Interest Payment Dates; Interest and Fee Basis;
Loan Accounts....................................................................32
(A) Promise to Pay..............................................................32
(B) Interest Payment Dates......................................................32
(C) Fees........................................................................33
(D) Interest and Fee Basis......................................................33
(E) Loan Account................................................................33
(F) Entries Binding.............................................................33
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
2.15 Notification of Advances, Interest Rates, Prepayments and Aggregate
Commitment Reductions............................................................34
2.16 Lending Installations..............................................................34
2.17 Non-Receipt of Funds by the Administrative Agent...................................34
2.18 Termination Date...................................................................34
2.19 Letter of Credit Facility..........................................................35
2.20 Letter of Credit Participation.....................................................35
2.21 Reimbursement Obligation...........................................................36
2.22 Cash Collateral....................................................................36
2.23 Letter of Credit Fees..............................................................37
2.24 Indemnification; Exoneration.......................................................37
2.25 Transitional Letter................................................................38
2.26 Judgment Currency..................................................................39
2.27 Market Disruption..................................................................39
ARTICLE III: CHANGE IN CIRCUMSTANCES............................................................40
3.1 Yield Protection....................................................................40
3.2 Changes in Capital Adequacy Regulations.............................................41
3.3 Availability of Types of Advances...................................................41
3.4 Funding Indemnification.............................................................42
3.5 Taxes...............................................................................42
3.6 Mitigation; Lender Statements; Survival of Indemnity................................43
ARTICLE IV: CONDITIONS PRECEDENT................................................................44
4.1 Initial and Letters of Credit.......................................................44
4.2 Each Loan and Letter of Credit......................................................44
ARTICLE V: REPRESENTATIONS AND WARRANTIES.......................................................44
5.1. Corporate Existence and Standing...................................................44
5.2. Authorization and Validity.........................................................45
5.3. No Conflict; Government Consent....................................................45
5.4. Financial Statements...............................................................45
5.5. Material Adverse Change............................................................45
5.6. Taxes..............................................................................46
5.7. Litigation and Contingent Liabilities..............................................46
5.8. Subsidiaries.......................................................................46
5.9. ERISA..............................................................................46
5.10 Accuracy of Information............................................................47
5.11 Securities Activities..............................................................47
5.12 Material Agreements................................................................47
5.13 Compliance with Laws...............................................................47
5.14 Assets and Properties .............................................................47
5.15 Statutory Indebtedness Restrictions................................................48
</TABLE>
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<TABLE>
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5.16 Environmental Matters .............................................................48
5.17 Foreign Employee Benefit Matters...................................................48
5.18 Patents, Trademarks, Permits, Etc..................................................49
ARTICLE VI: COVENANTS...........................................................................49
6.1 Reporting...........................................................................49
(A) Financial Reporting.........................................................49
(B) Notice of Default...........................................................51
(C) Lawsuits....................................................................51
(D) ERISA Notices...............................................................51
(E) Other Reports...............................................................53
(F) Environmental Notices.......................................................53
(G) Other Information...........................................................53
6.2 Affirmative Covenants...............................................................53
(A) Existence, Etc..............................................................53
(B) Powers......................................................................53
(C) Compliance with Laws, Etc...................................................54
(D) Payment of Taxes and Claims.................................................54
(E) Insurance...................................................................54
(F) Inspection of Property; Books and Records; Discussions......................54
(G) ERISA Compliance............................................................55
(H) Maintenance of Property.....................................................55
(I) Environmental Compliance....................................................55
(J) Use of Proceeds.............................................................55
(K) Foreign Employee Benefit Compliance.........................................55
(L) Maintenance of Rights.......................................................55
(M) Conduct of Business.........................................................56
(N) Subsidiary Guaranties.......................................................56
6.3 Negative Covenants..................................................................56
(A) Indebtedness................................................................56
(B) Sales of Assets.............................................................57
(C) Liens.......................................................................57
(D) Investments.................................................................58
(E) Contingent Obligations......................................................59
(F) Acquisitions................................................................59
(G) Transactions with Affiliates................................................59
(H) Restriction on Fundamental Changes..........................................59
(I) Margin Regulations..........................................................60
(J) ERISA.......................................................................60
(K) Fiscal Year.................................................................60
(L) Prepayment of Other Indebtedness............................................60
6.4 Financial Covenants ................................................................60
(A) Minimum Consolidated Tangible Net Worth ....................................60
</TABLE>
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<TABLE>
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(B) Maximum Leverage Ratio......................................................61
ARTICLE VII: DEFAULTS...........................................................................61
7.1 Defaults............................................................................61
ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES..................................................................64
8.1 Remedies ...........................................................................64
(a) Termination of Commitments; Acceleration....................................64
(b) Rescission..................................................................64
(c) Enforcement.................................................................64
8.2 Defaulting Lender...................................................................65
8.3 Amendments..........................................................................66
8.4 Preservation of Rights..............................................................67
ARTICLE IX: GENERAL PROVISIONS..................................................................67
9.1 Survival of Representations ........................................................67
9.2 Governmental Regulation ............................................................67
9.3 Headings............................................................................67
9.4 Entire Agreement....................................................................68
9.5 Several Obligations; Benefits of this Agreement.....................................68
9.6 Expenses; Indemnification...........................................................68
(A) Expenses....................................................................68
(B) Indemnity...................................................................68
(C) Waiver of Certain Claims; Settlement of Claims..............................69
(D) Survival of Agreements......................................................69
9.8 Numbers of Documents................................................................69
9.9 Accounting .........................................................................70
9.10 Severability of Provisions.........................................................70
9.11 Nonliability of Lenders............................................................70
9.12 CHOICE OF LAW......................................................................70
9.13 WAIVER OF JURY TRIAL...............................................................70
9.14 No Strict Construction.............................................................70
ARTICLE X: THE ADMINISTRATIVE AGENT.............................................................70
10.1 Appointment; Nature of Relationship................................................70
10.2 Powers.............................................................................71
10.3 General Immunity...................................................................71
10.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc.......................71
10.5 Action on Instructions of Lenders..................................................72
10.6 Employment of Agents and Counsel...................................................72
10.7 Reliance on Documents; Counsel.....................................................72
10.8 The Administrative Agent's Reimbursement and Indemnification.......................72
</TABLE>
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<TABLE>
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10.9 Rights as a Lender.................................................................73
10.10 Lender Credit Decision............................................................73
10.11 Successor Administrative Agent....................................................73
ARTICLE XI: SETOFF; RATABLE PAYMENTS............................................................74
11.1 Setoff.............................................................................74
11.2 Ratable Payments...................................................................74
ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..................................74
12.1 Successors and Assigns.............................................................74
12.2 Participations.....................................................................75
(A) Permitted Participants; Effect..............................................75
(B) Voting Rights...............................................................75
(C) Benefit of Setoff...........................................................75
12.3 Assignments........................................................................75
(A) Permitted Assignments.......................................................75
(B) Effect; Effective Date......................................................76
(C) The Register................................................................76
12.4 Confidentiality...................................................................77
12.5 Dissemination of Information......................................................77
ARTICLE XIII: NOTICES...........................................................................77
13.1 Giving Notice.....................................................................77
13.2 Change of Address.................................................................78
ARTICLE XIV: COUNTERPARTS.......................................................................78
</TABLE>
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<PAGE> 7
EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A -- Commitments
(Definitions)
EXHIBIT B-1 -- Form of Syndicated Note
(Definitions)
EXHIBIT B-2 -- Form of Bid Rate Note
(Definitions)
EXHIBIT B-3 -- Form of Swing Line Loan Note
(Definitions)
EXHIBIT C -- Form of Assignment Agreement
(Sections 2.19, 12.3)
EXHIBIT D -- List of Closing Documents
(Section 4.1)
EXHIBIT E -- Form of Officer's Certificate
(Sections 4.2, 6.1(A)(iv))
EXHIBIT F -- Form of Compliance Certificate
(Sections 4.2, 6.1(A)(iv))
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SCHEDULES
Schedule I -- Eurocurrency Payment Offices (Definitions)
Schedule 1.1.1 -- Permitted Existing Contingent Obligations
(Definitions)
Schedule 1.1.2 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.3 -- Permitted Existing Investments (Definitions)
Schedule 1.1.4 -- Permitted Existing Liens (Definitions)
Schedule 2.25 -- Existing Letter of Credit (Section 2.25)
Schedule 5.7 -- Litigation; Loss Contingencies (Section 5.7)
Schedule 5.8 -- Subsidiaries (Section 5.8)
Schedule 5.14 -- Assets and Properties (Section 5.14)
Schedule 5.16 -- Environmental Matters (Section 5.16)
Schedule 6.3(L) -- Other Indebtedness (Section 6.3(L))
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CREDIT AGREEMENT
This Credit Agreement dated as of September 30, 1997 is entered into
among Wabash National Corporation, a Delaware corporation, the institutions
from time to time a party hereto as Lenders, whether by execution of this
Agreement or an assignment and acceptance pursuant to Section 12.3, and NBD
Bank, N.A., in its capacity as Administrative Agent for itself and the other
Lenders. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms. In addition to the terms defined in other
sections of this Agreement, the following terms used in this Agreement shall
have the following meanings, applicable both to the singular and the plural
forms of the terms defined:
As used in this Agreement:
"ABSOLUTE RATE AUCTION" has the meaning specified in Section
2.10(b)(i).
"ACQUISITION" means any transaction, or any series of related
transactions, by which the Borrower or any of its Subsidiaries (a) acquires any
going business or all or substantially all of the assets of any firm,
corporation or division thereof which constitutes a going business, whether
through purchase of assets, merger or otherwise or (b) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
partnership interests of a partnership or a majority (by percentage or voting
power) of the outstanding ownership interests of a limited liability company.
"ADMINISTRATIVE AGENT" means NBD in its capacity as contractual
representative for itself and the Lenders pursuant to Article X hereof and any
successor Administrative Agent appointed pursuant to Article X hereof.
"ADVANCE" means a Bid Rate Advance or a Syndicated Advance.
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control another Person if the controlling Person is
the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the
<PAGE> 10
controlled Person, whether through ownership of stock, membership,
ownership or other equity interests, by contract or otherwise. In addition,
each director of the Borrower or any Subsidiary of the Borrower shall be deemed
to be an Affiliate of the Borrower.
"AGREED CURRENCIES" means Dollars, Pounds Sterling, German Marks,
French Francs, Swiss Francs, Dutch Guilders, and any other currency which is
freely available and convertible into Dollars in which deposits are customarily
offered to banks in the London interbank market, which the Borrower requests
the Administrative Agent to include as an Agreed Currency hereunder and which
is acceptable to each Lender; provided that the Administrative Agent shall
promptly notify each Lender of each such request and each Lender shall be
deemed not to have agreed to each such request unless its consent thereto has
been received by the Administrative Agent within four Business Days from the
date of such notification by the Administrative Agent to such Lender.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof. The
initial Aggregate Commitment is $125,000,000.00.
"AGREEMENT" means this Credit Agreement, as it may be amended,
restated or otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect as of the date of this Agreement in the United States,
applied in a manner consistent with that used by the Borrower in its
preparation of its audited financial statements for the year ended December 31,
1996.
"ALTERNATE BASE RATE" means, for any day, a fluctuating interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of 1%) as shall be
in effect from time to time, which rate per annum shall at all times be equal
to the greatest of (a) the Prime Rate in effect on such day; and (b) the sum of
one-half of one percent (0.50%) and the Federal Funds Effective Rate in effect
on such day. For purposes hereof, "Prime Rate" shall mean the rate of interest
per annum publicly announced from time to time by NBD as its prime rate (it
being acknowledged that such announced rate may not necessarily be the lowest
rate charged by the Administrative Agent to any of its customers) in effect at
its principal office in Indianapolis, Indiana, each change in the Prime Rate
shall be effective on the date such change is publicly announced as being
effective. "Federal Funds Effective Rate" shall mean, for any day, a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by NBD from three Federal funds
brokers of recognized standing selected by the Administrative Agent. If for
any reason the Administrative Agent shall have
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<PAGE> 11
determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to
obtain sufficient quotations in accordance with the terms hereof, the Alternate
Base Rate shall be determined without regard to clause (b) of the first
sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change.
"APPLICABLE COMMITMENT FEE" as at any date of determination, shall be
the rate per annum then applicable in the determination of the amount payable
under Section 2.14(C) with respect to the unused Aggregate Commitment,
determined in accordance with the provisions of Section 2.6(b).
"APPLICABLE LETTER OF CREDIT FEE" as at any date of determination,
shall be the rate per annum then applicable in the determination of the amount
payable under Section 2.23 with respect to Letters of Credit, determined in
accordance with the provisions of Section 2.6(b).
"APPLICABLE MARGIN" shall have the meaning ascribed to that term in
Section 2.8(b).
"APPROXIMATE EQUIVALENT AMOUNT" of any currency with respect to any
amount of Dollars shall mean the Equivalent Amount of such currency with
respect to such amount of Dollars at such date, rounded up to the nearest
amount of such currency as determined by the Administrative Agent from time to
time.
"ARRANGER" means First Chicago Capital Markets, Inc.
"AUTHORIZED OFFICER" means any of the chief executive officer, chief
financial officer, controller and treasurer of the Borrower, acting singly.
"BASE RATE ADVANCE" means a Syndicated Advance which bears interest
at the Alternate Base Rate.
"BASE RATE LOAN" means a Syndicated Loan, or portion thereof, or a
Swing Line Loan which bears interest at the Alternate Base Rate.
"BENEFIT PLAN" means a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which the
Borrower or any other member of the Controlled Group is, or within the
immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
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<PAGE> 12
"BID RATE ADVANCE" means a borrowing consisting of simultaneous Bid
Rate Loans to the Borrower from each of the Lenders whose offer to make a Bid
Rate Loan as part of such borrowing has been accepted by the Borrower under the
applicable auction bidding procedure described in Section 2.10.
"BID RATE ADVANCE BORROWING NOTICE" has the meaning specified in
Section 2.10(b)(i).
"BID RATE LOAN" means a loan by a Lender to the Borrower as part of a
Bid Rate Advance resulting from the applicable auction bidding procedure
described in Section 2.10.
"BID RATE NOTE" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit B-2 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Bid Rate Loans made by such Lender to the Borrower.
"BID RATE REDUCTION" has the meaning specified in Section 2.1.
"BORROWER" means Wabash National Corporation, a Delaware corporation,
and its successors and assigns.
"BORROWING DATE" means a date on which an Advance or a Swing Line Loan
is made hereunder.
"BORROWING NOTICE" means a Syndicated Advance Borrowing Notice, a Bid
Rate Advance Borrowing Notice or a Swing Line Borrowing Notice.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or
rate selection of Loans bearing interest at the Eurocurrency Rate, a day (other
than a Saturday or Sunday) on which banks are open for business in
Indianapolis, Indiana and New York, New York and on which dealings in United
States Dollars and the other Agreed Currencies are carried on in the London
interbank market and (ii) for all other purposes a day (other than a Saturday
or Sunday) on which banks are open for business in Indianapolis, Indiana and
New York, New York.
"CAPITALIZED LEASE" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the government of the United States; (ii)
domestic and Eurocurrency certificates of
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<PAGE> 13
deposit and time deposits, bankers' acceptances and base rate
certificates of deposit issued by any commercial bank organized under the laws
of the United States, any state thereof, the District of Columbia, or its
branches or agencies and having capital and surplus in an aggregate amount not
less than $500,000,000 (fully protected against currency fluctuations for any
such deposits with a term of more than ten (10) days); (iii) shares of money
market, mutual or similar funds having net assets in excess of $500,000,000
maturing or being due or payable in full not more than one hundred eighty (180)
days after the Borrower's acquisition thereof and the investments of which are
limited to investment grade securities (i.e., securities rated at least Baa by
Moody's Investors Service, Inc. or at least BBB by Standard & Poor's Ratings
Group) and (iv) commercial paper of United States banks and bank holding
companies and their subsidiaries and United States finance, commercial,
industrial or utility companies which, at the time of acquisition, are rated
A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better) by
Moody's Investors Services, Inc.; provided that the maturities of such Cash
Equivalents shall not exceed 365 days.
"CHANGE" is defined in Section 3.2 hereof.
"CHANGE OF CONTROL" means the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Commission under the Securities Exchange Act of 1934) of 30%
or more of the outstanding shares of voting stock of the Borrower.
"CLOSING DATE" means the date on which the initial Loans are made
under this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"COMMISSION" means the Securities and Exchange Commission and any
Person succeeding to the functions thereof.
"COMMITMENT" means, for each Lender, the obligation of such Lender to
make Syndicated Loans and to purchase participations in Letters of Credit not
exceeding the amount set forth on Exhibit A to this Agreement opposite its name
thereon under the heading "Commitment" or the signature page of the Assignment
and Acceptance by which it became a Lender, as such amount may be modified from
time to time pursuant to the terms of this Agreement or to give effect to any
applicable Assignment and Acceptance.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit F delivered to the Administrative Agent and each Lender by the
Borrower pursuant to the provisions of this Agreement and covering, among other
things, its calculation of the Applicable Margin, Applicable Commitment Fee,
Applicable Letter of Credit Fee, its compliance with the financial covenants
contained in Section 6.4 and certain other provisions of this Agreement.
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<PAGE> 14
"CONSOLIDATED FUNDED DEBT" means Funded Debt of the Borrower and its
Subsidiaries, determined on a consolidated basis eliminating intercompany
items.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Borrower and its Subsidiaries for such period (taken as
a cumulative whole), as determined in accordance with Agreement Accounting
Principles, after eliminating all offsetting debits and credits between the
Borrower and its Subsidiaries and all other items required to be eliminated in
the course of the preparation of consolidated financial statements of the
Borrower and its Subsidiaries in accordance with Agreement Accounting
Principles.
"CONSOLIDATED TANGIBLE ASSETS" means as of the date of any
determination thereof, Consolidated Total Assets, but excluding therefrom
goodwill, patents, patent applications, permits, trademarks, trade names,
copyrights, licenses, franchises, experimental expense, organizational expense,
unamortized debt discount and expense, the excess of cost of shares acquired
over book value of related assets and such other assets as are properly
classified as "intangible assets" in accordance with Agreement Accounting
Principles.
"CONSOLIDATED TANGIBLE NET WORTH" means as of the date of any
determination thereof, the arithmetic sum of:
(a) the amount of the capital stock accounts (net of
treasury stock, at cost) plus (or minus in the case of deficit) the
surplus and retained earnings of the Borrower and its Subsidiaries,
PLUS
(b) minority interests and deferred taxes of the Borrower
and its Subsidiaries,
MINUS
(c) the net book value, after deducting any reserves
applicable thereto, of all items of the following character which are
included in the assets of the Borrower and its Subsidiaries, to wit:
(i) the incremental increase in an asset
resulting form any reappraisal, revaluation or write-up of
assets (other than any revaluation or write-up of assets in
accordance with Agreement Accounting Principles); and
(ii) goodwill, patents, patent applications,
permits, trademarks, trade names, copyrights, licenses,
franchises, experimental expense, organizational expense,
unamortized debt discount and expense, the excess of cost of
shares
-6-
<PAGE> 15
acquired over book value of related assets and such
other assets as are properly classified as "intangible assets"
acquired by the Borrower or any Subsidiary after December 1,
1996 to the extent and in the amount by which the fair market
value thereof is in excess of 10% of Consolidated Total Assets
as of any date of determination of Consolidated Total Assets;
all determined in accordance with Agreement Accounting Principles.
"CONSOLIDATED TOTAL ASSETS" means as of the date of any determination
thereof, total assets of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with Agreement Accounting Principles.
"CONSOLIDATED TOTAL CAPITALIZATION" means as of the date of any
determination thereof, the sum of (a) Consolidated Funded Debt plus (b)
Consolidated Tangible Net Worth.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means any
obligation (except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person guaranteeing
or in effect guaranteeing any Indebtedness, dividend or other obligation of any
other Person in any manner, whether directly or indirectly, including (without
limitation) obligations incurred through an agreement, contingent or otherwise,
by such Person:
(a) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such Indebtedness or obligation, or (ii) to maintain any
working capital or other balance sheet condition or any income
statement condition of any other Person or otherwise to advance or
make available funds for the purchase or payment of such Indebtedness
or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of any other Person to make
payment of the Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or
obligation against loss in respect thereof.
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<PAGE> 16
In any computation of the Indebtedness or other liabilities of the obligor
under any Contingent Obligation, the Indebtedness or other obligations that are
the subject of such Contingent Obligation shall be assumed to be direct
obligations of such obligor.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to
which that Person is a party or by which it or any of its properties is bound,
or to which it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Borrower, any corporation described in
clause (i) above or any partnership or trade or business described in clause
(ii) above.
"CONVERSION/CONTINUATION NOTICE" is defined in Section 2.8(D) hereof.
"CURE LOAN" is defined in Section 8.2 hereof.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens (other than Environmental Liens and Liens in favor
of the IRS or the PBGC) with respect to the payment of taxes,
assessments or governmental charges in all cases which are not yet due
or which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement
Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
similar Liens imposed by law created in the ordinary course of
business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained in
accordance with Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor
of the IRS or the PBGC) incurred or deposits made in the ordinary
course of business in connection with worker's compensation,
unemployment insurance or other types of social security benefits or
to secure the performance of bids, tenders, sales, contracts (other
than for the repayment of borrowed money), surety, appeal and
performance bonds; provided that
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<PAGE> 17
(A) all such Liens do not in the aggregate materially detract from the
value of assets or property of the Borrower and its Subsidiaries taken
as a whole or materially impair the use thereof in the operation of
their businesses taken as a whole, and (B) all Liens securing bonds to
stay judgments or in connection with appeals that do not secure at any
time an aggregate amount exceeding $5,000,000;
(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of- way, utility easements,
building restrictions and other similar charges or encumbrances on the
use of real property which do not interfere in any material respect
with the ordinary conduct of the business of the Borrower or any
Subsidiary of the Borrower;
(v) Liens of attachment or judgment with respect to judgments,
writs or warrants of attachment, or similar process against the
Borrower or any Subsidiary of the Borrower which do not constitute a
Default under Section 7.1(h);
(vi) Liens arising from leases, subleases or licenses granted
to others which do not interfere in any material respect with the
business of the Borrower or any Subsidiary of the Borrower; and
(vii) any interest or title of the lessor in the property
subject to any operating lease entered into by the Borrower or any
Subsidiary of the Borrower in the ordinary course of business.
"DEFAULT" means an event described in Article VII hereof.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States of America.
"DOLLAR AMOUNT" of any currency at any date shall mean (i) the amount
of such currency if such currency is Dollars or (ii) the Equivalent Amount of
Dollars if such currency is any currency other than Dollars, calculated on the
basis of the arithmetical mean of the buy and sell spot rates of exchange of
the Administrative Agent for such currency on the London market at 11:00 a.m.,
London time, two Business Days prior to the date on which such amount is to be
determined.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to federal, state and local laws
or regulations relating to or addressing pollution or protection of the
environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and
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Liability Act, 42 U.S.C. Section 9601 et seq., the Occupational Safety and
Health Act of 1970, 29 U.S.C. Section 651 et seq., and the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., in each
case including any amendments thereto, any successor statutes, and any
regulations or guidance promulgated thereunder, and any state or local
equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental
Authority for (a) any liability under Environmental, Health or Safety
Requirements of Law, or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement
of law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"EQUIVALENT AMOUNT" of any currency with respect to any amount of
Dollars at any date shall mean the equivalent in such currency of such amount
of Dollars, calculated on the basis of the arithmetical mean of the buy and
sell spot rates of exchange of the Administrative Agent for such other currency
at 11:00 a.m., London time, two Business Days prior to the date on which such
amount is to be determined.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EUROCURRENCY BASE RATE" means, with respect to any Eurocurrency Rate
Advance for any specified Interest Period, or a Bid Rate Advance pursuant to an
Indexed Rate Auction for an interest period designated by the Borrower, either
(i) the rate of interest per annum equal to the rate for deposits in the
applicable Agreed Currency in the approximate amount of the pro rata share of
the Administrative Agent of such Eurocurrency Advance with a maturity
approximately equal to such Interest Period or interest period which appears on
Telerate Page 3740 or Telerate Page 3750, as applicable, or, if there is more
than one such rate, the average of such rates rounded to the nearest 1/100 of
1%, as of 11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period or interest period or (ii) if no such rate of interest
appears on Telerate Page 3740 or Telerate Page 3750, as applicable, for any
specified Interest Period or interest period designated by the Borrower, the
rate at which deposits in the applicable Agreed Currency are offered by the
Administrative Agent to first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period or interest period, in the approximate amount of the
pro rata share of the Administrative Agent of such Eurocurrency Advance and
having a maturity approximately equal to such Interest Period or interest
period. The terms "Telerate Page 3740" and "Telerate Page
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3750" mean the display designated as "Page 3740" and "Page 3750", as
applicable, on the Associated Press-Dow Jones Telerate Service (or such other
page as may replace Page 3740 or Page 3750, as applicable, on the Associated
Press-Dow Jones Telerate Service or such other service as may be nominated by
the British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association interest rate settlement rates for the
relevant Agreed Currency). Any Eurocurrency Base Rate determined on the basis
of the rate displayed on Telerate Page 3740 or Telerate Page 3750 in accordance
with the foregoing provisions of this subparagraph shall be subject to
corrections, if any, made in such rate and displayed by the Associated
Press-Dow Jones Telerate Service within one hour of the time when such rate is
first displayed by such service.
"EUROCURRENCY PAYMENT OFFICE" of the Administrative Agent shall mean,
for each of the Agreed Currencies, the office, branch or affiliate of the
Administrative Agent, specified as the "EUROCURRENCY PAYMENT OFFICE" for such
currency in Schedule I hereto or such other office, branch, affiliate or
correspondent bank of the Administrative Agent, as it may from time to time
specify to the Borrower and each Lender as its Eurocurrency Payment Office.
"EUROCURRENCY RATE" means, with respect to a Eurocurrency Rate Advance
for the relevant Interest Period, the sum of (i) the quotient of (a) the
Eurocurrency Base Rate applicable to such Interest Period, divided by (b) one
minus the Reserve Requirement (expressed as a decimal) applicable to such
Interest Period, plus (ii) the Applicable Margin. The Eurocurrency Rate shall
be rounded to the next higher multiple of 1/16 of 1% if the rate is not such a
multiple.
"EUROCURRENCY RATE ADVANCE" means a Syndicated Advance which bears
interest at the Eurocurrency Rate.
"EUROCURRENCY RATE LOAN" means a Syndicated Loan, or portion thereof,
which bears interest at the Eurocurrency Rate.
"EXCLUDED TAXES" means, in the case of each Lender or applicable
Lending Installation and the Administrative Agent, taxes imposed on its overall
net income, and franchise taxes imposed on it, by (i) the jurisdiction under
the laws of which such Lender or the Administrative Agent is incorporated or
organized or any political subdivision thereof or (ii) the jurisdiction in
which the Administrative Agent's or such Lender's principal executive office or
such Lender's applicable Lending Installation is located or any political
subdivision thereof.
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"EXISTING LETTERS OF CREDIT" is defined in Section 2.25.
"FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning assigned to that
term in the definition of Alternate Base Rate above.
"FEDERAL FUNDS FUNDING RATE" means, with respect to any Swing Line
Loan bearing interest at the Federal Funds Rate, the rate per annum equal to
the consensus (or if no consensus exists, the arithmetic average) of the rates
at which reserves are offered by first-class banks to other first-class banks
(at approximately 10:00 a.m. Indianapolis time) on such day (or if such day is
not a Business Day, on the immediately preceding Business Day) on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by the Administrative
Agent in its sole discretion.
"FEDERAL FUNDS RATE" means, a rate per annum equal to the Federal
Funds Funding Rate plus the Applicable Margin.
"FEDERAL FUNDS RATE LOAN" means a Swing Line Loan which bears interest
at the Federal Funds Rate.
"FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of the Borrower, any of its Subsidiaries or any
members of its Controlled Group and is not covered by ERISA pursuant to ERISA
Section 4(b)(4).
"FOREIGN PENSION PLAN" means any employee benefit plan as described in
Section 3(3) of ERISA which (i) is maintained or contributed to for the benefit
of employees of the Borrower, any of its Subsidiaries or any of its ERISA
Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA,
and (iii) under applicable local law, is required to be funded through a trust
or other funding vehicle.
