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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 31, 1998
Date of Report
(Date of earliest event reported)
WABASH NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-10883 52-1375208
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
1000 Sagamore Parkway South
Lafayette, Indiana
(Address of principal executive offices)
47905
(Zip Code)
(765) 448-1591
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 31, 1998, Wabash National Corporation replaced its
existing $40 million receivable sale and servicing agreement with a new
non-recourse trade receivable securitization facility with NBD Bank, N.A. The
amount of the new facility is expected to vary between $75 to $90 million
depending on the amount of the underlying receivables. The Company applied the
net proceeds of the sale of the trade receivables to repay approximately $83
million of outstanding indebtedness under its unsecured revolving line of
credit with NBD Bank, N.A.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
The following are filed as exhibits to this Current Report on Form 8-K:
2.02 Receivables Sale Agreement, dated as of March 31, 1998
among Wabash National Corporation and Fruehauf Triler Services, Inc. and Wabash
National Funding Corporation.
2.03 Receivables Purchase Agreement dated as of March 31, 1998
among Wabash National Funding Corporation, Falcon Asset Securitization
Corporation, the Financial Institutions Party named therein and the First
National Bank of Chicago.
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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: April 14, 1998 By: /s/ RICK B. DAVIS
--------------------------------------------
Rick B. Davis
Controller
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RECEIVABLES SALE AGREEMENT
DATED AS OF MARCH 31, 1998
AMONG
WABASH NATIONAL CORPORATION AND FRUEHAUF TRAILER SERVICES, INC.,
AS THE ORIGINATORS,
AND
WABASH NATIONAL FUNDING CORPORATION,
AS THE BUYER
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TABLE OF CONTENTS
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ARTICLE I - AMOUNTS AND TERMS OF THE PURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1. Purchases of Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2. Payment for the Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.3. Purchase Price Credit Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.4. Payments and Computations, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.5. Transfer of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.6. Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II-REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.1. Originators' Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . 7
(a) Corporate Existence and Power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Non-Contravention, No Bulk Sale, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(e) Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(f) Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(g) Good Title; Perfection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(h) Places of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(i) Collections; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(j) Financial Statements; Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . 9
(k) Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(l) Actions, Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(m) Credit and Collection Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(n) Payments to Originator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(o) Ownership of the Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(p) Investment Company Act; Public Utility Holding Company Act. . . . . . . . . . . . . . . . . 10
(q) Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(r) ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III- CONDITIONS OF PURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.1. Conditions Precedent to Initial Purchase . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.2. Conditions Precedent to All Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV-COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.1. Affirmative Covenants of Originators . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Financial Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(i) Annual Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(ii) Quarterly Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(iii) Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(iv) Shareholders Statements and Reports. . . . . . . . . . . . . . . . . . . . . . . . 13
(v) S.E.C. Filings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(vi) Notices under Transaction Documents. . . . . . . . . . . . . . . . . . . . . . . . 13
(vii) Change in Credit and Collection Policy. . . . . . . . . . . . . . . . . . . . . . . 13
(viii) Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(i) Actual and Potential Events of Purchase and Sale Termination or Servicer Defaults. 14
(ii) Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(iii) ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(iv) Downgrade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Keeping and Marking of Records and Books. . . . . . . . . . . . . . . . . . . . . . . . . . 15
(f) Compliance with Contracts and Credit and Collection Policy . . . . . . . . . . . . . . . . 16
(g) Ownership Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(h) Purchasers' Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(i) Collections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.2. Negative Covenants of Originators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Name Change, Offices, Records and Books of Accounts. . . . . . . . . . . . . . . . . . . . 17
(b) Change in Payment Instructions to Obligors. . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Modifications to Contracts and Credit and Collection Policy. . . . . . . . . . . . . . . . 18
(d) Sales, Liens, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Accounting for Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V-ADMINISTRATION AND COLLECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.1. Designation of Sub-Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.2. Duties of Sub-Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.3. Collection Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.4. Responsibilities of the Originators . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.5. Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.6. Sub-Servicer Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VI-EVENTS OF PURCHASE AND SALE TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.1. Events of Purchase and Sale Termination. . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VII-INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.1. Indemnities by the Originators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.2. Other Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VIII-MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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Section 8.1. Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.2. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.3. Protection of Buyer's Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.4. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.5. Bankruptcy Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.6. Limitation of Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.7. CHOICE OF LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.8. CONSENT TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.9. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.10. Binding Effect; Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.11. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 8.12. Integration; Survival of Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 8.13. Counterparts; Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
EXHIBIT I DEFINITIONS
EXHIBIT II CHIEF EXECUTIVE OFFICE; RECORDS LOCATIONS; TRADE NAMES; FEIN
EXHIBIT III COLLECTION ACCOUNTS
EXHIBIT III-A COLLECTION ACCOUNTS
EXHIBIT IV FORM OF COMPLIANCE CERTIFICATE
EXHIBIT V FORM OF COLLECTION AGREEMENT
EXHIBIT VI CREDIT AND COLLECTION POLICY
EXHIBIT VII FORM OF INVOICE(S)
EXHIBIT VIII FORM OF MONTHLY REPORT
EXHIBIT IX FORM OF SUBSCRIPTION AGREEMENT
EXHIBIT X FORM OF SUBORDINATED NOTE
SCHEDULE A DOCUMENTS AND RELATED ITEMS TO BE DELIVERED ON OR PRIOR TO THE INITIAL PURCHASE
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THIS RECEIVABLES SALE AGREEMENT, dated as of March 31, 1998,
is by and among WABASH NATIONAL CORPORATION, a Delaware corporation ("WABASH"),
and FRUEHAUF TRAILER SERVICES, INC., a Delaware corporation ("FRUEHAUF"), and
WABASH NATIONAL FUNDING CORPORATION, a Missouri corporation (the "BUYER").
Each of Wabash and Fruehauf is sometimes hereinafter referred to as an
"ORIGINATOR" and together as the "ORIGINATORS." Unless defined elsewhere
herein, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in EXHIBIT I hereto.
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time
hereafter will own, certain Receivables. Each of the Originators
wishes to sell and assign to the Buyer, and the Buyer wishes to
purchase from each of the Originators, all of such Originator's right,
title and interest in and to such Receivables, whether now owned and
existing or hereafter arising.
Each of the Originators and the Buyer believes that it is in
their mutual best interests for such Originator to sell its
Receivables to the Buyer and for the Buyer to purchase such
Receivables.
The Buyer shall, on each applicable Purchase Date, purchase
all of each Originator's right, title and interest in and to such
Originator's Receivables existing on such date and all Related
Security and Collections associated therewith.
Each of the Originators and the Buyer intends the transactions
contemplated hereby to be true sales of Receivables from such
Originator to the Buyer, providing the Buyer with the full benefits of
ownership of the Receivables, and neither of the Originators nor the
Buyer intends these transactions to be, or for any purpose to be
characterized as, loans from the Buyer to either or both of the
Originators.
Upon each purchase of Receivables from an Originator, the
Buyer will sell undivided interests therein and in the associated
Related Security and Collections, pursuant to that certain Receivables
Purchase Agreement dated as of March 31, 1998 (as the same may from
time to time hereafter be amended, supplemented, restated or otherwise
modified, the "PURCHASE AGREEMENT") among the Buyer, Falcon Asset
Securitization Corporation ("FALCON"), the financial institutions from
time to time party thereto as "INVESTORS" and The First National Bank
of Chicago or any successor agent appointed under Article IX of the
Purchase Agreement, as agent for Falcon and such Investors (in such
capacity, the "AGENT").
ARTICLE I
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AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchases of Receivables.
(a) Each of the Originators does hereby sell, assign,
transfer, set-over and otherwise convey to the Buyer, without recourse (except
to the extent expressly provided herein), and the Buyer does hereby purchase
from such Originator, all of such Originator's right, title and interest in and
to all of such Originator's Receivables existing as of the date of the initial
Purchase hereunder and all of such Originator's Receivables thereafter arising,
together, in each case, with all Related Security relating thereto and all
Collections thereof.
(b) In no event shall the Buyer be obligated to purchase,
or either of the Originators be obligated to sell, any Receivable arising after
the Termination Date. On the date of the initial Purchase, the Buyer shall
acquire all of each Originator's right, title and interest in and to all
Receivables of such Originator existing as of the close of business on the
Business Day immediately prior to such Purchase, together with all Related
Security relating thereto and all Collections thereof. On each Business Day
thereafter through and including the Termination Date, the Buyer shall acquire
all of each Originator's right, title and interest in and to all of such
Originator's Receivables which were not previously purchased by the Buyer
hereunder upon the creation of such Receivables (together with all Related
Security relating thereto and all Collections thereof), PROVIDED THAT the
acquisition by the Buyer of such right, title and interest of such Originator
in connection with each Purchase hereunder is conditioned upon and subject to
such Originator's receipt of the Purchase Price therefor in accordance with
SECTION 1.2 below. In connection with the consummation of any Purchase
hereunder, the Buyer may request that the applicable Originator deliver, and
such Originator shall deliver, such approvals, opinions, information, reports
or documents as the Buyer may reasonably request.
(c) It is the intention of the parties hereto that each
Purchase of Receivables made hereunder shall constitute a "sale of accounts"
(as such term is used in Article 9 of the UCC), which sales are absolute and
irrevocable and provide the Buyer with the full benefits of ownership of such
Receivables. Except for the Purchase Price Credits owed pursuant to SECTION
1.3 hereof, each sale of Receivables hereunder is made without recourse to
either of the Originators; PROVIDED, HOWEVER, that (i) each Originator shall be
liable to the Buyer for its breach of any representations, warranties and
covenants made by such Originator, individually or, in the case of Fruehauf, as
Sub-Servicer, pursuant to the terms of the Transaction Documents to which such
Originator is a party, and (ii) such sale does not constitute and is not
intended to result in an assumption by the Buyer or any assignee thereof of any
obligation of either of the Originators or any other Person arising in
connection with the Receivables, the related Contracts and/or other Related
Security or any other obligations of such Originator. In view of the intention
of the parties hereto that the Purchases of Receivables made hereunder shall
constitute sales of such Receivables rather than loans secured thereby, each of
the Originators agrees on or prior to the date hereof to mark its master data
processing records relating to the Receivables with
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a legend acceptable to the Buyer and to the Agent (as the Buyer's assignee),
evidencing that the Buyer has purchased such Receivables as provided in this
Agreement and to note in its financial statements that its Receivables have
been sold to the Buyer. Upon the request of the Buyer or the Agent (as the
Buyer's assignee), each of the Originators will execute and file such financing
statements or continuation statements, and/or amendments thereto or assignments
thereof, and such other instruments or notices, as may be necessary or
appropriate to perfect and maintain the perfection of the Buyer's ownership
interest in the Purchased Assets, or as the Buyer or the Agent (as the Buyer's
assignee) may reasonably request.
Section 1.2. Payment for the Purchases.
(a) The Purchase Price for the initial Purchase of Receivables
shall be payable in full by the Buyer to the applicable Originator on the date
of such initial Purchase, and shall be paid to such Originator in the following
manner:
(i) by delivery of immediately available funds, to the
extent of funds made available to the Buyer in connection with its
subsequent sale of an interest in such Receivables to the Purchasers
under the Purchase Agreement; PROVIDED THAT a portion of such funds
shall be offset by amounts owed by Wabash to the Buyer on account of
the issuance of equity in the manner contemplated in the Subscription
Agreement and having a total value of not less than $ 2,490,000 with a
cash equity component of not less than $2,490,000, and
(ii) the balance, with the proceeds of a Subordinated
Loan.
The Purchase Price for each Purchase after the initial Purchase shall become
due and owing in full by the Buyer to the applicable Originator or its designee
on the date of such Purchase (EXCEPT THAT the Buyer may, with respect to any
such Purchase, offset against such Purchase Price any amounts owed by the
applicable Originator to the Buyer hereunder and which have become due but
remain unpaid) and shall be paid to such Originator in the manner provided in
the following paragraphs (b), (c) and (d).
(b) With respect to any Purchase after the initial
Purchase hereunder, on each Settlement Date, the Buyer shall pay to the
applicable Originator the Purchase Price for each Purchase from such Originator
during the preceding Calculation Period as follows:
FIRST, by delivery of immediately available funds, to the
extent of funds available to the Buyer from its subsequent sale of an
interest in such Receivables to the Agent for the benefit of the
Purchasers under the Purchase Agreement or otherwise;
SECOND, by borrowing from the applicable Originator a
subordinated revolving loan (each, a "SUBORDINATED LOAN") in an amount
not to exceed the lesser of (i) the remaining unpaid portion of such
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Purchase Price and (ii) the maximum Subordinated Loan that could be
borrowed without rendering the Buyer's Net Worth less than the
Required Capital Amount; and
THIRD, solely in the case of Purchases from Wabash, unless
either of the Originators has declared the Termination Date to have
occurred, by accepting a contribution to the Buyer's capital pursuant
to the Subscription Agreement in an amount equal to the remaining
unpaid balance of such Purchase Price.
Subject to the limitations set forth in the preceding clause SECOND, each of
the Originators irrevocably agrees to advance each Subordinated Loan requested
of it by the Buyer on or prior to the Termination Date. The Subordinated Loans
owing to each of the Originators shall be evidenced by, and shall be payable in
accordance with the terms and provisions of a Subordinated Note and shall be
payable solely from funds which the Buyer is not required under the Purchase
Agreement to set aside for the benefit of, or otherwise pay over to, the Agent
for the benefit of the Purchasers.
(c) From and after the Termination Date, neither of the
Originators shall be obligated to (but may, at its option): (i) sell
Receivables to the Buyer, or (ii) in the case of Wabash, contribute Receivables
to the Buyer's capital pursuant to clause THIRD in SECTION 1.2(b) unless, in
either of the foregoing cases, the applicable Originator reasonably determines
that the Purchase Price therefor will be satisfied with funds available to the
Buyer from sales of interests in the Receivables pursuant to the Purchase
Agreement, Collections, proceeds of Subordinated Loans or otherwise.
(d) On each Business Day during a Calculation Period
after the date of the initial Purchase, all Collections received shall be
applied by the applicable Originator as payments toward the Purchase Price of
Receivables sold or to be sold by such Originator to the Buyer during such
Calculation Period. In the event that with respect to any Calculation Period,
the aggregate Collections received by any Originator exceeds the Purchase Price
of Receivables sold by the applicable Originator to Buyer hereunder during such
Calculation Period, such Originator shall pay such excess to Buyer in cash,
PROVIDED THAT if the Termination Date has not occurred, such excess may first
be deducted from the amount, if any, owing to such Originator under its
Subordinated Note. Although amounts shall be paid directly to the applicable
Originator on a daily basis in accordance with the first sentence of this
paragraph, settlement of the Purchase Price between the Buyer and the
applicable Originator shall be effected on a monthly basis on Settlement Dates
with respect to all Purchases within the same Calculation Period and based on
the information contained in the Monthly Report for the Calculation Period then
most recently ended. In addition to such other information as may be included
therein, each Monthly Report shall set forth the following with respect to the
related Calculation Period: (i) the aggregate Outstanding Balance of
Receivables created by each of the Originators and conveyed in Purchases during
such Calculation Period, as well as the Net Receivables Balance (as defined in
the Purchase Agreement) included therein, (ii) the aggregate Purchase Price
payable to each of the Originators in respect of such Purchases, specifying the
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Discount Factor in effect for such Calculation Period and the aggregate
Purchase Price Credits deducted in calculating such aggregate Purchase Price,
(iii) the aggregate amount of funds received by such Originator during such
Calculation Period which are to be applied toward the aggregate Purchase Price
owing for such Calculation Period pursuant to the first sentence of this
paragraph, (iv) the increase or decrease in the amount outstanding under the
Subordinated Notes as of the end of such Calculation Period after giving effect
to the application of funds toward the aggregate Purchase Price and the
restrictions on Subordinated Loans set forth in paragraph (b) above, and (v)
the amount of any capital contribution made by Wabash to the Buyer as of the
end of such Calculation Period pursuant to paragraph (c) above. Although
settlement shall be effected on Settlement Dates, increases or decreases in the
amount owing under the Subordinated Notes made pursuant to paragraph (b) above
and any contribution of capital by Wabash to the Buyer made pursuant to
paragraph (c) above shall be deemed to have occurred and shall be effective as
of the last Business Day of the Calculation Period to which such settlement
relates.
Section 1.3. Purchase Price Credit Adjustments. If on any
day the Outstanding Balance of a Receivable is:
(a) reduced as a result of any defective or damaged goods
or services, trade-ins, any cash discount or any adjustment by the
applicable Originator (whether individually or, in the case of
Fruehauf, in its performance of its duties as Sub-Servicer),
(b) reduced or canceled as a result of a setoff in
respect of any claim by any Person (whether such claim arises out of
the same or a related transaction or an unrelated transaction and
whether such claim relates to the applicable Originator or any
Affiliate thereof other than the Buyer), or
(c) is otherwise reduced as a result of any of the
factors set forth in the definition of "DILUTIONS,"
then, in such event, the Buyer shall be entitled to a credit (each, a "PURCHASE
PRICE CREDIT") against the Purchase Price otherwise payable hereunder to the
applicable Originator equal to the full amount of such reduction or
cancellation. If such Purchase Price Credit exceeds the Original Balance of
the Receivables to be sold by the applicable Originator hereunder on any
Purchase Date, then the applicable Originator shall pay the remaining amount of
such Purchase Price Credit in cash within 2 Business Days thereafter; PROVIDED
THAT if the Termination Date has not occurred, such Originator shall be allowed
to deduct the remaining amount of such Purchase Price Credit from any
indebtedness owed to it under its Subordinated Note.
Section 1.4. Payments and Computations, Etc. All amounts
to be paid or deposited by the Buyer hereunder shall be paid or deposited in
accordance with the terms hereof on the day when due in immediately available
funds to the account of the applicable Originator designated from time to time
by such Originator or as
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otherwise directed by such Originator. In the event that any payment owed by
any Person hereunder becomes due on a day which is not a Business Day, then
such payment shall be made on the next succeeding Business Day. Any amount due
hereunder which is not paid when due hereunder shall bear interest at the Base
Rate as in effect from time to time until paid in full; PROVIDED, HOWEVER, that
such interest rate shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made
on the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
Section 1.5. Transfer of Records.
(a) In connection with the Purchases of Receivables
hereunder, each of the Originators hereby sells, transfers, assigns and
otherwise conveys to the Buyer all of such Originator's right and title to and
interest in the Records relating to all Receivables sold by such Originator
hereunder, without the need for any further documentation in connection with
any Purchase. In connection with such transfer, each of the Originators hereby
grants to each of the Buyer, the Agent, the Servicer and the Sub-Servicer, an
irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by such Originator to account for Receivables sold by
it, to the extent necessary to administer such Receivables, whether such
software is owned by such Originator or is owned by others and used by such
Originator under license agreements with respect thereto; PROVIDED THAT should
the consent of any licensor of such Originator to such grant of the license
described herein be required, such Originator hereby agrees that upon the
request of the Buyer (or the Agent as the Buyer's assignee), such Originator
will use its reasonable efforts to obtain the consent of such third-party
licensor. The license granted hereby shall be irrevocable, and shall terminate
on the date this Agreement terminates in accordance with its terms.
(b) Each of the Originators (i) shall take such action
reasonably requested by the Buyer and/or the Agent (as the Buyer's assignee),
from time to time hereafter, that may be necessary or appropriate to ensure
that the Buyer and its assigns under the Purchase Agreement have an enforceable
ownership interest in the Records relating to the Receivables purchased from
such Originator hereunder, and (ii) shall use its reasonable efforts to ensure
that the Buyer, the Agent and the Servicer each has an enforceable right
(whether by license or sublicense or otherwise) to use all of the computer
software used to account for the Receivables and/or to recreate such Records.
Section 1.6. Characterization. If, notwithstanding the
intention of the parties expressed in SECTION 1.1(c), any sale by either of the
Originators (or contribution by Wabash) to the Buyer of Receivables hereunder
shall be characterized as a secured loan and not a sale, then this Agreement
shall constitute a security agreement under the UCC and other applicable law.
Without being in derogation of the parties' intention that each sale of
Receivables hereunder shall constitute a true sale thereof, each of the
Originators hereby grants to the Buyer a duly perfected
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security interest in all of such Originator's right, title and interest in and
to all of such Originator's Receivables existing as of the date of the initial
Purchase hereunder and all of such Originator's Receivables thereafter arising,
together in each case with all Related Security relating thereto and all
Collections thereof, which security interest shall be prior to all other
Adverse Claims thereto. After an Event of Purchase and Sale Termination, the
Buyer and its assignees shall have, in addition to the rights and remedies
which they may have under this Agreement, all other rights and remedies
provided to a secured creditor after default under the UCC and other applicable
law, which rights and remedies shall be cumulative.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Originators' Representations and Warranties.
Each of Fruehauf, individually and in its capacity as Sub-Servicer, and (except
where a specific representation speaks only of Fruehauf) Wabash represents and
warrants to the Buyer and its assigns as follows:
(a) Corporate Existence and Power. Such Originator is a
corporation validly organized and existing and in good standing under the laws
of the state of its incorporation, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where the nature of
its business requires such qualification and the failure to be so qualified
would have a Material Adverse Effect, and has full power and authority and
holds all requisite governmental licenses, permits and other approvals to enter
into and perform its obligations under the Transaction Documents and to own and
hold under lease its property and to conduct its business substantially as
currently conducted.