"FUNDED DEBT" of any Person means all Indebtedness of such Person
which would, in accordance with Agreement Accounting Principles, constitute
long-term Indebtedness, including, without limitation (a) all Indebtedness of
such Person for borrowed money or which has been incurred in connection with
the acquisition of assets in each case having a final maturity of more than one
year for the date of origin thereof (or which is renewable or extendible at the
option of the obligor for a period or periods more than one year from the date
of origin), including in any event all payments in respect thereof that are
required to be made within one year from the date of any determination of
Funded Debt, whether or not the obligation to make such payments shall
constitute a current liability of the obligor under Agreement Accounting
Principles, and all Indebtedness of such Person outstanding under any revolving
credit, line of credit, commercial extension of credit or similar agreement
between such Person and a financial institution or
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<PAGE> 21
institutional investor which is classified as long-term in accordance
with Agreement Accounting Principles, (b) all Capitalized Lease Obligations of
such Person, (c) all Contingent Obligations of such Person with respect to
Funded Debt of others, and (d) all Indebtedness of such Person outstanding
under any revolving credit, line of credit, commercial extension of credit or
similar agreement between such Person and financial institution, whether or not
classified as long-term or short-term Indebtedness, if, during the 365-day
period immediately preceding the date of any determination of Funded Debt of
such Person, there shall not have been a period of at least 30 consecutive days
during which Indebtedness of such Person outstanding under such revolving
credit, line of credit, commercial extension of credit or similar agreement is
equal to zero, in which event there shall be included in such determination of
Funded Debt an amount equal to the highest aggregate amount of all such
Indebtedness outstanding during any period of 30 consecutive days selected by
such Person during such preceding 365-day period.
"GOVERNMENTAL ACTS" is defined in Section 2.24(a) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money, including
reimbursement obligations (contingent or otherwise) with respect to
letters of credit;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising
in the ordinary course of business but including, without limitation,
all liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) its Capitalized Lease Obligations;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such liabilities);
(e) any Contingent Obligation of such Person with respect
to liabilities of a type described in any of clauses (a) through (d)
hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under Agreement Accounting Principles.
In no event shall Indebtedness include Unfunded Liabilities of any Plan of the
Borrower and its Subsidiaries, which amount, as of December 31, 1996, was zero.
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<PAGE> 22
"INDEMNIFIED MATTERS" is defined in Section 9.6(B) hereof.
"INDEMNITEES" is defined in Section 9.6(B) hereof.
"INTEREST PERIOD" means, with respect to a Eurocurrency Rate Loan, a
period of one (1), two (2), three (3) or six (6) months commencing on a
Business Day selected by the Borrower pursuant to this Agreement. Such
Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months thereafter; provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business
Day.
"INVESTMENT" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of stock, partnership interest, ownership or
membership interest, notes, debentures or other securities, or of a beneficial
interest in stock, partnership interest, ownership or membership interest,
notes, debentures or other securities, issued by any other Person, (ii) any
purchase by that Person of all or substantially all of the assets of a business
conducted by another Person, and (iii) any loan, advance (other than deposits
with financial institutions available for withdrawal on demand, prepaid
expenses, accounts receivable, advances to employees and similar items made or
incurred in the ordinary course of business) or capital contribution by that
Person to any other Person, including all Indebtedness to such Person arising
from a sale of property by such Person other than in the ordinary course of its
business.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"ISSUING LENDER" means NBD.
"L/C DRAFT" means a draft drawn on the Issuing Lender pursuant to a
Letter of Credit.
"L/C INTEREST" shall have the meaning ascribed to such term in Section
2.20.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the
sum of the Dollar Amounts of (i) the aggregate of the amount then available for
drawing under each of the Letters of Credit, (ii) the face amount of all
outstanding L/C Drafts corresponding to the Letters of Credit, which L/C Drafts
have been accepted by the Issuing Lender, (iii) the aggregate outstanding
amount of all Reimbursement Obligations at such time and (iv) the aggregate
face
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amount of all Letters of Credit requested by the Borrower but not yet
issued (unless the request for an unissued Letter of Credit has been denied).
"LENDERS" means the lending institutions listed on the signature pages
of this Agreement, including the Issuing Lender and the Swing Line Lender, and
their respective successors and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the
Administrative Agent, any office, branch, subsidiary or affiliate of such
Lender or the Administrative Agent.
"LETTER(S) OF CREDIT" means any or all of the Existing Letters of
Credit and the letters of credit to be issued by the Issuing Lender pursuant to
Section 2.19 hereof.
"LEVERAGE RATIO" is defined in Section 6.4(C).
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN" means a Syndicated Loan, A Bid Rate Loan or a Swing Line Loan.
"LOAN ACCOUNT" is defined in Section 2.15(E) hereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranty and all
other documents, instruments and agreements executed in connection therewith or
contemplated thereby, including the letter agreement regarding fees among the
Administrative Agent, the Arranger and the Borrower, in each case as the same
may be amended, restated or otherwise modified and in effect from time to time.
"MARGIN STOCK" shall have the meaning ascribed to such term in
Regulation U promulgated by the Board of Governors of the Federal Reserve
System, as from time to time in effect.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance or
Properties of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Borrower and its Subsidiaries to perform their respective
obligations under the Loan Documents, or (c) the ability of the Lenders or the
Administrative Agent to enforce the Obligations in any material respect.
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<PAGE> 24
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in
Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by either the Borrower or any member of the
Controlled Group.
"NBD" means NBD Bank, N.A. in its individual capacity.
"NON PRO RATA LOAN" is defined in Section 8.2 hereof.
"NOTES" means the Syndicated Notes, the Bid Rate Notes and the Swing
Line Loan Note.
"NOTICE OF ASSIGNMENT" is defined in Section 12.3(B) hereof.
"OBLIGATIONS" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Administrative
Agent, the Arranger, any Lender, the Issuing Lender, the Swing Line Lender, any
Affiliate of any of the foregoing or any Indemnitee, of any kind or nature,
present or future, arising under this Agreement, the Notes or any other Loan
Document, whether or not evidenced by any note, guaranty or other instrument,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute
or contingent, due or to become due, now existing or hereafter arising and
however acquired. The term includes, without limitation, all interest,
charges, expenses, fees, attorneys' fees and disbursements, paralegals' fees
(in each case whether or not allowed), and any other sum chargeable to the
Borrower under this Agreement or any other Loan Document.
"OTHER TAXES" is defined in Section 3.5 hereof.
"PARTICIPANTS" is defined in Section 12.2(A) hereof.
"PAYMENT DATE" means the first Business Day of each calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERMITTED ACQUISITION" means any Acquisition made by the Borrower or
any of its Subsidiaries provided that: (a) as of the date of such Acquisition,
no Default or Unmatured Default shall have occurred and be continuing or would
result from such Acquisition or from the incurrence of any Indebtedness in
connection with such Acquisition; (b) prior to the date of such Acquisition,
such Acquisition shall have been approved by the board of directors and, if
applicable, the shareholders of the Person whose stock or assets are being
acquired in connection with such Acquisition and no claim or challenge has been
asserted or threatened by any shareholder or director of such Person which
could reasonably be expected to have a material adverse effect on such
Acquisition or a Material Adverse Effect; and (c) as of the date of any
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<PAGE> 25
such Acquisition, all approvals required in connection with such
Acquisition shall have been obtained.
"PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent
Obligations of the Borrower and its Subsidiaries identified as such on Schedule
1.1.1 to this Agreement.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the
Borrower and its Subsidiaries identified as such on Schedule 1.1.2 to this
Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.3 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower
or its Subsidiaries identified as such on Schedule 1.1.4 to this Agreement.
"PERSON" means any natural person, corporation, firm, company, joint
venture, partnership, association, enterprise, trust or other entity or
organization, or any government or political subdivision or any agency,
department or instrumentality thereof.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA
in respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"PRIORITY DEBT" means (i) all Indebtedness of the Borrower or any
Subsidiary secured by a Lien on any property of the Borrower or any Subsidiary,
excluding Indebtedness secured by Liens permitted by clauses (i), (ii) or (iii)
of Section 6.3(C), and (ii) all Indebtedness of Subsidiaries, excluding
Indebtedness consisting of intercompany loans from the Borrower to any
Subsidiary.
"PROPERTY" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"PRO RATA SHARE" means, with respect to any Lender, the percentage
obtained by dividing (A) such Lender's Commitment at such time (in each case,
as adjusted from time to time in accordance with the provisions of this
Agreement) by (B) the Aggregate Commitment at such time.
"PURCHASERS" is defined in Section 12.3(A) hereof.
"RATE OPTION" means the Eurocurrency Rate or the Base Rate.
"REGISTER" is defined in Section 12.3(C) hereof.
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<PAGE> 26
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"REIMBURSEMENT OBLIGATION" is defined in Section 2.21 hereof.
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Contaminants
through or in the air, soil, surface water or groundwater.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days
after such event occurs, provided, however, that a failure to meet the minimum
funding standards of Section 412 of the Code and of Section 302 of ERISA shall
be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the
aggregate, are greater than fifty percent (50%); provided, however, that, if
any of the Lenders shall have failed to fund its Pro Rata Share of any
Revolving Loan requested by the Borrower which such Lenders are obligated to
fund under the terms of this Agreement and any such failure has not been cured,
then for so long as such failure continues, "REQUIRED LENDERS" means Lenders
(excluding all Lenders whose failure to fund their respective Pro Rata Shares
of such Revolving Loans have not been so cured) whose Pro Rata Shares represent
greater than fifty percent (50%) of the aggregate Pro Rata Shares of such
Lenders; provided, further, however, that, if the Commitments have been
terminated pursuant to the terms of this Agreement, "REQUIRED LENDERS" means
Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans and L/C Obligations
are greater than fifty percent (50%).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws
or other organizational or governing documents of such Person, and any law,
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 including, without limitation, the Securities Act of 1933, the
Securities Exchange Act 1934, Regulations G, T, U and X promulgated by the
Board of Governors of the
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Federal Reserve System, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or Permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"RESERVE REQUIREMENT" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
Eurocurrency liabilities.
"RISK-BASED CAPITAL GUIDELINES" is defined in Section 3.2 hereof.
"SENIOR NOTES" means $150,000,000 aggregate principal amount of the
Borrower's Senior Notes, Series A through H, due 2001- 2008.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any company, partnership, association, joint venture or similar
business organization more than 50% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary" shall
mean a direct or indirect Subsidiary of the Borrower.
"SWING LINE BORROWING NOTICE" is defined in Section 2.9(b).
"SWING LINE COMMITMENT" means the obligation of the Swing Line Lender
to make Swing Line Loans up to a maximum principal amount of $10,000,000 in the
aggregate at any one time outstanding.
"SWING LINE LENDER" means NBD.
"SWING LINE LOAN" means a loan made available to the Borrower by the
Swing Line Lender pursuant to Section 2.9.
"SWING LINE LOAN NOTE" means a Note in substantially the form of
Exhibit B-3 hereto duly executed by the Borrower and payable to the order of
the Swing Line Lender in the amount of its Swing Line Commitment.
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<PAGE> 28
"SYNDICATED ADVANCE" means a borrowing consisting of simultaneous
Syndicated Loans of the same Type made to the Borrower by each of the Lenders
pursuant to Section 2.1, and for, in the case of Eurocurrency Rate Advances,
the same Interest Period.
"SYNDICATED ADVANCE BORROWING NOTICE" has the meaning specified in
Section 2.6(a).
"SYNDICATED LOAN" means a loan by a Lender to the Borrower as part of a
Syndicated Advance.
"SYNDICATED NOTE" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit B-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender resulting
from the Syndicated Loans made by such Lender to the Borrower.
"TANGIBLE ASSETS" means as of the date of any determination thereof,
with respect to any Person, total assets of such Person in accordance with
Agreement Accounting Principles, but excluding therefrom goodwill, patents,
patent applications, permits, trademarks, trade names, copyrights, licenses,
franchises, experimental expense, organizational expense, unamortized debt
discount and expense, the excess of cost of shares acquired over book value of
related assets and such other assets as are properly classified as "intangible
assets" in accordance with Agreement Accounting Principles.
"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"TERMINATION DATE" means the earlier of (a) September 30, 2002 and (b)
the date of termination of the Commitments pursuant to Section 2.4 or Section
8.1.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower
or such Controlled Group member 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 the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which could reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the
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<PAGE> 29
appointment of a trustee to administer, any Benefit Plan; or (vi) the
partial or complete withdrawal of the Borrower or any member of the Controlled
Group from a Multiemployer Plan.
"TRANSFEREE" is defined in Section 12.5 hereof.
"TYPE" means, (a) with respect to any Syndicated Loan, its nature as a
Base Rate Loan or a Eurocurrency Rate Loan, (b) with respect to any Syndicated
Advance, its nature as a Base Rate Advance or a Eurocurrency Rate Advance, and
(c) with respect to any Swing Line Loan, its nature as a Base Rate Loan or a
Federal Funds Rate Loan.
"UNFUNDED LIABILITIES" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or
the giving of notice, or both, would constitute a Default.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Any accounting terms used in
this Agreement which are not specifically defined herein shall have the
meanings customarily given them in accordance with generally accepted
accounting principles in existence as of the date hereof.
ARTICLE II: THE CREDITS
2.1 Syndicated Loans. Upon the satisfaction of the conditions
precedent set forth in Sections 4.1 and 4.2 hereof, from and including the date
of this Agreement and prior to the Termination Date, each Lender severally and
not jointly agrees, on the terms and conditions set forth in this Agreement, to
make Syndicated Loans to the Borrower from time to time, in an Agreed Currency,
in a Dollar Amount not to exceed in the aggregate at any one time outstanding
the amount of such Lender's Commitment; provided, however, (i) that the
Aggregate Commitment shall be deemed used from time to time to the extent of
(a) the aggregate amount of the Bid Rate Loans then outstanding, and such
deemed use of the Aggregate Commitment shall be applied to the Lenders ratably
according to their respective Commitments (such deemed use of the aggregate
amount of the Commitments being a "Bid Rate Reduction") and (b) the aggregate
L/C Obligations then outstanding, and such deemed use of the Aggregate
Commitment shall be applied to the Lenders ratably according to their
respective Commitments, and (ii) that the aggregate Dollar Amount of
Eurocurrency Rate Loans and L/C Obligations in Agreed Currencies other than
Dollars outstanding at any time shall not exceed 50% of the Aggregate
Commitment at such time. For so long as the aggregate outstanding Dollar
Amount of Syndicated Advances, Bid
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<PAGE> 30
Rate Advances, Swing Line Loans and L/C Obligations is less than 95% of
the Aggregate Commitment, the Dollar Amount of each Eurocurrency Rate Advance
in an Agreed Currency other than Dollars for all purposes under this Agreement
(other than Section 2.3(B)) shall be the Dollar Amount thereof as of the date
such Eurocurrency Rate Advance was made, and the Dollar Amount of each undrawn
Letter of Credit in an Agreed Currency other than Dollars for all purposes of
this Agreement (other than Section 2.3(B)) shall be the Dollar Amount thereof
as of the first Business Day in each week, as determined by the Administrative
Agent. For so long as the aggregate outstanding Dollar Amount of Syndicated
Advances, Bid Rate Advances, Swing Line Loans and L/C Obligations is equal to
or greater than 95% of the Aggregate Commitment, the Administrative Agent shall
determine the Dollar Amount of all Eurocurrency Rate Advances and L/C
Obligations in Agreed Currencies other than Dollars as of the first Business
Day in each week, and the availability of Loans and Letters of Credit under
this Agreement shall be determined on the basis of such Dollar Amount most
recently determined. Each Syndicated Advance under this Section 2.1 shall
consist of Syndicated Loans made by each Lender ratably in proportion to such
Lender's respective Pro Rata Share. Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow Syndicated Loans at any time prior
to the Termination Date. The Syndicated Loans made on the Closing Date shall
initially be Base Rate Loans and thereafter may be continued as Base Rate Loans
or converted into Eurocurrency Rate Loans in the manner provided in Section 2.8
and subject to the other conditions and limitations therein set forth and set
forth in this Article II. On the Termination Date, the outstanding principal
balance of the Syndicated Loans shall be paid in full by the Borrower.
2.2 Rate Options for Syndicated Advances. The Syndicated Advances
may be Base Rate Advances or Eurocurrency Rate Advances, or a combination
thereof, selected by the Borrower in accordance with Sections 2.6 and 2.8. The
Borrower may select, in accordance with Sections 2.6 and 2.8, Rate Options and
Interest Periods applicable to portions of the Syndicated Advances.
2.3 Payments of Syndicated Loans.
(A) Optional Payments. Subject to Section 3.4 and the requirements of
Section 2.7, the Borrower may (a) following notice given to the Administrative
Agent by the Borrower, by not later than 11:00 a.m. (Indianapolis time) on the
date of the proposed prepayment, such notice specifying the aggregate principal
amount of and the proposed date of the prepayment, and if such notice is given
the Borrower shall, prepay the outstanding principal amounts of the Base Rate
Loans comprising part of the same Syndicated Advance in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
principal amount prepaid and (b) following notice given to the Administrative
Agent by the Borrower by not later than 11:00 a.m. (Indianapolis time) on, if
the Advance to be prepaid is a Eurocurrency Rate Advance, the fifth Business
Day preceding the date of the proposed prepayment, such notice specifying the
Syndicated Advance to be prepaid and the proposed date of the prepayment, and,
if such notice is given, the Borrower shall, prepay the outstanding principal
amounts of the Eurocurrency Rate Loans comprising a Eurocurrency Rate Advance
in whole (and not in part), together with accrued
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<PAGE> 31
interest to the date of such prepayment on the principal amount
prepaid. Each partial prepayment shall be in an aggregate principal amount not
less than $1,000,000 and an integral multiple of $1,000,000.
(B) Mandatory Prepayments. If at any time and for any reason the
aggregate Dollar Amount of the outstanding Loans and L/C Obligations is greater
than the Aggregate Commitment, the Borrower shall immediately make a mandatory
prepayment of the Obligations in an amount equal to such excess. If at the
time any such mandatory prepayment is required the aggregate Dollar Amount of
the outstanding Eurocurrency Rate Loans and L/C Obligations in Agreed
Currencies other than Dollars exceeds 50% of the Aggregate Commitment at such
time, the Borrower shall effect such prepayment in a manner that eliminates
such excess.
2.4 Reduction of Commitments. The Borrower may permanently reduce
the Aggregate Commitment in whole, or in part ratably among the Lenders, in an
aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in
excess of that amount, upon at least five Business Days' prior written notice
to the Administrative Agent, which notice shall specify the amount of any such
reduction; provided, however, that the amount of the Aggregate Commitment may
not be reduced below the sum of the aggregate principal amount of the
outstanding Advances and the aggregate outstanding L/C Obligations and Swing
Line Loans. All accrued commitment fees shall be payable on the effective date
of any termination of the obligations of the Lenders to make Loans hereunder.
2.5 Method of Borrowing Syndicated Advances. The Administrative Agent
shall notify each Lender by 12:00 noon (Indianapolis time) of each Advance on
the Borrowing Date of each Base Rate Advance, three Business Days before the
Borrowing Date of each Eurocurrency Rate Advance in Dollars and four Business
Days before the Borrowing Date for each Eurocurrency Rate Advance in an Agreed
Currency other than Dollars and, not later than 1:00 p.m. (Indianapolis time)
on each Borrowing Date, each Lender shall make available its Syndicated Loan or
Loans, in funds immediately available in Indianapolis to the Administrative
Agent at its address specified pursuant to Article XIII hereof, unless the
Administrative Agent has notified the Lenders that such Loan is to be made
available to the Borrower at the Administrative Agent's Eurocurrency Payment
Office, in which case each Lender shall make available its Syndicated Loan or
Loans, in funds immediately available to the Administrative Agent at its
Eurocurrency Payment Office, not later than 1:00 p.m. (local time in the city
of the Administrative Agent's Eurocurrency Payment Office) in the Agreed
Currency designated by the Administrative Agent. The Administrative Agent will
promptly make the funds so received from the Lenders available to the Borrower.
2.6 Method of Selecting Types and Interest Periods for Syndicated
Advances; Determination of Applicable Margins.
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<PAGE> 32
(a) Method of Selecting Types and Interest Periods for
Advances. The Borrower shall select the Type of Syndicated Advance
and, in the case of each Eurocurrency Rate Advance, the Interest
Period and Agreed Currency applicable to each Syndicated Advance from
time to time. The Borrower shall give the Administrative Agent
irrevocable notice (a "SYNDICATED ADVANCE BORROWING NOTICE") not later
than 11:00 a.m. (Indianapolis time) on the Borrowing Date of each Base
Rate Advance, three Business Days before the Borrowing Date for each
Eurocurrency Rate Advance in Dollars and four Business Days before the
Borrowing Date for each Eurocurrency Rate Advance in an Agreed
Currency other than Dollars, specifying: (i) the Borrowing Date
(which shall be a Business Day) of such Advance; (ii) the aggregate
amount of such Advance; (iii) the Type of Advance selected; and (iv)
in the case of each Eurocurrency Rate Advance, the Interest Period and
Agreed Currency applicable thereto. Each Syndicated Advance in an
Agreed Currency other than Dollars must be a Eurocurrency Rate
Advance. There shall be no more than six (6) Interest Periods in
effect with respect to all of the Syndicated Advances at any time.
Each Base Rate Advance shall bear interest from and including the date
of the making of such Advance to (but not including) the date of
repayment thereof at the Base Rate, changing when and as such Base
Rate changes. Changes in the rate of interest on that portion of any
Syndicated Advance maintained as a Base Rate Loan will take effect
simultaneously with each change in the Alternate Base Rate. Each
Eurocurrency Rate Advance shall bear interest from and including the
first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate
determined as applicable to such Eurocurrency Rate Advance.
(b) Determination of Applicable Margin, Applicable Letter of
Credit Fee and Applicable Commitment Fee.
(i) Definitions. As used in this Section 2.6(b) and in this
Agreement, the following terms shall have the following meanings:
"Applicable Margin", "Applicable Commitment
Fee" and "Applicable Letter of Credit Fee" shall mean
the per annum rates constituting the Applicable
Margin, Applicable Commitment Fee and Applicable
Letter of Credit Fee, respectively, determined in
accordance with the provisions of this Section
2.6(b), by reference to the following:
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<PAGE> 33
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
APPLICABLE APPLICABLE APPLICABLE
LEVERAGE RATIO MARGIN COMMITMENT FEE LETTER OF CREDIT FEE
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
GREATER THAN OR EQUAL TO
0.50 TO 1 0.55% 0.175% 0.55%
- ---------------------------------------------------------------------------------------
LESS THAN 0.50 TO 1 AND
GREATER THAN OR EQUAL TO
0.40 TO 1 0.475% 0.15% 0.475%
- ---------------------------------------------------------------------------------------
LESS THAN 0.40 TO 1 AND
GREATER THAN OR EQUAL TO
0.30 TO 1 0.40% 0.125% 0.40%
- ---------------------------------------------------------------------------------------
LESS THAN 0.30 TO 1 AND
GREATER THAN OR EQUAL TO
0.20 TO 1 0.30% 0.10% 0.30%
- ---------------------------------------------------------------------------------------
LESS THAN 0.20 TO 1 0.25% 0.085% 0.25%
- ---------------------------------------------------------------------------------------
</TABLE>
"Leverage Ratio" shall have the meaning ascribed to that
term in Section 6.4(A).
(ii) Determination of Applicable Margin, Applicable Letter of
Credit Fee and Applicable Commitment Fee.
(A) Subject to the provisions of clause (C) below, the
Applicable Margin in respect of any Loan, the Applicable Letter of
Credit Fee payable under Section 2.23 and the Applicable Commitment
Fee payable under Section 2.14(C) shall be determined by reference to
the tables set forth in clause (i) above, as applicable, on the basis
of the Leverage Ratio (calculated as provided in Section 6.4)
determined by reference to the most recent financial statements
delivered pursuant to Section 6.1(A)(i) or 6.1(A)(ii).
(B) Upon receipt of the financial statements delivered
pursuant to Section 6.1(A)(i) or Section 6.1(A)(ii), as applicable,
the Applicable Margin, the Applicable Letter of Credit Fee and
Applicable Commitment Fee shall be adjusted, such adjustment being
effective on the first (1st) Business Day after receipt of such
financial statements and the Compliance Certificate to be delivered in
connection therewith; provided, however, if the Borrower shall not
have timely delivered such financial statements in accordance with
Section 6.1(A)(i) or Section 6.1(A)(ii), as applicable, beginning with
the
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date upon which such financial statements should have been delivered
and continuing until such financial statements are delivered, it shall
be assumed for purposes of determining the Applicable Margin, the
Applicable Commitment Fee and the Applicable Letter of Credit Fee
that the Leverage Ratio was greater than or equal to 0.50 to 1.
(C) Notwithstanding anything herein to the contrary, from the
date hereof to but not including the first Business Day following
receipt of the Borrower's quarterly financial statements delivered
pursuant to Section 6.1(A)(i) for the quarter ended June 30, 1997, the
Applicable Margin, Applicable Letter of Credit Fee and Applicable
Commitment Fee shall be determined based upon an assumption that the
Leverage Ratio is less than 0.50 to 1 and greater than or equal to
0.40 to 1.
2.7 Minimum Amount of Each Syndicated Advance. Each Eurocurrency
Rate Advance shall be in the minimum amount of $5,000,000 or the Approximate
Equivalent Amount of any Agreed Currency other than Dollars (and in multiples
of $1,000,000 or the Approximate Equivalent Amount of any Agreed Currency other
than Dollars if in excess thereof), and each Base Rate Advance shall be in the
minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), provided, however, that any Base Rate Advance may be in the amount of
the unused Aggregate Commitment.
2.8 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Syndicated Advances.
(A) Right to Convert. The Borrower may elect from time to time,
subject to the provisions of Section 2.6, Section 2.7 and this Section 2.8, to
convert all or any part of a Syndicated Advance of any Type into any other Type
or Types of Syndicated Advance; provided that any conversion of any
Eurocurrency Rate Advance shall be made on, and only on, the last day of the
Interest Period applicable thereto.
(B) Automatic Conversion and Continuation. Base Rate Loans shall
continue as Base Rate Loans unless and until such Base Rate Loans are converted
into Eurocurrency Rate Loans. Eurocurrency Rate Loans shall continue as
Eurocurrency Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurocurrency Rate Loans (other than Eurocurrency
Rate Loans in Agreed Currencies other than Dollars) shall be automatically
converted into Base Rate Loans unless the Borrower shall have given the
Administrative Agent notice in accordance with Section 2.8(D) requesting that,
at the end of such Interest Period, such Eurocurrency Rate Loans continue as a
Eurocurrency Rate Loan. Eurocurrency Rate Loans in an Agreed Currency other
than Dollars shall automatically continue as Eurocurrency Rate Loans in the
same Agreed Currency unless the Borrower notifies the Administrative Agent
otherwise as provided herein.
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<PAGE> 35
(C) No Conversion Post-Default or Post-Unmatured Default.
Notwithstanding anything to the contrary contained in Section 2.8(A) or Section
2.8(B), no Syndicated Loan may be converted into or continued as a Eurocurrency
Rate Loan (other than a Eurocurrency Rate Loan in an Agreed Currency other than
Dollars) except with the consent of the Required Lenders when any Default or
Unmatured Default has occurred and is continuing.
(D) Conversion/Continuation Notice. The Borrower shall give the
Administrative Agent irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of
each conversion of a Base Rate Loan into a Eurocurrency Rate Loan or
continuation of a Eurocurrency Rate Loan (other than a Eurocurrency Rate Loan
in an Agreed Currency other than Dollars) not later than 11:00 a.m.
(Indianapolis time) three Business Days or, with respect to the continuation of
a Eurocurrency Rate Loan in an Agreed Currency other than Dollars, four
Business Days prior to the date of the requested conversion or continuation,
specifying: (1) the requested date (which shall be a Business Day) of such
conversion or continuation; (2) the amount and Type of the Syndicated Loan to
be converted or continued; and (3) the amounts of Eurocurrency Rate Loan(s)
into which such Syndicated Loan is to be converted or continued and the
duration of the Interest Periods applicable thereto. If no such notice is
given with respect to a Eurocurrency Rate Loan in an Agreed Currency other than
Dollars, the Interest Period applicable to the automatic continuation of such
Loan shall be one month.
2.9 Swing Line Loans. (a) Amount of Swing Line Loans. Upon the
satisfaction of the conditions precedent set forth in Sections 4.1 and 4.2,
from and including the date of this Agreement and prior to the Termination
Date, the Swing Line Lender agrees, on the terms and conditions set forth in
this Agreement, to make Swing Line Loans in Dollars to the Borrower from time
to time in an amount not to exceed in the aggregate at any one time outstanding
the lesser of (i) $10,000,000 or (ii) the amount by which the Aggregate
Commitment exceeds the sum of the outstanding principal Dollar Amount of
Syndicated Advances, Bid Rate Advances and L/C Obligations at such time. Each
Swing Line Loan shall be in a minimum amount of not less than $500,000 (or such
lesser amount as may be agreed to by the Swing Line Lender) or an integral
multiple of $100,000 ( or such lesser amount as may be agreed to by the Swing
Line Lender) in excess thereof, and all interest payable on the Swing Line
Loans shall be payable to the Swing Line Lender for the account of the Swing
Line Lender. In no event shall the number of Swing Line Loans outstanding at
any time be greater than five (5).
(b) Borrowing Notice. The Borrower shall deliver to the
Administrative Agent and the Swing Line Lender a notice (a "SWING LINE
BORROWING NOTICE") signed by it not later than 11:00 a.m. (Indianapolis time)
on the Borrowing Date of each Swing Line Loan specifying (i) the applicable
Borrowing Date (which shall be a Business Day), (ii) the aggregate amount of
the requested Swing Line Loan, and (iii) the Type of Swing Line Loan selected.
The Swing Line Loans may be Base Rate Loans or Federal Funds Rate Loans, as the
Borrower may select.
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<PAGE> 36
(c) Making of Swing Line Loans. Promptly after receipt of
the Borrowing Notice under Section 2.9(b), the Administrative Agent shall
notify the Swing Line Lender of the requested Swing Line Loan. Not later than
2:00 p.m. (Indianapolis time) on the applicable Borrowing Date, the Swing Line
Lender shall make available its Swing Line Loan in funds immediately available
in Indianapolis to the Administrative Agent at the address specified by the
Administrative Agent or directly to the Borrower. If such funds are made
available to the Administrative Agent, the Administrative Agent will promptly
make such funds available to the Borrower.
(d) Repayment of Swing Line Loans. The Swing Line Loans
shall be evidenced by the Swing Line Loan Note and each Swing Line Loan shall
be paid in full by the Borrower on or before the fifth Business Day after the
Borrowing Date for such Swing Line Loan. Outstanding Swing Line Loans may be
repaid from the proceeds of Syndicated Advances, Bid Rate Advances or Swing
Line Loans. Any repayment of a Swing Line Loan shall be accompanied by accrued
interest thereon and, subject to Section 2.9(a), shall be in the minimum amount
of $100,000 (or such lesser amount as may be agreed to by the Swing Line
Lender) and in increments of $100,000 (or such lesser amount as may be agreed
to by the Swing Line Lender) in excess thereof or the full amount of such Swing
Line Loan. If the Borrower at any time fails to repay a Swing Line Loan on the
applicable date when due, the Borrower shall be deemed to have elected to
borrow a Syndicated Advance which shall be a Base Rate Advance under Section
2.1 as of such date equal in amount to the unpaid amount of such Swing Line
Loan (notwithstanding the minimum amount of Base Rate Advances as provided in
Section 2.7). The proceeds of any such Advance shall be used to repay such
Swing Line Loan. Unless the Administrative Agent upon the request of or with
the consent of the Required Lenders shall have notified the Swing Line Lender
prior to such Swing Line Lender making any Swing Line Loan, that the applicable
conditions precedent set forth in Article IV have not then been satisfied, each
Lender's obligation to make Syndicated Loans pursuant to Section 2.1 and this
Section 2.9(d) to repay such Swing Line Loan shall be unconditional,
continuing, irrevocable and absolute and shall not be affected by any
circumstances, including the occurrence or continuance of a Default. In the
event that any Lender fails to make payment to the Administrative Agent of any
amount due under this Section 2.9(d), the Administrative Agent shall be
entitled to receive, retain and apply against such obligation the principal and
interest otherwise payable to such Lender hereunder until the Administrative
Agent receives such payment from such Lender or such obligation is otherwise
fully satisfied. In addition to the foregoing, if for any reason any Lender
fails to make payment to the Administrative Agent of any amount due under this
Section 2.9(d), such Lender shall be deemed, at the option of the
Administrative Agent, to have unconditionally and irrevocably purchased from
the Swing Line Lender, without recourse or warranty, an undivided interest in
and participation in the applicable Swing Line Loan in the amount of the
Syndicated Loan such Lender was required to make pursuant to this Section
2.9(d), and such interest and participation may be recovered from such Lender
together with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of demand by the Administrative Agent
and ending on the date such obligation is fully satisfied.
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<PAGE> 37
2.10. The Bid Rate Advances. (a) Each Lender severally agrees that, on
the terms and conditions set forth in this Agreement, the Borrower may request
and receive Bid Rate Advances in Dollars under this Section 2.10 from time to
time on any Business Day during the period from the date hereof until the date
occurring 30 days prior to the Termination Date in the manner set forth below;
provided, however, that, following the making of each Bid Rate Advance, the
aggregate amount of the Advances then outstanding plus the aggregate amount of
the Swing Line Loans then outstanding plus the aggregate amount of the L/C
Obligations then outstanding shall not exceed the Aggregate Commitment (computed
without regard to any Bid Rate Reduction).
(b) The procedures for the solicitation and acceptance of Bid
Rate Loans are set forth below:
(i) The Borrower may request a Bid Rate Advance under this
Section 2.10(b) by giving the Administrative Agent irrevocable notice,
in the form attached hereto as Exhibit G (a "Bid Rate Advance
Borrowing Notice"), specifying the date and aggregate amount of the
proposed Bid Rate Advance, the maturity date for repayment of each Bid
Rate Loan to be made as part of such Bid Rate Advance (which maturity
date may not be earlier than, in the case of an Absolute Rate Auction,
the date occurring seven days, and in the case of an Indexed Rate
Auction, the date occurring one month after the date of the related
Bid Rate Advance or later than, in the case of an Absolute Rate
Auction, the earlier of the day occurring 180 days after the date of
such Bid Rate Advance and the Termination Date, and in the case of an
Indexed Rate Auction, the earlier of the day occurring six months
after the date of such Bid Rate Advance and the Termination Date), the
interest payment date or dates relating thereto, and any other terms
to be applicable to such Bid Rate Advance, not later than 10:00 a.m.
(Indianapolis time) (A) one Business Day prior to the date of the
proposed Bid Rate Advance, if the Borrower shall specify in the Bid
Rate Advance Borrowing Notice that the rates of interest to be offered
by the Lenders shall be absolute rates per annum (such type of
solicitation being an "Absolute Rate Auction"), and (B) five Business
Days prior to the date of the proposed Bid Rate Advance, if the
Borrower shall specify in the Bid Rate Advance Borrowing Notice that
the rates of interest to be offered by the Lenders shall be based on
the Eurocurrency Base Rate with respect to Dollars (such type of
solicitation being an "Indexed Rate Auction"). The Administrative
Agent shall, promptly following its receipt of a Bid Rate Advance
Borrowing Notice under this Section 2.10(b), notify each Lender of
such request by sending such Lender a copy of such Bid Rate Advance
Borrowing Notice.
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<PAGE> 38
(ii) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more Bid Rate Loans to the
Borrower as part of such proposed Bid Rate Advance at a rate or rates
of interest specified by such Lender in its sole discretion, by
notifying the Administrative Agent (which shall give prompt notice
thereof to the Borrower), before 10:00 a.m. (Indianapolis time) (or if
such Lender is the Administrative Agent, before 9:45 a.m. (Indianapolis
time)) (A) on the date of such proposed Bid Rate Advance, in the case
of an Absolute Rate Auction, and (B) four Business Days before the date
of such proposed Bid Rate Advance, in the case of an Indexed Rate
Auction of the minimum amount and maximum amount of each Bid Rate Loan
which such Lender would be willing to make as part of such proposed Bid
Rate Advance (which amounts may, subject to the proviso to the first
sentence of Section 2.10(a), exceed such Lender's Commitment), the rate
or rates of interest, in the case of an Absolute Rate Auction, or the
spread or spreads with respect to the Eurocurrency Base Rate, in the
case of an Indexed Rate Auction, therefor and such Lender's Lending
Installation with respect to such Bid Rate Loan.
(iii) The Borrower shall, in turn, before (A) 11:00 a.m.
(Indianapolis time) on the date of such proposed Bid Rate Advance, in
the case of an Absolute Rate Auction, and (B) 10:00 a.m. (Indianapolis
time) three Business Days before the date of such proposed Bid Rate
Advance, in the case of an Indexed Rate Auction for a Bid Rate
Advance, either:
(x) cancel such Bid Rate Advance by giving the
Administrative Agent notice to that effect, or
(y) accept, subject to Section 2.10(d), one or more
of the offers made by any Lender or Lenders pursuant to
Section 2.10(b)(ii), in its sole discretion, by giving notice
to the Administrative Agent of the amount of each Bid Rate
Loan (which amount shall be equal to or greater than the
minimum amount, and equal to or less than the maximum amount,
notified to the Borrower by the Administrative Agent on behalf
of such Lender for such Bid Rate Loan pursuant to Section
2.10(b)(ii)) to be made by each Lender as part of such Bid
Rate Advance, and reject any remaining offers made by Lenders
pursuant to Section 2.10(b)(ii) by giving the Administrative
Agent notice to that effect.
(iv) If the Borrower notifies the Administrative Agent that
such Bid Rate Advance is canceled pursuant to Section 2.10(b)(iii)(x),
the Administrative Agent shall give prompt notice thereof to the
Lenders and such Bid Rate Advance shall not be made.
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<PAGE> 39
(v) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to Section 2.10(b)(iii)(y), the
Administrative Agent shall in turn promptly notify (A) each Lender that
has made an offer as described in Section 2.10(b)(ii) of the date, and
aggregate amount of such Bid Rate Advance and whether or not any offer
or offers made by such Lender pursuant to Section 2.10(b)(ii) have been
accepted by the Borrower and (B) each Lender that is to make a Bid Rate
Loan as part of such Bid Rate Advance, of the amount of each Bid Rate
Loan to be made by such Lender as part of such Bid Rate Advance. Each
Lender that is to make a Bid Rate Loan as part of such Bid Rate Advance
shall, not later than 1:00 p.m. (Indianapolis time) on the date of such
Bid Rate Advance specified in the notice received from the
Administrative Agent pursuant to clause (A) of the preceding sentence,
make available for the account of its Lending Installation to the
Administrative Agent at the relevant Payment Office such Lender's
portion of such Bid Rate Advance, in same day funds. Upon fulfillment
of the applicable conditions set forth in Article IV and after receipt
by the Administrative Agent of such funds, the Administrative Agent
will make such funds available to the Borrower at the Administrative
Agent's aforesaid address. Promptly after each Bid Rate Advance the
Administrative Agent will notify each Lender of the amount of such Bid
Rate Advance, the consequent Bid Rate Reduction and the dates upon
which such Bid Rate Reduction commenced and will terminate.
(c) Each Bid Rate Advance shall be in an aggregate amount not
less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof,
and, following the making of each Bid Rate Advance, the Borrower shall be in
compliance with the limitation set forth in the proviso to the first sentence
of Section 2.10(a).
(d) Each acceptance by the Borrower pursuant to Section
2.10(b)(iii)(y) of the offers made in response to a Bid Rate Advance Borrowing
Notice shall be treated as an acceptance of such offers in ascending order of
the rates or margins, as applicable, at which the same were made but if, as a
result thereof, two or more offers at the same such rate or margin would be
partially accepted, then the amounts of the Bid Rate Loans in respect of which
such offers are accepted shall be treated as being the amounts which bear the
same proportion to one another as the respective amounts of the Bid Rate Loans
so offered bear to one another but, in each case, rounded as the Administrative
Agent may consider necessary to ensure that the amount of each such Bid Rate
Loan is $100,000 or an integral multiple thereof.
(e) Within the limits and on the conditions set forth in this
Section 2.10, the Borrower may from time to time borrow under this Section
2.10, repay pursuant to Section 2.10(f), and reborrow under this Section 2.10.
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(f) The Borrower shall repay to the Administrative Agent for
the account of each Lender which has made a Bid Rate Loan to it, on the
maturity date of such Bid Rate Loan (such maturity date being that specified by
the Borrower for repayment of such Bid Rate Loan in the related Bid Rate
Advance Borrowing Notice), or, if earlier, the acceleration of the Obligations
pursuant to Section 8.1, the then unpaid principal amount of such Bid Rate
Loan. The Borrower shall have no right to prepay any principal amount of any
Bid Rate Loan unless, and then only on the terms, specified by the Borrower for
such Bid Rate Loan in the related Bid Rate Advance Borrowing Notice, and
subject to Section 3.4.
(g) The Borrower shall pay interest on the unpaid principal
amount of each Bid Rate Loan made to it, from the date of such Bid Rate Loan to
the date the principal amount of such Bid Rate Loan is repaid in full, at the
rate of interest for such Bid Rate Loan specified by the Lender making such Bid
Rate Loan in the related notice submitted by such Lender pursuant to Section
2.10(b)(ii), payable on the interest payment date or dates specified by the
Borrower for such Bid Rate Loan in the related Bid Rate Advance Borrowing
Notice and on any date on which such Bid Rate Loan is prepaid, whether by
acceleration or otherwise. In the event the term of any Bid Rate Loan shall be
longer than three months, interest thereon shall be payable not less frequently
than once each three-month period during such term.
2.11 Default Rate. After the occurrence and during the continuance
of a Default, at the option of the Administrative Agent or at the direction of
the Required Lenders, the interest rate(s) applicable to the Obligations and
the letter of credit fee payable under Section 2.23 with respect to Letters of
Credit shall be increased by two percent (2.0%) per annum above the interest
rate or fee otherwise applicable.
2.12 Method of Payment. All payments of principal, interest, and
fees hereunder shall be made, without setoff, deduction or counterclaim, to the
Administrative Agent (i) at the Administrative Agent's office in Indianapolis,
Indiana in immediately available funds with respect to Advances denominated in
Dollars and (ii) in the Administrative Agent's Eurocurrency Payment Office in
immediately available funds with respect to any Advance denominated in an
Agreed Currency other than Dollars, in each case, or at any other Lending
Installation of the Administrative Agent specified in writing (by 9:00 a.m.
(Indianapolis time) on the day before the date when due) by the Administrative
Agent to the Borrower, by 2:00 p.m. local time in Indianapolis with respect to
Advances denominated in Dollars and 2:00 p.m. local time in the Administrative
Agent's Eurocurrency Payment Office with respect to Advances denominated in an
Agreed Currency other than Dollars on the date when due and shall be made
ratably among the Lenders (unless such amount is not to be shared ratably in
accordance with the terms hereof). Each Advance shall be repaid or prepaid in
the currency in which it was made in the amount borrowed and interest payable
thereon shall be paid in such currency. Each payment delivered to the
Administrative Agent for the account of any Lender shall be delivered promptly
by the Administrative Agent to such Lender in the same type of funds which the
Administrative Agent received at its address specified pursuant to Article XIII
or at any Lending Installation specified
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in a notice received by the Administrative Agent from such Lender. The Borrower
authorizes the Administrative Agent to charge any account of the Borrower
maintained with NBD for each payment of principal, interest and fees as it
becomes due hereunder. Notwithstanding the foregoing provisions of this Section,
if, after the making of any Advance in any currency other than Dollars, currency
control or exchange regulations are imposed in the country which issues such
currency with the result that different types of such currency (the "New
Currency") are introduced and the type of currency in which the Advance was made
(the "Original Currency") no longer exists or the Borrower is not able to make
payment to the Administrative Agent for the account of the Lenders in such
Original Currency, then all payments to be made by the Borrower hereunder or
under the Notes in such currency shall be made in such amount and such type of
the New Currency or Dollars as shall be equivalent to the amount of such payment
otherwise due hereunder or under the Notes in the Original Currency, it being
the intention of the parties hereto that the Borrower take all risks of the
imposition of any such currency control or exchange regulations. In addition,
notwithstanding the foregoing provisions of this Section, if, after the making
of any Advance in any currency other than Dollars, the Borrower is not able to
make payment to the Administrative Agent for the account of the Lenders in the
type of currency in which such Advance was made because of the imposition of any
such currency control or exchange regulation, then such Advance shall instead be
repaid when due in Dollars in a principal amount equal to the Dollar Amount (as
of the date of repayment) of such Advance.
2.13 Notes, Telephonic Notices. Each Lender is authorized to record
the principal amount of each of its Loans and each repayment with respect to
its Loans on the schedule attached to its respective Notes; provided, however,
that the failure to so record shall not affect the Borrower's obligations under
any such Note. The Borrower authorizes the Lenders and the Administrative
Agent to extend Syndicated Advances, effect selections of Types of Syndicated
Advances and to transfer funds based on telephonic notices made by any person
or persons the Administrative Agent or any Lender in good faith believes to be
acting on behalf of the Borrower. The Borrower agrees to deliver promptly to
the Administrative Agent a written confirmation, signed by an Authorized
Officer, if such confirmation is requested by the Administrative Agent or any
Lender, of each telephonic notice. If the written confirmation differs in any
material respect from the action taken by the Administrative Agent and the
Lenders, (i) the telephonic notice shall govern absent manifest error and (ii)
the Administrative Agent or the Lender, as applicable, shall promptly notify
the Authorizing Officer who provided such confirmation of such difference.
2.14 Promise to Pay; Interest and Fees; Interest Payment Dates;
Interest and Fee Basis; Loan Accounts.
(A) Promise to Pay. The Borrower unconditionally promises to pay
when due the principal amount of each Loan made to it and all other Obligations
incurred by it, and to pay all unpaid interest accrued thereon, in accordance
with the terms of this Agreement and the Notes.
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(B) Interest Payment Dates. Interest accrued on each Base Rate Loan
and Federal Funds Rate Loan shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
such Base Rate Loan or Federal Funds Rate Loan, as applicable, is prepaid,
whether due to acceleration or otherwise, and at maturity (whether by
acceleration or otherwise). Interest accrued on each Eurocurrency Rate Loan
shall be payable on the last day of its applicable Interest Period, on any date
on which the Eurocurrency Rate Loan is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Eurocurrency Rate Loan
having an Interest Period longer than three months shall also be payable on the
last day of each three-month interval during such Interest Period. Interest
accrued on each Bid Rate Loan shall be payable as provided in Section 2.10(g).
Interest accrued on the principal balance of all other Obligations shall be
payable in arrears (i) upon repayment thereof in full or in part, (ii) if not
theretofore paid in full, at the time such other Obligation becomes due and
payable (whether by acceleration or otherwise) and (iii) if not theretofore
paid in full, on demand, commencing on the first such day following the date
such Obligation became payable pursuant to the terms of this Agreement or the
other Loan Documents.
(C) Fees. (i) The Borrower shall pay or cause the appropriate
Subsidiary to pay to the Administrative Agent, for the account of the Lenders
in accordance with their Pro Rata Shares, a commitment fee accruing at the rate
of the Applicable Commitment Fee per annum from and after the date hereof until
the Termination Date on the amount by which (A) the Aggregate Commitment in
effect from time to time exceeds (B) the aggregate outstanding amount of the
Syndicated Advances and L/C Obligations from time to time. All such commitment
fees payable under this clause (C) shall be payable quarterly in arrears on the
first Business Day of each calendar quarter occurring after the date hereof
and, in addition, on the Termination Date. For purposes of calculating the
Applicable Commitment Fee hereunder, the principal amount of each Syndicated
Advance made in a currency other than Dollars shall be the Dollar Amount of
such Syndicated Advance as determined under clause (ii) of the definition of
"Dollar Amount" on the date such Syndicated Advance was made.
(ii) The Borrower agrees to pay to the Administrative Agent the fees
set forth in the letter agreement among the Borrower, the Administrative Agent
and the Arranger dated July 29, 1997.
(D) Interest and Fee Basis. Interest on Eurocurrency Rate Loans and
Bid Rate Loans and all fees shall be calculated for actual days elapsed on the
basis of a 360-day year, except that in the case of Eurocurrency Rate Loans
denominated in French Francs or any other Agreed Currency for which customary
practice so requires, interest shall be calculated for actual days elapsed on
the basis of a 365-day year or, when appropriate, 366-day year. Interest on
Base Rate Loans and Federal Funds Rate Loans shall be calculated for actual
days elapsed on the basis of a 365-day year or, when appropriate, 366-day year.
Interest shall be payable for the day an Obligation is incurred but not for the
day of any payment on the amount paid if payment is received prior to 12:00
noon local time in Indianapolis with respect to Loans denominated in
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Dollars and 12:00 noon local time in the Administrative Agent's Eurocurrency
Payment Office with respect to Loans denominated in an Agreed Currency other
than Dollars at the place of payment. If any payment of principal of or
interest on a Loan or any payment of any other Obligations shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
(E) Loan Account. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "LOAN ACCOUNT") evidencing the
Obligations of the Borrower to such Lender owing to such Lender from time to
time, including the amount of principal and interest payable and paid to such
Lender from time to time hereunder and under the Notes.
(F) Entries Binding. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest
error, unless the Borrower objects to information contained in the Register and
each Loan Account within thirty (30) days of the Borrower's receipt of such
information.
2.15 Notification of Advances, Interest Rates, Prepayments and
Aggregate Commitment Reductions. Promptly after receipt thereof, the
Administrative Agent will notify each Lender of the contents of each Aggregate
Commitment reduction notice, Borrowing Notice, Continuation/Conversion Notice,
and repayment notice received by it hereunder. The Administrative Agent will
notify each Lender of the interest rate applicable to each Eurocurrency Rate
Loan promptly upon determination of such interest rate and will give each
Lender prompt notice of each change in the Alternate Base Rate.
2.16 Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or
facsimile notice to the Administrative Agent and the Borrower, designate a
Lending Installation through which Loans will be made by it and for whose
account Loan payments are to be made.
2.17 Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the
Administrative Agent of (i) in the case of a Lender, the proceeds of a Loan or
(ii) in the case of the Borrower, a payment of principal, interest or fees to
the Administrative Agent for the account of the Lenders, that it does not
intend to make such payment, the Administrative Agent may assume that such
payment has been made. The Administrative Agent may, but shall not be
obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or the Borrower, as
the case may be, has not in fact made such payment to the Administrative Agent,
the recipient of such payment shall, on demand by the Administrative Agent,
repay to the
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Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by the Administrative Agent until the date the Administrative
Agent recovers such amount at a rate per annum equal to (i) in the case of
payment by a Lender, the Federal Funds Effective Rate for such day or (ii) in
the case of payment by the Borrower, the interest rate applicable to the
relevant Loan.
2.18 Termination Date. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent indemnity
and reimbursement obligations) shall have been fully and indefeasibly paid and
satisfied, all financing arrangements among the Borrower and the Lenders shall
have been terminated and all of the Letters of Credit shall have expired, been
canceled or terminated, all of the rights and remedies under this Agreement and
the other Loan Documents shall survive.
2.19 Letter of Credit Facility. Upon receipt of duly executed
applications therefor, and such other documents, instructions and agreements as
the Issuing Lender may reasonably require, and subject to the provisions of
Section 2.1 and Article IV, the Issuing Lender shall issue letters of credit
denominated in an Agreed Currency for the account of the Borrower (or for the
account of the Borrower and any of its Subsidiaries, provided that the
Borrower's obligations hereunder with respect thereto shall be several and not
joint), on terms as are satisfactory to the Issuing Lender; provided, however,
that no Letter of Credit will be issued for the account of Borrower by the
Issuing Lender if on the date of issuance, before or after taking such Letter
of Credit into account, (i) the aggregate amount of the Advances, the Swing
Line Loans and the L/C Obligations at such time would exceed the Aggregate
Commitment at such time or (ii) the aggregate outstanding amount of the L/C
Obligations exceeds $30,000,000; and provided, further, that no Letter of
Credit shall be issued which has an expiration date later than the date which
is five (5) Business Days immediately preceding the Termination Date. Each
Letter of Credit may, upon the request of the Borrower, include a provision
whereby such Letter of Credit shall be renewed automatically for additional
consecutive periods of 12 months or less (but not beyond the date that is five
Business Days prior to the Termination Date) unless the Issuing Lender notifies
the beneficiary thereof at least 30 days prior to the then-applicable expiry
date that such Letter of Credit will not be renewed.
2.20 Letter of Credit Participation. Immediately upon the issuance
of each Letter of Credit by the Issuing Lender hereunder, each Lender shall be
deemed to have automatically, irrevocably and unconditionally purchased and
received from the Issuing Lender an undivided interest and participation in and
to such Letter of Credit, the obligations of the Borrower in respect thereof,
and the liability of the Issuing Lender thereunder (collectively, an "L/C
INTEREST") in an amount equal to the amount available for drawing under such
Letter of Credit multiplied by such Lender's Pro Rata Share.
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The Issuing Lender will notify the Administrative Agent promptly upon
presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit and the Administrative Agent will promptly notify each Lender. On or
before the Business Day on which the Issuing Lender makes payment of each such
L/C Draft or any other draw on a Letter of Credit, on demand of the Issuing
Lender received by each Lender not later than 1:00 p.m. (Indianapolis time) on
such Business Day, each Lender shall make payment on such Business Day to the
Administrative Agent for the account of the Issuing Lender, in immediately
available funds in an amount equal to such Lender's Pro Rata Share of the
amount of such payment or draw.
Upon the Administrative Agent's receipt of funds as a result of the
Issuing Lender's payment on an L/C Draft or any other draw on a Letter of
Credit issued by the Issuing Lender, the Administrative Agent shall promptly
pay such funds to the Issuing Lender. The obligation of each Lender to pay the
Administrative Agent for the account of the Issuing Lender under this Section
2.20 shall be unconditional, continuing, irrevocable and absolute. In the
event that any Lender fails to make payment to the Administrative Agent of any
amount due under this Section 2.20, the Administrative Agent shall be entitled
to receive, retain and apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until the Administrative Agent on
behalf of the Issuing Lender receives such payment from such Lender or such
obligation is otherwise fully satisfied; provided, however, that nothing
contained in this sentence shall relieve such Lender of its obligation to
reimburse the Administrative Agent for such amount in accordance with this
Section 2.20.
2.21 Reimbursement Obligation. The Borrower agrees unconditionally,
irrevocably and absolutely upon receipt of notice from the Administrative Agent
or the Issuing Lender to pay immediately to the Administrative Agent, for the
account of the Issuing Lender or the account of the Lenders, as the case may
be, the amount of each advance which may be drawn under or pursuant to a Letter
of Credit issued for its account or an L/C Draft related thereto (such
obligation of the Borrower to reimburse the Issuing Lender or the
Administrative Agent for an advance made under a Letter of Credit or L/C Draft
being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with respect to
such Letter of Credit or L/C Draft), each such payment to be made by the
Borrower to the Administrative Agent no later than 2:00 p.m. (Indianapolis
time) on the Business Day on which the Issuing Lender makes payment of each
such L/C Draft or, in the case of any other draw on a Letter of Credit, 2:00
p.m. (Indianapolis time) on the date specified in a demand by the
Administrative Agent, which shall be the date on which a corresponding payment
is to be made by the Issuing Lender. The Issuing Lender may direct the
Administrative Agent to make such demand with respect to Letters of Credit
issued by the Issuing Lender. If the Borrower at any time fails to repay a
Reimbursement Obligation pursuant to this Section 2.21, the Borrower shall be
deemed to have elected to borrow a Syndicated Advance from the Lenders, as of
the date of the payment by the Issuing Lender giving rise to the Reimbursement
Obligation equal in amount to the amount of, and in the Agreed Currency of,
the unpaid Reimbursement Obligation. Such Syndicated Advance shall be made as
of the date of the payment giving rise to such Reimbursement Obligation,
automatically, without
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notice and without any requirement to satisfy the conditions precedent otherwise
applicable to a Syndicated Advance if the Borrower shall have failed to make
such payment to the Administrative Agent for the account of the applicable
Issuing Lender prior to such time. Such Syndicated Advance shall constitute a
Base Rate Advance, if the Reimbursement Obligation is in Dollars, or a
Eurocurrency Rate Advance in the same Agreed Currency for an Interest Period of
one month, if the Reimbursement Obligation is in an Agreed Currency other than
Dollars, and the proceeds of such Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises and,
for any reason, the Lenders are unable to make or have no obligation to make a
Syndicated Advance, then such Reimbursement Obligation shall bear interest from
and after such day, until paid in full, at the interest rate applicable to a
Base Rate Advance.