(b) Non-Contravention, No Bulk Sale, Etc.. The
execution, delivery and performance by such Originator of this Agreement and
each other Transaction Document to which such Originator is a party, and such
Originator's use of the proceeds of Purchases made hereunder, are within its
corporate powers, have been duly authorized by all necessary corporate action,
do not contravene or violate (i) its certificate or articles of incorporation
or by-laws, (ii) any law, rule or regulation applicable to it the contravention
or violation of which would or could reasonably be expected to have a Material
Adverse Effect, (iii) any restrictions under any material agreement, contract
or instrument to which it is a party or by which it or any of its property is
bound, the contravention or violation of which would or could reasonably be
expected to have a Material Adverse Effect or (iv) any material order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, the contravention or violation of which would or could reasonably be
expected to have a Material Adverse Effect and do not result in the creation or
imposition of any Adverse Claim on assets of such Originator or its
Subsidiaries (except as created hereunder); and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law. No
transaction contemplated hereby requires compliance with any bulk sales act or
similar law.
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(c) Governmental Authorization. Other than the filing of
the financing statements required hereunder, no authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
such Originator of the Transaction Documents to which it is a party.
(d) Binding Effect. Each of the Transaction Documents to
which such Originator is a party has been duly authorized, executed and
delivered by such Originator. Each of such Transaction Documents constitutes
the legal, valid and binding obligation of such Originator enforceable against
such Originator in accordance with its respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws of general applicability and by the effect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(e) Accuracy of Information. All information heretofore
furnished by such Originator or any of its Affiliates to the Buyer, the Agent
or the Purchasers for purposes of or in connection with the Transaction
Documents or any transaction contemplated thereby is, and all such information
hereafter furnished by such Originator or any of its Affiliates to the Buyer,
the Agent and/or the Purchasers will be, true and accurate in every material
respect, on the date such information is stated or certified and does not and
will not contain any material misstatement of fact or omit to state a material
fact or any fact necessary to make the statements contained therein not
misleading.
(f) Use of Proceeds. No proceeds of any Purchase
hereunder will be used (i) for a purpose which violates, or would be
inconsistent with, Regulation G, T, U or X promulgated by the Board of
Governors of the Federal Reserve System from time to time or (ii) to acquire
any security in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended.
(g) Good Title; Perfection. Immediately prior to each
Purchase hereunder, such Originator shall be the legal and beneficial owner of
its Receivables and Related Security with respect thereto, free and clear of
any Adverse Claim, except as created by the Transaction Documents. This
Agreement is effective to, and shall, upon each Purchase hereunder, irrevocably
transfer to the Buyer legal and equitable title to, with the legal right to
sell and encumber, such Receivables and the Related Security, free and clear of
any Adverse Claim except as otherwise created by the Buyer under the Purchase
Agreement. Without limiting the foregoing, there has been duly filed all
financing statements or other similar instruments or documents necessary under
the UCC of all appropriate jurisdictions (or any comparable law) to perfect the
Buyer's ownership interest in such Receivables and the other Purchased Assets
originated by such Originator.
(h) Places of Business. The principal places of business
and chief executive office of such Originator and the offices where such
Originator keeps all its Records are located at the address(es) listed on
EXHIBIT II or such other locations
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notified to the Buyer in accordance with SECTION 4.2(a) in jurisdictions where
all action required by SECTION 4.2(a) has been taken and completed. Such
Originator's Federal Employer Identification Number is correctly set forth on
EXHIBIT II.
(i) Collections; etc. Except as otherwise notified to
the Buyer in accordance with SECTION 4.2(b):
(i) such Originator has instructed all Obligors to pay
all Collections directly to a segregated lock-box identified on
EXHIBIT III hereto,
(ii) in the case of all proceeds remitted to any such
lock-box which is now or hereafter established, such proceeds will be
deposited directly by the applicable Collection Bank into a
concentration account or a depository account listed on EXHIBIT III,
(iii) the names and addresses of all Collection Banks,
together with the account numbers of the Collection Accounts of such
Originator at each Collection Bank, are listed on EXHIBIT III, and
(iv) each lock-box and Collection Account listed on
EXHIBIT III-A is subject to a Collection Agreement that is in full
force and effect, and after the occurrence and during the continuance
of a Servicer Default, each lock-box and Collection Account (other
than any lock-box or Collection Account then subject to a Collection
Agreement) shall, within ten (10) Business Days after such Originator
receives notice thereof, be subject to a Collection Agreement,
PROVIDED THAT if after using reasonable efforts, the applicable
Originator is unable within ten (10) Business Days to obtain the
consent and agreement of the applicable bank or financial institution
where any such lock-box or Collection Account is maintained to such
Collection Agreement, such Originator shall no longer permit
Collections to be deposited into such lock-box or Collection Account
and shall cause all Collections previously sent to such lock-box or
Collection Account to be sent to a lock-box or Collection Account that
is subject to a Collection Agreement.
In the case of lock-boxes and Collection Accounts identified on EXHIBIT III,
exclusive dominion and control thereof has been transferred to the Buyer. Such
Originator has not granted any Person, other than the Buyer as contemplated by
this Agreement, dominion and control of any lock-box or other Collection
Account, or the right to take dominion and control of any lock-box or other
Collection Account at a future time or upon the occurrence of a future event.
(j) Financial Statements; Material Adverse Effect. The
consolidated financial statements of such Originator and its consolidated
Subsidiaries dated December 31, 1997 furnished by such Originator to the Buyer
and the Agent are complete and correct in all material respects, and such
financial statements have been
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prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial condition
and results of operations of such Originator and its consolidated Subsidiaries
as of such date and for the period ended on such date. Since December 31,
1997, no event has occurred which would have a Material Adverse Effect.
(k) Names. In the past five years, such Originator has
not used any corporate names, trade names or assumed names other than those
listed on EXHIBIT II.
(l) Actions, Suits. There are no actions, suits or
proceedings pending, or to the best of such Originator's knowledge, threatened,
against or affecting such Originator, or any of the properties of such
Originator, in or before any court, arbitrator or other body, which are
reasonably likely to (i) adversely affect the collectibility of a material
portion of the Receivables, (ii) materially adversely affect the financial
condition of such Originator or (iii) materially adversely affect the ability
of such Originator to perform its obligations under the Transaction Documents.
Such Originator is not in default with respect to any order of any court,
arbitrator or governmental or regulatory body.
(m) Credit and Collection Policy. With respect to each
Receivable, such Originator has complied in all material respects with the
Credit and Collection Policy.
(n) Payments to Originator. With respect to each
Receivable sold by such Originator to the Buyer under this Agreement, the Buyer
has given reasonably equivalent value to such Originator in consideration for
the transfer of such Receivable and the Related Security with respect thereto
under this Agreement and such transfer was not made for or on account of an
antecedent debt. No sale by such Originator to the Buyer of any Receivable is
or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11
U.S.C. Sections 101 et seq.), as amended.
(o) Ownership of the Buyer. Wabash owns one hundred
percent (100%) of the issued and outstanding capital stock of the Buyer. Such
capital stock is validly issued, fully paid and nonassessable and there are no
options, warrants or other rights to acquire securities of the Buyer. The
management of Wabash has determined that the organization of the Buyer and the
limited purposes of the Buyer are in the best interests of Wabash.
(p) Investment Company Act; Public Utility Holding
Company Act. Such Originator is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended from time to time, or any
successor statute. Such Originator is not a "holding company" or an
"affiliate" of a "holding company" or, as of the date of this Agreement, a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company act of 1935, as amended.
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(q) Purpose. Such Originator has determined that, from a
business viewpoint, the sale of the Receivables to the Buyer contemplated
hereby is in the best interests of such Originator.
(r) ERISA. No fact or circumstance, including but not
limited to any Reportable Event, exists in connection with any Plan which would
constitute grounds for the termination of any Plan by the Pension Benefit
Guaranty Corporation or for the appointment by the appropriate United States
District Court of a trustee to administer any such Plan and which would result
in the termination of a Plan and the incurrence of material liability by such
Originator or any ERISA Affiliate to the Plan, the PBGC, participants,
beneficiaries or a trustee. No Plan has an accumulated funding deficiency as
defined in Section 412(a) of the Code or Section 302(a) of ERISA, and no lien
exists with respect to any Plan for failure to make required contributions as
described under 412(n) of the Code or Section 302(f) of ERISA. For the
purposes of this representation and warranty, such Originator shall be deemed
to have knowledge of all facts attributable to the Plan administrator
designated pursuant to ERISA.
ARTICLE III
CONDITIONS OF PURCHASES
Section 3.1. Conditions Precedent to Initial Purchase.
The initial Purchase under this Agreement is subject to the conditions
precedent that (i) the Buyer shall have received on or before the date of such
Purchase those documents listed on SCHEDULE A hereto and (ii) all conditions
precedent to the initial purchase under the Purchase Agreement shall have been
satisfied and/or waived.
Section 3.2. Conditions Precedent to All Purchases. Each
Purchase shall be subject to the further conditions precedent that (a) on the
date of each such Purchase, the following statements shall be true both before
and after giving effect to such Purchase (and acceptance of the proceeds of
such Purchase shall be deemed a representation and warranty by the applicable
Originator that such statements are then true):
(i) the representations and warranties of such Originator
set forth in ARTICLE II are correct on and as of the date of such
Purchase as though made on and as of such date;
(ii) no event has occurred, or would result from such
Purchase, that will constitute an Event of Purchase and Sale
Termination, and no event has occurred and is continuing, or would
result from such Purchase, that would constitute a Potential Event of
Purchase and Sale Termination; and
(iii) the Termination Date shall not have occurred;
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and (b) the Buyer shall have received such other approvals, opinions
or documents as it may reasonably request.
Notwithstanding the foregoing conditions precedent, upon
payment of the Purchase Price for any Purchase (whether by payment of cash,
through an increase in the amounts outstanding under the applicable
Subordinated Note, by offset of amounts owed to the Buyer by such Originator
and/or, in the case of Purchases from Wabash, by offset of capital
contributions to be made by Wabash under the Subscription Agreement), title to
the applicable Receivables and related assets included in such Purchase shall
vest in the Buyer, whether or not the conditions precedent to such Purchase
were in fact satisfied.
ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of Originators. Until
the date this Agreement shall terminate in accordance with its terms, each of
Fruehauf, individually and in its capacity as Sub-Servicer, and Wabash
covenants and agrees as follows:
(a) Financial Reporting. It will maintain a system of
accounting established and administered in accordance with generally accepted
accounting principles, and furnish to the Buyer:
(i) Annual Reporting. Within 90 days after the close of
each of its fiscal years, a complete copy of Wabash's consolidated and
consolidating audit report, which shall include at least Wabash's
consolidated and consolidating balance sheet, income statement and
statement of cash flow for such year, examined in accordance with
generally accepted auditing standards by an independent public
accountant of national reputation selected by Wabash and reasonably
acceptable to the Buyer, together with the certificate described in
clause (iii) below. Such auditor's report shall be free from
exceptions, reservations or qualifications as a result of which the
auditor is unable to conclude that the financial statements fairly
present or adequately disclose the financial condition of Wabash and
its consolidated Subsidiaries (including Fruehauf) and shall not be
limited because of restricted or limited access by such accountant to
any material portion of the Originators' or any Subsidiary's records.
Delivery within the time period specified above of copies of Wabash's
Annual Report filed with the Securities and Exchange Commission on
Form 10-K for such fiscal year (together with Wabash'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 Securities and Exchange
Commission shall be deemed to satisfy the requirements of this SECTION
4.1(a)(i).
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(ii) Quarterly Reporting. Within 60 days after the close
of each of the first three quarterly periods of each of its fiscal
years, Wabash's unaudited consolidated and consolidating balance
sheet, income statement and statement of cash flow for such quarter
and that portion of the fiscal year ending with such quarter,
certified by the Chief Financial Officer or Controller of Wabash as
being complete and correct and fairly presenting Wabash's and its
consolidated Subsidiaries' (including Fruehauf's) financial condition
and results of operations as of the end of such quarter and for that
portion of the fiscal year ending with such quarter, together with the
certificate described in clause (iii) below. Delivery within the time
periods specified above of copies of Wabash's Quarterly Report on Form
10-Q for the applicable quarter prepared in compliance with the
requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this SECTION
4.1(a)(ii).
(iii) Compliance Certificate. Together with the financial
statements required to be delivered under clauses (i) and (ii) above,
a compliance certificate in substantially the form of EXHIBIT IV
signed by such Originator's Chief Financial Officer or Controller and
dated the date of such annual financial statement or such quarterly
financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon
the furnishing thereof to the shareholders of such Originator, copies
of all financial statements, reports and proxy statements so
furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements, notices of securities issuance,
annual, quarterly, monthly or other regular reports, if any, which
such Originator or any of its Subsidiaries files with the Securities
and Exchange Commission.
(vi) Notices under Transaction Documents. Forthwith upon
its receipt of any notice, request for consent, certification, report
or other communication under or in connection with any Transaction
Document from any Person other than the Buyer, the Agent or any
Purchaser, copies of the same (other than any such notice, request,
certification, report or other communication delivered by or in
connection with any Obligor that does not indicate the occurrence or
the likely occurrence of a material adverse effect on the
collectibility of a material portion of Receivables attributable to
such Obligor).
(vii) Change in Credit and Collection Policy. At least 30
days prior to the effectiveness of any material change in or material
amendment to the Credit and Collection Policy referred to in SECTION
5.2(c) of the Receivables Purchase Agreement and promptly after any
other material change in or material amendment to the Credit and
Collection Policy, a copy of the Credit and Collection Policy then in
effect and a notice indicating such change or amendment.
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(viii) Other Information. Such other information (including
non-financial information) as the Buyer (or any of its assignees) may
from time to time reasonably request.
(b) Notices. Such Originator will notify the Buyer and
the Agent in writing of any of the following immediately upon learning of the
occurrence thereof, describing the same and, if applicable, the steps being
taken with respect thereto:
(i) Actual and Potential Events of Purchase and Sale
Termination or Servicer Defaults. The occurrence of each Event of
Purchase and Sale Termination, Potential Event of Purchase and Sale
Termination, Servicer Default or Potential Servicer Default of which
such Originator becomes aware.
(ii) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding against such
Originator or any of its Subsidiaries, or to which such Originator or
any of its Subsidiaries becomes party, in either case which (A)
remains unsettled for a period of 90 days from the commencement
thereof and involves claims for damages or relief in an amount which
could reasonably be expected to have a Material Adverse Effect, or (B)
has resulted in a final judgment or judgments for the payment of money
in an amount which has a Material Adverse Effect.
(iii) ERISA. The occurrence of any Reportable Event under
Section 4043(c) (5), (6), (9) or (10) of ERISA with respect to any
Plan, any decision to terminate or withdraw from a Plan, any finding
made with respect to a Plan under Section 4041(c) or (e) of ERISA, the
commencement of any proceeding with respect to a Plan under Section
4042 of ERISA, the failure to make any required installment or other
required payment under Section 412 of the Code or Section 302 of ERISA
on or before the date for such installment or payment, or any material
increase in the actuarial present value of unfunded vested benefits
under all Plans over the preceding year.
(iv) Downgrade. Any downgrade in the rating of any
Indebtedness of such Originator by Standard & Poor's Ratings Group or
by Moody's Investors Service, Inc., setting forth the Indebtedness
affected and the nature of such change.
(v) Labor, Strike, Walkout, Lockout or Slowdown. The
commencement or threat of any labor strike, walkout, lockout or concerted labor
slowdown which could reasonably be expected to have a Material Adverse Effect
(collectively, "LABOR ACTIONS").
(c) Compliance with Laws. Such Originator will comply in
all material respects with all applicable laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject.
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(d) Audits. Such Originator will furnish to the Buyer
(and/or the Agent on behalf of the Buyer) from time to time such information
with respect to it and the Receivables as the Buyer or the Agent may reasonably
request. Subject to SECTION 8.4 and SECTION 11.5(b) of the Purchase Agreement,
such Originator shall, at such Originator's expense and during regular business
hours as requested by Buyer (or the Agent on its behalf) upon reasonable
notice, permit the Buyer or the Agent, or their respective agents or
representatives (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Originator relating to
Receivables and the Related Security, including, without limitation, the
related Contracts, and (ii) to visit the offices and properties of such
Originator for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to such Originator's financial condition
or the Receivables and the Related Security or such Originator's performance
hereunder or such Originator's performance under the Contracts with any of the
officers or employees of such Originator having knowledge of such matters (the
procedures described in the foregoing clauses (i) and (ii) are referred to
herein as an "Audit"). The first Audit shall occur in July 1998 for the 6
month period ending June 30, 1998. Audits shall be limited to one per calendar
year so long as (i) no Servicer Default has occurred and is continuing, and
(ii) the preceding Audit was reasonably satisfactory in all material respects
to Buyer (and/or Agent on Buyer's behalf), otherwise the frequency of Audits
shall not be limited.
(e) Keeping and Marking of Records and Books.
(i) Such Originator will maintain and implement
administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables
originated by it in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and
other information reasonably necessary or advisable for the collection
of all Receivables (including, without limitation, records adequate to
permit the immediate identification of each new Receivable originated
by it and all Collections of and adjustments to each existing
Receivable). Such Originator will give the Agent notice of any
material change in the administrative and operating procedures
referred to in the previous sentence.
(ii) Such Originator will (a) on or prior to the date
hereof, mark its master data processing records and other books and
records relating to its Receivables with a legend, acceptable to the
Buyer, describing the ownership interest of the Buyer therein and
further describing the assignment of interests therein sold by the
Buyer to the Agent for the benefit of the Purchasers pursuant to the
Purchase Agreement and (b) upon the request of the Buyer or the Agent
following the occurrence of an Event of Purchase and Sale Termination:
(x) mark each Contract with a legend describing Buyer's interest
therein and further describing the Agent's interest therein for the
benefit of the Purchasers and (y) deliver to the Buyer or its designee
all Contracts (including, without limitation, all multiple originals
of any such Contract constituting "chattel paper," certificated
"investment property" or an "instrument").
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(f) Compliance with Contracts and Credit and Collection
Policy. Such Originator will timely and fully perform and comply in all
material respects with all provisions, covenants and other promises required to
be observed by it under the Contracts related to the Receivables conveyed by it
hereunder, and (ii) comply in all material respects with the Credit and
Collection Policy. Such Originator will pay when due any taxes payable in
connection with the Receivables conveyed by it hereunder.
(g) Ownership Interest. Such Originator shall take all
necessary action to establish and maintain in favor of the Buyer a valid and
perfected first priority ownership interest in the Purchased Assets to the
fullest extent contemplated herein, including, without limitation, taking such
action to perfect, protect or more fully evidence the interest of the Buyer
hereunder as the Buyer or its assignees may reasonably request.
(h) Purchasers' Reliance. Such Originator acknowledges
that the Agent and the Purchasers are entering into the transactions
contemplated by the Purchase Agreement in reliance upon the Buyer's identity as
a separate legal entity from Wabash. Therefore, from and after the date of
execution and delivery of this Agreement, Wabash shall take all reasonable
steps including, without limitation, all steps that the Buyer or any assignee
of the Buyer may from time to time reasonably request, to maintain the Buyer's
identity as a separate legal entity and to make it manifest to third parties
that the Buyer is an entity with assets and liabilities distinct from those of
Wabash and any Affiliates thereof and not just a division of Wabash. Without
limiting the generality of the foregoing and in addition to the other covenants
set forth herein, (i) neither of the Originators shall hold itself out to third
parties as liable for the debts of the Buyer nor purport to own the Receivables
and other assets acquired by the Buyer, (ii) Wabash shall take all other
actions necessary on its part to ensure that the Buyer is at all times in
compliance with the "separateness" covenants set forth in SECTION 5.1(k) of the
Purchase Agreement and (iii) Wabash shall cause all tax liabilities arising in
connection with the transactions contemplated herein or otherwise to be
allocated between Wabash and the Buyer on an arm's-length basis and in a manner
consistent with the procedures set forth in U.S. Treasury Regulations Sections
1.1502-33(d) and 1.1552-1.
(i) Collections. Such Originator shall instruct all
Obligors to pay all Collections directly to a segregated lock-box or other
Collection Account listed on EXHIBIT III. A Collection Agreement that is in
full force and effect is required for each segregated lock-box or other
Collection Account listed on EXHIBIT III-A, but upon the occurrence and during
the continuance of a Servicer Default, each segregated lock-box or other
Collection Account (other than any lock-box or Collection Account then subject
to a Collection Agreement) shall, within ten (10) Business Days after such
Originator receives notice thereof, be subject to a Collection Agreement,
PROVIDED THAT if after using reasonable efforts, the applicable Originator is
unable within ten (10) Business Days to obtain the consent and agreement of the
applicable bank or financial institution where any such lock-box or Collection
Account is maintained to such Collection Agreement, such Originator shall no
longer permit Collections to be deposited into such lock-box or Collection
Account and shall cause all Collections
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previously sent to such lock-box or Collection Account to be sent to a lock-box
or Collection Account that is subject to a Collection Agreement. In the case
of payments remitted to any lock-box, the Originator shall cause all proceeds
from such lock-box to be deposited directly by a Collection Bank into a
concentration account or a depositary account listed on EXHIBIT III. Pursuant
to SECTION 5.3 hereof and the Collection Agreements, such Originator has
transferred and assigned to the Buyer all of its right, title and interest in
and to, and exclusive ownership, dominion and control (subject to the terms of
this Agreement) to each Collection Account. In the case of any Collections
received by either of the Originators, such Originator shall remit such
Collections to a Collection Account established for purposes of receiving
Collections on Receivables originated by it not later than the Business Day
immediately following the date of receipt of such Collections, and, at all
times prior to such remittance, such Originator shall itself hold such
Collections in trust, for the exclusive benefit of the Buyer and its assigns.