2.22 Cash Collateral. Notwithstanding anything to the contrary herein
or in any application for a Letter of Credit, after the occurrence and during
the continuance of Default, the borrower shall, upon the Administrative Agent's
demand, deliver to the Administrative Agent for the benefit of the Lenders,
cash, or other collateral of a type satisfactory to the Required Lenders, having
a value, as determined by such Lenders, equal to the aggregate outstanding L/C
Obligations of the Borrower. In addition, if the amount of L/C Obligations
outstanding at any time exceeds the Aggregate Commitment, the Borrower shall
deposit cash collateral with the Administrative Agent in an amount equal to the
amount by which such L/C Obligations exceed the Aggregate Commitment. Any such
collateral shall be held by the Administrative Agent in a separate account
appropriately designated as a cash collateral account in relation to this
Agreement and the Letters of Credit and retained by the Administrative Agent
for the benefit of the Lenders as collateral security for the Borrower's
obligations in respect of this Agreement and each of the Letters of Credit and
L/C Drafts. Such amounts shall be applied to reimburse the Administrative
Agent or the Issuing Lender, as applicable, for drawings or payments under or
pursuant to Letters of Credit or L/C Drafts, or if no such reimbursement is
required, to payment of such of the other Obligations as the Administrative
Agent shall determine. If no Default shall be continuing, amounts remaining in
any cash collateral account established pursuant to this Section 2.22 which are
not to be applied to reimburse the Administrative Agent for amounts actually
paid or to be paid by the Administrative Agent in respect of a Letter of Credit
or L/C Draft shall be returned to the Borrower (after deduction of the
Administrative Agent's expenses incurred in connection with such cash
collateral account).
2.23 Letter of Credit Fees. The Borrower agrees to pay (i)
quarterly, in arrears, on each Payment Date to the Administrative Agent for the
ratable benefit of the Lenders, except as set forth in Section 8.2, a letter of
credit fee in the amount of the Applicable Letter of Credit Fee per annum on
the aggregate average daily outstanding Dollar Amount available for drawing
under all of the Letters of Credit and (ii) to the Administrative Agent for the
benefit of the Issuing Lender, a fronting fee of 1/8 of one percent (0.125%)
of the initial outstanding Dollar Amount available for drawing under each
Letter of Credit (other than the Existing Letters of Credit), payable on the
date of issuance of such Letter of Credit, plus all customary fees and other
issuance, amendment,
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document examination, negotiation and presentment expenses and related charges
in connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by the Issuing Lender with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time of
invoice of such amounts.
2.24 Indemnification; Exoneration. (a) In addition to amounts
payable as elsewhere provided in this Agreement, the Borrower agrees to
protect, indemnify, pay and save harmless the Administrative Agent, the Issuing
Lender and each Lender from and against any and all liabilities and costs which
the Administrative Agent, the Issuing Lender or any Lender may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit other than, in the case of the Issuing Lender, as a result of
its Gross Negligence or willful misconduct, as determined by the final judgment
of a court of competent jurisdiction, or (ii) the failure of the Issuing Lender
of a Letter of Credit to honor a drawing under such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority (all such acts or omissions
herein called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Issuing Lender and the
Administrative Agent, the Borrower assume all risks of the acts and omissions
of, or misuse of such Letter of Credit by, the beneficiary of any Letter of
Credit. In furtherance and not in limitation of the foregoing, subject to the
provisions of the Letter of Credit applications and Letter of Credit
reimbursement agreements executed by the Borrower at the time of request for
any Letter of Credit, the Issuing Lender of a Letter of Credit, the
Administrative Agent and the Lenders shall not be responsible (in the absence
of Gross Negligence or willful misconduct in connection therewith, as
determined by the final judgment of a court of competent jurisdiction): (i)
for the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a 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) for failure of the beneficiary of
a Letter of Credit to comply duly with conditions required in order to draw
upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex,
or other similar form of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for 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) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Administrative Agent, the Issuing Lender
and the Lenders including, without limitation, any Governmental Acts. None
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of the above shall affect, impair, or prevent the vesting of any of the Issuing
Lender's rights or powers under this Section 2.24.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Lender under or in connection with Letters of Credit issued on behalf
of the Borrower or any related certificates shall not, in the absence of Gross
Negligence or willful misconduct, as determined by the final judgment of a
court of competent jurisdiction, put the Issuing Lender, the Administrative
Agent or any Lender under any resulting liability to the Borrower or relieve
the Borrower of any of its obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.24 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
2.25 Transitional Letter of Credit Provisions. From and after the Closing
Date, the letters of credit described on Schedule 2.25 (the "Existing Letters of
Credit") shall be deemed to constitute Letters of Credit issued pursuant to
Section 2.19 in which the Lenders participate pursuant to Section 2.20. Fees
shall accrue in respect of the Existing Letters of Credit as provided in Section
2.23 beginning as of the Closing Date. Certain of the Existing Letters of
Credit were issued by an affiliate of NBD, but shall be treated for all purposes
under this Agreement, including, without limitation, for purposes of Section
2.20 and the purchase by each Lender of a participation interest therein, as if
they had been issued by NBD as Issuing Lender.
2.26 Judgment Currency. If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due from the Borrower hereunder
or under any of the Notes in the currency expressed to be payable herein or
under the Notes (the "specified currency") into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase the specified currency with
such other currency at the Administrative Agent's main office in Indianapolis,
Indiana on the Business Day preceding that on which the final, non-appealable
judgment is given. The obligations of the Borrower in respect of any sum due
to any Lender or the Administrative Agent hereunder or under any Note shall,
notwithstanding any judgment in a currency other than the specified currency,
be discharged only to the extent that on the Business Day following receipt by
such Lender or the Administrative Agent (as the case may be) of any sum
adjudged to be so due in such other currency such Lender or the Administrative
Agent (as the case may be) may in accordance with normal, reasonable banking
procedures purchase the specified currency with such other currency. If the
amount of the specified currency so purchased is less than the sum originally
due to such Lender or the Administrative Agent, as the case may be, in the
specified currency, the Borrower agrees, to the fullest extent that it may
effectively do so, as a separate
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obligation and notwithstanding any such judgment, to indemnify such Lender or
the Administrative Agent, as the case may be, against such loss, and if the
amount of the specified currency so purchased exceeds (a) the sum originally due
to any Lender or the Administrative Agent, as the case may be, in the specified
currency and (b) any amounts shared with other Lenders as a result of
allocations of such excess as a disproportionate payment to such Lender under
Section 11.2, such Lender or the Agent, as the case may be, agrees to remit such
excess to the Borrower.
2.27 Market Disruption. Notwithstanding the satisfaction of all
conditions referred to in Article II with respect to any Syndicated Advance in
any currency other than Dollars, if there shall occur on or prior to the date
of such Syndicated Advance any change in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls which would in the reasonable opinion of the Administrative Agent or
the Required Lenders make it impracticable for the Eurocurrency Rate Loans
comprising such Syndicated Advance to be denominated in the currency specified
by the Borrower, then the Administrative Agent shall forthwith give notice
thereof to the Borrower and the Lenders, and such Eurocurrency Rate Loans shall
not be denominated in such currency but shall be made on such Borrowing Date in
Dollars, in an aggregate principal amount equal to the Dollar Amount of the
aggregate principal amount specified in the related Borrowing Notice, as Base
Rate Loans, unless the Borrower notifies the Agent at least one Business Day
before such date that (i) it elects not to borrow on such date or (ii) it
elects to borrow on such date in a different Agreed Currency, as the
case may be, in which the denomination of such Eurocurrency Rate Loans would in
the opinion of the Administrative Agent and the Required Lenders be practicable
and in an aggregate principal amount equal to the Dollar Amount of the
aggregate principal amount specified in the related Borrowing Notice.
ARTICLE III: CHANGE IN CIRCUMSTANCES
3.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and
having general applicability to all banks within the jurisdiction in which such
Lender operates (excluding, for the avoidance of doubt, the effect of and
phasing in of capital requirements or other regulations or guidelines passed
prior to the date of this Agreement), or any interpretation or application
thereof by any Governmental Authority charged with the interpretation or
application thereof, or the compliance of any Lender therewith,
(i) subjects any Lender (each reference in this Section 3.1
to a Lender being in its capacity as a Lender or the Issuing Lender,
or both) or any applicable Lending Installation to any tax, duty,
charge or withholding on or from payments due from the Borrower
(excluding Excluded Taxes), or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to any Lender in
respect of its Loans, its L/C Interests,
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the Letters of Credit or other amounts due it hereunder, provided, that
this clause (i) shall not apply with respect to any Taxes to
which Section 3.5 applies, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation with
respect to its Eurocurrency Rate Loans, L/C Interests or the Letters
of Credit, or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining the Eurocurrency Rate Loans, the L/C
Interests or the Letters of Credit or reduces any amount received by
any Lender or any applicable Lending Installation in connection with
Eurocurrency Rate Loans or Letters of Credit, or requires any Lender
or any applicable Lending Installation to make any payment calculated
by reference to the amount of Loans or L/C Interests held or interest
received by it or by reference to the Letters of Credit, by an amount
deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement, then, within 15 days after
receipt by the Borrower of written demand by such Lender pursuant to Section
3.6, the Borrower shall pay or cause the appropriate Subsidiary to pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans, L/C Interests, Letters of Credit and its Revolving Loan
Commitment.
3.2 Changes in Capital Adequacy Regulations. If a Lender (each
reference in this Section 3.2 to a Lender being in its capacity as a Lender or
the Issuing Lender, or both) determines (i) the amount of capital required or
expected to be maintained by such Lender, any Lending Installation of such
Lender or any corporation controlling such Lender is increased as a result of a
"Change" (as defined below), and (ii) such increase in capital will result in
an increase in the cost to such Lender of maintaining its Loans, L/C Interests,
the Letters of Credit or its obligation to make Loans hereunder, then, within
15 days after receipt by the Borrower of written demand by such Lender pursuant
to Section 3.6, the Borrower shall pay or cause the appropriate Subsidiary to
pay such Lender the amount necessary to compensate for any shortfall in the
rate of return on the portion of such increased capital which such Lender
determines is attributable to this Agreement, its Loans, its L/C Interests, the
Letters of Credit or its obligation to make Loans hereunder (after taking into
account such Lender's policies as to capital adequacy). "CHANGE" means (i) any
change after the date of this Agreement in the "Risk-Based Capital Guidelines"
(as defined below) excluding, for the avoidance of doubt, the effect of any
phasing in of such Risk-Based Capital Guidelines or any other capital
requirements passed prior to the date hereof, or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of
law) after the
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date of this Agreement and having general applicability to all
banks and financial institutions within the jurisdiction in which such Lender
operates which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means (i) the
risk-based capital guidelines in effect in the United States on the date of
this Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3 Availability of Types of Advances. If (i) any Lender determines
that maintenance of any of its Eurocurrency Rate Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, or (ii) the Required Lenders determine
that (x) deposits of a type, currency and maturity appropriate to match fund
Eurocurrency Rate Advances are not available or (y) the interest rate
applicable to a Eurocurrency Rate Advance does not accurately reflect the cost
of making or maintaining such a Eurocurrency Rate Advance, then the
Administrative Agent shall suspend the availability of Eurocurrency Rate
Advances of the affected Type or in the affected currency and, in the case of
any occurrence set forth in clause (i), require any affected Eurocurrency Rate
Advances to be repaid or, in the case of Eurocurrency Rate Loans in Dollars, at
the option of the Borrower, converted to Base Rate Advances.
3.4 Funding Indemnification. If any payment of a Eurocurrency Rate
Advance or Bid Rate Advance occurs on a date which is not the last day of the
applicable Interest Period in the case of a Eurocurrency Advance, or the
applicable maturity date in the case of a Bid Rate Advance, whether because of
acceleration, prepayment, or otherwise, or a Eurocurrency Rate Advance or Bid
Rate Advance is not made or continued on the date specified by the Borrower for
any reason other than default by the Lenders, the Borrower agrees to indemnify
each Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain the Eurocurrency Rate Advance or Bid Rate Advance,
as the case may be.
3.5. Taxes. (i) All payments by the Borrower to or for the account
of any Lender or the Administrative Agent hereunder or under any Note shall be
made free and clear of and without deduction for any and all Taxes. If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender or the Administrative Agent, (a) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.5) such Lender or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with
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applicable law and (d) the Borrower shall furnish to the Administrative Agent
the original or a certified copy of a receipt evidencing payment thereof.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note ("OTHER TAXES").
(iii) The Borrower hereby agrees to indemnify the Administrative
Agent and each Lender for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed on amounts payable under
this Section 3.5) paid by the Administrative Agent or such Lender and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto. Payments due under this indemnification shall be made
within 30 days of the date the Administrative Agent or such Lender makes demand
therefor pursuant to Section 3.6.
(iv) At least five Business Days prior to the first date on which
interest or fees are payable hereunder for the account of any Lender, each
Lender that is not incorporated under the laws of the United States of America
or a state thereof (each a "NON- U.S. LENDER") agrees that it will deliver to
each of the Borrower and the Administrative Agent two duly completed copies of
IRS Form 1001 or 4224, certifying in either case that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of
any United States federal income taxes. Each Non-U.S. Lender further
undertakes to deliver to each of the Borrower and the Administrative Agent (i)
two renewals or additional copies of such form (or any successor
form) on or before the date that such form expires or becomes obsolete, and
(ii) after the occurrence of any event requiring a change in the most recent
forms so delivered by it, such additional forms or amendments thereto as may be
reasonably requested by the Borrower or the Administrative Agent. All forms or
amendments described in the preceding sentence shall certify that such Lender
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the Administrative Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to clause (iv), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under
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this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
3.6 Mitigation; Lender Statements; Survival of Indemnity. To the
extent reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurocurrency Rate Loans to reduce any
liability of the Borrower to such Lender under Sections 3.1 and 3.2 or to avoid
the unavailability of a Type of Advance under Section 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender requiring
compensation pursuant to this Article III shall use its best efforts to notify
the Borrower and the Administrative Agent in writing of any Change, law,
policy, rule, guideline or directive giving rise to such demand for
compensation not later than ninety (90) days following the date upon which the
responsible account officer of such Lender knows or should have known of such
Change, law, policy, rule, guideline or directive. Any demand for compensation
pursuant to this Article III shall be in writing and shall state the amount
due, if any, under Section 3.1, 3.2, 3.4 or 3.5 and shall set forth in
reasonable detail the calculations upon which such Lender determined such
amount. Such written demand shall be rebuttably presumed correct for all
purposes. Determination of amounts payable under such Sections in connection
with a Eurocurrency Rate Loan shall be calculated as though each Lender funded
its Eurocurrency Rate Loan through the purchase of a deposit of the type,
currency and maturity corresponding to the deposit used as a reference in
determining the Eurocurrency Rate applicable to such Loan, whether in fact that
is the case or not. The obligations of the Borrower under Sections 3.1, 3.2,
3.4 and 3.5 shall survive payment of the Obligations and termination of this
Agreement.
ARTICLE IV: CONDITIONS PRECEDENT
4.1 Initial and Letters of Credit. The Lenders shall not be required
to make the initial Loans or the Issuing Lender to issue any Letters of Credit
unless the Borrower shall have furnished to the Administrative Agent, with
sufficient copies (other than in the case of the Notes) for each of the
Lenders, such documents as the Administrative Agent or any Lender or its
counsel may have reasonably requested, including, without limitation, all of
the documents reflected on the List of Closing Documents attached as Exhibit D
to this Agreement.
4.2 Each Loan and Letter of Credit. Except as expressly provided in
Section 2.23, no Lender shall be required to make any Loan and the Issuing
Lender shall not be required to issue any Letter of Credit, unless on the
applicable Borrowing Date, or in the case of a Letter of Credit, the date on
which the Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
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(ii) The representations and warranties contained in Article
V are true and correct as of such Borrowing Date, except for
representations and warranties made with reference solely to an
earlier date, which representations and warranties shall be true and
correct as of such earlier date.
Each Borrowing Notice with respect to each Loan or Advance and each
letter of credit application with respect to a Letter of Credit shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) will have been satisfied as of the date
of such Loan or Advance or the issuance of such Letter of Credit. Any Lender
or the Issuing Lender may require a duly completed officer's certificate in
substantially the form of Exhibit E hereto and/or a duly completed compliance
certificate in substantially the form of Exhibit F hereto as a condition to
making any Loan or issuing any Letter of Credit.
ARTICLE V: REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and the other financial
accommodations to the Borrower and in order to induce the Issuing Lender to
issue the Letters of Credit described herein, the Borrower represents and
warrants as follows to each Lender and the Administrative Agent as of the
Closing Date and thereafter on each date as required by Section 4.2:
5.1. Corporate Existence and Standing. The Borrower and each of its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except to the extent that, in the case of any Subsidiary
of the Borrower, the failure to be in good standing or authorized to conduct
business in any jurisdiction could not, when taken together with all similar
failures by such Subsidiary and each other Subsidiary, reasonably be expected to
have a Material Adverse Effect.
5.2. Authorization and Validity. The Borrower has the corporate
power and authority and legal right to execute and deliver the Loan Documents
and to perform its obligations thereunder. The execution and delivery of the
Loan Documents by the Borrower and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and each
Loan Document constitutes the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and general principles
of equity, regardless of whether the application of such principles is
considered in a proceeding in equity or at law.
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5.3. No Conflict; Government Consent. Neither the execution and
delivery of the Loan Documents by the Borrower, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or any Subsidiary or the Borrower's or
any Subsidiary's articles of incorporation or by-laws or comparable
constitutive documents or the provisions of any indenture, instrument or
agreement to which the Borrower or any Subsidiary is a party or is subject, or
by which it, or its Property, is bound, or conflict with or constitute a
default thereunder, or result in the creation or imposition of any Lien in, of
or on the Property of the Borrower or any Subsidiary pursuant to the terms of
any such indenture, instrument or agreement which violation, conflict or
imposition could reasonably be expected to have a Material Adverse Effect. No
order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any Governmental Authority is
required to authorize, or is required in connection with the execution,
delivery and performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents.
5.4. Financial Statements. The December 31, 1996, consolidated
financial statements of the Borrower and its Subsidiaries, previously delivered
to the Lenders, were prepared in accordance with Agreement Accounting
Principals in effect on the date such statements were prepared and fairly
present the consolidated financial condition of the Borrower and its
Subsidiaries at the date thereof and the consolidated results of their
operations for the period then ended. The consolidated financial statements of
the Borrower and its Subsidiaries dated as of March 31, 1997 and June 30, 1997,
previously delivered to the Lenders, were prepared in accordance with Agreement
Accounting Principles in effect on the dates such statements were prepared and
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries at the respective dates thereof and the consolidated results of
their operations for the three-month and six-month periods, respectively, then
ended, subject to normal year-end adjustments.
5.5. Material Adverse Change. Since June 30, 1997, there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. All tax returns required to be filed by the Borrower or
any of its Subsidiaries in any jurisdiction have, in fact, been filed, all such
tax returns have been prepared in accordance with applicable laws, and all
taxes, assessments, fees and other governmental charges upon the Borrower or
any Subsidiary or upon any of their respective properties, income or
franchises, which are shown on such returns have been paid except to the extent
such tax payments are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with Agreement Accounting Principles. For all
taxable years ending on or before December 31, 1994, the United States Federal
income tax liability of the Borrower and its Subsidiaries has been satisfied
and either the
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period of limitations on assessment of additional United States
Federal income tax has expired or the Borrower or the applicable Subsidiary has
entered into an agreement with the IRS closing conclusively the total tax
liability for the taxable year. Neither the Borrower nor any of its
Subsidiaries knows of any proposed additional tax assessment against it or any
of them for which adequate provision has not been made on its or their
accounts, and no controversy in respect of additional income or other taxes due
or claimed to be due to any Governmental Authority is pending or to the
knowledge of the Borrower or its Subsidiaries threatened the outcome of which
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of any taxes or other governmental charges are adequate.
5.7. Litigation and Contingent Liabilities. Except as set forth on
Schedule 5.7 hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting the Borrower or any Subsidiary
of the Borrower which could reasonably be expected to have a Material Adverse
Effect. Other than any liability incident to such litigation, arbitration or
proceedings, to the knowledge of the Borrower's officers neither the Borrower
nor any of its Subsidiaries has any material contingent liabilities not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8. Subsidiaries. As of the Closing Date, Schedule 5.8 hereto
contains an accurate list of all of the Subsidiaries (except for inactive
Subsidiaries with immaterial assets and liabilities) of the Borrower, setting
forth their respective jurisdictions of incorporation and the percentage of
their respective capital stock owned by the Borrower or its Subsidiaries. All
of the issued and outstanding shares of capital stock of the Subsidiaries of
the Borrower listed on Schedule 5.8 hereto have been duly authorized and issued
and are fully paid and non-assessable and are free and clear of all Liens,
except Liens permitted under Section 6.3(C).
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $5,000,000. Neither the Borrower nor any other
member of the Controlled Group has incurred, or is reasonably expected to
incur, any withdrawal liability to Multiemployer Plans in excess of $5,000,000
in the aggregate. Each Plan complies in all material respects with all
applicable requirements of law and regulations, no Reportable Event has
occurred with respect to any Plan, none of the Borrower or any other member of
the Controlled Group has withdrawn from any Plan or initiated steps to do so,
and no steps have been taken to reorganize or terminate any Plan.
5.10 Accuracy of Information. The information, exhibits and reports
furnished by or on behalf of the Borrower and any of its Subsidiaries to the
Administrative Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents, including, without limitation, the
Confidential Information Memorandum dated September, 1997 prepared by the
Borrower, the representations and warranties of the Borrower and its
Subsidiaries
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contained in the Loan Documents, and all certificates and documents delivered to
the Administrative Agent and the Lenders pursuant to the terms thereof do not
contain as of the date furnished any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which they were made, not
misleading.
5.11 Securities Activities. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
5.12 Material Agreements. Neither the Borrower nor any Subsidiary is
a party to any agreement or instrument or subject to any charter or other
contractual or corporate restriction which will have or is reasonably likely to
have a Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries has received notice or has knowledge that (i) it is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation applicable to it, or (ii)
any condition exists which, with the giving of notice or the lapse of time or
both, would constitute a default with respect to any such Contractual
Obligation, in each case, except where such default or defaults, if any, will
not have or are not reasonably likely to have a Material Adverse Effect.
5.13 Compliance with Laws. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate will have or is reasonably likely to have a Material Adverse Effect.
5.14 Assets and Properties. Except as disclosed on Schedule 5.14
hereto, the Borrower and each of its Subsidiaries has good and marketable title
to all of its assets and properties (tangible and intangible, real or personal)
owned by it or a valid leasehold interest in all of its leased assets (except
insofar as marketability may be limited by any laws or regulations of any
Governmental Authority affecting such assets), and all such assets and property
are free and clear of all Liens, except Liens permitted under Section 6.3(C).
Substantially all of the assets and properties owned by, leased to or used by
the Borrower and/or each such Subsidiary of the Borrower are in adequate
operating condition and repair, ordinary wear and tear excepted.
5.15 Statutory Indebtedness Restrictions. Neither the Borrower, nor
any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce
Act, or the Investment Company Act of 1940, or any other federal or state
statute or regulation which limits its ability to incur indebtedness.
5.16 Environmental Matters. (a) Except as disclosed on Schedule
5.16 to this Agreement
(i) the operations of the Borrower and its Subsidiaries
comply in all material respects with Environmental, Health or Safety
Requirements of Law;
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(ii) the Borrower and its Subsidiaries have all material
permits, licenses or other authorizations required under
Environmental, Health or Safety Requirements of Law and are in
material compliance with such permits;
(iii) neither the Borrower, any of its Subsidiaries nor any
of their respective present property or operations, or, to the best of
the Borrower's or any of its Subsidiaries' knowledge, any of their
respective past property or operations, are subject to or the subject
of any investigation known to the Borrower or any of its Subsidiaries,
any judicial or administrative proceeding, order, judgment, decree,
settlement or other agreement respecting: (A) any material violation
of Environmental, Health or Safety Requirements of Law; (B) any
material remedial action; or (C) any material claims or liabilities
arising from the Release or threatened Release of a Contaminant into
the environment;
(iv) there is not now, nor to the best of the Borrower's or
any of its Subsidiaries' knowledge has there ever been, on or in the
property of the Borrower or any of its Subsidiaries any landfill,
waste pile, underground storage tanks, aboveground storage tanks,
surface impoundment or hazardous waste storage facility of any kind,
polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other equipment, or asbestos-containing material the
consequences of which, in each case or in the aggregate, could be
material; and
(v) neither the Borrower nor any of its Subsidiaries has any
material Contingent Obligation or material contingent liability in
connection with any Release or threatened Release of a Contaminant
into the environment.
(b) For purposes of this Section 5.16 "material" means any
noncompliance or basis for liability which could reasonably be likely to
subject the Borrower to liability in excess of $5,000,000.
5.17 Foreign Employee Benefit Matters. Each Foreign Employee Benefit
Plan is in compliance in all respects with all laws, regulations and rules
applicable thereto and the respective requirements of the governing documents
for such Plan, except for any non-compliance the consequences of which, in the
aggregate, would not result in a material obligation to pay money. The
aggregate of the accumulated benefit obligations under all Foreign Pension
Plans does not exceed the current fair market value of the assets held in the
trusts or similar funding vehicles for such Plans or reasonable reserves have
been established in accordance with prudent business practices or as required
by Agreement Accounting Principles with respect to any shortfall. With respect
to any Foreign Employee Benefit Plan maintained or contributed to by the
Borrower or any Subsidiary or any member of its Controlled Group (other than a
Foreign Pension Plan), reasonable reserves have been established in accordance
with prudent business practice or where required by ordinary accounting
practices in the jurisdiction in which such Plan
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is maintained. There are no actions, suits or claims (other than routine claims
for benefits) pending or, to the knowledge of the Borrower, threatened against
the Borrower or any Subsidiary or any ERISA Affiliate with respect to any
Foreign Employee Benefit Plan.
5.18 Patents, Trademarks, Permits, Etc. The Borrower and each of
its Subsidiaries owns, is licensed or otherwise has the lawful right to use, or
has all permits and other approvals of Governmental Authorities, patents,
trademarks, service marks, trade names, copyrights, technology, know-how and
processes used in or necessary for the conduct of its business as currently
conducted which are material to the financial condition, business, operations,
assets and prospects of the Borrower and its Subsidiaries taken as a whole.
The use of such permits and other approvals of Governmental Authorities,
patents, trademarks, service marks, trade names, copyrights, technology,
know-how and processes by the Borrower or any of its Subsidiaries does not
infringe on the rights of any Person, subject to such claims and infringements
the existence of which do not have and could not reasonably be expected to have
a Material Adverse Effect.
ARTICLE VI: COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity and reimbursement obligations), unless the
Required Lenders shall otherwise give prior written consent:
6.1 Reporting. the Borrower shall:
(A) Financial Reporting. Furnish to the Administrative Agent (which
will furnish copies of the following to the Lenders):
(i) Quarterly Reports. As soon as practicable, and in any
event within sixty (60) days after the end of each of the first three
fiscal quarters in each fiscal year, the consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as at
statements of income and cash flow of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, certified by the chief financial officer or controller of the
Borrower on behalf of the Borrower as fairly presenting in all
material respects the consolidated and consolidating financial
position of the Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the
periods indicated in accordance with Agreement Accounting Principles,
subject to normal year end adjustments. Delivery within the time
period specified above of copies of the Borrower's Quarterly Report on
Form 10-Q prepared in compliance with the requirements therefor
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and filed with the Commission shall be deemed to satisfy the
requirements of this Section 6.1(A)(i).
(ii) Annual Reports. As soon as practicable, and in any
event within ninety (90) days after the end of each fiscal year, (a)
the consolidated and consolidating balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income, stockholders'
equity and cash flow of the Borrower and its Subsidiaries for such
fiscal year and, in comparative form the corresponding figures for the
previous fiscal year and (b) an audit report on the items (other than
the consolidating financial statements) listed in clause (a) hereof of
independent certified public accountants of recognized national
standing, which audit report shall be unqualified and shall state that
such financial statements fairly present in all material respects the
consolidated financial position of the Borrower and its Subsidiaries
as at the dates indicated and the results of their operations and cash
flow for the periods indicated in conformity with Agreement Accounting
Principles and that the examination by such accountants in connection
with such consolidated financial statements has been made in
accordance with generally accepted auditing standards. Delivery
within the time period specified above of the Borrower's Annual Report
on Form 10-K for such fiscal year (together with the Borrower's annual
report to shareholders, if any, prepared pursuant to Rule 14a-3 under
the Securities Exchange Act of 1934) prepared in accordance with the
requirements therefor and filed with the Commission shall be deemed to
satisfy the foregoing requirements of this Section 6.1(A)(ii),
provided that the auditors' report contained therein satisfies the
requirements specified in clause (b) above. The deliveries made
pursuant to this clause (ii) shall be accompanied by a certificate of
such accountants that, in the course of their examination necessary
for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion
of such accountants, any Default or Unmatured Default shall exist,
stating the nature and status thereof.