In the case of any remittances received by such Originator in any such
Collection Account that shall have been identified, to the satisfaction of the
Servicer, to not constitute Collections or other proceeds of Receivables or the
Related Security, such Originator shall promptly remit such items to the Person
identified to it as being the owner of such remittances. From and after the
date the Agent delivers to any of the Collection Banks a Collection Notice
pursuant to SECTION 6.3 of the Purchase Agreement, the Agent, as assignee of
the Buyer, may request that the applicable Originator, and such Originator
thereupon promptly shall, direct all Obligors on Receivables sold by it to the
Buyer to remit all payments thereon to a new depositary account (the "NEW
CONCENTRATION ACCOUNT") specified by the Agent and, at all times thereafter
such Originator shall not deposit or otherwise credit to the New Concentration
Account any cash or payment item other than Collections. Alternatively, after
the occurrence of a Servicer Default, the Agent may request that the applicable
Originator, and such Originator thereupon promptly shall, direct all Persons
then making remittances to any account listed on EXHIBIT III which remittances
are not payments on Receivables to deliver such remittances to a location other
than an account listed on EXHIBIT III.
(j) ERISA. Such Originator shall make all required
installments or other required payments under Section 412 of the Code or
Section 302 of ERISA on or before the due date for such installment or other
payment except to the extent failure to make such installment or payment would
not have a Material Adverse Effect.
Section 4.2. Negative Covenants of Originators. Until the
date this Agreement shall terminate in accordance with its terms, each of
Fruehauf, individually and in its capacity as Sub-Servicer, and Wabash, further
covenants and agrees as follows:
(a) Name Change, Offices, Records and Books of Accounts.
Such Originator will not change its name, identity or corporate structure
(within the meaning of Section 9-402(7) of any applicable enactment of the UCC)
or relocate its chief executive office or any office where Records are kept
unless it shall have: (i) given the Buyer and the Agent at least 30 days prior
notice thereof and (ii) delivered to the Buyer all financing statements,
instruments and other documents requested by
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the Buyer (or the Agent on behalf of the Buyer) in connection with such change
or relocation.
(b) Change in Payment Instructions to Obligors. Such
Originator will not add or terminate any bank as a Collection Bank from those
listed in EXHIBIT III, or make any change in its instructions to Obligors
regarding payments to be made to such Originator or payments to be made to any
lock-box, Collection Account or Collection Bank, unless the Buyer and the Agent
shall have received, at least five (5) Business Days before the proposed
effective date therefor:
(i) written notice of such addition, termination or
change, and
(ii) with respect to the addition of a lock-box,
Collection Account or Collection Bank, an executed account agreement
and an executed Collection Agreement from such Collection Bank
relating thereto;
PROVIDED, HOWEVER, that such Originator may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing lock-box or other Collection Account that is
subject to a Collection Agreement then in effect.
(c) Modifications to Contracts and Credit and Collection
Policy. Such Originator shall not fail to continue to engage primarily in the
material lines of business in which it operates on the date hereof and will not
make any material change in the Credit and Collection Policy which would be
reasonably likely to adversely affect the collectibility of any material
portion of the Receivables or decrease the credit quality of any newly created
Receivables in any material respect. Except as provided in SECTION 5.2(c),
neither Fruehauf, individually nor as Sub-Servicer, nor Wabash will extend,
amend or otherwise modify the terms of any Receivable or any Contract related
thereto other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens, Etc. Such Originator shall not sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, or create or suffer to exist any Adverse Claim upon
(including, without limitation, the filing of any financing statement) or with
respect to, any of the Purchased Assets or assign any right to receive income
in respect thereof (other than, in each case, the creation of the interests
therein in favor of the Buyer provided for herein and the Agent and the
Purchasers provided for in the Purchase Agreement), and such Originator shall
defend the right, title and interest of the Buyer in, to and under any of the
foregoing property, against all claims of third parties claiming through or
under such Originator.
(e) Accounting for Purchases. Such Originator will not,
and shall not permit any Affiliate to, account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than the sale of the Receivables and Related Security by such
Originator to the Buyer or in any other
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respect account for or treat the transactions contemplated hereby in any manner
other than as a sale of the Receivables and Related Security by such Originator
to the Buyer except to the extent that such transactions are not recognized on
account of consolidated financial reporting in accordance with generally
accepted accounting principles.
ARTICLE V
ADMINISTRATION AND COLLECTION
Section 5.1. Designation of Sub-Servicer. (a) The
servicing, administration and collection of the Receivables shall be conducted
by the Servicer so designated from time to time in accordance with SECTION 6.1
of the Purchase Agreement. Fruehauf is hereby designated as, and hereby agrees
to act as sub-servicer (the "SUB-SERVICER") for the Buyer in the Buyer's
capacity as the initial Servicer designated pursuant to the terms of the
Purchase Agreement, and Fruehauf agrees in such capacity as Sub-Servicer to
perform all of the duties and obligations of the Servicer set forth herein and
in the Purchase Agreement with respect to the Receivables, Related Security
related thereto and Collections thereof.
(b) Fruehauf further agrees that, so long as it shall
remain as Sub-Servicer, it shall be directly liable to the Agent and the
Purchasers for the full and prompt performance of all such duties and
responsibilities of the Servicer; PROVIDED THAT (i) nothing in this Agreement
shall eliminate the Buyer's primary liability to the Agent and the Purchasers
for its duties as Servicer, (ii) the Buyer and its assigns shall retain sole
responsibility and authority for withdrawing funds from each Collection
Account, and (iii) the Agent and the Purchasers shall be entitled to deal
exclusively with the Buyer in matters relating to the discharge by the Servicer
of its duties pursuant to SECTION 6.1 of the Purchase Agreement.
(c) Without the prior written consent of the Buyer and
its assignees, Fruehauf shall not be permitted to delegate any of its duties or
responsibilities as Sub-Servicer to any Person. If at any time the Agent shall
designate as Servicer any Person other than the Buyer, all duties and
responsibilities theretofore delegated by the Buyer to Fruehauf may, at the
discretion of the Agent, be terminated forthwith on notice given by the Buyer
or the Agent (as assignee of the Buyer) to Fruehauf.
Section 5.2. Duties of Sub-Servicer. (a) The Sub-Servicer
shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Receivable from time to time, all in accordance with
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy.
(b) The Sub-Servicer shall use its reasonable best
efforts to segregate, on each Business Day, in a manner acceptable to the Buyer
and the Agent, all cash, checks and other instruments received by it from time
to time constituting Collections from the general funds of the Sub-Servicer
prior to the remittance thereof to the Buyer
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to be administered in accordance with the procedures described herein and in
Article I of the Purchase Agreement.
(c) The Sub-Servicer, may, in accordance with the Credit
and Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Sub-Servicer may determine to be
appropriate to maximize Collections thereof; PROVIDED, HOWEVER, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Defaulted Receivable or limit the rights of the Agent
or the Purchasers under the Purchase Agreement. Notwithstanding anything to
the contrary contained herein, from and after the occurrence of an Event of
Purchase and Sale Termination, the Buyer shall have the absolute and unlimited
right to direct the Sub-Servicer to commence or settle any legal action with
respect to any Receivable or to foreclose upon or repossess any Related
Security.
(d) The Sub-Servicer shall hold in trust for the Buyer
and its assignees, in accordance with their respective interests, all Records
that evidence or relate to the Receivables, the related Contracts and Related
Security or that are otherwise necessary or desirable to collect the
Receivables and shall, as soon as reasonably practicable upon demand of the
Buyer, deliver or make available to the Buyer all such Records at the chief
executive office of Fruehauf. The Sub-Servicer shall, as soon as practicable
following receipt thereof, turn over to the Buyer all Collections of
Receivables LESS any cash collections or other cash proceeds received with
respect to indebtedness not constituting Receivables.
(e) Any payment by an Obligor in respect of any
indebtedness owed by it to either of the Originators in connection with a
Receivable shall, except as otherwise specified by such Obligor or otherwise
required by contract or law and unless otherwise instructed by the Buyer, be
applied as a Collection of any Receivable of such Obligor originated by such
Originator (starting with the oldest such Receivable) to the extent of any
amounts then due and payable thereunder before being applied to any other
receivable or other obligation of such Obligor.
Section 5.3. Collection Rights. Each of the Originators
hereby authorizes the Buyer and the Servicer, and agrees that each of the Buyer
and the Servicer shall be entitled to (i) endorse such Originator's name on
checks and other instruments representing Collections, (ii) enforce the
Receivables and the Related Security and (iii) take such action as shall be
necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the
Servicer or its designees, on behalf of the Buyer and its assignees, rather
than such Originator.
Section 5.4. Responsibilities of the Originators.
Anything herein to the contrary notwithstanding, the exercise by the Buyer (or
its assignees) of its rights hereunder shall not release the Sub-Servicer or
such Originator from any of their respective duties or obligations with respect
to any Receivables or under the related Contracts. Neither the Buyer nor any
of its assignees (including any Servicer) shall
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have any obligation or liability with respect to any Receivables or related
Contracts, nor shall any of them be obligated to perform the obligations of
such Originator.
Section 5.5. Reports. On or before the Business Day that
is three (3) Business Days prior to the Settlement Date of each month (or, if
such date is not a Business Day, the next succeeding Business Day), and at such
times as the Buyer or the Agent (as the Buyer's assignee) shall reasonably
request, the Sub-Servicer shall prepare and forward to the Buyer and the Agent
a Monthly Report for the related Calculation Period (or other comparable report
for such period as may be applicable).
Section 5.6. Sub-Servicer Fee. In consideration of the
Sub-Servicer's agreement to perform the duties and obligations of the Servicer
under the Purchase Agreement, the Buyer hereby agrees that, so long as Fruehauf
shall continue to perform as Sub-Servicer hereunder, the Buyer shall pay over
to Fruehauf a monthly fee in an amount equal to (i) a per annum rate not to
exceed 1% agreed to by the Buyer and Fruehauf from time to time, MULTIPLIED BY
(ii) the average Outstanding Balance of the Receivables held by the Buyer
(without taking account of any interests therein sold pursuant to the Purchase
Agreement) during the preceding Calculation Period, such fee to be calculated
to provide the Servicer and the Sub-Servicer reasonable compensation for their
respective servicing activities. Such fee shall be payable for each calendar
month on the Settlement Date immediately following the last day of such
calendar month.
ARTICLE VI
EVENTS OF PURCHASE AND SALE TERMINATION
Section 6.1. Events of Purchase and Sale Termination. The
occurrence of any one or more of the following events shall constitute an Event
of Purchase and Sale Termination:
(a) Either of the Originators or the Sub-Servicer shall
fail (i) to make any payment or deposit required hereunder, or (ii) to perform
or observe any term, covenant or agreement hereunder (other than as referred to
in clause (i) of this paragraph (a)) and such failure shall remain unremedied
for 3 days following occurrence thereof.
(b) Any representation, warranty, certification or
statement made by either of the Originators or the Sub-Servicer in this
Agreement, any other Transaction Document or in any other document delivered
pursuant hereto or thereto shall prove to have been incorrect in any material
respect when made or deemed made.
(c) (i) Either of the Originators or the Sub-Servicer
shall generally not pay its debts as such debts become due or shall admit in
writing its inability to pay its debts generally or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against either of the Originators or the Sub-Servicer seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding
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up, reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for
it or any substantial part of its property, unless any such proceeding or
action instituted by any Person other than such Originator is set aside or
withdrawn or ceases to be in effect within sixty (60) days from the date of the
filing of such action or making of any such appointment described in this
subsection (c); or (ii) either of the Originators or the Sub-Servicer shall
take any corporate action to authorize any of the actions set forth in clause
(i) above in this subsection (c).
(d) One or more final judgments shall be entered against
either of the Originators or any of their respective Subsidiaries (other than
the Buyer) for the payment of money in the aggregate amount of $1,000,000, or
the equivalent thereof in another currency, or more on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and such judgment shall continue unsatisfied and in effect for thirty (30)
consecutive days without a stay of execution.
(e) Any Plan of either of the Originators or any of its
Subsidiaries shall be terminated within the meaning of Title IV of ERISA except
as permitted by Section 4044(d) of ERISA, or a trustee shall be appointed by
the appropriate U.S. District Court to administer any Plan of such Originator
or any of its Subsidiaries, or the PBGC shall institute proceedings to
terminate any Plan of such Originator or any of its Subsidiaries or to appoint
a trustee to administer any such Plan and, upon the occurrence of any of the
foregoing, the then current value of guaranteed benefits and other benefit
commitments (as such terms are defined under Title IV of ERISA and determined
in accordance with the principles of Title IV of ERISA) for which such
Originator or any Subsidiary (other than the Buyer) might be liable to any
Person exceed the then current value of the assets allocable to such benefits
by more than $1,000,000.
(f) A Change of Control shall occur.
(g) A Servicer Default shall occur under the terms of the
Purchase Agreement and the Agent, at the direction of the Required Investors,
shall declare the Facility Termination Date to have occurred.
Section 6.2. Remedies. Upon the occurrence and during the
continuance of an Event of Purchase and Sale Termination, the Buyer may either
(i) remove Fruehauf as Sub-Servicer (to the extent such Event of Purchase and
Sale Termination was caused by, or arose as a result of the activities of, the
Sub-Servicer), or (ii) if such Event of Purchase and Sale Termination arose
other than as described in SECTION 6.2(i), declare the Termination Date to have
occurred, whereupon the Termination Date shall forthwith occur, without demand,
protest or further notice of any kind, all of which are hereby expressly waived
by each of the Originators; PROVIDED, HOWEVER, that upon the occurrence of an
Event of Purchase and Sale Termination described in SECTION 6.1(c) above or of
an actual or deemed entry of an
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order for relief with respect to either of the Originators under the Federal
Bankruptcy Code, the Termination Date shall automatically occur, without
demand, protest or any notice of any kind, all of which are hereby expressly
waived by each of the Originators. Upon the occurrence of the Termination Date
for any reason whatsoever, the Buyer and its assigns shall have, in addition to
all other rights and remedies under this Agreement or otherwise, all other
rights and remedies provided under the UCC, which rights shall be cumulative.
ARTICLE VII
INDEMNIFICATION
Section 7.1. Indemnities by the Originators. Without
limiting any other rights which the Buyer may have hereunder or under
applicable law, each of the Originators hereby jointly and severally agrees to
indemnify the Buyer and its assignees (including the Agent and each Purchaser)
and their respective officers, directors, agents and employees (each an
"INDEMNIFIED PARTY") from and against any and all damages, losses, claims,
taxes, liabilities, costs, expenses and for all other amounts payable,
including reasonable attorneys' fees and disbursements (all of the foregoing
being collectively referred to as "INDEMNIFIED AMOUNTS") awarded against or
actually incurred by any of them arising out of any of the following:
(i) any representation or warranty made by either
Originator (including, in the case of Fruehauf, in its capacity as the
Sub-Servicer) or any its officers under or in connection with this
Agreement, any other Transaction Document, any Monthly Report or any
other information or report delivered by either Originator or the
Sub-Servicer (so long as Fruehauf is the Sub-Servicer) pursuant hereto
or thereto, which shall have been false or incorrect when made or
deemed made;
(ii) the failure by either Originator (including, in the
case of Fruehauf, in its capacity as the Sub-Servicer) to comply with
any applicable law, rule or regulation with respect to any Receivable
or Contract related thereto, or the nonconformity of any Receivable or
Contract with any such applicable law, rule or regulation;
(iii) any failure of either Originator (including, in the
case of Fruehauf, in its capacity as the Sub-Servicer) to perform its
duties or obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability or similar claim arising out
of or in connection with goods or services which are the subject of
any Contract originated by such Originator;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of any Obligor to the payment
of any Receivable sold
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to the Buyer by either Originator (including, without limitation, a
defense based on such Receivable or the related Contract not being a
legal, valid and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other claim resulting
from the furnishing or failure to furnish the underlying services;
(vi) the commingling by either Originator (including, in
the case of Fruehauf, in its capacity as the Sub-Servicer) of
Collections of Receivables at any time with other funds;
(vii) any investigation, litigation or proceeding related
to or arising from this Agreement or any other Transaction Document,
the transactions contemplated hereby or thereby, the use of the
proceeds of a Purchase, the ownership of the Receivables or any other
investigation, litigation or proceeding relating to either Originator
in which any Indemnified Party becomes involved as a result of any of
the transactions contemplated hereby or thereby;
(viii) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of either Obligor
being immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding;
(ix) the sale by either Originator to the Buyer for cash
of any Receivable which is not, at the time of such sale, an Eligible
Receivable; or
(x) the failure to vest and maintain vested in the Buyer,
or to transfer to the Buyer, legal and equitable title to, and
ownership of, a first priority perfected ownership interest in the
Purchased Assets originated by either Originator, free and clear of
any Adverse Claim (other than as created under the Purchase
Agreement);
EXCLUDING, HOWEVER, the following:
(a) Indemnified Amounts to the extent final judgment of a
court of competent jurisdiction holds such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of
the Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes
losses in respect of Receivables that prove to be uncollectible on
account of the insolvency, bankruptcy or lack of creditworthiness of
the related Obligor; or
(c) taxes on or measured by the overall gross or net
income of such Indemnified Party to the extent that the computation of
such taxes is consistent with (i) the characterization of the
Purchases as true sales and (ii) the characterization of the
transactions under the Purchase Agreement as creating indebtedness of
the Buyer for purposes of federal taxation.
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Section 7.2. Other Costs and Expenses. Each of the
Originators, jointly and severally, shall pay to the Buyer on demand any and
all reasonable costs and expenses actually incurred by the Buyer, if any,
including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and
in connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following an Event of
Purchase and Sale Termination.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Waivers and Amendments.
(a) No failure or delay on the part of the Buyer (or any of
its assignees) or either of the Originators (including, in the case of
Fruehauf, in its capacity as Sub-Servicer) in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any
other further exercise thereof or the exercise of any other power, right or
remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing signed by the Originators
and the Buyer and, to the extent required under the Purchase Agreement, the
Agent, the Investors and/or the Required Investors.
Section 8.2. Notices. Except as otherwise expressly
provided herein, all communications and notices provided for hereunder shall be
in writing (including bank wire, telecopy or electronic facsimile transmission
or similar writing) and shall be given to the other parties hereto at their
respective addresses or telecopy numbers set forth on the signature pages
hereof or at such other address or telecopy number as such party may hereafter
specify for the purpose of giving notice to such party. All such
communications and notices shall, when mailed, telecopied, telegraphed, telexed
or cabled, be effective when received through the mails, transmitted by
telecopy, delivered to the telegraph company, confirmed by telex answerback or
delivered to the cable company, respectively.
Section 8.3. Protection of Buyer's Interests.
(a) Each of the Originators agrees that from time to
time, at its expense, it will promptly execute and deliver all instruments and
documents, and take all actions, that may be necessary or desirable, or that
the Buyer (or its assignees) may reasonably request, to perfect, protect or
more fully evidence the Buyer's ownership of the Receivables, or to enable the
Buyer (or its assignees) to exercise and enforce their rights and remedies
hereunder. The Buyer may, or the Buyer may direct
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the applicable Originator to, notify the Obligors on Receivables, at any time
following the occurrence of a Servicer Default and the replacement of Buyer as
Servicer under the Purchase Agreement, at such Originator's expense, of the
Buyer's ownership of the Receivables and may also direct that payments of all
amounts due or that become due under any or all Receivables be made directly to
the Buyer or its designee.
(b) If either of the Originators or the Sub-Servicer
fails to perform any of its obligations hereunder, the Buyer (or any of its
assignees) may (but shall not be required to) perform, or cause the performance
of, such obligation; and the Buyer's (and any of its assignee's) costs and
expenses incurred in connection therewith shall be payable by such Originator
or the Sub-Servicer, as applicable, on demand. Each of the Originators and the
Sub-Servicer irrevocably authorizes the Buyer at any time and from time to time
in the sole discretion of the Buyer, and appoints the Buyer as its
attorney-in-fact, to act on behalf of such Originator and, as applicable, the
Sub-Servicer: (i) to execute on behalf of such Originator as seller/debtor and
to file financing statements necessary or desirable in the Buyer's sole
discretion to perfect and to maintain the perfection and priority of the
Buyer's ownership interest in the Purchased Assets and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables as a financing statement in such offices as the
Buyer in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority of the Buyer's ownership interest in the
Purchased Assets. This appointment is coupled with an interest and is
irrevocable.
Section 8.4. Confidentiality.
(a) Each of the Originators and the Sub-Servicer shall
maintain and shall cause each of its employees and officers to maintain the
confidentiality of the content of this Agreement and the Purchase Agreement and
of the other confidential proprietary information with respect to the Agent and
Falcon and their respective businesses obtained by it or them in connection
with the structuring, negotiating and execution of the transactions
contemplated herein and therein, except that each of the Originators, the
Sub-Servicer and their respective officers and employees may disclose such
information to the Originator's or the Sub-Servicer's external accountants and
attorneys and as required by any applicable law or order of any judicial or
administrative proceeding. In addition, each of the Originators and the
Sub-Servicer may disclose any such nonpublic information pursuant to any law,
rule, regulation, direction, request or order of any judicial, administrative
or regulatory authority or proceedings (whether or not having the force or
effect of law).
(b) Anything herein to the contrary notwithstanding, each
of the Originators and the Sub-Servicer hereby consents to the disclosure of
any nonpublic information with respect to it (i) to the Buyer, the Agent, the
Investors or Falcon by each other, (ii) by the Buyer, the Agent or the
Purchasers to any prospective or actual assignee or participant of any of them
or (iii) by the Agent to any rating agency, Commercial Paper dealer or provider
of a surety, guaranty or credit or liquidity enhancement to Falcon or any
entity organized for the purpose of purchasing, or
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making loans secured by, financial assets for which First Chicago acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, provided each such Person is
informed of the confidential nature of such information in a manner consistent
with the practice of the Agent for the making of such disclosures generally to
Persons of such types and agrees that its use of such information shall be
limited to purposes related to such Person's acquisition and/or funding of
Receivable Interests (as defined in the Purchase Agreement) or providing
liquidity or credit enhancement therefor, or rating commercial paper to fund
such Receivable Interests. In addition, the Buyer, the Purchasers and the
Agent may disclose any such nonpublic information pursuant to any law, rule,
regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the force or effect
of law).
Section 8.5. Bankruptcy Petition.
(a) Each of the Originators and the Sub-Servicer hereby
covenants and agrees that, prior to the date which is one year and one day
after the payment in full of all outstanding senior indebtedness of Falcon, it
will not institute against, or join any other Person in instituting against,
Falcon any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
(b) Each of the Originators and the Sub-Servicer hereby
covenants and agrees that, prior to the date which is one year and one day
after all Aggregate Unpaids (under and as defined in the Purchase Agreement)
have been paid, it will not institute against, or join any other Person in
instituting against, the Buyer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the
laws of the United States or any state of the United States.
Section 8.6. Limitation of Liability. Except with respect
to any claim arising out of the willful misconduct or gross negligence of
Falcon, the Agent or any Investor or any assignee or participant of any of
them, no claim may be made by either of the Originators, the Sub-Servicer or
any other Person against Falcon, the Agent or any Investor or their respective
Affiliates, directors, officers, employees, attorneys or agents for any
special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act,
omission or event occurring in connection therewith; and each of the
Originators hereby waives, releases, and agrees not to sue upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
SECTION 8.7. CHOICE OF LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF ILLINOIS.
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SECTION 8.8. CONSENT TO JURISDICTION. EACH OF THE
ORIGINATORS HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT
EXECUTED BY SUCH ORIGINATOR PURSUANT TO THIS AGREEMENT AND EACH OF THE
ORIGINATORS HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE BUYER (OR THE
RIGHTS OF THE AGENT OR ANY PURCHASER AS THE BUYER'S ASSIGNEES) TO BRING
PROCEEDINGS AGAINST EITHER OR BOTH OF THE ORIGINATORS IN THE COURTS OF ANY
OTHER JURISDICTION WHEREIN ANY ASSETS OF SUCH ORIGINATOR MAY BE LOCATED. ANY
JUDICIAL PROCEEDING BY EITHER OR BOTH OF THE ORIGINATORS AGAINST THE BUYER, THE
AGENT OR ANY PURCHASER, ANY AFFILIATE OF THE AGENT OR A PURCHASER, OR ANY OTHER
OF THE BUYER'S ASSIGNEES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY EITHER OR BOTH OF THE ORIGINATORS PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
SECTION 8.9. WAIVER OF JURY TRIAL. EACH OF THE
ORIGINATORS AND THE BUYER HEREBY WAIVES 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 THIS AGREEMENT, ANY DOCUMENT EXECUTED BY EITHER OR BOTH OF THE
ORIGINATORS PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 8.10. Binding Effect; Assignability. This
Agreement shall be binding upon and inure to the benefit of the Originators,
the Buyer and their respective successors and permitted assigns (including any
trustee in bankruptcy). Neither of the Originators may assign any of its
rights and obligations hereunder or any interest herein without the prior
written consent of the Buyer. The Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of the Originators. Without limiting the foregoing, each of the
Originators acknowledges that the Buyer, pursuant to the Purchase Agreement,
shall assign to the Agent, for the benefit of the Purchasers, its rights,
remedies, powers and privileges hereunder and that the Agent may further assign
such rights, remedies, powers and privileges to the extent permitted in the
Purchase Agreement. Each of the Originators agrees that the Agent, as the
assignee of the Buyer, shall, subject to the terms of the Purchase Agreement,
have the right to enforce this Agreement and to exercise directly all of the
Buyer's rights and remedies under this Agreement (including, without
limitation, the right to give or withhold any consents or approvals of the
Buyer to be given or withheld hereunder) and each of the
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<PAGE> 33
Originators agrees to cooperate fully with the Agent and the Servicer in the
exercise of such rights and remedies. Each of the Originators further agrees
to give to the Agent copies of all notices it is required to give to the Buyer
hereunder. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and, subject to
the first sentence of SECTION 1.1(b), shall remain in full force and effect
until such time, after the Termination Date, as the Aggregate Unpaids shall be
equal to zero; PROVIDED, HOWEVER, that the rights and remedies with respect to
(i) any breach of any representation and warranty made by each of the
Originators pursuant to Article II, (ii) the indemnification and payment
provisions of Article VII, and (iii) SECTION 8.5 shall be continuing and shall
survive any termination of this Agreement.
Section 8.11. Subordination. Each of the Originators
agrees that any indebtedness, obligation or claim, it may from time to time
hold or otherwise have (other than any obligation or claim with respect to the
fees payable by the Buyer under SECTION 5.6) against the Buyer or any assets or
properties of the Buyer, whether arising hereunder or otherwise existing, shall
be subordinate in right of payment to the prior payment in full of any
indebtedness or obligation of the Buyer owing to the Agent or any Purchaser
under the Purchase Agreement. The subordination provision contained herein is
for the direct benefit of, and may be enforced by, the Agent and the Purchasers
and/or any of their assignees under the Purchase Agreement.
Section 8.12. Integration; Survival of Terms. This
Agreement, the Subordinated Notes, the Subscription Agreement and the
Collection Agreements contain the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.
Section 8.13. Counterparts; Severability. This Agreement
may be executed in any number of counterparts and by each party hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date hereof.
<TABLE>
<S> <C>
ORIGINATORS: WABASH NATIONAL CORPORATION
By:
-----------------------------------
Name:
Title:
Address for Notices:
1000 Sagamore Parkway South
Lafayette, IN 47905
Attention: Rick B. Davis, Controller
Phone: (765) 449-5392
Fax: (765) 447-9405
FRUEHAUF TRAILER SERVICES, INC.
By:
-----------------------------------
Name:
Title:
Address for Notices:
12813 Flushing Meadows Drive
St. Louis, MO 63131
Attention: Steven M. Old, Controller
Phone: (314) 822-1113
Fax: (314) 822-7627
</TABLE>
S-1
<PAGE> 35
BUYER: WABASH NATIONAL FUNDING CORPORATION
By:
------------------------------------
Name:
Title:
Address for Notices:
12813 Flushing Meadows Drive
St. Louis, MO 63131
Attention: Steven M. Old
Vice President and Treasurer
Phone: (314) 822-1113
Fax: (314) 822-7627
S-2
<PAGE> 36
EXHIBIT I
DEFINITIONS
AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE
FOLLOWING MEANINGS (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO BOTH THE SINGULAR
AND PLURAL FORMS OF THE TERMS DEFINED):
"ADVERSE CLAIM" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the other
Person, whether through ownership of voting securities, by contract or
otherwise.
"AGENT" means First Chicago in its capacity as "AGENT" under
the Purchase Agreement, and not in its individual capacity as an Investor, and
any successor Agent appointed under ARTICLE IX of the Purchase Agreement.
"AGREEMENT" means this Receivables Sale Agreement, as it may
be amended, restated or otherwise modified and in effect from time to time.
"AGGREGATE UNPAIDS" has the meaning set forth in the Purchase
Agreement.
"BASE RATE" means a rate per annum equal to the corporate base
rate, prime rate or base rate of interest, as applicable, announced by the
Reference Bank from time to time, changing when and as such rate changes;
PROVIDED, HOWEVER, that from and after the occurrence of an Event of Purchase
and Sale Termination and for so long as such Event of Purchase and Sale
Termination shall be continuing, the "BASE RATE" shall equal the sum of the
corporate base rate, prime rate or base rate of interest, as applicable,
announced by the Reference Bank from time to time, plus 2% per annum, changing
when and as such rate changes
"BUSINESS DAY" means any day on which banks are not authorized
or required to close in New York, New York or Chicago, Illinois and The
Depository Trust Company of New York is open for business.
"CALCULATION PERIOD" means each full or partial calendar month
which elapses during the term of this Agreement. The first Calculation Period
shall commence on the date of the initial Purchase and the final Calculation
Period shall terminate on the Termination Date.
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"CAPITAL" shall have the meaning set forth in the Purchase
Agreement.
"CHANGE OF CONTROL" means (i) any Person or Persons acting in
concert shall acquire beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934) of 20% or more of the outstanding shares of voting stock of an
Originator; or (ii) during any period of twelve (12) consecutive months,
commencing before or after the date hereof, individuals who at the beginning of
such twelve-month period were directors of an Originator shall cease for any
reason to constitute a majority of the board of directors of such Originator;
or (iii) Wabash shall cease to own, free and clear of all Adverse Claims, all
of the outstanding shares of voting stock of the Buyer on a fully-diluted
basis.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COLLECTION ACCOUNT" means each concentration account,
depositary account, lock-box account or similar account in which any
Collections are collected or deposited.
"COLLECTION AGREEMENT" means, in the case of any actual or
proposed Collection Account, an agreement in substantially the form of EXHIBIT
V hereto.
"COLLECTION BANK" means, at any time, any of the banks or
other financial institutions holding one or more Collection Accounts.
"COLLECTION DATE" means that date following the Termination
Date which is one year and one day after the date which (i) the Outstanding
Balance of all Receivables sold hereunder has been reduced to zero and (ii) the
Originators have paid to the Buyer all indemnities, adjustments and other
amounts which may be owed hereunder in connection with the Purchases.
"COLLECTIONS" means, (a) with respect to any Receivable, all
cash collections and other cash proceeds in respect of such Receivable,
including, without limitation, all cash proceeds of Related Security with
respect to such Receivable and (b) all payments or principal and interest made
under the Parent Demand Note.
"CONTRACT" means, with respect to any Receivable, any and all
Invoices and other agreements pursuant to which goods or services are ordered
from or provided by an Originator.
"CREDIT AND COLLECTION POLICY" means the Originators'
collective credit and collection policies and practices relating to Contracts
and Receivables existing on the date hereof and summarized in EXHIBIT VI
hereto, as modified from time to time in accordance with this Agreement.
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"DEFAULTED RECEIVABLE" means a Receivable: (i) as to which
any payment, or part thereof, remains unpaid for 90 days or more from the
original due date for such payment; (ii) as to which the Obligor thereof has
taken any action, or suffered any event to occur, of the type described in
SECTION 6.1(c) (as if references to either of the Originators therein refer to
such Obligor); (iii) as to which the Obligor thereof, if a natural person, is
deceased; or (iv) which has been identified by the applicable Originator as
uncollectible.
"DELINQUENT RECEIVABLE" means a Receivable (other than a
Defaulted Receivable) as to which any payment, or part thereof, remains unpaid
for more than 60 days but less than 90 days from the original due date for such
payment.
"DILUTIONS" means, at any time, the aggregate amount of
reductions in the Outstanding Balances of the Receivables as a result of any
setoff, discount, rebate, trade-in credit, credit memo, inter-company entry,
adjustment or otherwise, other than (i) cash Collections on account of the
Receivables, and (ii) charge-offs less the aggregate amount of customer
deposits at such time.
"DISCOUNT FACTOR" means a percentage calculated to provide the
Buyer with a reasonable return on its investment in the Receivables purchased
from an Originator after taking account of (i) the time value of money based
upon the anticipated dates of collection of such Receivables and the cost to
the Buyer of financing its investment in such Receivables during such period,
(ii) the risk of nonpayment by the Obligors, and (iii) the costs of
sub-servicing performed by Fruehauf. Each of the Originators and the Buyer may
agree from time to time to change the Discount Factor applicable to such
Originator based on changes in one or more of the items affecting the
calculation thereof, PROVIDED THAT any change to such Discount Factor shall
take effect as of the commencement of a Calculation Period, shall apply only
prospectively and shall not affect the Purchase Price payment in respect of
Purchases which occurred during any Calculation Period ending prior to the
Calculation Period during which the applicable Originator and the Buyer agree
to make such change.
"ELIGIBLE RECEIVABLE" shall have the meaning specified in the
Purchase Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer with either of the
Originators under Section 414 of the Code.
"EVENT OF PURCHASE AND SALE TERMINATION" has the meaning
assigned to that term in SECTION 6.1.
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<PAGE> 39
"FACILITY TERMINATION DATE" has the meaning set forth in the
Purchase Agreement.
"FINANCE CHARGES" means, with respect to a Contract, any
finance, interest, late payment charges or similar charges owing by an Obligor
pursuant to such Contract.
"FIRST CHICAGO" means The First National Bank of Chicago in
its individual capacity and its successors.
"FRUEHAUF" means Fruehauf Trailer Services, Inc., a Delaware
corporation, and its successors.
"INVESTORS" has the meaning set forth in the Preliminary
Statement of this Agreement.
"INVOICE" means, collectively, with respect to any Receivable,
any and all instruments, bills of lading, invoices or other writings which
evidence such Receivable or the goods (if any) underlying such Receivable.
"LABOR ACTIONS" has the meaning set forth in SECTION
4.1(b)(v).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the financial condition, business or operations of either of the
Originators, (ii) the ability of either of the Originators to perform its
obligations under any Transaction Document, (iii) the legality, validity or
enforceability of this Agreement, any Transaction Document (other than the
Collection Agreements) or any Collection Agreement relating to a Collection
Account into which a material portion of Collections are deposited, (iv) the
applicable Originator's, the Buyer's, the Agent's or any Purchaser's interest
in the Receivables generally or in any significant portion of the Receivables,
the Related Security or the Collections with respect thereto, or (v) the
collectibility of the Receivables generally or of any material portion of the
Receivables.
"MONTHLY REPORT" means a report, in substantially the form of
EXHIBIT VIII hereto (appropriately completed), furnished by the Sub-Servicer to
the Buyer and the Agent (as the Buyer's assignee) pursuant to SECTION 5.5.
"NET WORTH" means, as of the last Business Day of each
Calculation Period preceding any date of determination, an amount equal to (a)
the aggregate Outstanding Balance of the Receivables owned by the Buyer at such
time, OVER (b) THE SUM OF (i) the aggregate Capital outstanding at such time,
PLUS (ii) the aggregate outstanding principal balance of the Subordinated
Loans.
"OBLIGOR" means a Person obligated to make payments pursuant
to a Contract.
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<PAGE> 40
"ORIGINAL BALANCE" means, with respect to any Receivable, the
Outstanding Balance of such Receivable on the date it was purchased by the
Buyer.
"ORIGINATOR" means each of Wabash and Fruehauf.
"OUTSTANDING BALANCE" of any Receivable at any time means the
then outstanding principal balance thereof, and shall exclude any interest or
Finance Charges thereon, without regard to whether any of the same shall have
been capitalized.
"PBGC" means the Pension Benefit Guaranty Corporation created
under Section 4002(a) of ERISA or any successor thereto.
"PARENT DEMAND NOTE" has the meaning set forth in the Purchase
Agreement.
"PERSON" means an individual, partnership, corporation,
association, trust, limited liability company, joint venture or any other
entity, or organization, including a government or political subdivision or
agent or instrumentality thereof.
"PLAN" means any defined benefit plan maintained or
contributed to by either of the Originators or any Subsidiary of such
Originator or by any trade or business (whether or not incorporated) under
common control with such Originator or any Subsidiary of such Originator as
defined in Section 4001(b) of ERISA and insured by the PBGC under Title IV of
ERISA.
"POTENTIAL EVENT OF PURCHASE AND SALE TERMINATION" means an
event which, with the passage of time or the giving of notice, or both, would
constitute an Event of Purchase and Sale Termination.
"POTENTIAL SERVICER DEFAULT" has the meaning set forth in the
Purchase Agreement.
"PURCHASE" means each purchase by the Buyer of Receivables and
Related Security from an Originator pursuant to SECTION 1.1 of this Agreement.
"PURCHASE AGREEMENT" has the meaning set forth in the
Preliminary Statement of this Agreement.
"PURCHASE DATE" means the date on which each Purchase occurs
hereunder.
"PURCHASE PRICE" means, with respect to any Purchase on any
date, the aggregate price to be paid to the applicable Originator for such
Purchase in accordance with SECTION 1.2 of this Agreement for the Receivables
and Related Security being sold to the Buyer on such date, which price shall
equal (i) the product of (x) the Original Balance of such Receivables TIMES (y)
one minus the Discount Factor then in
7
<PAGE> 41
effect, MINUS (ii) any Purchase Price Credits to be credited against the
purchase price otherwise payable in accordance with SECTION 1.3 hereof.
"PURCHASE PRICE CREDIT" has the meaning set forth in SECTION
1.3.
"PURCHASED ASSETS" means, collectively, all Receivables
existing on the date of the initial Purchase hereunder, and all Receivables
arising thereafter through and including the Termination Date, all Collections
and Related Security associated therewith, all proceeds of the foregoing, and
all Collection Accounts and all balances, checks, money orders and other
instruments from time to time therein.
"PURCHASER" has the meaning set forth in the Purchase
Agreement.
"RECEIVABLE" means the indebtedness and other obligations owed
(at the time it arises, and before giving effect to any transfer or conveyance
contemplated under the Transaction Documents) to an Originator, whether
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of semi-trailers and related parts and
services by such Originator to commercial customers and includes, without
limitation, the obligation to pay any Finance Charges with respect thereto.
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual Invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction.
"RECORDS" means, with respect to any Receivable, all Contracts
and other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"REFERENCE BANK" means NBD Bank, N.A., or such other bank as
the Agent shall designate with the consent of the Buyer.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the applicable Originator's interest
in any goods (if any), the sale of which gave rise to such Receivable,
and any and all insurance contracts with respect thereto,
(ii) all customer deposits and other security
interests or liens and property subject thereto from time to time, if
any, purporting to secure payment of such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise, together with
all financing statements and security agreements describing any
collateral securing such Receivable,
8
<PAGE> 42
(iii) all guaranties, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to
the Contract related to such Receivable or otherwise,
(iv) all Records related to such Receivable,
(v) all of the applicable Originator's right,
title and interest in, to and under each Contract executed in
connection therewith in favor of or otherwise for the benefit of the
applicable Originator; and
(vi) all proceeds of any of the foregoing.
"REPORTABLE EVENT" has the meaning set forth in Section 4043
of ERISA.
"REQUIRED CAPITAL AMOUNT" means $2,490,000.
"REQUIRED INVESTORS" has the meaning set forth in the Purchase
Agreement.
"SECTION" means a numbered section of this Agreement, unless
another document is specifically referenced.
"SERVICER" means at any time the Person then authorized
pursuant to ARTICLE VI of the Purchase Agreement to service, administer and
collect Receivables.
"SERVICER DEFAULT" has the meaning set forth in the Purchase
Agreement.
"SETTLEMENT DATE" has the meaning assigned thereto in the
Purchase Agreement.
"SUBORDINATED LOAN" has the meaning set forth in SECTION
1.2(b).
"SUBORDINATED NOTE" means each promissory note in
substantially the form of EXHIBIT X hereto as more fully described in SECTION
1.2, as the same may be amended, restated, supplemented or otherwise modified
from time to time.
"SUBSCRIPTION AGREEMENT" means the Stockholder and
Subscription Agreement in substantially the form of EXHIBIT IX hereto, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"SUB-SERVICER" means Fruehauf in its capacity as sub-servicer
for the Servicer as described in SECTION 5.1 hereof.
"SUB-SERVICER FEE" means the fee described in SECTION 5.6
hereof.
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"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 partnership, association, limited liability company,
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 Subsidiary of an Originator.
"TERMINATION DATE" means, the earliest of (i) the Facility
Termination Date, (ii) the date of the declaration or automatic occurrence of
the Termination Date pursuant to SECTION 6.2(ii), and (iii) the date designated
by either of the Originators as the Termination Date in a written notice
delivered to the Buyer not less than ten days prior to such designated date.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement,
the Purchase Agreement, the Subordinated Note, the Subscription Agreement, each
Collection Agreement and all other instruments, documents and agreements
executed and delivered by the Buyer or either or both of the Originators in
connection herewith or with the Purchase Agreement.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"WABASH" means Wabash National Corporation, a Delaware
corporation, and its successors.