(iii) Officer's Certificate. Together with each delivery of any
financial statement pursuant to clauses (i) and (ii)of this Section
6.1(A), (a) an Officer's Certificate of the Borrower, substantially in
the form of Exhibit E attached hereto and made a part hereof, stating
that no Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof and (b)
a Compliance Certificate, substantially in the form of Exhibit F
attached hereto and made a part hereof, signed by the Borrower's chief
financial officer or controller, setting forth calculations which
demonstrate compliance with the provisions of Section 6.4.
(B) Notice of Default. Promptly upon any of the chief executive
officer, chief operating officer, chief financial officer, treasurer or
controller of the Borrower obtaining knowledge (i) of any condition or event
which constitutes a Default or Unmatured Default, or becoming aware that any
Lender or Administrative Agent has given any written notice with respect to a
claimed Default or Unmatured Default under this Agreement, or (ii) that any
Person has given any written
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notice to the Borrower or any Subsidiary of the Borrower or taken any other
action with respect to a claimed default or event or condition of the type
referred to in Section 7.1(e), deliver to the Administrative Agent and the
Lenders an Officer's Certificate specifying (a) the nature and period of
existence of any such claimed default, Default, Unmatured Default, condition or
event, (b) the notice given or action taken by such Person in connection
therewith, and (c) what action the Borrower has taken, is taking and proposes to
take with respect thereto.
(C) Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Borrower or
any of its Subsidiaries or any property of the Borrower or any of its
Subsidiaries not previously disclosed pursuant to Section 5.7, which action,
suit, proceeding, governmental investigation or arbitration exposes, or in the
case of multiple actions, suits, proceedings, governmental investigations or
arbitrations arising out of the same general allegations or circumstances which
expose, in the Borrower's reasonable judgment, the Borrower or any of its
Subsidiaries to liability in an amount aggregating $1,000,000 or more
(exclusive of claims covered by insurance policies of the Borrower or any of
its Subsidiaries unless the insurers of such claims have disclaimed coverage or
reserved the right to disclaim coverage on such claims and exclusive of claims
covered by the indemnity of a financially responsible indemnitor in favor of
the Borrower or any of its Subsidiaries (unless the indemnitor has disclaimed
or reserved the right to disclaim coverage thereof)), give written notice
thereof to the Administrative Agent on behalf of the Lenders and provide such
other information as may be reasonably available to enable each Lender and the
Administrative Agent and its counsel to evaluate such matters; and (ii) in
addition to the requirements set forth in clause (i) of this Section 6.1(C),
upon request of the Administrative Agent or the Required Lenders, promptly give
written notice of the status of any action, suit, proceeding, governmental
investigation or arbitration covered by a report delivered pursuant to clause
(i) above and provide such other information as may be reasonably available to
it that would not result in loss of any attorney-client privilege by disclosure
to the Lenders to enable each Lender and the Administrative Agent and its
counsel to evaluate such matters.
(D) ERISA Notices. Deliver or cause to be delivered to the
Administrative Agent and the Lenders, at the Borrower's expense, the following
information and notices as soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower
obtains knowledge that a Termination Event has occurred, a written
statement of the chief financial officer of the Borrower describing
such Termination Event and the action, if any, which the Borrower has
taken, is taking or proposes to take with respect thereto, and when
known, any action taken or threatened by the IRS, DOL or PBGC with
respect thereto and (b) within ten (10) Business Days after any member
of the Controlled Group obtains knowledge that a Termination Event has
occurred which could reasonably be expected to subject the Borrower to
liability in excess of $1,000,000, a written statement of the chief
financial
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officer of the Borrower describing such Termination Event
and the action, if any, which the member of the Controlled Group has
taken, is taking or proposes to take with respect thereto, and when
known, any action taken or threatened by the IRS, DOL or PBGC with
respect thereto;
(ii) within ten (10) Business Days after the Borrower or any
of its Subsidiaries obtains knowledge that a non- exempt prohibited
transaction (as defined in ERISA and the Code) has occurred, a
statement of the chief financial officer of the Borrower describing
such transaction and the action which the Borrower or such Subsidiary
has taken, is taking or proposes to take with respect thereto;
(iii) within ten (10) Business Days after the Borrower or any
of its Subsidiaries receives notice of any unfavorable determination
letter from the IRS regarding the qualification of a Plan under
Section 401(a) of the Code, copies of each such letter;
(iv) within ten (10) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by the Borrower or
a member of the Controlled Group with respect to such request;
(v) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of the PBGC's intention
to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(vi) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of a notice from a
Multiemployer Plan regarding the imposition of withdrawal liability,
copies of each such notice;
(vii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group fails to make a required installment or
any other required payment under Section 412 of the Internal Revenue
Code on or before the due date for such installment or payment, a
notification of such failure; and
(viii) within ten (10) Business Days after the Borrower or
any member of the Controlled Group knows or has reason to know that
(a) a Multiemployer Plan has been terminated, (b) the administrator
or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, or (c) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate
a Multiemployer Plan.
For purposes of this Section 6.1(D), the Borrower, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the Administrator of any Plan of
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which the Borrower or any member of the Controlled Group or such Subsidiary is
the plan sponsor.
(E) Other Reports. Deliver or cause to be delivered to the
Administrative Agent and the Lenders copies of all financial statements,
reports and notices, if any, sent or made available generally by the Borrower
to owners of ownership, membership or other equity interests in the Borrower or
filed with the Commission by the Borrower, all press releases made available
generally by the Borrower or any of the Borrower's Subsidiaries to the public
concerning material developments in the business of the Borrower or any such
Subsidiary and all notifications received from the Commission by the Borrower
or its Subsidiaries pursuant to the Securities Exchange Act and the rules
promulgated thereunder.
(F) Environmental Notices. As soon as possible and in any event
within ten (10) days after receipt by the Borrower or any of its Subsidiaries,
a copy of (i) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release by
the Borrower, any of its Subsidiaries, or any other Person of any Contaminant
into the environment, and (ii) any notice alleging any violation of any
Environmental, Health or Safety Requirements of Law by the Borrower or any of
its Subsidiaries if, in either case, such notice or claim relates to an event
which could reasonably be expected to subject the Borrower or any of its
Subsidiaries to liability in excess of $5,000,000.
(G) Other Information. Promptly upon receiving a request therefor
from the Administrative Agent, prepare and deliver to the Administrative Agent
and the Lenders such other information with respect to the business, Property,
prospects, condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries as from time to time may be reasonably requested
by the Administrative Agent or the Administrative Agent.
6.2 Affirmative Covenants.
(A) Existence, Etc. The Borrower shall, and shall cause each of its
Subsidiaries to, at all times maintain its existence and preserve and keep, or
cause to be preserved and kept, in full force and effect its rights and
franchises material to its businesses, except that any Subsidiary of the
Borrower may merge with or liquidate into the Borrower or any other Subsidiary
of the Borrower, provided that the surviving entity expressly assumes any
liabilities, if any, of either of such Subsidiaries with respect to the
Obligations pursuant to an assumption agreement reasonably satisfactory to the
Administrative Agent and provided further that the consolidated net
worth of the surviving corporation is not less than the consolidated net worth
of the Subsidiary with any liability with respect to the Obligations
immediately prior to such merger.
(B) Powers. The Borrower shall, and shall cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its business requires it
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to be so qualified and where the failure to be so qualified will have or is
reasonably likely to have a Material Adverse Effect.
(C) Compliance with Laws, Etc. The Borrower shall, and shall cause
its Subsidiaries to, (a) comply with all Requirements of Law and all
restrictive covenants affecting such Person or the business, properties, assets
or operations of such Person, and (b) obtain as needed all permits, licenses
and franchises necessary for its operations and maintain such permits in good
standing unless failure to comply or obtain could not reasonably be anticipated
to have a Material Adverse Effect.
(D) Payment of Taxes and Claims. The Borrower shall pay, and cause
each of its Subsidiaries to pay, (i) all taxes, assessments and other
governmental charges imposed upon it or on any of its properties or assets or
in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien (other
than a Lien permitted by Section 6.3(C)) upon any of the Borrower's or such
Subsidiary's property or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided, however, that no such taxes,
assessments and governmental charges referred to in clause (i) above or claims
referred to in clause (ii) above (and interest, penalties or fines relating
thereto) need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with
Agreement Accounting Principles shall have been made therefor; and provided
further that no Default or Unmatured Default shall arise or occur with respect
to this Section 6.2(D) unless unpaid taxes, assessments, governmental charges
and claims (other than those being contested pursuant to the preceding proviso)
exceed $1,000,000 in the aggregate.
(E) Insurance. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect insurance policies and programs providing coverage that is
reasonably consistent with prudent industry practice.
(F) Inspection of Property; Books and Records; Discussions. The
Borrower shall permit, and cause each of the Borrower's Subsidiaries to permit,
any authorized representative(s) designated by either the Administrative Agent
or any Lender to visit and inspect any of the properties of the Borrower or
any of its Subsidiaries, to examine, audit, check and make copies of their
respective financial and accounting records, books, journals, orders, receipts
and any correspondence and other data relating to their respective businesses
or the transactions contemplated hereby (including, without limitation, in
connection with environmental compliance, hazard or liability), and to discuss
their affairs, finances and accounts with their officers and independent
certified public accountants, all upon reasonable notice and at such reasonable
times during normal business hours, as often as may be reasonably requested.
The Borrower shall keep and maintain, and cause each of the Borrower's
Subsidiaries to keep and
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maintain, in all material respects, proper books of record and account in which
entries in conformity with Agreement Accounting Principles shall be made of all
dealings and transactions in relation to their respective businesses and
activities. If a Default has occurred and is continuing, the Borrower, upon the
Administrative Agent's request, shall turn over any such records to the
Administrative Agent or its representatives.
(G) ERISA Compliance. The Borrower shall, and shall cause each of
the Borrower's U.S. Subsidiaries to, establish, maintain and operate all Plans
to comply in all material respects with the provisions of ERISA, the Code, all
other applicable laws, and the regulations and interpretations thereunder and
the respective requirements of the governing documents for such Plans.
(H) Maintenance of Property. The Borrower shall cause all property
used or useful in the conduct of its business or the business of any Subsidiary
to be maintained and kept in adequate condition, repair and working order and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in the judgment of the Borrower may be necessary so that the business carried
on in connection therewith may be properly conducted at all times; provided,
however, that nothing in this Section 6.2(H) shall prevent the Borrower from
discontinuing the operation or maintenance of any of such property if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Administrative Agent or the Lenders.
(I) Environmental Compliance. The Borrower and its Subsidiaries
shall comply with all Environmental, Health or Safety Requirements of Law,
except where noncompliance will not have or is not reasonably likely to subject
the Borrower and its Subsidiaries to liability, individually or in the
aggregate, in excess of $5,000,000 (excluding amounts covered by indemnity
claims that are not in dispute).
(J) Use of Proceeds. The Borrower shall use the proceeds of the
Loans to provide funds for the working capital needs and other general
corporate purposes of the Borrower and its Subsidiaries and to repay
outstanding Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loans to purchase or carry any
"Margin Stock" or to make any Acquisition, other than any Permitted Acquisition
pursuant to Section 6.3(F).
(K) Foreign Employee Benefit Compliance. The Borrower shall, and
shall cause each of its Subsidiaries and ERISA Affiliates to, establish,
maintain and operate all Foreign Employee Benefit Plans to comply in all
material respects with all laws, regulations and rules applicable
thereto and the respective requirements of the governing documents for such
Plans, except for failures to comply which, in the aggregate, would not result
in liability in excess of $1,000,000.
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(L) Maintenance of Rights. The Borrower shall obtain and maintain,
and shall cause each of its Subsidiaries to obtain and maintain, in full force
and effect all licenses, franchises, permits other similar rights necessary for
the operation of its business, except where the failure to obtain or maintain
such rights does not have and could not reasonably be expected to have a
Material Adverse Effect.
(M) Conduct of Business. The Borrower will continue, and will cause
each Subsidiary to continue, to engage primarily in the material lines of
business which the Borrower and its Subsidiaries operate, respectively, as of
the date hereof.
(N) Subsidiary Guaranties. Promptly after the Closing Date, the
Borrower will use its best efforts to obtain the consent of the holders of the
Senior Notes (the "Noteholders"), on terms acceptable to the Required Lenders,
to permit the Borrower's domestic Subsidiaries to execute and deliver to the
Administrative Agent, for the benefit of the Lenders, guaranties of the
Borrower's Obligations in a form satisfactory in form and substance to the
Required Lenders. If within 90 days after the Closing Date the Borrower (i)
obtains the necessary consent from the Noteholders, (ii) causes the
Subsidiaries to execute and deliver satisfactory guaranties to the
Administrative Agent, (iii) provides to the Administrative Agent all related
documentation the Administrative Agent may reasonably request, including,
without limitation, certified resolutions, incumbency certificates and legal
opinions, and (iv) enters into an amendment to this Agreement that incorporates
provisions with respect to such guaranties in a manner satisfactory to the
Administrative Agent and the Required Lenders, then such amendment shall also
provide that Section 6.4(A) will be modified pursuant to such amendment to
reduce the amount in clause (i) thereof to $150,000,000 and to delete clause
(iii) thereof.
6.3 Negative Covenants.
(A) Indebtedness. Neither the Borrower nor any of its Subsidiaries
shall directly or indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Indebtedness, except:
(a) the Obligations;
(b) Permitted Existing Indebtedness;
(c) Indebtedness arising from intercompany loans from the
Borrower to any Subsidiary;
(d) Indebtedness with respect to surety, appeal and
performance bonds obtained by the Borrower or any of its Subsidiaries
in the ordinary course of business;
(e) Indebtedness constituting Contingent Obligations
permitted by Section 6.3(E);
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(f) unsecured Indebtedness and other liabilities incurred in
the ordinary course of business and consistent with past practice, but
not incurred through the borrowing of money or the obtaining of credit
(other than customary trade terms); and
(g) other unsecured and purchase money Indebtedness and
Priority Debt;
provided that, in the case of clauses (a), and (g) above, immediately after
giving effect to the creation, issuance, assumption, guarantee or incurrence of
such Indebtedness, (i) if such Indebtedness is Funded Debt, the aggregate
amount of all Funded Debt of the Borrower and its Subsidiaries on a
consolidated basis does not exceed 60% of Consolidated Total Capitalization
determined as of the end of the immediately prior fiscal quarter, and (ii) if
such Indebtedness is Priority Debt, the aggregate amount of all Priority Debt
outstanding at such time does not exceed 20% of Consolidated Tangible Net Worth
at such time.
(B) Sales of Assets. Neither the Borrower nor any of its
Subsidiaries shall sell, assign, transfer, lease, convey or otherwise dispose
of any property, whether now owned or hereafter acquired, or any income or
profits therefrom, or enter into any agreement to do so, except:
(i) sales of inventory in the ordinary course of business;
(ii) the disposition of obsolete equipment in the ordinary
course of business;
(iii) sales of accounts receivable for fair market value,
without recourse, to (1) a bank or other financial institution or (2)
any other Person in a transaction in which a bank or other financial
institution then purchases such accounts receivable in a transaction
or transactions relating to the sale by the Borrower or such
Subsidiary to such Person of such accounts receivable;
(iv) sales by Wabash National Finance Corporation in the
ordinary course of business of lease and other finance contract
receivables and equipment subject to lease, if such transaction (a) is
for not less than fair market value and (b) when combined with all
other such sales during the then current fiscal year represents
disposition of not greater than (I) during fiscal year 1997, 75% of
Wabash National Finance Corporation's Tangible Assets as of December
31, 1996, and (II) thereafter, 50% of Wabash National Finance
Corporation's Tangible Assets at the end of the immediately preceding
fiscal year; and
(v) sales, assignments, transfers, leases, conveyances or
other dispositions of other assets (but not including assets of Wabash
National Finance Corporation) if such transaction (a) is for not less
than fair market value, and (b) when combined with all such other
sales, assignments, transfers, conveyances or other dispositions
during the then current fiscal year represents the disposition of not
greater than ten percent (10.0%) of the
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Borrower's Consolidated Tangible Assets (but excluding Wabash National
Finance Corporation's Tangible Assets) at the end of the immediately
preceding fiscal year.
(C) Liens. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective property or assets except:
(i) Permitted Existing Liens;
(ii) Customary Permitted Liens;
(iii) purchase money Liens (including the interest of a
lessor under a Capitalized Lease and Liens to which any property is
subject at the time of the acquisition thereof by the Borrower or one
of its Subsidiaries) securing permitted purchase money Indebtedness;
provided that such Liens shall not apply to any property of the
Borrower or its Subsidiaries other than that purchased or subject to
such Capitalized Lease;
(iv) Liens securing Priority Debt permitted by Section
6.3(A);
(v) Liens arising in connection with sales of accounts,
leases and other contract receivables permitted by Section
6.3(B)(iii)or (iv); and
(vi) Environmental Liens securing liabilities, claims, costs
or damages not exceeding $5,000,000 in the aggregate.
In addition, neither the Borrower nor any or its Subsidiaries shall, after the
date hereof, become a party to any agreement, note, indenture or other
instrument, or take any other action, which would prohibit the creation of a
Lien on any of its properties or other assets in favor of the Administrative
Agent for the benefit of itself and the Lenders as collateral for the
Obligations; provided that any agreement, note, indenture or other instrument
in connection with permitted purchase money Indebtedness (including Capitalized
Lease Obligations) may prohibit the creation of a Lien in favor of the
Administrative Agent for the benefit of itself and the Lenders on the items of
property obtained with the proceeds of such permitted purchase money
Indebtedness.
(D) Investments. Neither the Borrower nor any of its Subsidiaries
shall directly or indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments;
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(iii) Investments received in connection with the bankruptcy
or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(iv) Investments consisting of deposit accounts maintained by
the Borrower or any of its Subsidiaries in connection with their cash
management systems;
(v) Investments with respect to Indebtedness permitted
pursuant to Section 6.3(A)(c);
(vi) Investments in connection with Permitted Acquisitions;
and
(vii) Investments consisting of minority interests and joint
ventures and loans or advances to such entities, provided that at the
time any such Investment is made the amount of all Investments under
this clause (vii) (including such new Investment, and including all
Permitted Existing Investments that are of the type covered by this
clause (vii)) does not exceed 25% of Consolidated Tangible Net Worth
at such time.
(E) Contingent Obligations. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Contingent Obligation, except: (i) recourse obligations
resulting from endorsement of negotiable instruments for collection in the
ordinary course of business; (ii) Permitted Existing Contingent Obligations and
any extensions, renewals or replacements thereof, provided that any such
extension, renewal or replacement is not greater than the Indebtedness under,
and shall be on terms no less favorable to the Borrower or such Subsidiary than
the terms of, the Permitted Existing Contingent Obligation being extended,
renewed or replaced; (iii) obligations, warranties, and indemnities, not
relating to Indebtedness of any Person, which have been or are undertaken or
made in the ordinary course of business and not for the benefit of or in favor
of an Affiliate of the Borrower or such Subsidiary; (iv) Contingent Obligations
of the Borrower or any of its Subsidiaries with respect to any Indebtedness
permitted by this Agreement; and (v) Contingent Obligations with respect to
surety, appeal and performance bonds obtained by the Borrower or any Subsidiary
in the ordinary course of business.
(F) Acquisitions. Neither the Borrower nor any of its Subsidiaries
shall make any Acquisition other than a Permitted Acquisition.
(G) Transactions with Affiliates. Neither the Borrower nor any of
its Subsidiaries shall directly or indirectly enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
the Borrower which is not its Subsidiary, on terms that are less favorable to
the Borrower or its Subsidiaries, as applicable, than those that might be
obtained in an arm's length transaction at the time from Persons who are not
such an Affiliate.
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(H) Restriction on Fundamental Changes. Neither the Borrower nor any of its
Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's or any such
Subsidiary's business or property, whether now or hereafter acquired, except
transactions permitted under Sections 6.3(B) or 6.3(F) and except that any
Subsidiary of the Borrower may merge with or liquidate into the Borrower or any
other Subsidiary of the Borrower, provided that the surviving entity expressly
assumes any liabilities, if any, of either of such Subsidiaries with respect to
the Obligations pursuant to an assumption agreement reasonably satisfactory to
the Administrative Agent and provided further that the consolidated net worth
of the surviving corporation is not less than the consolidated net worth of the
Subsidiary with any liability with respect to the Obligations immediately prior
to such merger.
(I) Margin Regulations. Neither the Borrower nor any of its
Subsidiaries shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
(J) ERISA. The Borrower shall not:
(i) engage, or permit any of its Subsidiaries to engage, in
any prohibited transaction described in Sections 406 of ERISA or 4975
of the Code for which a statutory or class exemption is not available
or a private exemption has not been previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue
Code), with respect to any Benefit Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail, to
pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to
terminate, any Benefit Plan which would result in any liability of the
Borrower or any Controlled Group member under Title IV of ERISA;
(K) Fiscal Year. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of the 12-month period ending on December 31 of each calendar
year.
(L) Prepayment of Other Indebtedness. Neither the Borrower nor any
of its Subsidiaries shall make any optional prepayment, redemption, repurchase
or defeasance of any Funded Debt
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of the Borrower or any such Subsidiary, other than the Obligations and
other Indebtedness described on Schedule 6.3(L) hereto.
6.4 Financial Covenants. The Borrower shall comply with the
following:
(A) Minimum Consolidated Tangible Net Worth. The Borrower shall at
all times maintain Consolidated Tangible Net Worth at an amount not less than
the sum of (i) $200,000,000 plus (ii) 25% of Consolidated Net Income computed
on a cumulative basis for each of the elapsed fiscal quarters ending after
December 31, 2000 plus (iii) 50% of the amount of net proceeds to the Borrower
of any public or private offering of equity securities of the Borrower after
the date hereof (other than pursuant to the Borrower's employee stock plans);
provided that notwithstanding that Consolidated Net Income for any such elapsed
fiscal quarter may be a deficit figure, no reduction as a result thereof shall
be made with respect to the sum to be maintained pursuant hereto.
(B) Maximum Leverage Ratio. The Borrower shall not permit the ratio
("LEVERAGE RATIO") of Consolidated Funded Debt to Consolidated Total
Capitalization at any time to exceed 0.60 to 1.
ARTICLE VII: DEFAULTS
7.1 Defaults. Each of the following occurrences shall constitute a
Default under this Agreement:
(a) Failure to Make Payments When Due. The Borrower shall (i) fail
to pay when due any of the Obligations consisting of principal with respect to
the Loans or (ii) shall fail to pay within three (3) Business Days of the date
when due any of the other Obligations under this Agreement or the other Loan
Documents.
(b) Breach of Certain Covenants. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:
(i) Sections 6.1(C), 6.1(D), 6.1(E), 6.1(F), 6.1(G), 6.2(B),
6.2(C) or 6.2(F) and such failure shall continue unremedied for
fifteen (15) days;
(ii) Section 6.1(A) or 6.1(B) and such failure shall continue
unremedied for five (5) Business Days; or
(iii) Section 6.3 or 6.4.
(c) Breach of Representation or Warranty. Any representation or
warranty made or deemed made by the Borrower to the Administrative Agent or any
Lender herein or in any of the
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other Loan Documents or in any statement or certificate at any time given by the
Borrower pursuant to any of the Loan Documents shall be false or misleading in
any material respect on the date as of which made (or deemed made).
(d) Other Defaults. The Borrower shall default in the performance of
or compliance with any term contained in this Agreement (other than as covered
by paragraphs (a), (b) or (c) of this Section 7.1), or the Borrower shall
default in the performance of or compliance with any term contained in any of
the other Loan Documents, and such default shall continue for thirty (30) days
after the Borrower knew of such default or should have known of such default
exercising reasonable diligence.
(e) Default as to Other Indebtedness. Any of the Borrower or any of
its Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness (other than the Obligations) the outstanding principal
amount of which Indebtedness is in excess of $2,000,000; or any breach, default
or event of default shall occur, or any other condition shall exist under any
instrument, agreement or indenture pertaining to any such Indebtedness, if the
effect thereof is to cause an acceleration, mandatory redemption, a requirement
that the Borrower or any such Subsidiary offer to purchase such Indebtedness or
other required repurchase of such Indebtedness, or permit the holder(s) of such
Indebtedness to accelerate the maturity of any such Indebtedness or require a
redemption or other repurchase of such Indebtedness; or any such Indebtedness
shall be otherwise declared to be due and payable (by acceleration or
otherwise) or required to be prepaid, redeemed or otherwise repurchased by the
Borrower or any of its Subsidiaries (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against the
Borrower or any of its Subsidiaries and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of the
Borrower or any of its Subsidiaries in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the
Borrower or any of its Subsidiaries or over all or a substantial part
of the property of the Borrower or any of its Subsidiaries shall be
entered; or an interim receiver, trustee or other custodian of the
Borrower or any of its Subsidiaries or of all or a substantial
part of the property of the Borrower or any of its Subsidiaries
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shall be appointed or a warrant of attachment, execution or similar
process against any substantial part of the property of the Borrower or
any of its Subsidiaries shall be issued and any such event shall not be
stayed, dismissed, bonded or discharged within sixty (60) days after
entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower
or any of its Subsidiaries shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under
any such law, (iii) consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property, (iv) make any assignment for the benefit of creditors or (v) take any
corporate, partnership or comparable action to authorize any of the foregoing.
(h) Judgments and Attachments. Any money judgment(s) (other than a
money judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against any of the Borrower or any of its
Subsidiaries or any of their respective assets involving in any single case or
in the aggregate an amount in excess of $1,000,000 is (are) entered and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60)
days or in any event later than fifteen (15) days prior to the date of any
proposed sale thereunder.
(i) Dissolution. Any order, judgment or decree shall be entered
against the Borrower or any of its Subsidiaries decreeing its involuntary
dissolution or split up and such order shall remain undischarged and unstayed
for a period in excess of sixty (60) days; or the Borrower or any of its
Subsidiaries shall otherwise dissolve or cease to exist except as specifically
permitted by this Agreement unless the dissolving entity is a limited liability
company which elects to continue its existence.
(j) Loan Documents. At any time, for any reason, any Loan Document
as a whole that materially affects the ability of the Administrative Agent or
any of the Lenders to enforce the Obligations ceases to be in full force and
effect or the Borrower seeks to repudiate its obligations thereunder.
(k) Termination Event. Any Termination Event occurs which the
Required Lenders believe is reasonably likely to subject the Borrower or any of
its Subsidiaries to liability in excess of $1,000,000.
(l) Waiver of Minimum Funding Standard. If the plan administrator of
any 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 any Lender believes the
substantial business hardship upon which the application for the waiver is
based could reasonably be expected to subject either the Borrower or any
Controlled Group member to liability in excess of $1,000,000.
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(m) Change of Control. A Change of Control shall occur.
(n) Environmental Matters. The Borrower or any of its Subsidiaries
shall be the subject of any proceeding or investigation pertaining to (i) the
Release by the Borrower or any of its Subsidiaries of any Contaminant into the
environment, (ii) the liability of any of the Borrower or any of its
Subsidiaries arising from the Release by any other Person of any Contaminant
into the environment, or (iii) any violation of any Environmental, Health or
Safety Requirements of Law by the Borrower or any of its Subsidiaries, which,
in any case, has or is reasonably likely to subject the Borrower or any of its
Subsidiaries to liability individually or in the aggregate in excess of
$5,000,000 (exclusive of liabilities with respect to which the Borrower is
maintaining reserves as of the date hereof in accordance with Agreement
Accounting Principles).
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with Section 8.3.
ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND
REMEDIES
8.1 Remedies
(a) Termination of Commitments; Acceleration. If any Default
described in Section 7.1(f) or 7.1(g) occurs with respect to the Borrower, the
obligations of the Lenders to make Loans hereunder and the obligation of or the
Issuing Lender to issue Letters of Credit hereunder shall automatically
terminate and the Obligations shall immediately become due and payable without
any election or action on the part of the Administrative Agent, any Lender or
the Issuing Lender. If any other Default occurs, the Required Lenders may (i)
terminate or suspend the obligations of the Lenders to make Loans hereunder and
the obligation of the Issuing Lender to issue Letters of Credit hereunder, or
(ii) declare the Obligations to be due and payable, or both, and upon any
declaration under clause (ii), the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which the Borrower expressly waives.