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. ALL
TERMS USED IN ARTICLE 9 OF THE UCC IN THE STATE OF ILLINOIS, AND NOT
SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS DEFINED IN SUCH ARTICLE 9.
10
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EXHIBIT IV
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished pursuant to that
certain Receivables Sale Agreement dated as of March 31, 1998, among Wabash
National Corporation ("WABASH"), Fruehauf Trailer Services, Inc. ("FRUEHAUF")
and Wabash National Funding Corporation (the "AGREEMENT"). Capitalized terms
used and not otherwise defined herein are used with the meanings attributed
thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________________ of
[Wabash/Fruehauf];
2. I have reviewed the terms of the Agreement and I have
made, or have caused to be made under my supervision, a detailed review of the
transactions and conditions of [Wabash/Fruehauf] and its Subsidiaries during
the accounting period covered by the attached financial statements; and
3. The examinations described in paragraph 2 did not
disclose, and I have no knowledge of, the existence of any condition or event
which constitutes an Event of Purchase and Sale Termination or a Potential
Event of Purchase and Sale Termination, as each such term is defined under the
Agreement, during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate, except as
set forth below.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which [Fruehauf/Wabash] has taken, is
taking, or proposes to take with respect to each such condition or event:
The foregoing certifications and the financial statements
delivered with this Certificate in support hereof, are made and delivered this
____ day of ______________, 19__.
-------------------------
[Name]
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EXHIBIT V
FORM OF COLLECTION AGREEMENT
[On letterhead of Wabash National Funding Corporation]
__________, 19__
[Date]
[Collection Bank Name and Address]
Attention: ________________
Re: Wabash National Funding Corporation
[Insert applicable Originator Name]
Ladies and Gentlemen:
You have exclusive control of P.O. Box ___________, [city],
[state] [zip] (the "LOCK-BOX") for the purpose of receiving mail and
processing payments therefrom pursuant to that certain lock-box services
agreement dated ____________, 19__ between you and [Originator Name] (the
"AGREEMENT"). You hereby confirm your agreement to perform the services
described therein. Among the services you have agreed to perform therein is to
endorse all checks and other evidences of payment, and credit such payments to
checking account no. ___________ maintained with you in the name of [Originator
Name] (the "EXISTING ACCOUNT").
[Originator Name] (the "ORIGINATOR") hereby transfers and
assigns all of its right, title and interest in and to, and exclusive ownership
and control over, the Lock-Box to Wabash National Funding Corporation ("SPC").
Originator and SPC hereby request that from and after March 31, 1998, in lieu
of being deposited in the Existing Account, all checks and other evidences of
payment that are sent to the Lock-Box be endorsed and deposited in SPC's
account no. _____________ (the "LOCK-BOX ACCOUNT") in the name of "Wabash
National Funding Corporation, as 'Collection Agent' for the benefit of The
First National Bank of Chicago, as Agent under that certain Receivables
Purchase Agreement dated as of March 31, 1998 among SPC, various purchasers and
The First National Bank of Chicago, as Agent".
SPC hereby irrevocably instructs you, and you hereby agree,
that upon receiving notice from The First National Bank of Chicago, as Agent
(the "AGENT") in the form attached hereto as Annex A: (i) the name of the
Lock-Box Account will be changed to "The First National Bank of Chicago, as
Agent" (or any designee of the Agent), and the Agent will have exclusive
ownership of and access to such Lock-Box Account, and neither Originator, SPC
nor any of their respective affiliates will have any
12
<PAGE> 46
control of such Lock-Box Account or any access thereto, (ii) you will either
continue to send the funds from the Lock-Box to the Lock-Box Account, or will
redirect the funds as the Agent may otherwise request, (iii) you will transfer
monies on deposit in the Lock-Box Account, at any time, as directed by the
Agent, (iv) all services to be performed by you under the Agreement will be
performed on behalf of the Agent, and (v) all correspondence or other mail
which you have agreed to send to either Originator or SPC will be sent to the
Agent at the following address:
The First National Bank of Chicago, as Agent
Suite 0596, 1-21
One First National Plaza
Chicago, Illinois 60670
Attention: Credit Manager, Asset-Backed Finance
Moreover, upon such notice, the Agent will have all rights and
remedies given to Originator or SPC under the Agreement. Each of Originator
and SPC agrees, however, to continue to pay all fees and other assessments due
thereunder at any time.
You hereby acknowledge that monies deposited in the Lock-Box
Account or any other account established with you by the Agent for the purpose
of receiving funds from the Lock-Box are subject to the liens of the Agent for
itself and as agent under the Receivables Purchase Agreement, and will not be
subject to deduction, set-off, banker's lien or any other right you or any
other party may have against Originator or SPC, except that you may debit the
Lock-Box Account for any items deposited therein that are returned or otherwise
not collected and for all charges, fees, commissions and expenses incurred by
you in providing services hereunder, all in accordance with your customary
practices for the charge back of returned items and expenses.
This letter agreement and the rights and obligations of the
parties hereunder will be governed by and construed and interpreted in
accordance with the laws of the State of Illinois. This letter agreement may
be executed in any number of counterparts and all of such counterparts taken
together will be deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between
the parties, and may not be altered, modified, terminated or amended in any
respect, nor may any right, power or privilege of any party hereunder be waived
or released or discharged, except upon execution by all parties hereto of a
written instrument so providing. In the event that any provision in this
letter agreement is in conflict with, or inconsistent with, any provision of
the Agreement, this letter agreement will exclusively govern and control. Each
party agrees to take all actions reasonably requested by any other party to
carry out the purposes of this letter agreement or to preserve and protect the
rights of each party hereunder.
13
<PAGE> 47
Please indicate your agreement to the terms of this letter
agreement by signing in the space provided below. This letter agreement will
become effective immediately upon execution of a counterpart of this letter
agreement by all parties hereto.
Very truly yours,
[ORIGINATOR NAME]
By:
------------------------------
Name:
Title:
WABASH NATIONAL FUNDING CORPORATION
By:
------------------------------
Name:
Title:
Acknowledged and agreed to
this day of , 199 :
------- ----------- -
[COLLECTION BANK]
By:
-----------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
By:
-----------------------------------
Authorized Agent
14
<PAGE> 48
ANNEX A
FORM OF COLLECTION NOTICE
[On letterhead of the Agent]
[Date]
[Collection Bank Name and Address]
Attention: ________________
Re: Wabash National Funding Corporation
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights
pursuant to that certain letter agreement among [Originator Name], Wabash
National Funding Corporation, you and us, to have the name of, and to have
exclusive ownership and control of, account number ________________ (the
"LOCK-BOX ACCOUNT") maintained with you, transferred to "The First National
Bank of Chicago, as Agent." [The Lock-Box Account will henceforth be a
zero-balance account, and funds deposited in the Lock-Box Account should be
sent at the end of each day to _________________]. You have further agreed to
perform all other services you are performing under that certain agreement
dated ____________ between you and [Originator Name] on our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
--------------------------------
Authorized Agent
15
<PAGE> 49
EXHIBIT VII
FORM OF INVOICE(S)
16
<PAGE> 50
EXHIBIT VIII
FORM OF MONTHLY REPORT
17
<PAGE> 51
EXHIBIT IX
FORM OF SUBSCRIPTION AGREEMENT
----------
STOCKHOLDER AND SUBSCRIPTION AGREEMENT
THIS STOCKHOLDER AND SUBSCRIPTION AGREEMENT (this
"AGREEMENT"), dated as of March 31, 1998, is entered into by and between WABASH
NATIONAL FUNDING CORPORATION, a Missouri corporation ("SPC"), and WABASH
NATIONAL CORPORATION, a Delaware corporation ("WABASH"). Except as otherwise
specifically provided herein, capitalized terms used in this Agreement have the
meanings ascribed thereto in the Receivables Sale Agreement dated as of even
date herewith among Wabash, Fruehauf Trailer Services, Inc. ("Fruehauf") and
SPC (as amended, restated, supplemented or otherwise modified from time to
time, the "SALE AGREEMENT").
RECITALS
A. SPC has been organized under the laws of the State of
Missouri for the purpose of, among other things, purchasing, holding,
financing, receiving and transferring accounts receivable and related
assets originated or otherwise held by Wabash and Fruehauf.
B. Contemporaneously with the execution and delivery of
this Agreement: (i) Wabash, Fruehauf and SPC have entered into the
Sale Agreement pursuant to which Wabash has, from and after the
initial purchase date thereunder and prior to the termination date
specified therein, sold all of its Receivables, Collections and
Related Security to SPC; and (ii) SPC, certain financial institutions
party thereto as "PURCHASERS," and The First National Bank of Chicago,
as the "AGENT," have entered into a Receivables Purchase Agreement,
dated as of even date herewith, (as amended, restated, supplemented or
otherwise modified from time to time, the "PURCHASE AGREEMENT")
pursuant to which SPC will sell "RECEIVABLE INTERESTS" to the Agent
for the benefit of the Purchasers.
C. SPC desires to sell shares of its capital stock to
Wabash, and Wabash desires to purchase such shares, on the terms set
forth in this Agreement.
NOW, THEREFORE, SPC and Wabash agree as follows:
1. Purchase and Sale of Capital Stock. Wabash hereby
purchases from SPC, and SPC hereby sells to Wabash, 1,000 shares of common
stock, par value $0.01 per share, of SPC (the "COMMON STOCK") for the Stock
Purchase Price set forth
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<PAGE> 52
in Section 2.1. The shares of Common Stock being purchased under this
Agreement are referred to herein as the "SHARES." Within three (3) Business
Days from the date hereof, SPC shall deliver to Wabash a certificate registered
in Wabash's name representing the Shares.
2. Consideration for Shares and Capital Contributions.
2.1 Consideration for Shares. To induce SPC to enter
into the Sale Agreement and to enable SPC to fund its obligations
thereunder by consummating the transactions contemplated by the
Purchase Agreement, and in reliance upon the representations and
warranties set forth herein, Wabash hereby pays to SPC on the date
hereof the sum of $2,490,000 (the "STOCK PURCHASE PRICE") in
consideration of the purchase of the Shares. The Stock Purchase Price
shall take the form of a transfer of cash, except that Wabash may, in
lieu of cash payment of the Stock Purchase Price, offset the amount of
the Stock Purchase Price against the purchase price otherwise payable
by SPC to Wabash on the initial purchase date pursuant to the Sale
Agreement.
2.2 Contributions After Initial Closing Date. From time
to time Wabash may make additional capital contributions to SPC. All
such contributions shall take the form of a cash transfer, except that
SPC agrees to, in lieu of cash payment thereof, offset the amount of
such contributions against the purchase price for Receivables
otherwise payable by SPC to Wabash on the date of such capital
contributions. All of the Receivables so paid for through such offset
shall constitute purchased Receivables within the meaning of the Sale
Agreement and shall be subject to all of the representations,
warranties and indemnities otherwise made thereunder. It is expressly
understood and agreed that Wabash has no obligations under this
Agreement or otherwise to make any capital contributions from and
after payment of the Stock Purchase Price.
3. Representations and Warranties of SPC. SPC
represents and warrants to Wabash as follows:
(a) SPC is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Missouri,
and has all requisite corporate power and authority to carry on its
business as proposed to be conducted on the date hereof.
(b) SPC has all requisite legal and corporate power to
enter into this Agreement, to issue the Shares and to perform its
other obligations under this Agreement.
(c) Upon receipt by SPC of the Stock Purchase Price and
the issuance of the Shares to Wabash, the Shares will be duly
authorized, validly issued, fully paid and nonassessable.
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<PAGE> 53
(d) SPC has taken all corporate action necessary for its
authorization, execution and delivery of, and, its performance under,
this Agreement.
(e) This Agreement constitutes a legally valid and
binding obligation of SPC, enforceable against SPC in accordance with
its terms, except that enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles
of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
(f) SPC has filed its Articles of Incorporation in the
form attached hereto as Annex A with the Secretary of State of
Missouri and (ii) adopted By-laws in the form attached hereto as Annex
B.
(g) The issuance of the Shares by SPC hereunder is
legally permitted by all laws and regulations to which SPC is subject.
4. Representations and Warranties of Wabash. Wabash
represents and warrants to SPC as follows:
(a) Wabash is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware,
and has all requisite corporate power and authority to carry on its
business as conducted on the date hereof.
(b) Wabash has all requisite legal and corporate power to
enter into this Agreement, to purchase the Shares and to perform its
other obligations under this Agreement.
(c) Wabash has taken all corporate action necessary for
its authorization, execution and delivery of, and its performance
under, this Agreement.
(d) This Agreement constitutes a legally valid and
binding obligation of Wabash, enforceable against Wabash in accordance
with its terms, except that enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(e) Wabash is purchasing the Shares for investment for
its own account, not as a nominee or agent, and not with a view to any
distribution of any part thereof; Wabash has no current intention of
selling, granting a participation in, or otherwise distributing, the
shares.
20
<PAGE> 54
(f) Wabash understands that the Shares have not been
registered under the Securities Act of 1933, as amended, or under any
other Federal or state law, and that SPC does not contemplate such a
registration.
(g) Wabash has such knowledge, sophistication and
experience in financial and business matters that it is capable of
evaluating the merits and risks of the transactions contemplated by
this Agreement, and has made such investigations in connection
herewith as have been deemed necessary or desirable to make such
evaluation.
(h) The purchase of the Shares by Wabash is legally
permitted by all laws and regulations to which Wabash is subject.
5. Restrictions on Transfer Imposed by the Act; Legend.
5.1 Legend. Each certificate representing any Shares
shall be endorsed with the following legend;
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT
REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES ACT. SUCH SECURITIES SHALL NOT BE
SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED
OR DISPOSED OF ABSENT SUCH REGISTRATION, UNLESS, IN THE
OPINION OF THE CORPORATION'S COUNSEL, SUCH REGISTRATION IS NOT
REQUIRED. IN ADDITION, THESE SECURITIES HAVE BEEN ISSUED OR
SOLD IN RELIANCE ON SECTION 4(2) OF THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN
A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER SUCH ACT.
5.2 Registration of Transfers. SPC need not register a
transfer of any Shares unless the conditions specified in the legend set forth
in Section 5.1 hereof are satisfied. SPC may also instruct its transfer agent
(which may be SPC) not to register the transfer of any Shares unless the
conditions specified in the legend set forth in Section 5.1 hereof are
satisfied.
6. Agreement to Vote. Wabash hereby agrees and
covenants to vote all of the shares of Common Stock now or hereafter owned by
it, whether beneficially or otherwise, as is necessary at a meeting of
stockholders of SPC, or by written consent in lieu of any such meeting, to
cause to be elected to, and maintained on, SPC's board of directors at least
one (1) person meeting the qualifications of an Independent Director and
selected in accordance with the provisions of the Articles of Incorporation and
By-Laws of SPC.
7. Successors and Assigns. Each party agrees that it
will not assign, sell, transfer, delegate, or otherwise dispose of, whether
voluntarily or involuntarily,
21
<PAGE> 55
or by operation of law, any right or obligation under this Agreement except in
connection with a transfer of Shares in compliance with the terms and
conditions hereof, as contemplated by Section 5.2 above, or otherwise in
accordance with the terms hereof. Any purported assignment, transfer or
delegation in violation of this Section 7 shall be null and void ab initio.
Subject to the foregoing limits on assignment and delegation and except as
otherwise provided herein, this Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective heirs, legatees, executors,
administrators, assignees and legal successors.
8. Amendments and Waivers. Any term hereof may be
amended and the observance of any term hereof may be waived (either generally
or in a particular instance and either retroactively or prospectively) only
with the written consent of SPC and Wabash. Any amendment or waiver so
effected shall be binding upon SPC and Wabash.
9. Further Acts. Each party agrees to perform any
further acts and execute and deliver any document which may be reasonably
necessary to carry out the provisions of this Agreement.
10. Counterparts. This Agreement may be executed in any
number of counterparts, and all of such counterparts together will be deemed
one instrument.
11. Notices. Any and all notices, acceptances,
statements and other communications to Wabash in connection herewith shall be
in writing, delivered personally, by facsimile or certified mail, return
receipt requested, and shall be addressed to the address of Wabash indicated on
the stock transfer register of SPC or, if no address is so indicated, to the
address provided to SPC pursuant to the Sale Agreement unless changed by
written notice to SPC or its successor.
12. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, EXCEPT
AND TO THE EXTENT THE GENERAL BUSINESS AND CORPORATION LAW OF THE STATE OF
MISSOURI IS APPLICABLE.
13. Entire Agreement. This Agreement, together with the
Sale Agreement and documents expressly to be delivered in connection therewith,
constitute the entire understanding and agreement between the parties hereto
with subject matter hereof and thereof.
14. Severability of this Agreement. In case any
provision of this Agreement shall be invalid or unenforceable, the validity,
legality and enforceability of the remaining shall not in any way be affected
or impaired thereby.
22
<PAGE> 56
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first above written.
<TABLE>
<S> <C>
SPC WABASH
WABASH NATIONAL FUNDING
CORPORATION, WABASH NATIONAL CORPORATION,
a Missouri corporation a Delaware corporation
By: By:
-------------------------- -------------------
Name: Name:
Title: Title:
</TABLE>
23
<PAGE> 57
ANNEX A
FORM OF ARTICLES OF INCORPORATION
24
<PAGE> 58
ANNEX B
FORM OF BY-LAWS
25
<PAGE> 59
EXHIBIT X
FORM OF SUBORDINATED NOTE
---
SUBORDINATED NOTE
______________, 1998
1. Note. FOR VALUE RECEIVED, the undersigned, WABASH
NATIONAL FUNDING CORPORATION, a Missouri corporation ("SPC"), hereby
unconditionally promises to pay to the order of [ORIGINATOR NAME], a Delaware
corporation ("ORIGINATOR"), in lawful money of the United States of America and
in immediately available funds, on the date following the Termination Date
which is one year and one day after the date which (i) the Outstanding Balance
of all Receivables sold under the "SALE AGREEMENT" referred to below has been
reduced to zero and (ii) the Originator has paid to the Buyer all indemnities,
adjustments and other amounts which may be owed hereunder in connection with
the Purchases (the "COLLECTION DATE"), the aggregate unpaid principal sum
outstanding of all "SUBORDINATED LOANS" made from time to time by Originator to
SPC pursuant to and in accordance with the terms of that certain Receivables
Sale Agreement dated as of March 31, 1998 among Wabash National Corporation,
Fruehauf Trailer Services, Inc. and SPC (as amended, restated, supplemented or
otherwise modified from time to time, the "SALE AGREEMENT"). Reference to
SECTION 1.2 of the Sale Agreement is hereby made for a statement of the terms
and conditions under which the loans evidenced hereby have been and will be
made. All terms which are capitalized and used herein and which are not
otherwise specifically defined herein shall have the meanings ascribed to such
terms in the Sale Agreement.
2. Interest. SPC further promises to pay interest on
the outstanding unpaid principal amount hereof from the date hereof until
payment in full hereof at a rate equal to the Base Rate; PROVIDED, HOWEVER,
that if SPC shall default in the payment of any principal hereof, SPC promises
to, on demand, pay interest at the rate of the Base Rate plus 2.00% on any such
unpaid amounts, from the date such payment is due to the date of actual
payment. Interest shall be payable on the first Business Day of each month in
arrears; PROVIDED, HOWEVER, that SPC may elect on the date any interest payment
is due hereunder to defer such payment and upon such election the amount of
interest due but unpaid on such date shall constitute principal under this
Subordinated Note. The outstanding principal of any loan made under this
Subordinated Note shall be due and payable on the Collection Date and may be
repaid or prepaid at any time without premium or penalty.
3. Principal Payments. Originator is authorized and
directed by SPC to enter on the grid attached hereto, or, at its option, in its
books and records, the date and amount of each loan made by it which is
evidenced by this Subordinated Note and the amount of each payment of principal
made by SPC, and absent manifest
26
<PAGE> 60
error, such entries shall constitute PRIMA FACIE evidence of the accuracy of
the information so entered; PROVIDED THAT neither the failure of Originator to
make any such entry or any error therein shall expand, limit or affect the
obligations of SPC hereunder.
4. Subordination. The indebtedness evidenced by this
Subordinated Note is subordinated to the prior payment in full of all of SPC's
recourse obligations under that certain Receivables Purchase Agreement dated as
of March 31, 1998 by and among SPC, various "PURCHASERS" from time to time
party thereto, and The First National Bank of Chicago, as the "AGENT" (as
amended, restated, supplemented or otherwise modified from time to time, the
"PURCHASE AGREEMENT"). The subordination provisions contained herein are for
the direct benefit of, and may be enforced by, the Agent and the Purchasers
and/or any of their respective assignees (collectively, the "SENIOR CLAIMANTS")
under the Purchase Agreement. Until the date on which all "CAPITAL"
outstanding under the Purchase Agreement has been repaid in full and all other
obligations of SPC and/or the Servicer thereunder and under the "FEE LETTER"
referenced therein (all such obligations, collectively, the "SENIOR CLAIM")
have been indefeasibly paid and satisfied in full, Originator shall not demand,
accelerate, sue for, take, receive or accept from SPC, directly or indirectly,
in cash or other property or by set-off or any other manner (including, without
limitation, from or by way of collateral) any payment or security of all or any
of the indebtedness under this Subordinated Note or exercise any remedies or
take any action or proceeding to enforce the same; PROVIDED, HOWEVER, that (i)
Originator hereby agrees that it will not institute against SPC any proceeding
of the type described in SECTION 6.1(c) of the Sale Agreement unless and until
the Collection Date has occurred and (ii) nothing in this paragraph shall
restrict SPC from paying, or Originator from requesting, any payments under
this Subordinated Note so long as SPC is not required under the Purchase
Agreement to set aside for the benefit of, or otherwise pay over to, the funds
used for such payments to any of the Senior Claimants and further provided that
the making of such payment would not otherwise violate the terms and provisions
of the Purchase Agreement. Should any payment, distribution or security or
proceeds thereof be received by Originator in violation of the immediately
preceding sentence, Originator agrees that such payment shall be segregated,
received and held in trust for the benefit of, and deemed to be the property
of, and shall be immediately paid over and delivered to the Agent for the
benefit of the Senior Claimants.
5. Bankruptcy; Insolvency. Upon the occurrence of any
proceeding of the type described in SECTION 6.1(c) of the Sale Agreement
involving SPC as debtor, then and in any such event the Senior Claimants shall
receive payment in full of all amounts due or to become due on or in respect of
Capital and the Senior Claim (including "DISCOUNT" accruing under the Purchase
Agreement after the commencement of any such proceeding, whether or not any or
all of such Discount is an allowable claim in any such proceeding) before
Originator is entitled to receive payment on account of this Subordinated Note,
and to that end, any payment or distribution of assets of SPC of any kind or
character, whether in cash, securities or other property, in any applicable
insolvency proceeding, which would otherwise be payable to or deliverable upon
or with respect to any or all indebtedness under this
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<PAGE> 61
Subordinated Note, is hereby assigned to and shall be paid or delivered by the
Person making such payment or delivery (whether a trustee in bankruptcy, a
receiver, custodian or liquidating trustee or otherwise) directly to the Agent
for application to, or as collateral for the payment of, the Senior Claim until
such Senior Claim shall have been paid in full and satisfied.
6. Amendments. This Subordinated Note shall not be
amended or modified except in accordance with SECTION 8.1 of the Sale
Agreement. The terms of this Subordinated Note may not be amended or otherwise
modified without the prior written consent of the Agent for the benefit of the
Purchasers.
7. Governing Law. This Subordinated Note has been made
and delivered in Chicago, Illinois, and shall be interpreted and the rights and
liabilities of the parties hereto determined in accordance with the laws and
decisions of the State of Illinois. Wherever possible each provision of this
Subordinated Note shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Subordinated Note
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Subordinated Note.
8. Waivers. All parties hereto, whether as makers,
endorsers, or otherwise, severally waive presentment for payment, demand,
protest and notice of dishonor. Originator additionally expressly waives all
notice of the acceptance by any Senior Claimant of the subordination and other
provisions of this Subordinated Note and expressly waives reliance by any
Senior Claimant upon the subordination and other provisions herein provided.
9. Assignment. This Subordinated Note may not be
assigned, pledged or otherwise transferred to any party other than Originator
without the prior written consent of the Agent, and any such attempted transfer
shall be void.
WABASH NATIONAL FUNDING CORPORATION
By:
-----------------------------
Name:
Title:
28
<PAGE> 1
================================================================================
================================================================================
RECEIVABLES PURCHASE AGREEMENT
DATED AS OF MARCH 31, 1998
AMONG
WABASH NATIONAL FUNDING CORPORATION,
AS SELLER,
FALCON ASSET SECURITIZATION CORPORATION,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AS INVESTORS,
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
================================================================================
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Purchase Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Making Incremental Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3. Selection of Tranche Periods and Discount Rates . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4. Percentage Evidenced by Receivable Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.5. Dividing or Combining Receivable Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.6. Reinvestment Purchases and Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.7. Liquidation Settlement Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.8. Limited Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.9. Discount; Payments and Computations, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.10. Maximum Aggregate Receivables Interest;
Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.11. Seller's Extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.12. Servicer Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II LIQUIDITY FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.1. Transfer to Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.2. Transfer Price Reduction Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.3. Payments to Falcon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.4. Limitation on Commitment to Purchase from Falcon . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.5. Defaulting Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.1. Seller Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Non-Contravention, Due Authorization, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(d) Binding Effect . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(e) Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(f) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(g) Title to Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(h) Places of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(i) Collections; etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(j) Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(k) Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(l) Actions, Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(m) Credit and Collection Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(n) Payments to Applicable Originator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(o) Ownership of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(p) Not an Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(q) Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(r) Net Receivables Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.2. Investor Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(d) Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IV CONDITIONS OF PURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.1. Conditions Precedent to Initial Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.2. Conditions Precedent to All Purchases and Reinvestments . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.1. Affirmative Covenants of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(e) Keeping and Marking of Records and Books . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(f) Compliance with Contracts and Credit and Collection
Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(g) Purchase of Receivables from the Originators . . . . . . . . . . . . . . . . . . . . . . . . . 17
(h) Ownership Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(i) Payment to the Applicable Originator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(j) Performance and Enforcement of Sale Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 17
(k) Purchasers' Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(l) Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(m) Minimum Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.2. Negative Covenants of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Name Change, Offices, Records and Books of Accounts . . . . . . . . . . . . . . . . . . . . . . 21
(b) Change in Payment Instructions to Obligors . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(c) Modifications to Contracts and Credit and Collection Policy . . . . . . . . . . . . . . . . . . 21
(d) Sales, Liens, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(e) Nature of Business; Other Agreements; Other Indebtedness . . . . . . . . . . . . . . . . . . . 22
(f) Amendments to Sale Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(g) Amendments to Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(h) Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(i) Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VI ADMINISTRATION AND COLLECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.1. Designation of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.2. Duties of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.3. Collection Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.4. Responsibilities of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.5. Receivables Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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ARTICLE VII SERVICER DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.1. Servicer Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VIII INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.1. Indemnities by the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.2. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 8.3. Costs and Expenses Relating to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE IX THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.1. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.2. Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.3. Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.4. Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.5. Non-Reliance on Agent and Other Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.6. Reimbursement and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.7. Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.8. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE X ASSIGNMENTS; PARTICIPATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.1. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.2. Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 11.1. Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 11.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11.3. Ratable Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 11.4. Protection of Ownership Interests of the Purchasers . . . . . . . . . . . . . . . . . . . . . . . 37
Section 11.5. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.6. Bankruptcy Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.7. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.8. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.9. CONSENT TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.11. Integration; Survival of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.12. Counterparts; Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.13. First Chicago Roles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.14. Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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EXHIBITS AND SCHEDULES
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Exhibit I Definitions
Exhibit II Chief Executive Office; Place(s) of Business; Records Locations; FEIN
Exhibit III Collection Accounts
Exhibit III-A Collection Accounts
Exhibit IV Form of Compliance Certificate
Exhibit V Form of Monthly Report
Exhibit VI Form of Collection Agreement
Exhibit VII Credit and Collections Policy
Exhibit VIII Form of Purchase Notice
Annex A Special Obligors
Schedule I Closing Documents
</TABLE>
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THIS RECEIVABLES PURCHASE AGREEMENT, dated as of March 31,
1998, is by and among Wabash National Funding Corporation, a Missouri
corporation (the "SELLER"), the Investors (hereinafter defined), Falcon Asset
Securitization Corporation ("FALCON") and The First National Bank of Chicago,
as Agent. Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in EXHIBIT I hereto.
PRELIMINARY STATEMENTS
The Seller desires to transfer and assign Receivable Interests
to the Purchasers from time to time.
Falcon may, in its absolute and sole discretion, purchase
Receivable Interests from the Seller from time to time.
The Investors shall, at the request of the Seller, purchase
Receivable Interests from time to time. In addition, the Investors
have agreed to provide a liquidity facility to Falcon.
The First National Bank of Chicago has been requested and is
willing to act as Agent on behalf of Falcon and the Investors in
accordance with the terms hereof.
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility.
(a) Upon the terms and subject to the conditions hereof,
the Seller may, at its option, sell and assign Receivable Interests to the
Agent for the benefit of one or more of the Purchasers. Falcon may, at its
option, instruct the Agent to purchase on behalf of Falcon, or if Falcon shall
decline to purchase, unless the Seller cancels such Purchase in accordance with
SECTION 1.2, the Agent shall purchase on behalf of the Investors, Receivable
Interests from time to time during the period from the date hereof to but not
including the Facility Termination Date. The Seller hereby assigns, transfers
and conveys to the Agent for the benefit of the relevant Purchaser(s), and the
Agent hereby acquires, all of the Seller's now owned and existing and hereafter
arising or acquired right, title and interest in and to the Receivable
Interests.
(b) The Seller may, upon at least 30 Business Days' notice
to the Agent, terminate in whole or reduce in part, ratably among the
Investors, the unused portion of the Purchase Limit; PROVIDED THAT each partial
reduction of the Purchase Limit shall be in an amount equal to $5,000,000 or an
integral multiple thereof.
Section 1.2. Making Incremental Purchases. The Seller shall
provide the Agent with a purchase notice, in substantially the form of EXHIBIT
VIII hereto (each, a
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"PURCHASE NOTICE"), at least one (1) Business Day prior to the initial Purchase
of Receivable Interests hereunder (or three (3) Business Days prior to such
initial Purchase if the Seller desires to select the LIBO Rate with respect
thereto) and at least two (2) Business Days prior to each subsequent
Incremental Purchase. Each Purchase Notice shall, except as set forth below,
be irrevocable and shall specify the requested Purchase Price (which shall not
be less than $1,000,000) and Purchase Date (which, except for the initial
Purchase, shall be a Settlement Date), together with the duration of the
initial Tranche Period and the initial Discount Rate related thereto.
Following receipt of a Purchase Notice, the Agent will determine whether Falcon
agrees to make the purchase. If Falcon declines to make a proposed Purchase,
the Agent shall promptly advise the Seller and the Servicer of such fact, and
(i) the Seller may thereupon cancel the Purchase Notice or (ii) in the absence
of such a cancellation, the Incremental Purchase of the Receivable Interests
will be made by the Investors. On the date of each Incremental Purchase, upon
satisfaction of the applicable conditions precedent set forth in ARTICLE IV,
Falcon or each Investor, as applicable, shall deposit to the Facility Account,
in immediately available funds, no later than 12:00 noon (Chicago time), an
amount equal to (i) in the case of Falcon, the aggregate Purchase Price of each
Receivable Interest Falcon is then purchasing or (ii) in the case of an
Investor, such Investor's Pro Rata Share of the aggregate Purchase Price of
each of the Receivable Interests the Investors are purchasing.
Section 1.3. Selection of Tranche Periods and Discount Rates.
(a) Each Receivable Interest shall at all times have an
associated amount of Capital, a Discount Rate and Tranche Period applicable to
it. Not less than $1,000,000 of Capital may be allocated to any single
Receivable Interest. The Seller shall request Discount Rates and Tranche
Periods for the Receivable Interests of the Purchasers. Subject to the notice
requirements set forth in the next sentence, the Seller may select the LIBO
Rate or the Base Rate to be applicable to each Receivable Interest; PROVIDED,
HOWEVER, that not more than 5 Tranche Periods with respect to LIBO Rates may be
outstanding at any one time. The Seller shall by 12:00 noon (Chicago time):
(i) at least three (3) Business Days prior to the
expiration of any then existing Tranche Period with respect to which
the LIBO Rate is being requested as a new Discount Rate, and
(ii) at least one (1) Business Day prior to the expiration
of any Tranche Period with respect to which the Base Rate is being
requested as a new Discount Rate,
give the Agent irrevocable notice of the new Tranche Period and Discount Rate
for the Receivable Interest associated with such expiring Tranche Period. If
the Seller fails to request timely a Discount Rate and/or a Tranche Period for
any Receivable Interest pursuant to the terms of this SECTION 1.3, the Discount
Rate shall be the Base Rate, and the applicable Tranche Period shall be a
period of one Business Day commencing on the day requested in the Purchase
Notice or the last day of the then expiring
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Tranche Period for such Receivable Interest, as applicable. Until the Seller
gives notice to the Agent of another Discount Rate, the initial Discount Rate
for any Receivable Interest transferred to the Investors pursuant to SECTION
2.1 shall be the Base Rate.
(b) If any Investor notifies the Agent that it has
determined that funding its Pro Rata Share of the Receivable Interests of the
Investors at a LIBO Rate would violate any applicable law, rule, regulation, or
directive of any governmental or regulatory authority, whether or not having
the force of law, or that (i) deposits of a type and maturity appropriate to
match fund its Receivable Interests at such LIBO Rate are not available or (ii)
such LIBO Rate does not accurately reflect the cost of acquiring or maintaining
a Receivable Interest at such LIBO Rate, then the Agent shall suspend the
availability of such LIBO Rate with respect to such Investor and require the
Seller to select the Base Rate with respect to such Investor for any Receivable
Interest accruing Discount at such LIBO Rate.
Section 1.4. Percentage Evidenced by Receivable Interests.
Each Receivable Interest shall be initially computed on its date of purchase.
Thereafter, until its Liquidation Day, each Receivable Interest shall be
automatically recomputed (or deemed to be recomputed) on each day prior to its
Liquidation Day. The variable percentage represented by any Receivable
Interest as computed (or deemed recomputed) as of the close of business on the
day immediately preceding its Liquidation Day shall remain constant at all
times after such Liquidation Day.
Section 1.5. Dividing or Combining Receivable Interests. The
Seller or the Agent may, upon notice to and consent by the other received not
later than the applicable time required under SECTION 1.3(a) prior to the end
of a Tranche Period for any Receivable Interest, take any of the following
actions with respect to such Receivable Interest: (i) divide the Receivable
Interest into two or more Receivable Interests having aggregate Capital equal
to the Capital of such divided Receivable Interest, (ii) combine the Receivable
Interest with another Receivable Interest with a Tranche Period ending on the
same day, creating a new Receivable Interest having Capital equal to the
Capital of the two Receivable Interests combined or (iii) combine the
Receivable Interest with a Receivable Interest to be purchased on such day by
such Purchaser, creating a new Receivable Interest having Capital equal to the
Capital of the two Receivable Interests combined, PROVIDED THAT a Receivable
Interest of Falcon may not be combined with a Receivable Interest of the
Investors.
Section 1.6. Reinvestment Purchases and Settlements. At any
time that any Collection is received by the Servicer after the initial
Purchase, or any other Incremental Purchase, of a Receivable Interest hereunder
and on or prior to the Liquidation Day of such Receivable Interest:
first, at any time the Servicer is not the Seller or Wabash or
an Affiliate thereof, the Servicer may retain a portion of such
Collection in payment of any Servicer Fees that are then due and
owing;
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second, the Servicer is hereby directed to pay a portion of the
remainder, if any, of such Collection to the Agent in payment of any
accrued and unpaid Discount and Facility Fees that are then due and
owing;
third, except to the extent the Seller wishes to reduce the
outstanding amount of Capital of a Receivable Interest (in which case
the provisions of SECTION 1.7 shall be applicable to the portion of
such Receivable Interest represented by such reduction in Capital),
the Seller hereby requests and the Purchasers hereby agree to make,
simultaneously with such receipt, a reinvestment (each, a
"REINVESTMENT") with that portion of the remainder of such Collection
that is part of such Receivable Interest such that after giving effect
to such Reinvestment, the amount of the Capital of such Receivable
Interest immediately after any such receipt and corresponding
Reinvestment shall be equal to the amount of the Capital immediately
prior to such receipt;
fourth, if the Servicer is the Seller or Wabash or an Affiliate
thereof, the Servicer may retain a portion of the remainder, if any,
of such Collection in payment of any Servicer Fees that are then due
and owing; and
fifth, any remaining portion of such Collection shall be paid
to the Seller or as the Seller may direct.
Section 1.7. Liquidation Settlement Procedures. On the
Liquidation Day of a Receivable Interest and on each day thereafter, the
Servicer shall set aside and hold in trust for the holder of such Receivable
Interest, the percentage evidenced by such Receivable Interest, of all
Collections received on such day. On the last day of each Tranche Period of a
Receivable Interest after the occurrence of its Liquidation Day, the Servicer
shall remit to the Agent's account the amounts set aside pursuant to the
preceding sentence, together with any remaining amounts set aside pursuant to
SECTION 1.8 prior to such day, but not to exceed the sum of: (i) the accrued
Discount for such Receivable Interest, (ii) the Capital of such Receivable
Interest, (iii) the aggregate of all other amounts then owed hereunder by
Seller to the Purchasers, and (iv) the accrued Servicer Fees for such
Receivable Interest. If there shall be insufficient funds on deposit for the
Servicer to distribute funds in payment in full of the aforementioned amounts,
the Servicer shall distribute funds:
first, to reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
second, to the Servicer (if the Servicer is not the Seller or
Wabash or an Affiliate thereof) in payment of all accrued Servicer
Fees in respect of such Receivable Interest,
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third, in payment of all accrued and unpaid Discount and
Facility Fees for such Receivable Interest that are then due and
owing,
fourth, in reduction of the Capital of such Receivable
Interest,
fifth, in payment of all other amounts (including, without
limitation, Deemed Collections, Early Collection Fees and Default
Fees, if any), that are then due and owing to the Purchasers, and
sixth, to the Servicer (if the Seller or Wabash or an Affiliate
thereof is the Servicer) in payment of all accrued Servicer Fees in
respect of such Receivable Interest.
Collections allocated to the Receivable Interests of the Investors shall be
shared ratably by the Investors in accordance with their Pro Rata Shares.
Collections applied to the payment of fees, expenses, Discount and all other
amounts payable by the Seller to the Agent and the Purchasers hereunder shall
be allocated ratably among the Agent and the Purchasers in accordance with such
amounts owing to each of them. To the extent Collections are available for
such purpose in accordance with the foregoing, the accrued Servicer Fees in
respect of each Receivable Interest shall be remitted to the Servicer.
Following the date on which the Aggregate Unpaids are reduced to zero, the
Servicer shall pay to Seller any remaining Collections set aside and held by
the Servicer pursuant to this SECTION 1.7. Until such remaining Collections
have been paid by the Servicer to the Seller, the Servicer shall hold such
remaining Collections in trust for the Seller.
Section 1.8. Limited Recourse.
(a) If on any day the Outstanding Balance of a Receivable
is (i) reduced as a result of any rejected or returned goods, trade-ins, any
cash discount or any adjustment by the Seller, (ii) reduced or cancelled as a
result of a setoff in respect of any claim by any Person (whether such claim
arises out of the same or a related transaction or an unrelated transaction),
or (iii) is otherwise reduced as a result of any of the factors set forth in
the definition of "DILUTIONS," the Seller shall be deemed to have received on
the following Business Day a Collection of such Receivable in the amount of
such reduction or cancellation.
(b) If on any day any of the representations or warranties
in SECTIONS 3.1(g), (i), (m) OR (n) is no longer true with respect to a
Receivable, the Seller shall be deemed to have received on the following
Business Day a Collection of such Receivable in full.
(c) If the Seller receives any Collections or is deemed to
receive Collections pursuant to this SECTION 1.8 or otherwise, the Seller shall
pay such Collections or deemed Collections to the Servicer not later than the
next succeeding Settlement Date and, at all times prior to such payment, such
amounts shall be held in trust by the Seller for the exclusive benefit of the
Purchasers and the Agent.
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(d) If on any day prior to the Facility Termination Date,
the Net Receivables Balance is less than the sum of (i) aggregate Capital
outstanding, plus (ii) the Aggregate Reserves, the Seller shall pay the amount
of such deficiency within 1 Business Day after discovery thereof by the Seller.
Section 1.9. Discount; Payments and Computations, Etc.
(a) Discount shall accrue for each Receivable Interest for
each day occurring during the Tranche Period for such Receivable Interest and
shall be payable on each Settlement Date after the initial Purchase.
(b) Notwithstanding any limitation on recourse contained
in this Agreement, the Seller shall pay to the Agent, for the account of the
relevant Purchasers, all accrued and unpaid Discount, the Arrangement Fee and
Facility Fee Fees set forth in the Fee Letter, all amounts payable pursuant to
ARTICLE VIII, if any, all Servicer costs, if any, payable pursuant to SECTION
6.2 and on demand therefor, any Early Collection Fee. If any Person fails to
pay any amount when due hereunder, such Person agrees to pay, on demand, the
Default Fee.
(c) All amounts to be paid or deposited by any Person
hereunder shall be paid or deposited in accordance with the terms hereof no
later than 12:00 noon (Chicago time) on the day when due in immediately
available funds; if such amounts are payable to a Purchaser, they shall be paid
to the Agent, for the account of such Purchaser, at One First National Plaza,
Chicago, Illinois 60670 until otherwise notified by the Agent. The Agent
shall, in accordance with its customary practice, provide invoices from time to
time to the Seller in respect of Discount and other fees and expenses payable
by the Seller hereunder. In the event the Seller shall at any time fail to pay
any amount when due hereunder, the Agent may, on notice to the Seller, debit
the Facility Account for such amount. All computations of Discount with
reference to the LIBO Rate and per annum fees hereunder and under the Fee
Letter shall be made on the basis of a year of 360 days for the actual number
of days elapsed (including the first but excluding the last day). All
computations of Discount with reference to the Base Rate shall be made on the
basis of a year of 365 days for the actual number of days elapsed. All per
annum fees shall be payable monthly in arrears on each Settlement Date. If any
amount hereunder shall be payable on a day which is not a Business Day, such
amount shall be payable on the next succeeding Business Day.