(b) Rescission. If at any time after termination of the Lenders'
obligations to make Syndicated Loans or acceleration of the maturity of the
Loans, Borrower shall pay all arrears of interest and all payments on account
of principal of the Loans and Reimbursement Obligations which shall have become
due otherwise than by acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Defaults and Unmatured Defaults (other than nonpayment of
principal of and accrued interest on the Loans due and payable solely by virtue
of acceleration) shall be remedied or waived pursuant to Section 8.3, then upon
the written consent of the Required Lenders and written notice to the Borrower,
the termination of Lenders' respective obligations to make Revolving Loans and
the
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respective Lenders' and the Issuing Lender's obligations to participate in or
issue Letters of Credit or the aforesaid acceleration and its consequences may
be rescinded and annulled; but such action shall not affect any subsequent
Default or Unmatured Default or impair any right or remedy consequent thereon.
The provisions of the preceding sentence are intended merely to bind the Lenders
and the Issuing Lender to a decision which may be made at the election of the
Required Lenders; they are not intended to benefit the Borrower and do not give
the Borrower the right to require the Lenders to rescind or annul any
termination of the aforesaid obligations of the Lenders or the Issuing Lender
or any acceleration hereunder, even if the conditions set forth herein
are met.
(c) Enforcement. The Borrower acknowledges that in the event the
Borrower fail to perform, observe or discharge any of its obligations or
liabilities under this Agreement or any other Loan Document, any remedy of law
may prove to be inadequate relief to the Administrative Agent, the Issuing
Lender and the Lenders; therefore, the Borrower agrees that the Administrative
Agent, the Issuing Lender and the Lenders shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
8.2 Defaulting Lender. In the event that any Lender fails to fund
its Pro Rata Share of any Syndicated Advance requested or deemed requested by
the Borrower which such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Advance being hereinafter referred to as
a "NON PRO RATA LOAN"), until the earlier of such Lender's cure of such failure
and the termination of the Commitments, the proceeds of all amounts thereafter
repaid to the Administrative Agent by the Borrower and otherwise required to be
applied to such Lender's share of all other Obligations pursuant to the terms
of this Agreement shall be advanced to the Borrower by the Administrative Agent
("CURE LOANS") on behalf of such Lender to cure, in full or in part, such
failure by such Lender, but shall nevertheless be deemed to have been paid to
such Lender in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary:
(i) the foregoing provisions of this Section 8.2 shall apply
only with respect to the proceeds of payments of Obligations and shall
not affect the conversion or continuation of Loans pursuant to Section
2.8;
(ii) any such Lender shall be deemed to have cured its
failure to fund its Pro Rata Share of any Syndicated Advance at such
time as an amount equal to such Lender's original Pro Rata Share of
the requested principal portion of such Advance is fully funded to the
Borrower, whether made by such Lender itself or by operation of the
terms of this Section 8.2, and whether or not the Non Pro Rata Loan
with respect thereto has been repaid, converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Syndicated Advance shall bear
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interest at the rate applicable to Syndicated Loans which are Base
Rate Loans, in effect from time to time, and for all other purposes
of this Agreement shall be treated as if they were Base Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in
accordance with the other terms of this Agreement, would be applied to
the outstanding Base Rate Loans shall be applied first, ratably to all
Base Rate Loans constituting Non Pro Rata Loans, second, ratably to
Base Rate Loans other than those constituting Non Pro Rata Loans or
Cure Loans and, third, ratably to Base Rate Loans constituting Cure
Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its Pro Rata Share of any Syndicated
Advance and the termination of the Commitments, the term "Required
Lenders" for purposes of this Agreement shall mean Lenders (excluding
all Lenders whose failure to fund their respective Pro Rata Share of
such Advance have not been so cured) whose Pro Rata Shares represent
greater than fifty percent (50%) of the aggregate Pro Rata Shares of
such Lenders; and
(vi) for so long as and until any such Lender's failure to
fund its Pro Rata Share of any Syndicated Advance is cured in
accordance with Section 8.2(ii), (A) such Lender shall not be entitled
to any commitment fees with respect to its Commitment and (B) such
Lender shall not be entitled to any letter of credit fees, which
commitment fees and letter of credit fees shall accrue in favor of the
Lenders which have funded their respective Pro Rata Share of such
requested Advance, shall be allocated among such performing Lenders
ratably based upon their relative Commitments, and shall be calculated
based upon the average amount by which the Aggregate Commitment of
such performing Lenders exceeds the sum of (I) the outstanding
principal amount of the Syndicated Loans owing to such performing
Lenders, plus (II) the outstanding Reimbursement Obligations owing to
such performing Lenders, plus (III) the aggregate participation
interests of such performing Lenders arising pursuant to Section 2.20
with respect to undrawn and outstanding Letters of Credit.
8.3 Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Administrative Agent with the consent in writing of
the Required Lenders) and the Borrower may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Lenders or the Borrower
hereunder or waiving any Default hereunder; provided, however, that no such
supplemental agreement shall, without the consent of each Lender affected
thereby:
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(i) Postpone or extend the Termination Date or any other date
fixed for any payment of principal of, or interest on, the Loans, the
Reimbursement Obligations or any fees or other amounts payable to such
Lender (except with respect to a waiver of the application of the
default rate of interest pursuant to Section 2.11 hereof).
(ii) Reduce the principal amount of any Loans or L/C
Obligations, or reduce the rate or extend the time of payment of
interest or fees thereon or other amounts payable hereunder.
(iii) Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders specified to be
the applicable percentage in this Agreement to act on specified
matters or amend the definitions of "Required Lenders" or "Pro Rata
Share".
(iv) Increase the amount of the Commitment of any Lender
hereunder or increase any Lender's Pro Rata Share.
(v) Permit the Borrower to assign its rights under this
Agreement.
(vi) Amend this Section 8.3.
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent. No amendment of any provision of this Agreement relating to the Issuing
Lender shall be effective without the written consent of the Administrative
Agent and the Issuing Lender. No amendment of any provision of this Agreement
relative to the Swing Line Lender shall be effective without the written
consent of the Swing Line Lender. The Administrative Agent may waive payment
of the fee required under Section 12.3(B) without obtaining the consent of any
of the Lenders.
8.4 Preservation of Rights. No delay or omission of the Lenders, the
Issuing Lender, the Administrative Agent or the Administrative Agent to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall
not constitute any waiver or acquiescence. Any single or partial exercise of
any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 8.3, and
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Administrative Agent and the Lenders until the
Obligations have been paid in full.
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ARTICLE IX: GENERAL PROVISIONS
9.1 Survival of Representations. All representations and warranties
of the Borrower contained in this Agreement shall survive delivery of the Notes
and the making of the Loans herein contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower and neither the Administrative Agent nor the Issuing Lender shall
be obligated to issue any Letter of Credit for the account of the Borrower in
violation of any limitation or prohibition provided by any applicable statute
or regulation.
9.3 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
9.4 Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Administrative Agent and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Administrative Agent and the Lenders relating to the subject matter thereof.
9.5 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other. The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
9.6 Expenses; Indemnification.
(A) Expenses. The Borrower shall reimburse the Administrative Agent
and the Arranger for any reasonable costs, internal charges and out-of-pocket
expenses (including attorneys' and paralegals' fees and time charges of
attorneys and paralegals for the Administrative Agent or the Arranger, which
attorneys and paralegals may be employees of the Administrative Agent or the
Arranger) paid or incurred by either the Administrative Agent or the Arranger
in connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan
Documents. The Borrower also agrees to reimburse the Administrative Agent, the
Lenders and the Issuing Lender for any costs, internal charges and
out-of-pocket expenses (including attorneys' and paralegals' fees and time
charges of attorneys and paralegals for the Administrative Agent, the Lenders
and the Issuing Lender, which attorneys and paralegals may be employees of
Agent, the Lenders or the Issuing Lender) paid or incurred by
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Agent, any Lender or the Issuing Lender in connection with the collection of the
Obligations and enforcement of the Loan Documents.
(B) Indemnity. Each of the Borrower further agrees to defend,
protect, indemnify, and hold harmless the Administrative Agent, the Arranger,
each and all of the Lenders, the Issuing Lender, the Swing Loan Lender and each
of their respective Affiliates, and each of such Administrative Agent's,
Arranger's, Lender's, Issuing Lender's or Affiliate's respective officers,
directors, employees, attorneys and agents (including, without limitation,
those retained in connection with the satisfaction or attempted satisfaction of
any of the conditions set forth in Article IV) (collectively, the
"INDEMNITEES") from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses of any
kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, Administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents, or any act,
event or transaction related or attendant thereto, the making of the
Loans, and the issuance of and participation in Letters of Credit
hereunder, the management of such Loans or Letters of Credit or the
use or intended use of the proceeds of the Loans or Letters of Credit
hereunder; or
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton
injury, damage or threat to the environment, natural resources or
public health or welfare, costs and expenses (including, without
limitation, attorney, expert and consulting fees and costs of
investigation, feasibility or remedial action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known
or unknown, absolute or contingent, past, present or future relating
to violation of any Environmental, Health or Safety Requirements of
Law arising from or in connection with the past, present or future
operations of the Borrower, its Subsidiaries or any of their
respective predecessors in interest, or, the past, present or future
environmental, health or safety condition of any respective property
of the Borrower or its Subsidiaries, the presence of
asbestos-containing materials at any respective property of the
Borrower or its Subsidiaries or the Release or threatened Release of
any Contaminant into the environment (collectively, the "INDEMNIFIED
MATTERS");
provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused solely by or resulting
solely from the willful misconduct or Gross Negligence of such Indemnitee or
breach of contract by such Indemnitee with respect to the Loan Documents, in
each case, as determined by the final non-appealable judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the
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preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.
(C) Waiver of Certain Claims; Settlement of Claims. The Borrower
further agrees to assert no claim against any of the Indemnitees on any theory
of liability for consequential, special, indirect, exemplary or punitive
damages. No settlement shall be entered into by the Borrower or any if its
Subsidiaries with respect to any claim, litigation, arbitration or other
proceeding relating to or arising out of the transaction evidenced by this
Agreement or the other Loan Documents (whether or not the Administrative Agent,
any Lender, the Issuing Lender or any Indemnitee is a party thereto) unless
such settlement releases all Indemnitees from any and all liability with
respect thereto.
(D) Survival of Agreements. The obligations and agreements of the
Borrower under this Section 9.7 shall survive the termination of this
Agreement.
9.8 Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Administrative
Agent with sufficient counterparts so that the Administrative Agent may furnish
one to each of the Lenders.
9.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.10 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11 Nonliability of Lenders. The relationship among the Borrower
and the Lenders, the Issuing Lender, the Swing Line Lender, and the
Administrative Agent shall be solely that of borrower and lender. Neither the
Administrative Agent nor any Lender nor the Issuing Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent,
nor any Lender, nor the Issuing Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations.
9.12 CHOICE OF LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF INDIANA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
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9.13 WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
9.14 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
ARTICLE X: THE ADMINISTRATIVE AGENT
10.1 Appointment; Nature of Relationship. NBD is appointed by the
Lenders (each reference in this Article X to a Lender being in its capacity
either as a Lender or the Issuing Lender or the Swing Line Lender, or any or
all of the foregoing) as the Administrative Agent hereunder and under each
other Loan Document, and each of the Lenders irrevocably authorizes the
Administrative Agent to act as the contractual representative of such Lender
with the rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this Article X.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have
any fiduciary responsibilities to any Lender by reason of this Agreement and
that the Administrative Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders' contractual
representative, the Administrative Agent (i) does not assume any fiduciary
duties to any of the Lenders, and (ii) is acting as an independent contractor,
the rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders agrees to assert
no claim against the Administrative Agent on any agency theory or any other
theory of liability for breach of fiduciary duty, all of which claims each
Lender waives.
10.2 Powers. The Administrative Agent shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties to the Lenders, or any obligation to the
Lenders to take any action hereunder or under any of the other Loan Documents
except any action specifically provided by the Loan Documents required to be
taken by the Administrative Agent.
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10.3 General Immunity. Neither the Administrative Agent nor any of
its directors, officers, agents or employees shall be liable to any of the
Borrower, the Lenders or any Lender for any action taken or omitted to be
taken by it or them hereunder or under any other Loan Document or in
connection herewith or therewith except to the extent such action or inaction
is found in a final non-appealable judgment by a court of competent
jurisdiction to have arisen solely from (i) the Gross Negligence or willful
misconduct of such Person or (ii) breach of contract by such Person with
respect to the Loan Documents.
10.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc.
Neither the Administrative 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 statement, warranty or representation made in connection with
any Loan Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements of any obligor under any Loan
Document; (iii) the satisfaction of any condition specified in Article IV; (iv)
the existence or possible existence of any Default or (v) the validity,
effectiveness or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith. Neither the Administrative Agent
nor the Administrative Agent shall be responsible to any Lender for any
recitals, statements, representations or warranties herein or in any of the
other Loan Documents, for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or
for the financial condition of any guarantor of any or all of the Obligations,
the Borrower or any of its Subsidiaries.
10.5 Action on Instructions of Lenders. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders (except with respect to actions
that require the consent of all of the Lenders as provided in Section 8.3), and
such instructions and any action taken or failure to act pursuant thereto shall
be binding on all of the Lenders and on all holders of Notes. The
Administrative Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6 Employment of Agents and Counsel. The Administrative Agent may
execute any of their respective duties hereunder and under any other Loan
Document by or through employees, agents, and attorneys-in-fact, and shall not
be answerable to the Lenders, except as to money or securities received by it
or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Administrative
Agent shall be entitled to advice of counsel concerning the contractual
arrangement among the Administrative Agent and the Lenders and all matters
pertaining to such Agent's duties hereunder and under any other Loan Document.
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10.7 Reliance on Documents; Counsel. The Administrative Agent shall
be entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and,
in respect to legal matters, upon the opinion of counsel selected by the
Administrative Agent, which counsel may be employees of the Administrative
Agent.
10.8 The Administrative Agent's Reimbursement and Indemnification.
The Lenders agree to reimburse and indemnify the Administrative Agent ratably
in proportion to their respective Pro Rata Shares (i) for any amounts not
reimbursed by the Borrower for which the Administrative Agent is entitled to
reimbursement or indemnification by the Borrower under the Loan Documents, (ii)
for any other expenses incurred by the Administrative Agent on behalf of the
Lenders in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents, including as a result of a dispute among
the Lenders or between any Lender and the Administrative Agent, and (iii) for
any liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Administrative Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
including as a result of a dispute among the Lenders or between any Lender and
the Administrative Agent, provided that no Lender shall be liable for any of
the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
solely from the Gross Negligence or willful misconduct of the Administrative
Agent.
10.9 Rights as a Lender. With respect to its Commitment, Loans made
by it and the Notes issued to it and Letters of Credit issued by it as the
Issuing Lender, the Administrative Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as through it were not the Administrative Agent, as applicable, and the
term "Lender" or "Lenders" or "Issuing Lender", as applicable, shall, unless
the context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may accept deposits from, lend
money to and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Subsidiaries in which such
Person is not prohibited hereby from engaging with any other Person.
10.10 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and
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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 and the
other Loan Documents.
10.11 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint, on behalf of the Lenders, a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty days
after the retiring Administrative Agent's giving notice of resignation, then
the retiring Administrative Agent may appoint, on behalf of the Lenders, a
successor Administrative Agent. Notwithstanding anything herein to the
contrary, so long as no Default has occurred and is continuing, each such
successor Administrative Agent shall be subject to approval by the Borrower,
which approval shall not be unreasonably withheld. Such successor
Administrative Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as
the Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Loan Documents.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article X shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent hereunder and under the other
Loan Documents.
ARTICLE XI: SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of, any rights
of the Lenders or the Issuing Lender under applicable law, if any Default
occurs and is continuing, any indebtedness from any Lender or the Issuing
Lender to the Borrower (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Lender or the Issuing
Lender and the other Obligations, whether or not the Obligations, or any part
hereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or otherwise
(other than pursuant to Article XII, has payment made to it upon its Syndicated
Loans (other than payments received pursuant to Sections 3.1, 3.2, 3.4 or 3.5)
in a greater proportion than that received by any other Lender, such Lender
agrees, promptly upon demand, to purchase a portion of the Syndicated Loans
held by the other Lenders so that after such purchase each Lender will hold its
ratable proportion of Syndicated Loans. If any Lender, whether in connection
with setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such
action necessary such that all Lenders share in the benefits of such
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collateral ratably in proportion to their Syndicated Loans. In case any such
payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3 hereof. Notwithstanding clause (ii) of this Section 12.1,
any Lender may at any time, without the consent of the Borrower or the
Administrative Agent, assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank; provided, however, that no
such assignment shall release the transferor Lender from its obligations
hereunder. The Administrative Agent may treat the payee of any Note as the
owner thereof for all purposes hereof unless and until such payee complies with
Section 12.3 hereof in the case of an assignment thereof or, in the case of any
other transfer, a written notice of the transfer is filed with the
Administrative Agent. Any assignee or transferee of a Note agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
12.2 Participations.
(A) Permitted Participants; Effect. Subject to the terms set forth
in this Section 12.2, any Lender may, in the ordinary course of its business
and in accordance with applicable law, at any time sell to one or more banks or
other entities ("PARTICIPANTS") participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Commitment of such Lender, any
L/C Interest of such Lender or any other interest of such Lender under the Loan
Documents on a pro rata basis; provided that the amount of such participation
shall not be for less than $5,000,000. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents except that, for
purposes of Article III hereof, the Participants shall be entitled to the same
rights as if they were Lenders provided however that no
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Participant shall be entitled to receive any greater payment under Article III
than the Lender would have been entitled to receive with respect to the rights
participated.
(B) Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents, other than any amendment,
modification or waiver with respect to any Loan or Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable pursuant to the terms of this
Agreement with respect to any such Loan or Commitment, or postpones any date
fixed for any regularly-scheduled payment of principal of, or interest or fees
on, any such Loan or Commitment.
(C) Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 hereof in
respect to its participating interest in amounts owing under the Loan Documents
to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under the Loan Documents, provided that each Lender
shall retain the right of setoff provided in Section 11.1 hereof with respect
to the amount of participating interests sold to each Participant except to the
extent such Participant exercises its right of set off. The Lenders agree to
share with each Participant, and each Participant, by exercising the right of
setoff provided in Section 11.1 hereof, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts
to be shared in accordance with Section 11.2 as if each Participant were a
Lender.
12.3 Assignments.
(A) Permitted Assignments. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time assign to one
or more banks or other entities ("PURCHASERS") all or a portion of its rights
and obligations under this Agreement (including, without limitation, its
Commitment, all Loans owing to it, all of its interests as Issuing Lender with
respect to Letters of Credit, all of its participation interests in existing
Letters of Credit and Swing Line Loans, and its obligation to participate in
additional Letters of Credit and Swing Line Loans hereunder) in accordance with
the provisions of this Section 12.3. Each assignment shall be of a constant,
and not a varying, ratable percentage of all of the rights and obligations of
any assigning Lender under this Agreement. Such assignment shall be
substantially in the form of Exhibit C hereto and shall not be permitted
hereunder unless such assignment is either for all of such Lender's rights and
obligations under the Loan Documents or involves loans and commitments in an
aggregate amount of at least $5,000,000. Notice to the Administrative Agent
and consent of the Administrative Agent and, so long as no Default shall have
occurred and be continuing, notice to and consent of the Borrower (which
consents will not be unreasonably withheld) shall be required prior to an
assignment becoming effective with respect to a Purchaser which is not a Lender
or an Affiliate thereof.
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(B) Effect; Effective Date. Upon (i) delivery to the Administrative Agent of a
notice of assignment, substantially in the form attached as Appendix I to
Exhibit C hereto (a "NOTICE OF ASSIGNMENT"), together with any consent required
by Section 12.3(A) hereof, and (ii) except in the case of an assignment from a
Lender to an Affiliate thereof or to a fund managed by the same investment
manager, payment of a $3,000 fee to the Administrative Agent for processing such
assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall contain
a representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment, Loans and L/C Obligations under the
applicable assignment agreement are "plan assets" as defined under ERISA and
that the rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser, if not already a Lender, shall for all purposes be a
Lender party to this Agreement and any other Loan Documents executed by the
Lenders and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
consent or action by any of the Borrower or the Lenders and no further consent
or action by the Administrative Agent shall be required to release the
transferor Lender with respect to the percentage of the Aggregate Commitment,
Loans and Letter of Credit participations assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this Section 12.3(B),
the transferor Lender, the Administrative Agent and the Borrower shall make
appropriate arrangements so that replacement Notes are issued to such transferor
Lender and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their Commitment, as
adjusted pursuant to such assignment.
(C) The Register. The Administrative Agent shall maintain at its
address referred to in Section 13.1 a copy of each assignment delivered to and
accepted by it pursuant to this Section 12.3 and a register (the "REGISTER")
for the recordation of 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 and whether such Lender is an original Lender or the assignee of
another Lender pursuant to an assignment under this Section 12.3. The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower and each of its Subsidiaries, the
Administrative 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 the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
12.4 Confidentiality. Subject to Section 12.5, the Administrative
Agent and the Lenders shall hold all nonpublic information obtained pursuant to
the requirements of this Agreement and identified as such by the Borrower in
accordance with such Person's customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably required by a
prospective Transferee (as defined in Section 12.5 below) in connection with
the contemplated participation or assignment or as required or requested by any
Governmental Authority or representative thereof
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or pursuant to legal process and shall require any such Transferee or
prospective Transferee to agree (and require any of its Transferees to agree) to
comply with this Section 12.4. In no event shall the Administrative Agent or
any Lender be obligated or required to return any materials furnished by the
Borrower; provided, however, each prospective Transferee shall be required to
agree that if it does not become a participant or assignee it shall return all
materials furnished to it by or on behalf of the Borrower in connection with
this Agreement.
12.5 Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"TRANSFEREE") and any prospective Transferee any and all information in such
Lender's possession concerning the Borrower and its Subsidiaries and the
Collateral; provided that prior to any such disclosure, such prospective
Transferee shall agree to preserve in accordance with Section 12.4 the
confidentiality of any confidential information described therein.
ARTICLE XIII: NOTICES
13.1 Giving Notice. Except as otherwise permitted by Article II with
respect to Borrowing Notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as
may be designated by such party in a notice to the other parties. Any notice,
if mailed and properly addressed with postage prepaid, shall be deemed given
when received; any notice, if transmitted by telex or facsimile, shall be
deemed given when transmitted (answerback confirmed in the case of telexes);
or, if by courier, one (1) Business Day after deposit with a reputable
overnight carrier service; with all charges paid.
13.2 Change of Address. Any of the Borrower, the Administrative
Agent and any Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
ARTICLE XIV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Administrative Agent and the Lenders and each party as notified the
Administrative Agent by telex or telephone, that it has taken such action.
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[Remainder of This Page Intentionally Blank]
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<PAGE> 90
IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative
Agent have executed this Agreement as of the date first above written.
WABASH NATIONAL CORPORATION
By:___________________________
Name:
Title:
Address:
1000 Sagamore Parkway South
Lafayette, IN 47905
Attention: Mark R. Holden, Vice President
and Chief Financial Officer
Telephone No.: (765) 448-1591
Facsimile No.: (765) 449-5308
NBD BANK, N.A.
as the Administrative Agent, the
Issuing Lender, the Swing
Line Lender and as a Lender
By:___________________________
Name:
Title:
Address:
One Indiana Square
Indianapolis, IN 46266
Attention: Leo G. Watson, Jr.
Telephone No.: (317) 266-5937
Facsimile No.: (317) 266-6042
S-1
<PAGE> 91
BANK ONE, INDIANA, N.A.
By:___________________________
Name: K. Alexander Curry
Title:
Address:
111 Monument Circle, Suite 1911
Bank One Tower
P.O. Box 7700
Indianapolis, IN 46277-0119
Attention: K. Alexander Curry
Telephone No.: (317) 321-8230
Facsimile No.: (317) 321-8079
S-2
<PAGE> 92
THE NORTHERN TRUST COMPANY
By:___________________________
Name: Candelario Martinez
Title:
Address:
50 South LaSalle Street
Chicago, IL 60675
Attention: Candelario Martinez
Telephone No.: (312) 557-2816
Facsimile No.: (312) 444-7028
S-3
<PAGE> 93
STAR BANK N.A.
By:___________________________
Name: Thomas D. Gibbons
Title: Vice President
Address:
425 Walnut Street, 8th Floor
Cincinnati, OH 45202
Attention: Thomas D. Gibbons
Telephone No.: (513) 287-8313
Facsimile No.: (513) 632-2068
S-4
<PAGE> 94
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By:___________________________
Name:
Title:
Address:
200 S. Orange Avenue
Orlando, FL 32801
Attention: Christopher A. Black
Telephone No.: (407) 237-2467
Facsimile No.: (407) 237-6894
S-5
<PAGE> 95
CITIZENS BANK OF WESTERN INDIANA
By:___________________________
Name: Jay Reynolds
Title: Vice President
Address:
P.O. Box 1663
Lafayette, IN 47902
Attention: Jay Reynolds
Telephone No.: (765) 423-1865
Facsimile No.: (765) 742-2088
S-6
<PAGE> 1
URNr. 3037 /1997
SHAREHOLDERS' AGREEMENT
Today, on this fourth day of November nineteen
hundred and ninety seven
- 04.11.1997 -
there appeared
before me,
Dr. DIETER KARL
notary public in Munich, at the offices of Bayerische
Kapitalbeteiligungsgesellschaft mbH at OttostraBe 1,
80333 Munich, where I have come at the request of
the appearing persons:
1. Mr. Martin Weber
businessman
born on May 11, 1965,
business address: OttostraBe 1, 80333 Munich,
identified by his German Federal Identity Card,
acting not at his own behalf but under power of attorney
dated October 31, 1997 (which was presented in the
original and a copy of which is attached hereto) on
behalf of
BAYERISCHE KAPITALBETEILIGUNGSGESELLSCHAFT MBH with its
seat in Munich (commercial register Munich HRB 41723)
and its business address at OttostraBe 1, 80333
Munich
- hereinafter: "KBG" -
2. Mr. Mark R. Holden
businessman
<PAGE> 2
SHAREHOLDERS' AGREEMENT 2
- --------------------------------------------------------------
born on August 12, 1959,
business address: 1000 Sagamore Parkwav South,
Lafayette, Indiana 47905,
U.S.A.,
identified by his US Passport,
acting not on his own behalf but in his capacity as
Vice President and Chief Financial Officer with
individual powers of representation for WABASH NATIONAL
CORPORATION, a corporation under the laws of Delaware
with its seat in Lafayette and its business address at
1000 Sagamore Parkway South, Lafayette, Indiana 47905,
U.S.A.
- hereinafter: "WABASH" -,
and
3. Mr. Heiner Rogge,
businessman,
born on March 25, 1950,
identified by his German
Federal Identity Card,
business address: PoccistraBe 7, 80336 Munich,
acting not on his own behalf but
a. in his capacity as the sole managing director of ETZ
EUROPAISCHE TRAILERZUG BETEILIGUNGSGESLLSCHAFT MBH with its seat in
Munich (commercial register Munich HRB 106942) and its business address
at Poccistralle 7, 80336 Munich, and
b. in his capacity as the sole managing director of BTZ
BAYERISCHE TRAILERZUG GESELLSCHAFT FUR BIMODALEN GUTERVERKEHR MBH with
its seat in Munich (commercial register Munich HRB 97439) and its
business address at PoccistraBe 7, 80336 Munich
Upon request by the appearing persons, acting as indicated above, l
record according to their declarations the following:
<PAGE> 3
SHAREHOLDERS' AGREEMENT 3
- -------------------------------------------------------------------
SHAREHOLDERS AGREEMENT:
PREAMBLE
Whereas, KBG currently owns 100% of the issued and
outstanding share capital in ETZ Europaische Trailerzug
Beteiligungsgesellschaft mbH (the "Company"), a limited
liability company organized under the laws of Germany.
Whereas, WABASH intends to take over newly issued shares
equaling 25.1% of the issued and outstanding share
capital in the Company.
Whereas, the Company owns 99.89% of the issued and
outstanding share capital in BTZ Bayerische Trailerzug
Gesellschaft fur bimodalen Guterverkehr mbH ("BTZ"), a
limited liability company organized under the laws of
Germany;
Whereas, BTZ owns 99% and is the beneficial owner of
another 1% of the issued and outstanding share capital in
BTZ Italia S.r.L. ("BTZ Italia"), a limited liability
company organized under the laws of Italy, and BTZ
further owns 100% of the issued and outstanding share
capital in RM 37 Vermogensverwaltung GmbH ("RMV"), a
limited liability company organized under the laws of
Germany;
Whereas, the Company has currently no direct or indirect
subsidiaries other than BTZ, BTZ Italia and RMV (herein
referred to as the "Subsidiaries");
Whereas, KBG made available to the Company silent partner
equity contributions in the total amount of DM 9 million
and a bridge loan (the "Bridge Loan") in the amount of
DM 4.0 million and KBG has made available to BTZ a
guaranty in the amount of DM 2 million for operative
loans;
Whereas, KBG and WABASH believe that it is in their
respective best interest to make provisions for matters
relating to KBG's and WABASH's joint participation in the
Company and to certain aspects of the Company's and its
Subsidiaries' business;
Now, therefore, KBG and WABASH (the "Shareholders")
hereby agree as follows:
<PAGE> 4
SHAREHOLDERS' AGREEMENT 4
- --------------------------------------------------------------------
Section 1
CAPITALIZATION OF THE COMPANY
1.1 INITIAL CAPITAL STRUCTURE AND OWNERSHIP
The Company is a limited liability company established and existing
under the laws of Germany and registered with the Commercial Register of the
Amtsgericht Munich under No. HRB 106942. The Company has a nominal share
capital ("Stammkapital") of DM 13,000,000.- which has been fully paid in cash.
1.2 SHARE QUOTAS
KBG currently owns 100% of the issued and outstanding share capital of
the Company by owning share quotas ("Geschaftsanteile") with a total nominal
value of DM 13,000,000.-. KBG will have the Company issue to WABASH and WABASH
will take over, by duly notarized declaration, a share quota in the nominal
amount of DM 4,357,000.- equaling 25.1 % of the Company's nominal share capital
of then DM 17,357,000.-.
1.3 PREMIUM
The new share quota referenced in Section 1.2 shall be issued to
WABASH at nominal value plus a premium in the amount of DM 5,983,454.- out of
which DM 3,490,254.- will be paid in cash and the remaining amount of which
(i.e. DM 2,493,200.-) will be effected according to a separate agreement among
WABASH, the Company and BTZ.
1.4 CONVERSION OF SILENT PARTNERSHIP AND BRIDGE LOAN
KGB has, by duly effected shareholder resolution, converted its claims
under the silent partnership agreement up to the amount of DM 9,000,000 and the
principal of the Bridge Loan in the amount of DM 4,000,000.- into capital
reserves (Rucklagen) of the Company.
<PAGE> 5
SHAREHOLDERS' AGREEMENT 5
- ---------------------------------------------------------------------------
1.5 FUTURE CAPITAL REQUIREMENTS OF THE COMPANY.
If the management of the Company reasonably determines that the Company
or any of its current subsidiaries or subsidiaries it may have in the future
(together: the "Subsidiaries") is in need of additional funds which cannot be
obtained through bank financing at satisfactory conditions, and the
shareholders shall not have agreed on an increase of the nominal share capital
of the Company with the majority required by statute (at least 75 % of the
votes cast) within four weeks of delivery of a written notice by KBG of KBG's
intent to effect such increase, then KBG shall be entitled to cause the Company
to enter into a shareholder loan agreement with KBG, provided that (i) the
conditions of the loan must conform to arm's length standards and (ii) WABASH
must consent to the terms and conditions of the loan in writing, which consent
may not be unreasonably withheld and which consent shall be deemed to be
granted if the interest rate does not exceed the applicable 6 month LIBOR rate
on the last business day of the week preceding WABASH's receipt of the
afore-mentioned notice plus 6 percentage points, and provided further that
WABASH shall in any event be entitled to participate in the shareholder loan at
equal conditions in an amount proportional to its nominal interest in the
Company.
1.6 DIVIDENDS
The Shareholders will resolve on payments of dividends of the Company
and its Subsidiaries in accordance with applicable statutory law and the
Articles of Association as to be amended on the date hereof(the "Modified
Articles of Association"). The Company shall accumulate earnings only to the
extent reasonably required to finance the capital expenditures of the Company
and its Subsidiaries (including future growth in accordance with the relevant
business plans).
<PAGE> 6
SHAREHOLDERS' AGREEMENT 6
- --------------------------------------------------------------------------
Section 2
ARTICLES OF ASSOCIATION
The Shareholders will amend the Articles of Association on the date
hereof. The Shareholders shall, in the relation inter se, be bound by the
Articles of Association, as amended, as of the date thereof. In the relation of
the Shareholders inter se, the English text of the Articles of Association
shall take precedence over the German text. Furthermore, the parties undertake
to cause the Company to amend the Articles of Association of BTZ substantially
in accordance with the Articles of Association of the Company, as to be
amended.
SECTION 3
BUSINESS PLANS AND BUDGETS
3.1 ANNUAL BUSINESS PLANS AND BUDGETS
On or before October 31 of each year (however, for the the 1998 budget:
November 30, 1997), commencing with the year in which this Agreement is
executed, the Managing Board ("Geschaftsfuhrung") of the Company shall submit
for approval to the Supervisory Board ("Beirat") an annual business plan (the
"Annual Business Plan") and budget (the "Budget") for the entire operation of
the Company and its Subsidiaries for the following year which shall include all
expected revenues and expenditures for such periods and general strategic plans
for such periods. On or prior to November 30 of each year (however, for the
1998 budget: December 31, 1997), the Supervisory Board shall adopt, in amended
form, if it is deemed appropriate, the Annual Business Plan and Budget. Such
adoption of the Annual Business Plan and Budget requires a resolution of the
Supervisory Board with a majority of 75% of the votes cast.
Section 4
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF KBG
KBG hereby represents and warrants to WABASH that (a) neither the
execution and delivery of this Agreement by KBG nor KBG's performance of or
compliance with its
<PAGE> 7
SHAREHOLDERS' AGREEMENT 7
- ----------------------------------------------------------------------------
obligations hereunder constitutes or in the future will constitute a
breach or other violation of any agreement, contract or other commitment to
which KBG is a party or by which it or any significant part of its assets is or
in the future will be bound, and (b) neither KBG nor any of its subsidiaries is
or in the future will become a party to or subject to any agreement, contract
or other commitment which would hinder or interfere in any material respect
with KBG's ability to comply in all material respects with all of its duties
and obligations hereunder or its ability to afford WABASH the full benefit of
the cooperation contemplated by this Agreement.
4.2 REPRESENTATIONS AND WARRANTIES OF WABASH
WABASH hereby represents and warrants to KBG that (a) neither the execution and
delivery of this Agreement by WABASH nor WABASH's performance of or compliance
with its obligations hereunder constitutes or in the future will constitute a
breach or other violation of any agreement, contract or other commitment to
which WABASH is a party or by which it or any significant part of its assets is
or in the future will be bound, and (b) neither WABASH nor any of its
subsidiaries is or in the future will become a party to or subject to any
agreement, contract or other commitment which would hinder or interfere in any
material respect with WABASH's ability to comply in all material respects with
all of its duties and obligations hereunder or its ability to afford KBG the
full benefit of the cooperation contemplated by this Agreement.
Section 5
OBLIGATION TO SELL
If any third party (other than a party controlling, controlled by,
under common control with or otherwise affiliated with KBG) submits a binding
offer for the acquisition of 100% of the shares in the Company, KBG may,
without prejudice to WABASH's preemptive rights under the Articles of
Association, request that WABASH transfer all of its shares in the Company to
such third party at conditions equal to the conditions offered by the third
party to KBG. If the sale of WABASH's share to the third party would, in the
reasonable opinion of WABASH, impair the Company's or any of its Subsidiaries'
ability to meet its / their financial obligations, then WABASH shall be obliged
to sell only if
<PAGE> 8
SHAREHOLDERS' AGREEMENT 8
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KBG agrees to guarantee any obligations of the Company and its
Subsidiaries to WABASH which have arisen prior to such sale.
Section 6
GOING - PUBLIC
If KBG should decide to convert the Company into a stock corporation
(Aktiengesellschaft),and to have the stock of the Company listed as bearer
stock (Inhaberaktien) on a stock exchange, Wabash shall be obliged to vote its
shares in the Company accordingly (which includes the Amendment of the Articles
of Association to the extent necessary to comply with the mandatory provisions
of the Stock Corporations Act / Aktiengesetz), and to agree to such reasonable
and customary restrictions on sale of its stock as are reasonably required by
an independent underwriter engaged by KBG to prepare the admission of the stock
of the Company for trade over the stock exchange (provided that the
restrictions must equal the restrictions imposed on KBG). Until the day when
the stock of the Company is first quoted on a stock exchange, (i) KBG shall be
obliged to vote its stock in the Company to permit that all rights WABASH has
as a minority GmbH shareholder in the Company and its Subsidiaries shall remain
in full effect after the conversion into a stock corporation, and (ii) WABASH's
obligations with regard to its GmbH shares under Section 5 hereof as well as
any restrictions on transfer and preemptive rights of either party as set forth
in Section 11 of the Articles of Association shall remain in full effect.
Section 7
TERMINATION
This Agreement may be terminated by written notice of either Shareholder in the
event that: (i) the other Shareholder commits a material breach of this
Agreement; or (ii) the other Shareholder shall apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator of any of its
property, admit in writing its inability to pay its debts as they mature, make
a general assignment for the benefit of creditors, be adjudicated a bankrupt or
insolvent under applicable law, or if an order or decree shall be entered by
any court of competent jurisdiction approving a petition seeking
<PAGE> 9
SHAREHOLDERS' AGREEMENT 9
- ---------------------------------------------------------------------------
reorganization of the other Shareholder and such order or decree shall
continue in effect for any period of sixty (60) days.Upon termination of this
Agreement, this Agreement shall be void and of no further force or effect,
provided, however, that (i) such termination shall not result in the
termination of the provisions of Sections 1.5 (only in favor of the
non-breaching party), 4, 8 and 9 of this Agreement, which shall continue in
full force and effect and (ii) such termination shall not relieve any
Shareholder from liability for any prior breach of this Agreement.
Section 8
ARBITRATION, GOVERNING LAW
8.1 ARBITRATION
Any dispute, difference, controversy or claim between the Shareholders
arising in connection with or relating to this Agreement shall be finally
resolved by arbitration in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce (the "ICC"). Any such
arbitration proceedings shall be held in Paris, France. The arbitration
proceedings shall be conducted, and the award shall be rendered, in the English
language. The Shareholder initiating recourse to arbitration shall be treated
as the claimant party in the arbitration and the Shareholder against whom such
recourse is so initiated shall be treated as the defendant party in such
arbitration. There shall be three arbitrators, of whom one shall be nominated
by such claimant party and one shall be nominated by such defendant party, in
accordance with the ICC Rules i and within 14 days of commencement of the
proceedings. Unless within 30 days after both such nominations have been
effected the two arbitrators so nominated shall fail to agree upon the third
arbitrator, the third arbitrator shall be appointed by the Court of Arbitration
of the ICC. Among other remedies otherwise available to them, such arbitrators
shall be autorized to order the specific performance of any provisions
contained herein. Any award rendered by the arbitrators shall be final and
binding upon the Shareholder, and judgment upon such award, including any costs
of arbitration, may be entered in accordance with applicable law in any court
having jurisdiction thereof; provided, however, that, save as aforesaid, all
rights of appeal or recourse to any court of law whatsoever are hereby excluded
in relation to any arbitration or any award made
<PAGE> 10
SHAREHOLDERS' AGREEMENT 10
- -----------------------------------------------------------------------
therein. The Shareholders recognize and acknowledge that this Agreement
constitutes a commercial transaction, and that no Shareholder hereto shall be
entitled to plead sovereign immunity in respect of any arbitration or award
thereunder, or of its enforcement or execution in any jurisdiction.
8.2 GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with
the laws of Germany without giving effect to the rules on conflict of laws.
Section 9
MISCELLANEOUS
9.1 NOTICES; DOCUMENTS
All notices and other communications under this Agreement shall be in
writing (except where statutory provisions require notarization) in the English
language and shall be given or made (and shall be deemed to have been duly
given or made) by delivery in person, by overnight courier service, by telecopy
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective Sharerholders at the following addresses:
if to KBG:
Bayerische Kapitalbeteiligungsgesellschaft mbH
OttostraBe 1
80333 Munich
Germany
Tel: +49 89 55 25 63 - OFax: +49 89 55 25 63 90
Attention: Geschaftsfuhrung
if to WABASH:
<PAGE> 11
SHAREHOLDERS' AGREEMENT 11
- --------------------------------------------------------------------------
WABASH National Corporation
1000 Sagamore Pkwy S.
Lafayette
Indiana 47905
USA
Tel: + 1 765 448 1591
Fax: +1 765 449 5308
Attention: Chief Financial Officer
9.2 CONFIDENTIALITY
Each Shareholder shall treat confidentially in accordance with the
terms of this Section 9.2 all information provided to it by or on behalf of any
other Shareholder relating to the business and operations of such other
Shareholder and all correspondence among the Shareholders relating to this
Agreement or the transactions contemplated hereby, including the terms and
conditions hereof ("Confidential information"). Confidential information does
not include information (i) already available to the recipient party on a
non-confidential basis, (ii) that becomes generally available to the public
other than as a result of a disclosure by or on behalf of the recipient party
in violation of the terms of this Section 9.2, or (iii) that becomes available
to the recipient party on a nonconfidential basis from a source that is not a
party hereto, provided that such source is not known by the recipient to be
legally prohibited from, or contractually bound not to, disclose such
information.
9.3 NON-DISCLOSURE
Subject to Section 9.2 and 9.3, the Shareholders agree that any
Confidential Information received by it will not be disclosed by it except (i)
to such Shareholder's agents being under duties of confidentiality for the
benefit of the other Shareholder under applicable professional rules of conduct
and advisors and counsel having a need to know such information in connection
with advising or representing such Shareholder in respect of this Agreement and
the matters contemplated herin, (ii) with the prior written consent of the
Shareholder to whom such information pertains, (iii) in
<PAGE> 12
SHAREHOLDERS' AGREEMENT 12
- --------------------------------------------------------------------------
connection with the exercise of its rights or remedies under or
relating to this Agreement, or (iv) as required by applicable law or competent
judicial or governmental authority or in accordance with the applicable rules
of any stock exchange, including, without limitation, the U.S. Securities and
Exchange Commission and The New York Stock Exchange; provided, however, that in
the event that any Shareholder shall be required to make any disclosure of
Confidential Information as contemplated in this clause (iv), it shall to the
extent practicable (A) provide prior notice thereof to the Shareholder to whom
such information pertains, (B) only disclose such portions of Confidential
Information as, in the opinion of its counsel, shall be required to be
disclosed under the circumstances and (C), to the extent practicable,
reasonable and permitted, request confidential treatment for such disclosed
information.
9.4 INVESTMENT AGREEMENT
WABASH, KBG, the Company and BTZ hereby enter into an Investment
Agreement with the contents of the EXHIBIT.
9.5 SEVERABILITY
If any provision of this Agreement should be invalid or ineffective,
the validity of the remaining provisions hereof shall not be affected thereby.
The invalid or ineffective provisions shall be deemed to the replaced by such
valid and effective provision as most closely corresponds to the economic
purpose and substantive effect of the invalid or ineffective provision. The
same applies mutatis mutandis with regard to supplementary interpretation of
this Agreement.
9.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES
This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Shareholders with respect
to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral, between the Shareholders with respect to
the subject matter hereof. This Agreement is for the sole benefit of the
Shareholders and their permitted assigns and nothing herein express or implied
shall give to any other person any legal entitlements.
<PAGE> 13
SHAREHOLDERS' AGREEMENT 13
- --------------------------------------------------------------------------
9.7 Costs
The notarization fees for this Agreement shall be split equally among
KBG and Wabash.
Read (including the Exhibit) to the appearing persons in the presence
of the Notary, approved by the appearing persons and signed by them and by the
Notary as follows:
[SIG]
[SIG]
[SIG] [SIG]
[NOTARY SEAL]
<PAGE> 14
================================================================================
----------------------------------------------
INVESTMENT AGREEMENT
----------------------------------------------
By and Among
WABASH NATIONAL CORPORATION
BAYERISCHE KAPITALBETEILIGUNGSGESELLSCHAFT MBH
ETZ EUROPAISCHE TRAILERZUG
BETEILIGUNGSGESELLSCHAFT MBH
and
BTZ BAYERISCHE TRAILERZUG GESELLSCHAFT
FUR BIMODALEN GUTERVERKEHR MBH
November 4, 1997
================================================================================
<PAGE> 15
INVESTMENT AGREEMENT, dated November 4, 1997, (the "Agreement") among
WABASH NATIONAL CORPORATION ("WABASH"), a corporation organized under the laws
of Delaware, USA, BAYERISCHE KAPITALBETEILIGUNGSGESELLSCHAFT MBH ("KBG"), a
limited liability company organized under the laws of Germany, ETZ EUROPAISCHE
TRAILERZUG BETEILIGUNGSGESELLSCHAFT MBH (THE "COMPANY"), a limited liability
company organized under THE LAWS OF GERMANY and BTZ BAYERISCHE TRAILERZUG
GESELLSCHAFT FUR BIMODALEN GUTERVERKEHR MBH ("BTZ"), a limited liability
company organized under the laws of Germany. WABASH, KBG, the Company and BTZ
are sometimes each referred to herein as a "Party" and collectively as the
"Parties".
W I T N E S S E T H:
WHEREAS, KBG currently owns one hundred per cent (100%) of the issued and
outstanding share capital of the Company.
WHEREAS, the Company owns approximately ninety-nine point eighty-nine per
cent (99.89%) of the issued and outstanding share capital in BTZ.
WHEREAS, BTZ owns ninety-nine per cent (99%) and is the beneficial owner
of another per cent (1%) of the issued and outstanding share capital in BTZ
Italia S.r.L. ("BTZ Italia"), a limited liability company organized under the
LAWS of Italy, and BTZ further owns one hundred per cent (100%) of the issued
and outstanding share capital in RM 37 Vermogensverwaltung GmbH ("RM37), a
limited liability company organized under the laws of Germany.
WHEREAS, the Company has currently no direct or indirect subsidiaries
other than BTZ, BTZ Italia and RM37 (herein referred to as the
"Subsidiaries").
WHEREAS, KBG has made available to the Company silent partner equity
contributions in the amount of DM 9,000,000, bridge loans in the aggregate
amount of DM 4,000,000 and a guaranty in the amount of DM 2,000,000 for
operative loans.
WHEREAS, KBG has converted (i) its silent partners equity contributions
in the amount of DM 9,000,000 and (ii) the principal amount of the loans in the
aggregate amount of DM 4,000,000 made available to the Company into capital
reserves of the Company by duly effected agreement between KBG and the
Company.
WHEREAS, KBG and WABASH held discussions related to
<PAGE> 16
their future cooperation as shareholders of the Company and have agreed on a
modification of the Articles of Association ("Satzung") of the Company and
accordingly also of BTZ (the "Modified Articles of Association"), and on the
terms and provisions of a shareholders agreement entered into between KBG and
WABASH as shareholders in the Company (the "Shareholders Agreement").
WHEREAS, the Parties hereto desire that the investment of WABASH in the
Company described in this Agreement shall become effective only upon the valid
execution of the Shareholders Agreement.
WHEREAS, the Parties hereto have received on October 31, 1997 a
confirmation by the German cartel authorities ("Bundeskartellamt") that the
transactions contemplated hereby have been cleared and that no further cartel
or any other governmental approvals will be required.
NOW, THEREFORE, for and in consideration of the mutual representations,
warranties, covenants and agreements contained herein, and intending to be
legally bound hereby, the Parties hereto agree as follows:
ARTICLE I
AUTHORIZATION, SUBSCRIPTION AND PURCHASE
OF SHARE QUOTA
Section I.1 Capital Increase. (a) On the date hereof, the Company will
hold a Shareholders' Meeting ("Gesellschafterversammlung") of the Company and
approve (i) the increase of the nominal share capital of the Company from DM
13,000,000 to DM 17,357,000 by issuing to WABASH one new share quota
("Geschaftsanteil") with a total aggregate nominal value of DM 4,357,000 (the
"New Share Quota"), (ii) the issuance of the New Share Quota, constituting,
when issued and paid for, 25.1% of the then outstanding and fully paid-up
nominal share capital of the Company, (iii) the issuance of the New Share
Quota to WABASH at the total issue price of DM 10,340,454 (the "Issue Price"),
and (iv) the amendment to the Company's Articles of Association to reflect
such capital increase and to implement all terms and provisions as set forth
in the Modified Articles of Association.
(b) In connection with the issuance of the New Share Quota, KBG hereby
waives its preemptive rights ("Bezugsrechte") to subscribe for the New Share
Quota to be issued. No consideration in addition to the Issue Price shall be
payable by
<PAGE> 17
WABASH in connection with such waiver.
Section I.2 Issuance of New Share Quota to WABASH. Immediately after
the Company has held the Shareholders' Meeting and approved the resolutions
mentioned in Section 1.1 (a), the Company will deliver to WABASH a copy of the
resolution of the Company's Shareholders' Meeting regarding the increase of the
nominal share capital, the issuance of the New Share Quota to WABASH, and the
amendment of the Articles of Association as described in Section 1.1 hereof.
Immediately after receipt of such documents by WABASH, WABASH will subscribe to
and purchase the New Share Quota at the Issue Price. The Company and WABASH
will execute all corporate and other documents including, without limitation, a
statement of subscription ("Obernahmeerklarung") in the form of a notarial
deed, necessary to complete the issuance and purchase of the New Share Quota
and the transactions described herein. The statement of subscription shall
record WABASH's status as a shareholder of the Company
("Gesellschaftsbeitritt"). WABASH will pay via wire transfer an amount of DM
4,357,000 (the Nominal Issue Price") to the Company's account No.: 58355 at
Bayerische Landesbank, BLZ 700 500 00 and an amount of DM 3,490,254 (the
"Surplus Issue Price") to the joint account of KBG and WABASH (the "Joint
KBG/WABASH Account"), account no.:1008854 at First Chicago Frankfurt. Payment of
the remaining amount of DM 2,493,200 will be effected according to a separate
agreement to be entered into between Wabash, the Company and BTZ. The Company
agrees to file the resolution on the increase of the nominal share capital,
together with all other documents necessary to register the increase of the
Company's nominal share capital and the transactions described herein with the
Commercial Register in Munich ("Handelsregister") as soon as the increase in
the nominal share capital and payment for the New Share Quota have been
effected.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
KBG AND THE COMPANY
Section 2.1 KBG and the Company each severally represent and warrant to
WABASH as follows:
Section 2.1.1 Corporate Organization and Qualification. The Company is a
company duly organized and validly existing under the laws of Germany. BTZ is
a 99.89% subsidiary of the Company and a company duly organized and validly
existing under the laws of Germany. BTZ Italia S.r.L.
<PAGE> 18
is a subsidiary of BTZ and a company duly organized and validly existing under
the laws of Italy. RM37 is a 100% subsidiary of BTZ and a company duly
organized and validly existing under the laws of Germany. The Company and the
Subsidiaries have the requisite corporate power and authority to own, lease
and operate their properties and assets, and to carry on their business and
all other activities in which they are engaged as such have been and are now
being conducted.
Section 2.1.2 Authorized Capital. As of the date hereof, the authorized,
issued and outstanding share capital of the Company has a total nominal value
of DM 13,000,000 and has been validly issued, fully paid and is nonassessable.
There are no rights, options, warrants, commitments, agreements or
understandings of any kind to which the Company is a party or by which it is
bound obligating the Company to issue or sell additional share quotas or
obligating the Company to grant or enter into any such right, option, warrant,
commitment, agreement or understanding. The Company has not entered into any
obligations to repurchase, redeem or otherwise acquire any share quotas of the
Company.
Section 2.1.3 New Share Quota. The New Share Quota, when issued in
compliance with the provisions of this Agreement, will be duly authorized and
validly issued. Except for the preemptive rights waived pursuant to Section
1.1 (b) hereof, the issuance of the Share Quota is not subject to any other
preemptive or subscription rights or rights of first refusal or similar
rights. Upon subscription for the New Share Quota, WABASH will receive legal
and valid title to such New Share Quota, free and clear of all encumbrances,
liens, claims or other adverse interests. Except for the transfer restrictions
contained in the Modified Articles of Association of the Company to be enacted
and in the Shareholders Agreement entered into between KBG and WABASH the New
Share Quota will be freely transferable.
Section 2.1.4 Corporate Authority. The Company has all necessary power,
corporate and otherwise, and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company, the performance by the Company of its obligations hereunder and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by all requisite action on the part of the Company. This
Agreement constitutes a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms.
<PAGE> 19
Section 2.1.5 No Conflict. The execution and delivery of this Agreement
by the Company do not, and the performance by the Company of its obligations
hereunder and the consummation by the Company of the transactions contemplated
hereby will not, (a) conflict with or result in the violation of any provision
of the Articles of Association of the Company or of any law, regulation,
governmental, regulatory, administrative or court order, judgment, decree or
other ruling, decision or authorization applicable to the Company, including
any permits and licenses, or (b) conflict with, result in any violation of or
default (with or without notice or lapse of time or both) under, or give rise
to any right of termination, cancellation or acceleration of any right or
obligation or to a loss of any benefit under, any contract, agreement,
license, permit, franchise, concession or other instrument to which the
Company is a party or by which it is bound, other than any such conflicts,
violations, defaults, terminations, cancellations, accelerations or losses
that, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the financial condition, properties,
business, results of operations or prospects of the Company (each, a "Material
Adverse Effect") or would not have a material and adverse effect on the
Company's ability to consummate the transactions contemplated hereby or to
perform its obligations hereunder.
Section 2.1.6 Governmental Consents and Approvals.
The execution and delivery of this Agreement by the Company, the performance
by the Company of its obligations hereunder and the consummation by the Company
of the transactions contemplated hereby do not and will not, require any
consent, approval, authorization, license, permit or other order of, action by,
filing with or notification to, any court or governmental, regulatory or
administrative authority. The Parties have received on October 31, 1997 a
confirmation by the German cartel authorities ("Bundeskartellamt") that the
transactions contemplated hereby have been cleared and that no further cartel
approvals will be required.
Section 2.2 The Company represents and warrants to WABASH, and KBG, to
the best of its knowledge after due inquiry, represents and warrants to WABASH
as follows:
Section 2.2.1 Financial Information. The Company has delivered to WABASH
true and complete copies of the unaudited balance sheets of the Company as at
December 31, 1995 and 1996, and the related profit and loss accounts for each
of the two fiscal years ended December 31, 1995 and 1996, (collectively
referred to herein as the "ETZ - Fi-
<PAGE> 20
nancial Statements"). The 1996 ETZ-Financial Statements, however, did not
reflect the year-end accruals and the Company and KBG hereby represent and
warrant that the omission of such year-end accruals will not have any Material
Adverse Effect as defined herein. The Company, further, has delivered to
WABASH true and complete copies of the audited balance sheets of BTZ as at
December 31, 1995 and 1996, and the related profit and loss accounts for each
of the two fiscal years ended December 31, 1995 and 1996, together with all
related notes and schedules thereto, accompanied by the reports thereon of
BTZ's accountants (collectively referred to herein as the "BTZ-Financial
Statements"). The Company, further, has delivered to WABASH true and complete
copies of the unaudited interim financial statements of BTZ as at June 30,
1996 (the "BTZ-Interim Financial Statements"). The ETZ -Financial Statements,
the BTZ - Financial Statements and the BTZ - Interim Financial Statements are
herein referred to as the "Financial Statements". The Financial Statements
have been prepared in accordance with the German Generally Accepted Accounting
Principles applied on a consistent basis throughout the periods involved, and
present fairly the financial condition and results of operations of the
Company and its Subsidiaries as of the dates thereof and for the periods
covered thereby.
KBG, ETZ and BTZ will use their best efforts to procure that the ETZ -
Financial Statements for the years ended December 31, 1995 and 1996 will be
audited as soon as possible, in any event, however, no later than December 31,
1997. Each of KBG, ETZ and BTZ hereby represents and warrants that the Company
did not have any material business relationships (which would need to be
reflected in the Company s audited financial statements (including the notes
thereto)) with any companies other than KBG and BTZ.
The representations and warranties of KBG under the preceding sentence
shall expire upon presentation to WABASH of audited financial statements of
the Company for the years ended at December 31, 1995 and 1996, audited and
certified without any limitation (,,uneingeschranktes Testat") by an
independent outside auditor, as being in accordance with German Generally
Accepted Accounting Standards, to the extent that such accounts show that the
Company did not have any material business relationships (which would need to
be reflected in the Company's audited financial statements including the notes
thereto) with any companies other than KBG and BTZ. Upon expiry of the above
mentioned unrestricted representations and warranties given by KBG, KBG, as to
its best knowledge after due inquiry, represents and warrants to WABASH that
the Company did not have any material business
<PAGE> 21
relationships (which would need to be reflected in the Company's financial
statements (including the notes thereto)) with any companies other than KBG and
BTZ.