Section 1.10. Maximum Aggregate Receivables Interest; Grant of
Security Interest. The Seller shall ensure that the aggregate Receivable
Interests of the Purchasers shall at no time exceed 100%. If, on any day, the
aggregate Receivable Interests of the Purchasers exceeds 100%, the Seller shall
immediately pay to the Agent an amount to be applied to reduce the Capital of
the Receivable Interests, such that after giving effect to such payment the
aggregate of the Receivable Interest equals or is less than 100%. Such amount
shall be applied to the reduction of the Capital of the Receivable Interests
ratably in accordance with the percentages of the Receivable Interests. Any
amounts received by the Investors pursuant to the
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preceding sentence shall be applied ratably in accordance with their Pro Rata
Shares. The Seller hereby grants to the Agent for the ratable benefit of the
Purchasers a security interest in all of its now existing and hereafter arising
or acquired right, title and interest in and to the Receivables, the Related
Security, the Collection Accounts, the Collections and all proceeds of the
foregoing to secure payment of the Aggregate Unpaids, including its indemnity
obligations under ARTICLE VIII and all other obligations owed hereunder and
under the Fee Letter to the Agent and/or the Purchasers.
Section 1.11. Seller's Extinguishment. The Seller shall have
the right, on not less than thirty (30) Business Days' written notice to the
Agent, at any time following the reduction of the Capital to a level that is
less than 5.0% of the original Purchase Limit, to repurchase from the
Purchasers all, but not less than all, of the then outstanding Receivable
Interests. The purchase price in respect thereof shall be an amount equal to
the Aggregate Unpaids (including, without limitation, any Early Collection
Fees) through the date of such repurchase, payable in immediately available
funds. Such repurchase shall be without representation, warranty or recourse
of any kind by, on the part of, or against any Purchaser or the Agent.
Section 1.12. Servicer Fee. To the extent of available
Collections in accordance with the priorities set forth in SECTIONS 1.6 and
1.7, on each Settlement Date hereafter, the Servicer shall be paid the Servicer
Fee in arrears for the preceding Calculation Period.
ARTICLE II
LIQUIDITY FACILITY
Section 2.1. Transfer to Investors. Each Investor hereby
agrees, subject to SECTION 2.4, that immediately upon written notice from
Falcon delivered on or prior to the Liquidity Termination Date, it shall
acquire by assignment from Falcon, without recourse or warranty, its Pro Rata
Share of one or more of the Receivable Interests of Falcon as specified by
Falcon. Each Investor shall promptly pay to the Agent at an account designated
by the Agent, for the benefit of Falcon, its Acquisition Amount. Unless an
Investor has notified the Agent that it does not intend to pay its Acquisition
Amount, the Agent may assume that such payment has been made and may, but shall
not be obligated to, make the amount of such payment available to Falcon in
reliance upon such assumption. Falcon hereby sells and assigns to the Agent
for the ratable benefit of the Investors, and the Agent hereby purchases and
assumes from Falcon, effective upon the receipt by Falcon of the Falcon
Transfer Price, the Receivable Interests of Falcon which are the subject of any
transfer pursuant to this ARTICLE II.
Section 2.2. Transfer Price Reduction Discount. If the
Adjusted Liquidity Price is included in the calculation of the Falcon Transfer
Price for any Receivable Interest, each Investor agrees that the Agent shall
pay to Falcon the Reduction Percentage of any Discount received by the Agent
with respect to such Receivable Interest.
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Section 2.3. Payments to Falcon. In consideration for the
reduction of the Falcon Transfer Prices by the Falcon Transfer Price
Reductions, effective only at such time as the aggregate amount of the Capital
of the Receivable Interests of the Investors equals the Falcon Residual, each
Investor hereby agrees that the Agent shall not distribute to the Investors and
shall immediately remit to Falcon any Discount, Collections or other payments
received by it to be applied pursuant to the terms hereof or otherwise to
reduce the Capital of the Receivable Interests of the Investors.
Section 2.4. Limitation on Commitment to Purchase from Falcon.
Notwithstanding anything to the contrary in this Agreement, no Investor shall
have any obligation to purchase any Receivable Interest from Falcon, pursuant
to SECTION 2.1 or otherwise, if: (i) Falcon shall have voluntarily commenced
any proceeding or filed any petition under any bankruptcy, insolvency or
similar law seeking the dissolution, liquidation or reorganization of Falcon or
taken any corporate action for the purpose of effectuating any of the
foregoing; or (ii) involuntary proceedings or an involuntary petition shall
have been commenced or filed against Falcon by any Person under any bankruptcy,
insolvency or similar law seeking the dissolution, liquidation or
reorganization of Falcon and such proceeding or petition shall have not been
dismissed.
Section 2.5. Defaulting Investors. If one or more Investors
defaults in its obligation to pay its Acquisition Amount pursuant to SECTION
2.1 (each such Investor shall be called a "DEFAULTING INVESTOR" and the
aggregate amount of such defaulted obligations being herein called the "FALCON
TRANSFER PRICE DEFICIT"), then upon notice from the Agent, each Investor other
than the Defaulting Investors (a "NON-DEFAULTING INVESTOR") shall promptly pay
to the Agent, in immediately available funds, an amount equal to the lesser of
(x) such Non-Defaulting Investor's proportionate share (based upon the relative
Commitments of the Non-Defaulting Investors) of the Falcon Transfer Price
Deficit and (y) the unused portion of such Non-Defaulting Investor's
Commitment. A Defaulting Investor shall forthwith upon demand pay to the Agent
for the account of the Non-Defaulting Investors all amounts paid by each
Non-Defaulting Investor on behalf of such Defaulting Investor, together with
interest thereon, for each day from the date a payment was made by a
Non-Defaulting Investor until the date such Non-Defaulting Investor has been
paid such amounts in full, at a rate per annum equal to the Federal Funds
Effective Rate plus 0.5% for the first two Business Days and 2.0% per annum
thereafter. In addition, without prejudice to any other rights that Falcon may
have under applicable law, each Defaulting Investor shall pay to Falcon
forthwith upon demand, the difference between such Defaulting Investor's unpaid
Acquisition Amount and the amount paid with respect thereto by the
non-Defaulting Investors, together with interest thereon, for each day from the
date of the Agent's request for such Defaulting Investor's Acquisition Amount
pursuant to SECTION 2.1 until the date the requisite amount is paid to Falcon
in full, at a rate per annum equal to the Federal Funds Effective Rate plus
2.0%.
ARTICLE III
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REPRESENTATIONS AND WARRANTIES
Section 3.1. Seller Representations and Warranties. The
Seller hereby represents and warrants to the Agent and the Purchasers that:
(a) Corporate Existence and Power. The Seller is a
corporation validly organized and existing and in good standing under the laws
of the state of its incorporation, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where the nature of
its business requires such qualification and where the failure to be so
qualified would have a Material Adverse Effect, and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its obligations under the Transaction
Documents and to own and hold under lease its property and to conduct its
business as currently proposed to be conducted.
(b) Non-Contravention, Due Authorization, Etc.. The
execution, delivery and performance by the Seller of the Transaction Documents
to which it is a party, and the Seller's use of the proceeds of Purchases made
hereunder, are within its corporate powers, have been duly authorized by all
necessary corporate action, do not: (i) contravene the Seller's certificate of
incorporation, by-laws, or any shareholder agreements, voting trusts, and
similar arrangements applicable to any of its authorized shares, (ii)
contravene any contractual restriction, law or governmental regulation or court
decree or order binding on or affecting the Seller, or (iii) result in, or
require the creation or imposition of, any lien on any of the Seller's
properties. No transaction contemplated hereby requires compliance with any
bulk sales act or similar law.
(c) Governmental Authorization. Other than the filing of
the financing statements required hereunder, no authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Seller of the Transaction Documents to which it is a party.
(d) Binding Effect. Each of the Transaction Documents to
which the Seller is a party has been duly authorized, executed and delivered by
the Seller. Each of such Transaction Documents constitutes the legal, valid
and binding obligation of the Seller enforceable against the Seller in
accordance with its respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws of
general applicability and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
or at law).
(e) Accuracy of Information. All information heretofore
furnished by the Seller or any of its Affiliates to the Agent or the Purchasers
for purposes of or in connection with this Agreement, any of the other
Transaction Documents or any transaction contemplated hereby or thereby is, and
all such information hereafter furnished by the Seller or any of its Affiliates
to the Agent and/or the Purchasers will
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be, true and accurate in every material respect, as of the date such
information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
(f) Use of Proceeds. No proceeds of any Purchase
hereunder will be used (i) for a purpose which violates, or would be
inconsistent with, Regulation G, T, U or X promulgated by the Board of
Governors of the Federal Reserve System from time to time or (ii) to acquire
any security in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended.
(g) Title to Receivables. Each Receivable has been
purchased by the Seller from an Originator in accordance with the terms of the
Sale Agreement, and the Seller has thereby irrevocably obtained all legal and
equitable title to, and has the legal right to sell and encumber, such
Receivable, its Collections and the Related Security. Each such Receivable has
been transferred to the Seller free and clear of any Adverse Claim. Without
limiting the foregoing, there has been duly filed all financing statements or
other similar instruments or documents necessary under the UCC of all
appropriate jurisdictions (or any comparable law) to perfect the Seller's
ownership interest in such Receivable. Immediately prior to each Purchase
hereunder, the Seller shall be the legal and beneficial owner of the
Receivables and Related Security with respect thereto, free and clear of any
Adverse Claim, except as created by the Transaction Documents. This Agreement
is effective to, and shall, upon each Purchase hereunder, transfer to the Agent
for the benefit of the relevant Purchaser or Purchasers (and such Purchaser or
Purchasers shall acquire from the Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents.
(h) Places of Business. The principal place of business
and chief executive office of the Seller and the offices where the Seller keeps
all its Records are located at the address(es) listed on EXHIBIT II or such
other locations notified to the Agent in accordance with SECTION 5.2(a) in
jurisdictions where all action required by SECTION 5.2(a) has been taken and
completed. The Seller's Federal Employer Identification Number is correctly
set forth on EXHIBIT II.
(i) Collections; etc. Except as otherwise notified to the
Agent in accordance with SECTION 5.2(b):
(i) the Seller has instructed (or has required the
applicable Originator to instruct) all Obligors to pay all Collections
directly to a segregated lock-box identified on EXHIBIT III hereto,
(ii) in the case of all proceeds remitted to any such
lock-box which is now or hereafter established, such proceeds will be
deposited
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directly by the applicable Collection Bank into a concentration
account or a depository account listed on EXHIBIT III,
(iii) the names and addresses of all Collection Banks,
together with the account numbers of the Collection Accounts of the
Seller at each Collection Bank, are listed on EXHIBIT III, and
(iv) each lock-box and Collection Account listed on EXHIBIT
III-A is subject to a Collection Agreement that is in full force and
effect, and after the occurrence and during the continuance of a
Servicer Default, each lock-box and Collection Account (other than any
lock-box or Collection Account then subject to a Collection Agreement)
shall, within ten (10) Business Days after Seller receives notice
thereof, be subject to a Collection Agreement, PROVIDED THAT if after
using reasonable efforts, Seller is unable within ten (10) Business
Days to obtain the consent and agreement of the applicable bank or
financial institution where any such lock-box or Collection Account is
maintained to such Collection Agreement, Seller shall no longer permit
Collections to be deposited into such lock-box or Collection Account
and shall cause all Collections previously sent to such lock-box or
Collection Account to be sent to a lock-box or Collection Account that
is subject to a Collection Agreement.
In the case of lock-boxes and Collection Accounts identified on EXHIBIT III,
exclusive dominion and control thereof has been transferred to the Buyer. The
Seller has not granted any Person, other than the Agent as contemplated by this
Agreement, dominion and control of any lock-box or other Collection Account, or
the right to take dominion and control of any lock-box or other Collection
Account at a future time or upon the occurrence of a future event.
(j) Material Adverse Effect. Since December 31, 1997, no
event has occurred which would have a Material Adverse Effect.
(k) Names. In the past five years, the Seller has not
used any corporate names, trade names or assumed names other than the name in
which it has executed this Agreement.
(l) Actions, Suits. There are no actions, suits or
proceedings pending, or to the best of the Seller's knowledge, threatened,
against or affecting the Seller or the Originators, or any of the properties of
the Seller or the Originators, in or before any court, arbitrator or other
body, which are reasonably likely to (i) adversely affect the collectibility of
a material portion of the Receivables, (ii) materially adversely affect the
financial condition of the Seller and the Originators, taken as a whole, or
(iii) materially adversely affect the ability of the Seller or either of the
Originators to perform its respective obligations under the Transaction
Documents to which it is a party. The Seller is not in default with respect to
any order of any court, arbitrator or governmental or regulatory body.
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(m) Credit and Collection Policy. With respect to each
Receivable, each of the applicable Originators, the Seller and the Servicer has
complied in all material respects with the Credit and Collection Policy.
(n) Payments to Applicable Originator. With respect to
each Receivable sold to the Seller by an Originator, the Seller has given
reasonably equivalent value to the applicable Originator in consideration for
such Receivable and the Related Security with respect thereto under the Sale
Agreement and such transfer was not made for or on account of an antecedent
debt. No transfer by an Originator of any Receivable is or may be voidable
under any Section of the Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101
et seq.), as amended.
(o) Ownership of the Seller. Wabash owns, directly or
indirectly, 100% of the issued and outstanding capital stock of the Seller,
free and clear of any Adverse Claim. Such capital stock is validly issued,
fully paid and nonassessable, and there are no options, warrants or other
rights to acquire securities of the Seller.
(p) Not an Investment Company. The Seller is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended from time to time, or any successor statute.
(q) Purpose. The Seller has determined that, from a
business viewpoint, the purchase of Receivables and related interests from the
Originators under the Sale Agreement, and the sale of Receivable Interests to
the Purchasers and the other transactions contemplated herein, are in the best
interest of the Seller.
(r) Net Receivables Balance. As of each Purchase Date,
after giving prospective effect to the Purchase or any Reinvestment to be made
on such date, the Net Receivables Balance is at least equal to the sum of (i)
aggregate Capital outstanding, plus (ii) the Aggregate Reserves.
Section 3.2. Investor Representations and Warranties. Each
Investor hereby represents and warrants to the Agent and Falcon that:
(a) Existence and Power. Such Investor is a corporation
or a banking association duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, and has
all corporate power to perform its obligations hereunder.
(b) No Conflict. The execution, delivery and performance
by such Investor of this Agreement are within its corporate powers, have been
duly authorized by all necessary corporate action, do not contravene or violate
(i) its certificate or articles of incorporation or association or by-laws,
(ii) any law, rule or regulation applicable to it, (iii) any restrictions under
any agreement, contract or instrument to which it is a party or by which any of
its property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and
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do not result in the creation or imposition of any Adverse Claim on its assets.
This Agreement has been duly authorized, executed and delivered by such
Investor.
(c) Governmental Authorization. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery and
performance by such Investor of this Agreement.
(d) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of such Investor enforceable against such Investor
in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or limiting creditors' rights generally.
ARTICLE IV
CONDITIONS OF PURCHASES
Section 4.1. Conditions Precedent to Initial Purchase. The
initial Purchase of a Receivable Interest under this Agreement is subject to
the conditions precedent that (a) the Agent shall have received on or before
the date of such Purchase those documents listed on SCHEDULE I hereto, and (b)
the Agent shall have been paid all fees required to be paid on such date
pursuant to the terms of the Fee Letter.
Section 4.2. Conditions Precedent to All Purchases and
Reinvestments. Each Purchase of a Receivable Interest (other than pursuant to
SECTION 2.1) and each Reinvestment shall be subject to the further conditions
precedent that:
(a) in the case of each such Purchase, the Servicer shall have
delivered to the Agent on or prior to the date of such purchase, in form and
substance satisfactory to the Agent, all Monthly Reports as and when due under
SECTION 6.5;
(b) on the date of each such Purchase or Reinvestment, the
following statements shall be true both before and after giving effect to such
Purchase or Reinvestment (and acceptance of the proceeds of such Purchase or
Reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):
(i) the representations and warranties set forth in
SECTION 3.1 are correct on and as of the date of such Purchase or
Reinvestment as though made on and as of such date;
(ii) no event has occurred, or would result from such
Purchase or Reinvestment, that will constitute a Servicer Default, and
no event has occurred and is continuing, or would result from such
Purchase or Reinvestment, that would constitute a Potential Servicer
Default; and
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(iii) the Liquidity Termination Date shall not have
occurred, the aggregate Capital of all Receivable Interests shall not
exceed the Purchase Limit and the aggregate Receivable Interests shall
not exceed 100%; and
(c) the Agent shall have received such other approvals,
opinions or documents as it may reasonably request.
ARTICLE V
COVENANTS
Section 5.1. Affirmative Covenants of Seller. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full, the Seller
hereby covenants, individually and in its capacity as Servicer, that:
(a) Financial Reporting. The Seller will maintain a
system of accounting established and administered in accordance with generally
accepted accounting principles, and furnish to the Agent:
(i) Annual Reporting. Within 90 days after the close of
each of its fiscal years, financial statements for such fiscal year
certified in a manner acceptable to the Agent by the Chief Financial
Officer or the Controller of the Seller, together with copies of the
financial statements of the Originators delivered pursuant to SECTION
4.1(a)(i) of the Sale Agreement. In the event that Seller is
consolidated with Wabash for purpose of financial reporting, delivery
within the time period specified above of copies of the financial
statements of the Originators delivered pursuant to SECTION 4.1(a)(i)
of the Sale Agreement, shall be deemed to satisfy the requirements of
this SECTION 5.1(a)(i).
(ii) Quarterly Reporting. Within 60 days after the close
of the first three quarterly periods of each of its fiscal years,
balance sheets as at the close of each such period and statements of
income and retained earnings and a statement of cash flows for the
period from the beginning of such fiscal year to the end of such
quarter, all certified by its Chief Financial Officer or Controller,
together with copies of the financial statements of the Originators
delivered pursuant to SECTION 4.1(a)(ii) of the Sale Agreement. In
the event that Seller is consolidated with Wabash for financial
reporting purposes, delivery within the time period specified above of
copies of the financial statements of the Originators delivered
pursuant to SECTION 4.1(a)(ii) of the Sale Agreement, shall be deemed
to satisfy the requirements of this SECTION 5.1(a)(ii).
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in
substantially the form of EXHIBIT IV signed by the Seller's Chief
Financial Officer or Controller and dated the date of such annual
financial statement or such quarterly financial statement, as the case
may be, together with copies of the certificates delivered pursuant to
SECTION 4.1(a)(iii) of the Sale Agreement.
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(iv) Notices under Transaction Documents. Forthwith upon
its receipt of any notice, request for consent, certification, report
or other communication under or in connection with any Transaction
Document from any Person other than the Agent or Falcon, copies of the
same (other than any such notice, request, certification, receipt or
other communication delivered by or in connection with any Obligor
that does not indicate the occurrence or the likely occurrence of a
material adverse effect of the collectibility of a material portion of
the Receivables attributable to such Obligor).
(v) Change in Credit and Collection Policy. At least 30
days prior to the effectiveness of any material change in or amendment
to the Credit and Collection Policy referred to in SECTION 5.2(c)
hereof, and promptly after the effectiveness of any other change in or
amendment to the Credit and Collection Policy, a copy of the Credit
and Collection Policy then in effect and a notice indicating such
change or amendment.
(vi) Other Information. Such other information (including
non-financial information) as the Agent or any Purchaser may from time
to time reasonably request.
(b) Notices. The Seller will notify the Agent in writing
of any of the following immediately upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:
(i) Servicer Defaults or Potential Servicer Defaults. The
occurrence of each Servicer Default or each Potential Servicer
Default, by a statement of the Chief Financial Officer of the Seller.
(ii) Judgment. The entry of any judgment or decree against
the Seller if the aggregate amount of all judgments and decrees
against the Seller exceeds $10,000 after deducting (a) the amount with
respect to which the Seller was insured and with respect to which the
insurer has assumed liability in writing and (b) the amount for which
the Seller is otherwise indemnified to the reasonable satisfaction of
the Agent.
(iii) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding against the Seller
or to which the Seller becomes party in excess of $10,000 that remains
unsettled or undismissed for a period of thirty (30) days from the
commencement thereof and involves claims for damages or relief.
(iv) Termination Date under Sale Agreement. The occurrence
of the "TERMINATION DATE" under the Sale Agreement.
(v) Downgrade. Any downgrade in the rating of any
Indebtedness of the Seller or either of the Originators by Standard &
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Poor's Ratings Group or by Moody's Investors Service, Inc., setting
forth the Indebtedness affected and the nature of such change.
(c) Compliance with Laws. The Seller will comply in all
material respects with all applicable laws, rules, regulations, orders writs,
judgments, injunctions, decrees or awards to which it may be subject.