KBG, the Company and BTZ will use their best efforts to procure that
monthly financial statements of the Company and BTZ will, on a engaging basis,
be delivered as soon as possible to WABASH.
Section 2.2.2 No Undisclosed Liabilities. As of January 1, 1997, there
were no liabilities or obligations, whether absolute, accrued, contingent or
otherwise, of the Company or its Subsidiaries, of a nature which should have
been disclosed in the Financial Statements under German Generally Accepted
Accounting Principles, that have had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, other than as
reflected or reserved against in the Financial Statements.
Section 2.2.3 Conduct in the Ordinary Course; No Material Adverse
Change. Since January 1, 1997 the Company and its Subsidiaries have conducted
their business only in, and have not engaged in any material transaction other
than according to, the ordinary and usual course of such business and in a
manner consistent with past practice and there has not been (a) any event of
change which, individually or in the aggregate, have had or could reasonably
be expected to have a Material Adverse Effect; (b) any declaration, setting
aside or payment of any dividend or other distribution with respect to the
existing share quotas of the Company or its Subsidiaries; (c) any material
change by the Company or its Subsidiaries in accounting principles, practices
or methods; or (d) any event of default under or breach of (or any event which,
with the giving of notice or lapse of time or both, would be an event of
default or breach of) any credit, financing or other banking agreement or any
finance or operating lease, except where such event of default or breach is not
reasonably expected to have a Material Adverse Effect.
Section 2.2.4 Actions or Proceedings. Except to the extent disclosed in
the Financial Statements or listed in Schedule 2.2.4 hereto, there is no action,
suit, or other proceeding pending against, or to the knowledge of the senior
executives of the Company and the Subsidiaries after reasonable inquiry,
threatened against or affecting the Company or its Subsidiaries before any
court or arbitrator or any governmental, regulatory or administrative authority
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or to adversely affect the performance of the
obligations of the Company hereunder or the consummation of the transactions
contem-
<PAGE> 22
plated hereby.
Section 2.2.5 Compliance with Laws; Permits. The Company and its
Subsidiaries have complied, and are in compliance with all applicable laws,
regulations, permits, licenses, authorizations or orders (including any of the
foregoing relating to employment, labor matters, health, safety or the
protection of the environment) of any court or any governmental, regulatory or
administrative authority, where the failure to so comply has had or could
reasonably be expected to have a Material Adverse Effect. The Company and its
Subsidiaries hold in full force and effect all environmental, hazardous
material, health, safety, operating and other permits, licenses and other
authorizations of all courts or governmental, regulatory or administrative
authorities necessary or proper for the use and operation of the assets owned,
used or operated by it and for the conduct of its business, the absence of
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 2.2.6 Material Contracts. The Company has delivered or made
available to WABASH for review, true and correct copies or accurate and
complete written descriptions of the terms and provisions of all contracts and
agreements entered into by the Company and its Subsidiaries with their
shareholders or third parties, the cancellation or termination of which could
reasonably be expected to have a Material Adverse Effect. All such contracts
and agreements are, and on consummation of the transactions contemplated hereby
will remain, in full force and effect and the Company and its Subsidiaries are
not in breach of, or in default under, any such contract or agreement, and no
condition exists which but for the giving of notice or the passage of time
would result in a breach or default of any such contract or agreement.
Reference is made to the Management Disclosure Letter attached hereto
as Schedule 2.2.6.
Section 2.2.7 Taxes. All Tax Liabilities (as defined below) of the
Company and its Subsidiaries have been paid when and as due, except and to the
extent the Financial Statements contain sufficient provisions therefor. The
corporate income tax return of the Company and its Subsidiaries have not been
audited by the fiscal authorities. Such returns comply with all applicable laws
and regulations, other than noncompliances that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
For purposes of this Section, the term "Tax Liabilities" means all liabilities
in respect of any and all
<PAGE> 23
kinds of taxes (including, without limitation, income tax, corporate
tax, wealth and municipal taxes, transfer taxes of all kinds), levies, fees
(including, without limitation, social charges and other wage or salary related
duties), imposts or charges of any kind whatsoever, to be paid by the Company
or any of its Subsidiaries.
Section 2.2.8 Title and Related Matters. The Company and its
Subsidiaries have title to (i) all of their respective real and personal
properties and other assets, except as disclosed in Schedule 2.2.6, free and
clear of all title defects or encumbrances of any nature whatsoever and are
not, in the case of real property, subject to any rights of way, covenants,
conditions or building use restrictions, exceptions, variances, reservations or
limitations of any nature whatsoever that could materially limit the use of
such property as currently used; and (ii) the fixed and current assets owned or
leased by the Company and its Subsidiaries include all rights, properties and
other assets necessary to permit the Company and its Subsidiaries to conduct
business in all material respects in the same manner as their businesses have
been conducted prior to the date hereof. The only real property owned by the
Company or its Subsidiaries is set forth on Schedule 2.2.8 hereto.
Section 2.2.9 Insurance. All the assets of the Company and its
Subsidiaries of an insurable nature are adequately insured for all risks,
insured against by enterprises carrying on the same classes of business.
All policies of insurance taken out in connection with the assets of
the Company and its Subsidiaries are written in the name of the Company and its
Subsidiaries, respectively, and are in full force and effect. The Company and
its Subsidiaries have not done or omitted to do or allowed any third party to
do or not to do anything which might render any of those policies void or
voidable and have complied with all conditions attached to them.
No material claim under any policy of insurance taken out in connection
with the assets of the Company and of its Subsidiaries is outstanding and there
are no circumstances likely to give rise to such a claim.
Section 2.2.10 Industrial Property Rights and License Agreements. The
Company and its Subsidiaries have full legal title and are the exclusive owners
of the trademarks, patents for inventions, "know-how" and other intellectual
and industrial property rights specified in Schedule 2.2.10 hereto, and with
respect to such rights the Company and its Subsidiaries have duly and promptly
provided
<PAGE> 24
for payment of all the taxes due, if any. All such rights are valid and
existing and none of the same is subject to revocation.
None of the operations carried on by the Company and its Subsidiaries
infringes any right of another person in respect of any intellectual property
rights or will or may give rise to payment by the Company of any royalty or of
any sum in the nature of a royalty or to any liability to pay compensation
pursuant to any applicable legislation, nor have any claims or objections
concerning the free use and ownership of such rights by the Company been made
by any third parties.
Apart from the rights referred to above, the Company and its
Subsidiaries do not own, or make use of, in the course of their business, any
trademarks, patents for inventions, "know-how" or other intellectual or
industrial property rights in general.
The Company and its Subsidiaries are not party to any license
agreements or agreements of a like nature in relation to their business under
which they have granted or obtained the right to use patents for inventions,
trade marks, "know-how" or other intellectual or industrial property rights.
The Company or its Subsidiaries have not either disclosed or permitted or
undertaken or arranged to disclose to any person any of their know-how,
secrets, confidential information or lists of customers or suppliers.
The Company and its Subsidiaries have full and undisputed title, as
owner or licensee, to all trademarks, patents for inventions, "know-how" and
other intellectual and industrial property rights which are necessary to enable
them to carry on their business.
Section 2.2.11 Employees. The persons who, at the date of this
Agreement, are employed by the Company and its Subsidiaries are solely and
exclusively those listed by name, with indication of the relative category into
which they are placed, in Schedule 2.2.11 hereto (all the aforesaid persons are
hereinafter referred to as the "Employees"). The functions actually performed
by each of the Employees correspond to the category specified in Schedule
2.2.11.
The Employees have been duly remunerated for all the services performed
in the course of their working relationship with the Company and its
Subsidiaries in compliance with the applicable provisions of law and relative
labour contracts and all other payments due to them (whether in their capacity
as employees or otherwise) have been made
<PAGE> 25
and, with respect to any such amounts or rights which have matured in
favour of the Employees but which are not yet payable, funds sufficient to
cover the relative payments have been provided for in accordance with the
German Generally Accepted Accounting Principles. With respect to the
remuneration paid to the Employees, all Contributions have been made relating
to compulsory health insurance and social security and to the tax withholdings
laid down by law. No liability has been incurred by the Company or its
subsidiaries for breach of any contract of service or for services, or for any
other liability accruing from the termination of any contract of employment or
for services.
The overall package of remuneration and other benefits due to each
Employee and the relative categories into which they are placed are those set
forth in Schedule 2.2.11 hereto and there are no other forms of remuneration or
benefits or particular treatments (including, without limitation, special
incentive schemes) agreed, in addition to those set forth.
The conditions of employment applicable and actually applied to the
Employees are solely those provided for by law and by the provisions of the
applicable collective labour contracts. No special conditions of employment
exist, of a collective or individual nature, which provide for the regulation
of the relationship with the Employees or with any of them in a manner other
than that of the provisions referred to above.
There is no agreement or understanding (contractual or otherwise)
between the Company or any of its Subsidiaries and any Employee or ex-employee,
manager or former manager with respect to his employment or office, his ceasing
to be employed, termination of his office or his retirement of his employment
or appointment and more generally there is no agreement or understanding
(contractual or otherwise) between the Company and any Employee or ex-employee
with respect to his employment, his ceasing to be employed or his retirement
which is more favorable than the provisions set out in the applicable
collective labour contract.
Section 2.2.12 Full Disclosure. No representation or warranty of the
Company or KBG in this Agreement nor any statement in any other document
referred to herein contains any untrue statement of a material fact, or omits
to state a material fact necessary to make the statements contained herein or
therein not misleading.
<PAGE> 26
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF KBG,
THE COMPANY AND BTZ
KBG, the Company and BTZ each severally hereby represent and
warrant to WABASH, as follows:
Section 3.1 Authority. Each of KBG, the Company and BTZ, as the case
may be, has taken all action necessary and has given and obtained all
required authorizations and approvals and has all necessary power,
corporate and otherwise, and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by each
of KBG, the Company and BTZ, as the case may be, of its obligations
hereunder and the consummation by each of KBG, the Company and BTZ, as
the case may be, of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of each of KBG, the
Company and ETZ, as the case may be. This Agreement constitutes a legal,
valid and binding agreement of KBG, the Company and BTZ, as the case may
be, enforceable against each of KBG, the Company and BTZ, as the case may
be, in accordance with its terms.
Section 3.2 No Conflict. The execution and delivery of this
Agreement by each of KBG, the Company and BTZ, as the case may be, do
not, and the performance by each of KBG, the Company and BTZ, as the case
may be, of its obligations hereunder and the consummation by each of KBG,
the Company and BTZ, as the case may be, of the transactions contemplated
hereby will not, (i) conflict with or result in the violation of any law,
regulation, governmental or court order, judgment or decree applicable to
KBG, the Company or BTZ, as the case may be, or (ii) conflict with or
result in any breach of any contract, agreement, license, permit,
franchise, concession or other instrument to which KBG, the Company or
BTZ, as the case may be, is a party or by which it is bound, other than
any such conflicts or breaches that, individually or in the aggregate,
would not have a material and adverse effect on each of KBG's, the
Company's or BTZ's, ability, as the case may be, to consummate the
transactions contemplated hereby or to perform its obligations hereunder.
Section 3.3 Governmental Consents and Approvals. The execution and
delivery of this Agreement by each if KBG, the Company and BTZ, as the
case may be, does not, and the performance by each of KBG, the Company
and BTZ, as the case may be, of its obligations hereunder and the
consummation by KBG, the Company and BTZ, as the case may be, of the
transac-
<PAGE> 27
tions contemplated hereby will not, require any consent, approval,
authorization, license, permit or order of, action by, filing with or
notification to any court or governmental, regulatory or administrative
authority.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WABASH
WABASH hereby represents and warrants to KBG and the Company, as
follows:
Section 4.1 Organization and Authority. WABASH is a corporation duly
organized and validly existing under the laws of Delaware, USA. WABASH has all
necessary power, corporate and otherwise, and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by WABASH, the performance by WABASH of its obligations hereunder and the
consummation by WABASH of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of WABASH. This Agreement
constitutes a legal, valid and binding agreement of WABASH enforceable against
WABASH in accordance with its terms.
Section 4.2 No Conflict. The execution and delivery of this Agreement
by WABASH do not, and the performance by WABASH of its obligations hereunder
and the consummation by WABASH of the transactions contemplated hereby will
not, (i) conflict with or result in the violation of the Articles of
Association and By-laws of WABASH or any law, regulation, governmental or court
order, judgment or decree applicable to WABASH, or (ii) conflict with, result
in any violation of or default (with or without notice or lapse of time or
both) under, or give rise to any right of termination, cancellation or
acceleration of any right or obligation or to a loss of any benefit under, any
contract, agreement, license, permit, franchise, concession or other instrument
to which WABASH is a party or by which it is bound, other than any such
conflicts, violations or defaults that, individually or in the aggregate, would
not have a material and adverse effect on the ability of WABASH to consummate
the transactions contemplated hereby or to perform its obligations hereunder.
Section 4.3 Governmental Consents and Approvals. The execution and
delivery of this Agreement by WABASH, the performance by WABASH of its
obligations hereunder and the consummation by WABASH of the transactions
contemplated hereby do not and will not require any consent, approval,
<PAGE> 28
authorization, license, permit or other order of, action by, filing
with or notification to any court or governmental, regulatory or administrative
authority.
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
Section 5.1 Financing. The Nominal Issue Price to be received by the
Company as of the date hereof shall be, without any limitations and without any
right of rentention or offset, to the free disposition of the managing
directors ("Geschaftsfuhrer") of the Company.
The Surplus Issue Price to be ultimately received by the Company
pursuant to the provisions of this Agreement shall be paid by WABASH on the
date hereof to the Joint KBG/WABASH Account specified in Section 1.2 above and
shall be distributed and available to the Company (without any right of
retention or offset) in installments as described as follows:
The funds of the Surplus Issue Price on the Joint KBG/WABASH Account
shall be disbursed to the Company upon request by the Supervisory Board of the
Company, such request to be subject to a 75% majority resolution of the
Supervisory Board, in accordance with the cash needs of the Company as
reasonably determined by the management of the Company, provided, however,
that, unless otherwise resolved by an unanimous resolution of the Supervisory
Board, (i) 50% of the funds of the Surplus Issue Price on the Joint KBG/WABASH
Account shall be disbursed to the Company no later than June 30, 1998, and (ii)
the remaining 50% of the funds of the Surplus Issue Price on the Joint
KBG/WABASH Account shall be disbursed to the Company no later than December 31,
1998. KBG and WABASH shall be entitled to any interest for the Surplus Issue
Price accrued on the Joint KBG/WABASH Account which shall be equally divided
between KBG and WABASH in the ratio 50:50.
Section 5.2. Condition Precedent. The obligations of WABASH to
subscribe for the Share Quota and to consummate the contemplated transactions
as described herein is subject to (i) the execution of the Shareholders
Agreement and (ii) the conversion of (x) KBG's claims in the amount of DM
9,000,000 against the Company pursuant to the provisions of KBG's partnership
agreement with the Company into capital reserves of the Company by duly
effected shareholder resolution; and (y) the principal amount of the loan of DM
4,000,000 given by KBG to the Company into capital reserves
<PAGE> 29
of the Company by duly effected shareholder resolution.
ARTICLE VI
INDEMNIFICATION
Section 6.1. WABASH hereby agrees to indemnify and hold harmless the
Company from and against any and all direct losses, claims, damages,
liabilities, costs and expenses which the Company may suffer, incur or become
subject to, insofar as such losses, claims, damages, liabilities, costs or
expenses arise out of or are based upon any material breach of any
representation, warranty, covenant or agreement of WABASH contained in this
Agreement or any document delivered in connection with this Agreement.
Section 6.2. The Company, KBG and BTZ hereby jointly and severally
agree to indemnify and hold fully harmless WABASH from and against any and all
direct losses, claims, damages, liabilities, costs and expenses which WABASH
may suffer, incur or become subject to, insofar as such losses, claims,
damages, liabilities, costs or expenses arise out of or are based upon any
material breach of any representation, warranty, covenant or agreement of the
Company, KBG or BTZ contained in this Agreement or any document delivered in
connection with this Agreement.
ARTICLE VII
ARBITRATION, GOVERNING LAW
Section 7.1 Arbitration. Any dispute, controversy or claim arising out
of, relating to or in connection with this Agreement or the breach, termination
or validity thereof ("Dispute") shall be finally settled by arbitration under
the Rules of Arbitration of the International Chamber of Commerce (the "ICC")
then in effect (the "Rules"), except as modified herein. The arbitration
proceedings shall be conducted, and the award shall be rendered in Paris,
France, in the English language. In the event of an arbitration involving only
two of the parties hereto, there shall be three arbitrators of whom each of the
claimant and the respondent shall select one in accordance with the Rules. The
claimant shall name its arbitrator in its notice of arbitration which shall
also include its statement of claim. The respondent shall name its arbitrator
in its statement of defense which it shall deliver to claimant within thirty
(30) days of claimant's notice of arbitration and statement of claim. The two
arbitrators so appointed shall select a third arbitrator to serve as
<PAGE> 30
presiding arbitrator, such selection to be made within thirty (30) days
of the selection of the selection second arbitrator. If any arbitrator has not
been appointed within the time limits specified herein and in the Rules, such
appointment shall be made by the International Court of Arbitration of the ICC
upon the written request of either the claimant or respondent within thirty
(30) days of such request. In the event of an arbitration involving more than
two parties hereto, there shall be three arbitrators who shall be jointly
nominated by the parties. If the parties fail so to nominate the arbitrators
within thirty (30) days from the date when the claimant(s)' notice of
arbitration is communicated to the respondents, at the request of any party the
arbitrators shall be appointed by the International Court of Arbitration of the
ICC within thirty (30) days of such request. The arbitral tribunal shall have
the authority to award any remedy or relief proposed by the claimant(s) or
respondent(s) pursuant to this Agreement, including without limitation,
specific performance of any obligation created under this Agreement. The
Parties hereby waive any rights of application or appeal to any court or
tribunal of competent jurisdiction to the fullest extent permitted by law in
connection with any question of law arising in the course of the arbitration or
with respect to any award made except for actions relating to enforcement of
the arbitration agreement or an arbitral award. By agreeing to arbitration, the
Parties do not intend to deprive any court of its jurisdiction to issue a
pre-arbitral injunction, pre-arbitral attachment or other order in aid of
arbitration proceedings and the enforcement of any award. The award shall be
final and binding upon the Parties, and shall be the sole and exclusive remedy
between the Parties regarding any claims, counterclaims, issues, or accounting
presented to the arbitral tribunal. Judgment upon any award may be entered in
any court having jurisdiction thereof. The Parties recognize and acknowledge
that this Agreement constitutes a commercial transaction, and to the extent
that any Party hereto may be entitled, in any jurisdiction, to claim for itself
or its revenues, assets or properties, sovereign immunity from service of
process, from suit, from the jurisdiction of any arbitral tribunal or any
court, from attachment prior to judgment, from attachment in aid of execution
of an arbitral award (interlocutory or final), or from any other legal process,
and to the extent that, in any such jurisdiction there may be attributed such a
sovereign immunity, each Party hereto hereby irrevocably agrees not to claim,
and hereby irrevocably waives, such sovereign immunity.
Section 7.2 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of Germany without giving effect to its
rules on conflict of laws.
<PAGE> 31
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Expenses. All expenses of KBG, WABASH, the Company and BTZ
in connection with this Agreement, the transactions contemplated hereby and the
respective obligations of the Parties hereunder, shall be paid by the party
incurring such expense, except to the extent that notarization fees for this
Agreement and the Shareholders Agreement and all other notarial fees and
related expenses necessary to contemplate the transactions described herein and
therein shall be borne by WABASH and KBG in the ratio 50:50. The Parties,
however, acknowledge and agree that notarization fees related to the increase
of the Company's nominal share capital shall be borne by the Company.
Section 8.2 Notices; Documents. (a) All notices and other
communications under this Agreement shall be in writing in the English language
and shall be given or made (and shall be deemed to have been duly given or
made) by delivery in person, by overnight courier service, by telecopy or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective Parties at the following addresses (or at such other address for a
Party as shall be specified in a notice given in accordance with this Section
8.2):
if to KBG:
Bayerische
Kapitalbeteiligungsgesellschaft mbh
Ottostrabe 1
80333 Munich
Germany
Tel: +49 89 55 25 63 43
Fax: +49 89 55 25 63 40
Attention: Gechaftaleitung
if to WABASH:
WABASH National Corporation
1000 Sagamore Pkwy S.
Lafayette Indiana 47905
USA Tel: +1 765 448 1591
Fax: +1 765 449 5308
Attention: Dick Snodgress
<PAGE> 32
if to the Company:
ETZ Europaische Trailerzug
Beteiligungsgesellschaft mbH
PoccistraBe 7
80336 Munich
Germany
Tel: +49 89 74 71 48 40
Fax: +49 89 74 71 48 22
Attention: Geschaftsleitung
if to BTZ:
BTZ Bayerische Trailerzug Gesellschaft fur
bimodalen Guterverkehr mbH
PoccistraBe 7
80336 Munich Germany
Tel: +49 89 74 71 48 40
Fax: +49 89 74 71 48 22
Attention: Geschaftsleitung
(b) All documents and other instruments to be delivered under this
Agreement, shall be in the English language or, if the original language
thereof is not the English language, shall be accompanied by an English
language translation thereof.
Section 8.3 Confidentiality. (a) Each Party shall treat confidentially
in accordance with the terms of this Section 8.3 all information provided to it
by or on behalf of any other Party relating to the business and operations of
such other Party and all correspondence among the Parties relating to this
Agreement or the transactions contemplated hereby, including the terms and
conditions hereof ("Confidential Information"). Confidential Information does
not include information (i) already available to the recipient party on a
non-confidential basis, (ii) that becomes generally available to the public
other than as a result of a disclosure by or on behalf of the recipient party
in violation of the terms of this Section 8.3, or (iii) that becomes available
to the recipient party on a non-confidential basis from a source that is not a
party hereto, provided that such source is not known by the recipient to be
legally prohibited from, or contractually bound not to, disclose such
information.
(b) Subject to Section 8.4, the Parties agree that
<PAGE> 33
any Confidential Information received by it will not be disclosed by it
except (i) to such Party's advisors and counsel being subject to professional
duties of confidentiality also in favor of the other Parties, and having a need
to know such information in connection with advising or representing such Party
in respect of this Agreement and the matters contemplated herein, (ii) with the
prior written consent of the Party to whom such information pertains, (iii) in
connection with the exercise of its rights or remedies under or relating to
this Agreement, or (iv) as required by applicable law or competent judicial or
governmental authority or in accordance with the applicable rules of any stock
exchange; provided, however, that, in the event that any Party shall be
required to make any disclosure of confidential information as contemplated in
this clause (iv), it shall to the extent practicable (A) provide prior notice
thereof to the Party to whom such information pertains, (B) only disclose such
portions of Confidential Information as, in the opinion of its counsel, shall
be required to be disclosed under the circumstances and (C) request
confidential treatment for such disclosed information.
Section 8.4 Public Announcements. The Parties agree to consult with
each other before issuing any press release or otherwise making any public
statements with respect to the matters contemplated by this Agreement, and
shall not issue any such press release or make any such public statement prior
to such consultation or, after such consultation, if any Party is not
reasonably satisfied with the text of such release or statement, except as may
otherwise be required by applicable law.
Section 8.5 Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or construction of any provision of this Agreement.
Section 8.6 Severability. If any provision of this Agreement should be
invalid or ineffective, the validity of the remaining provisions hereof shall
not be affected thereby. The invalid or ineffective provisions shall be deemed
to be replaced by such valid and effective provision as most closely
corresponds to the economic purpose and substantive effect of the invalid or
ineffective provision and the original intention of the Parties. The same
applies mutatis mutandis with regard to the supplementary interpretation of the
Agreement.
Section 8.7 Entire Agreement; No Third Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein)
constitutes the entire
<PAGE> 34
agreement between the Parties with respect to the subject matter hereof
and supersedes all prior agreements and undertakings, both written and oral,
between the Parties with respect to the subject matter hereof. This Agreement
is for the sole benefit of the Parties and their permitted assigns and nothing
herein express or implied shall give to any other person any legal or equitable
rights hereunder.
Section 8.8 Amendments and Waivers. This Agreement may not be amended,
and none of its terms or provisions may be modified, except expressly by an
instrument in writing signed by the Parties. Any term or provision of this
Agreement may be waived, but only in writing by the Party that is entitled to
the benefit of such term or provision. No waiver by any Party of any provision
of this Agreement shall be deemed to be a waiver of any other provision hereof.
Section 8.9 Assignment. Except as expressly provided in this Agreement,
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the Parties without the prior written
consent of the other Parties, and any such purported assignment shall be void
and of no effect.
<PAGE> 35
TABLE OF CONTENTS
ARTICLE I. AUTHORIZATION, SUBSCRIPTION, PURCHASE AND SALE OF SHARE QUOTA
Section 1.1 ................................Capital Increase
Section 1.2 .......... Issuance of New Share Quota to WABASH
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF KBG AND THE
Section 2.1.1 ....................... Corporate Organization
................................. and Qualification
Section 2.1.2 ........................... Authorized Capital
Section 2.1.3 .............................. New Share Quota
Section 2.1.4 .......................... Corporate Authority
Section 2.1.5 .................................. No Conflict
Section 2.1.6 ...........Governmental Consents and Approvals
Section 2.2.1 ........................ Financial Information
Section 2.2.2 ................... No Undisclosed Liabilities
Section 2.2.3 .............. Conduct in the Ordinary Course;
........................ No Material Adverse Change
Section 2.2.4 ....................... Actions or Proceedings
Section 2.2.5 ................ Compliance with Laws; Permits
Section 2.2.6 ........................... Material Contracts
Section 2.2.7 ........................................ Taxes
Section 2.2.8 .................... Title and Related Matters
Section 2.2.9 .................................... Insurance
Section 2.2.10 ................. Industrial Property Rights
................................ and License Agreements
Section 2.2.11 ................................... Employees
Section 2.2.12 ..............................Full Disclosure
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF KBG, THE ..
Section 3.1 ...................................... Authority
Section 3.2 .................................... No Conflict
Section 3.3 ............ Governmental Consents and Approvals
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WABASH
Section 4.1 ..................... Organization and Authority
Section 4.2 .................................... No Conflict
Section 4.3 ............ Governmental Consents and Approvals
ARTICLE V. ADDITIONAL COVENANTS AND AGREEMENTS
Section 5.1 ....................................... Financing
<PAGE> 36
Section 5.2 ............................ Condition Precedent
ARTICLE VI. INDEMNIFICATION
ARTICLE VII. ARBITRATION, GOVERNING LAW
Section 7.1 .................................... Arbitration
Section 7.2 ................................... Governing Law
ARTICLE VIII. MISCELLANEOUS
Section 8.1 Expenses
Section 8.2 Notices; Documents
Section 8.3 Confidentiality
Section 8.4 Public Announcements
Section 8.5 Headings
Section 8.6 Severability
Section 8.7 Entire Agreement;
No Third Party Beneficiaries
Section 8.8 Amendments and Waivers
Section 8.9 Assignment
<PAGE> 1
EXHIBIT 23
[ARTHUR ANDERSEN LLP LETTERHEAD]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Wabash National Corporation:
We have reviewed the condensed consolidated balance sheets of WABASH NATIONAL
CORPORATION (a Delaware corporation) and subsidiaries as of September 30, 1997,
and the related condensed consolidated statements of income for the three
and nine-month periods ended September 30, 1997 and 1996, and the condensed
consolidated statements of cash flows for the nine-month periods ended
September 30, 1997 and 1996. These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquires of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Wabash National Corporation and
subsidiaries as of December 31, 1996 (not presented herein) and, in our report
dated January 17, 1997, we expressed an unqualified opinion on that statement.
In our opinion, the information set forth in the condensed consolidated balance
sheet of Wabash National Corporation and subsidiaries as of December 31, 1996
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
Arthur Andersen LLP
----------------------
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
October 17, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 10,864
<SECURITIES> 0
<RECEIVABLES> 136,000
<ALLOWANCES> 0
<INVENTORY> 208,421
<CURRENT-ASSETS> 380,820
<PP&E> 117,486
<DEPRECIATION> 0
<TOTAL-ASSETS> 605,925
<CURRENT-LIABILITIES> 156,234
<BONDS> 197,180
0
4
<COMMON> 200
<OTHER-SE> 220,677
<TOTAL-LIABILITY-AND-EQUITY> 220,881
<SALES> 577,897
<TOTAL-REVENUES> 577,897
<CGS> 533,987
<TOTAL-COSTS> 533,987
<OTHER-EXPENSES> 17,932
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,572
<INCOME-PRETAX> 14,867
<INCOME-TAX> 6,104
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,763
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