(d) Audits. The Seller will furnish to the Agent from
time to time such information with respect to the Receivables as the Agent may
reasonably request. Subject to SECTION 11.5(b), the Seller shall, once per
calendar year, at the Seller's expense and during regular business hours as
requested by the Agent upon reasonable notice, permit the Agent, or its agents
or representatives (and shall require the Originators to permit the Agent or
its agents or representatives) (i) to examine and make copies of and abstracts
from all Records in the possession or under the control of the Seller or the
applicable Originator relating to Receivables and the Related Security,
including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of the Seller or the Originators for the purpose of
examining such materials described in clause (i) above, and to discuss matters
relating to the Seller's or either Originator's financial condition or the
Receivables and the Related Security or the Seller's performance hereunder, or
either Originator's performance under any of the other Transaction Documents,
or the Seller's or either Originator's performance under the Contracts with any
of the officers or employees of the Seller or such Originator having knowledge
of such matters (the procedures described in the foregoing clauses (i) and (ii)
are referred to herein as an "Audit"). The first Audit shall occur in July
1998 for the 6 month period ending June 30, 1998. Audits shall be limited to
one per calendar year so long as (i) no Servicer Default has occurred and is
continuing and (ii) the preceding Audit was reasonably satisfactory in all
material respect to Agent, otherwise the frequency of Audits shall not be
limited.
(e) Keeping and Marking of Records and Books.
(i) The Seller will, and will require the applicable
Originator to, maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain all documents, books,
records and other information reasonably necessary or advisable for
the collection of all Receivables (including, without limitation,
records adequate to permit the immediate identification of each new
Receivable and all Collections of and adjustments to each existing
Receivable). The Seller will, and will require the applicable
Originator to, give the Agent notice of any material change in the
administrative and operating procedures referred to in the previous
sentence.
(ii) The Seller will, and will require the applicable
Originator to, (a) on or prior to the date hereof, mark its master
data processing records and other books and records relating to the
Receivable Interests with a legend, acceptable to the Agent,
describing the Receivable Interests and (b) upon the request of the
Agent following the occurrence and during the continuance of a
Servicer Default
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(A) mark each Contract with a legend describing the Receivable
Interests and (B) deliver to the Agent all Contracts (including,
without limitation, all multiple originals of any such Contract)
relating to the Receivables then in the Seller's possession.
(f) Compliance with Contracts and Credit and Collection
Policy. The Seller will, and will require the applicable Originator to, timely
and fully (i) perform and comply, in all material respects, with all
provisions, covenants and other promises required to be observed by it under
the Contracts related to the Receivables, and (ii) comply in all material
respects with the Credit and Collection Policy in regard to each Receivable and
the related Contract. The Seller will, and will require the applicable
Originator to, pay when due any taxes payable in connection with the
Receivables.
(g) Purchase of Receivables from the Originators. With
respect to each Receivable purchased under the Sale Agreement, the Seller shall
(or shall require the applicable Originator to) take all actions necessary to
vest legal and equitable title to such Receivable and the Related Security
irrevocably in the Seller, including, without limitation, the filing of all
financing statements or other similar instruments or documents necessary under
the UCC of all appropriate jurisdictions (or any comparable law) to perfect the
Seller's interest in such Receivable and such other action to perfect, protect
or more fully evidence the interest of the Seller as the Agent may reasonably
request.
(h) Ownership Interest. The Seller shall take all
necessary action to establish and maintain a valid and perfected first priority
undivided percentage ownership interest in the Receivables and the Related
Security and Collections with respect thereto, to the full extent contemplated
herein, in favor of the Agent and the Purchasers, including, without
limitation, taking such action to perfect, protect or more fully evidence the
interest of the Agent and the Purchasers hereunder as the Agent may reasonably
request.
(i) Payment to the Applicable Originator. With respect to
any Receivable purchased by the Seller from an Originator, such sale shall be
effected under, and in strict compliance with the terms of, the Sale Agreement,
including, without limitation, the terms relating to the amount and timing of
payments to be made to the applicable Originator in respect of the purchase
price for such Receivable.
(j) Performance and Enforcement of Sale Agreement. The
Seller shall timely perform the obligations required to be performed by the
Seller, and shall vigorously enforce the rights and remedies accorded to the
Seller, under the Sale Agreement. The Seller shall take all actions to perfect
and enforce its rights and interests (and the rights and interests of the
Purchasers and the Agents, as assignees of the Seller) under the Sale Agreement
as the Agent may from time to time reasonably request, including, without
limitation, making claims to which it may be entitled under any indemnity,
reimbursement or similar provision contained in the Sale Agreement. The Seller
shall diligently enforce its rights and interests under the Parent
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Demand Note including, but not limited to, making demand for payment thereunder
when required by the terms of this Agreement.
(k) Purchasers' Reliance. The Seller acknowledges that
the Purchasers are entering into the transactions contemplated by this
Agreement in reliance upon the Seller's identity as a legal entity that is
separate from the Originators. Therefore, from and after the date of execution
and delivery of this Agreement, the Seller shall take all reasonable steps
including, without limitation, all steps that the Agent or any Purchaser may
from time to time reasonably request to maintain the Seller's identity as a
separate legal entity and to make it manifest to third parties that the Seller
is an entity with assets and liabilities distinct from those of the Originators
and any Affiliates thereof and not just a division of either of the
Originators. Without limiting the generality of the foregoing and in addition
to the other covenants set forth herein, the Seller shall:
(i) conduct its own business in its own name and require
that all full-time employees of the Seller, if any, identify
themselves as such and not as employees of either of the Originators
(including, without limitation, by means of providing such employees
with business or identification cards identifying such employees as
the Seller's employees);
(ii) compensate all employees, consultants and agents
directly, from the Seller's bank accounts, for services provided to
the Seller by such employees, consultants and agents and, to the
extent any employee, consultant or agent of the Seller is also an
employee, consultant or agent of either of the Originators, allocate
the compensation of such employee, consultant or agent between the
Seller and the Originators on a basis which reflects the services
rendered to the Seller and the Originators;
(iii) clearly identify its offices (by signage or otherwise)
as its offices and, if such office is located in the offices of an
Originator, the Seller shall lease such office at a fair market rent;
(iv) have a separate telephone number, which will be
answered only in its name and separate stationery, invoices and checks
in its own name;
(v) conduct all transactions with the Originators
(including, without limitation, any delegation of its obligations
hereunder as Servicer) strictly on an arm's-length basis, allocate all
overhead expenses (including, without limitation, telephone and other
utility charges) for items shared between the Seller and the
applicable Originator on the basis of actual use to the extent
practicable and, to the extent such allocation is not practicable, on
a basis reasonably related to actual use;
(vi) at all times have at least one member of its Board of
Directors (an "INDEPENDENT DIRECTOR") who is "INDEPENDENT" as provided
in the Seller's Certificate of Incorporation as in effect on the date
hereof;
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(vii) observe all corporate formalities as a distinct
entity, and ensure that all corporate actions relating to (A) the
selection, maintenance or replacement of the Independent Director, (B)
the dissolution or liquidation of the Seller or (C) the initiation or
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving the Seller,
are duly authorized by unanimous vote of its Board of Directors
(including the Independent Director);
(viii) maintain the Seller's books and records separate from
those of the Originators and otherwise readily identifiable as its own
assets rather than assets of the Originators;
(ix) prepare financial statements separate from those of
the Originators and insure that any consolidated financial statements
of the Originators or any Affiliate thereof that include the Seller
have detailed notes clearly stating that the Seller is a separate
corporate entity and that its assets will be available first and
foremost to satisfy the claims of the creditors of the Seller;
(x) except as herein specifically otherwise provided, not
commingle funds or other assets of the Seller with those of the
Originators and not maintain bank accounts or other depository
accounts to which either of the Originators is an account party, into
which either of the Originators makes deposits or from which such
Originator has the power to make withdrawals except in its capacity as
Sub-Servicer;
(xi) not permit either of the Originators to pay any of the
Seller's operating expenses (except pursuant to allocation
arrangements that comply with the requirements of this SECTION
5.1(k)); and
(xii) take such other actions as are necessary on its part
to ensure that the facts and assumptions set forth in the opinion
issued by Skadden, Arps, Slate, Meagher & Flom (Illinois), as counsel
for the Seller, in connection with the closing or initial Purchase
under this Agreement and relating to substantive consolidation issues,
and in the certificates accompanying such opinion, remain true and
correct in all material respects at all times.
(l) Collections. The Seller shall instruct all Obligors
to pay all Collections directly to a segregated lock-box or other Collection
Account listed on EXHIBIT III. A Collection Agreement that is in full force
and effect is in place for each segregated lock-box or Collection Account
listed on EXHIBIT III-A, but upon the occurrence and during the continuance of
a Servicer Default, each segregated lock-box or other Collection Account (other
than any lock-box or Collection Account then subject to a Collection Agreement)
shall, within ten (10) Business Days after Seller receives notice thereof, be
subject to a Collection Agreement, PROVIDED THAT if after using reasonable
efforts, Seller is unable within ten (10) Business Days to obtain the consent
and agreement of the applicable bank or financial institution where any such
lock-box or Collection Account is maintained to such Collection Agreement,
Seller shall
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no longer permit Collections to be deposited into such Collection Account and
shall cause all Collections previously sent to such lock-box or Collection
Account to be sent to a lock-box or Collection Account that is subject to a
Collection Agreement. In the case of payments remitted to any lock-box, the
Seller shall cause all proceeds from such lock-box to be deposited directly by
a Collection Bank into a concentration account or a depositary account listed
on EXHIBIT III. In the case of any Collections received by the Seller, the
Seller shall remit such Collections to a Collection Account not later than the
Business Day immediately following the date of receipt of such Collections,
and, at all times prior to such remittance, the Seller shall itself hold such
Collections in trust, for the exclusive benefit of the Agent and the
Purchasers. In the case of any remittances received by the Seller in any
Collection Account that shall have been identified, to the satisfaction of the
Servicer, to not constitute Collections or other proceeds of the Receivables or
the Related Security, the Seller shall promptly remit such items to the Person
identified to it as being the owner of such remittances. From and after the
date the Agent delivers to any of the Collection Banks a Collection Notice
pursuant to SECTION 6.3, the Agent, as assignee of the Buyer, may request that
the applicable Originator, and the Seller thereupon promptly shall, direct all
Obligors on Receivables to remit all payments thereon to a new depositary
account (the "NEW CONCENTRATION ACCOUNT") specified by the Agent and, at all
times thereafter the Seller shall not deposit or otherwise credit to the New
Concentration Account any cash or payment item other than Collections.
Alternatively, after the occurrence of a Servicer Default, the Agent may
request that the Seller, and the Seller thereupon promptly shall, direct all
Persons then making remittances to any account listed on EXHIBIT III which
remittances are not payments on Receivables to deliver such remittances to a
location other than an account listed on EXHIBIT III.
(m) Minimum Net Worth. The Seller shall at all times
maintain Net Worth of not less than $2,490,000.
(n) Parent Demand Note:
(i) If a Servicer Default occurs, the Seller shall demand
immediate repayment in full of all principal outstanding under the
Parent Demand Note.
(ii) In addition to the foregoing, in the event that
Collections in any month and other funds available to the Seller are
insufficient to pay the full amount of Discount, fees due under the
Fee Letter and servicing fees and expenses due to the Sub-Servicer
under the Sale Agreement, the Seller shall demand payment of a portion
of the outstanding principal under the Parent Demand Note, if any, in
an amount equal to the lesser of the unpaid principal thereunder or
the aggregate amount of Discount, fees due under the Fee Letter and
servicing fees and expenses due to the Sub-Servicer under the Sale
Agreement which were not paid from such Collections or other funds.
(iii) Lastly, if on any Business Day following the Facility
Termination Date, the Seller is unable to pay any deemed Collection
due and owing the Agent and the Purchasers under SECTION 1.8 on such
day, the Seller shall
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demand payment of a portion of the outstanding principal under the
Parent Demand Note, if any, in an amount equal to the lesser of the
unpaid principal thereunder or the aggregate amount of such deemed
Collections which the Seller was unable to pay.
Section 5.2. Negative Covenants of Seller. Until the date on
which the Aggregate Unpaids have been indefeasibly paid in full, the Seller
hereby covenants, individually and in its capacity as Servicer, that:
(a) Name Change, Offices, Records and Books of Accounts.
The Seller will not change its name, identity or corporate structure (within
the meaning of Section 9-402(7) of any applicable enactment of the UCC) or
relocate its chief executive office or any office where Records are kept unless
it shall have: (i) given the Agent at least 30 days prior notice thereof and
(ii) delivered to the Agent all financing statements, instruments and other
documents requested by the Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. The Seller
will not add or terminate any bank as a Collection Bank, or make any change in
its instructions to Obligors regarding payments to be made thereto, unless the
Agent shall have received, at five (5) Business Days before the proposed
effective date therefor:
(i) written notice of such addition, termination or
change, and
(ii) with respect to the addition of a new Collection
Account or Collection Bank, an executed account agreement and an
executed Collection Agreement from such Collection Bank relating
thereto;
PROVIDED, HOWEVER, that the Seller may make changes in instructions to Obligors
regarding payments if such new instructions require such Obligor to make
payments to another existing Collection Account that is subject to a Collection
Agreement then in effect.
(c) Modifications to Contracts and Credit and Collection
Policy. The Seller will not make any change to the Credit and Collection
Policy which would be reasonably likely to adversely affect the collectibility
of any material portion of the Receivables or decrease the credit quality of
any newly created Receivables in any material respect. Except as provided in
SECTION 6.2(c), the Seller, acting as Servicer or otherwise, will not extend,
amend or otherwise modify in any material respect the terms of any Receivable
or any Contract related thereto other than in accordance with the Credit and
Collection Policy.
(d) Sales, Liens, Etc. The Seller shall not, and shall
not authorize either of the Originators to, sell, assign (by operation of law
or otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable or Related Security or Collections in
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respect thereof, or upon or with respect to any Contract under which any
Receivable arises, or any lock-box or Collection Account or assign any right to
receive income in respect thereof (other than, in each case, the creation of
the interests therein in favor of the Agent and the Purchasers provided for
herein), and the Seller shall defend the right, title and interest of the Agent
and the Purchasers in, to and under any of the foregoing property, against all
claims of third parties claiming through or under the Seller or either of the
Originators.
(e) Nature of Business; Other Agreements; Other
Indebtedness. The Seller shall not engage in any business or activity of any
kind or enter into any transaction or indenture, mortgage, instrument,
agreement, contract, lease or other undertaking, in each case other than the
transactions contemplated and authorized by this Agreement and the Sale
Agreement. Without limiting the generality of the foregoing, the Seller shall
not create, incur, guarantee, assume or suffer to exist any indebtedness or
other liabilities, whether direct or contingent, other than:
(i) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of business,
(ii) the incurrence of obligations under this Agreement or
any other Transaction Document,
(iii) the incurrence of obligations, as expressly
contemplated in the Sale Agreement, to make payment to the applicable
Originator thereunder for the purchase of Receivables from the
applicable Originator under the Sale Agreement, and
(iv) the incurrence of operating expenses in the ordinary
course of business of the type otherwise contemplated in SECTION
5.1(k) of this Agreement.
In the event the Seller shall at any time borrow a "SUBORDINATED LOAN" under
the Sale Agreement, the obligations of the Seller in connection therewith shall
be subordinated to the obligations of the Seller to the Purchasers and the
Agent under this Agreement, on the terms provided for in the Subordinated Note
and the Sale Agreement.
(f) Amendments to Sale Agreement. The Seller shall not,
without the prior written consent of the Agent (which consent shall not be
unreasonably withheld or delayed):
(i) cancel or terminate the Sale Agreement,
(ii) give any consent, waiver, directive or approval under
the Sale Agreement,
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(iii) waive any default, action, omission or breach under the
Sale Agreement, or otherwise grant any indulgence thereunder, or
(iv) amend, supplement or otherwise modify any of the terms of
the Sale Agreement.
(g) Amendments to Corporate Documents. Without the prior
written consent of the Agent, the Seller shall not amend its Certificate of
Incorporation or By-Laws in any respect that would impair its ability to comply
with the terms or provisions of any of the Transaction Documents, including,
without limitation, SECTION 5.1(k) of this Agreement.
(h) Merger. The Seller shall not merge or consolidate
with or into, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions, and except as otherwise
contemplated herein) all or substantially all of its assets (whether now owned
or hereafter acquired) to, or acquire all or substantially all of the assets
of, any Person.
(i) Restricted Junior Payments. The Seller shall not make
any Restricted Junior Payment: (i) if any Servicer Default or Potential
Servicer Default exists or would result therefrom or (ii) after the Facility
Termination Date.
ARTICLE VI
ADMINISTRATION AND COLLECTION
Section 6.1. Designation of Servicer.
(a) The servicing, administration and collection of the
Receivables shall be conducted by such Person (the "SERVICER") so designated
from time to time in accordance with this SECTION 6.1. The Seller is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms of this Agreement. The Agent may at any time
upon the occurrence and during the continuance of a Servicer Default designate
as Servicer any Person to succeed the Seller or any successor Servicer.
(b) The Seller is permitted to delegate, and the Seller
hereby advises the Purchasers and the Agent that it has delegated, to Fruehauf,
as Sub-Servicer of the Servicer, certain of its duties and responsibilities as
Servicer hereunder in respect of the Receivables transferred by the Originators
to the Seller. Notwithstanding the foregoing, (i) the Seller shall be and
remain primarily liable to the Agent and the Purchasers for the full and prompt
performance of all duties and responsibilities of the Servicer hereunder and
(ii) the Agent and the Purchasers shall be entitled to deal exclusively with
the Seller in matters relating to the discharge by the Servicer of its duties
and responsibilities hereunder, and the Agent and the Purchasers shall not be
required to give notice, demand or other communication to any Person other than
the Seller in order for communication to the Servicer and its Sub-Servicer or
other delegate
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in respect thereof to be accomplished. The Seller, at all times that it is the
Servicer, shall be responsible for providing its Sub-Servicer or other delegate
with any notice given under this Agreement.
(c) Without the prior written consent of the Required
Investors, (i) the Seller shall not be permitted to delegate any of its duties
or responsibilities as Servicer to any Person other than Fruehauf, and then
such delegation shall be limited to the activities of the Servicer hereunder,
and (ii) Fruehauf shall not be permitted to further delegate to any other
Person any of the duties or responsibilities of the Servicer delegated to it by
the Seller. If at any time the Agent shall designate as Servicer any Person
other than the Seller, all duties and responsibilities theretofore delegated by
the Seller to Fruehauf may, at the discretion of the Agent, be terminated
forthwith on notice given by the Agent to the Seller.
Section 6.2. Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Receivable from time
to time, all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and Collection
Policy.
(b) The Servicer shall administer the Collections in
accordance with the procedures described herein and in ARTICLE I. The Servicer
shall set aside and hold in trust for the account of the Seller and the
Purchasers their respective shares of the Collections of Receivables in
accordance with SECTIONS 1.6 and 1.7. The Servicer shall upon the request of
the Agent after the occurrence of a Liquidation Day, segregate, in a manner
acceptable to the Agent, all cash, checks and other instruments received by it
from time to time constituting Collections from the general funds of the
Servicer or the Seller prior to the remittance thereof in accordance with
SECTION 1.7. If the Servicer shall be required to segregate Collections
pursuant to the preceding sentence, the Servicer shall segregate and deposit
with a bank designated by the Agent such allocable share of Collections of
Receivables set aside for the Purchasers on the first Business Day following
receipt by the Servicer of such Collections, duly endorsed or with duly
executed instruments of transfer.
(c) The Servicer, may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer may determine to be
appropriate to maximize Collections thereof; PROVIDED, HOWEVER, that such
extension or adjustment shall not alter the status of such Receivable as a
Defaulted Receivable or limit the rights of the Agent or the Purchasers under
this Agreement. Notwithstanding anything to the contrary contained herein,
from and after the occurrence of a Servicer Default, the Agent shall have the
absolute and unlimited right to direct the Servicer to commence or settle any
legal action with respect to any Receivable or to foreclose upon or repossess
any Related Security.
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(d) The Servicer shall hold in trust for the Seller and
the Purchasers, in accordance with their respective interests in the
Receivables, all Records that evidence or relate to the Receivables, the
related Contracts and Related Security or that are otherwise necessary or
desirable to collect the Receivables and shall, as soon as reasonably
practicable upon demand of the Agent, deliver or make available to the Agent
all such Records, (x) if such demand is made at any time prior to the
replacement of the Seller as Servicer hereunder, at the chief executive office
of Wabash and (y) if such demand is made at any time after the replacement of
the Seller as Servicer hereunder, to such location as the Agent may designate
in writing. The Servicer shall, as soon as practicable following receipt
thereof, turn over to the Seller (i) that portion of Collections of Receivables
representing the Seller's undivided fractional ownership interest therein,
less, in the event the Seller is not the Servicer, all reasonable out-of-pocket
costs and expenses of the Servicer of servicing, administering and collecting
the Receivables, and (ii) any cash collections or other cash proceeds received
with respect to indebtedness not constituting Receivables. The Servicer shall,
from time to time at the request of any Purchaser, furnish to the Purchasers
(promptly after any such request) a calculation of the amounts set aside for
the Purchasers pursuant to SECTION 1.7.
(e) Any payment by an Obligor in respect of any
indebtedness owed by it to the Seller in connection with a Receivable shall,
except as otherwise specified by such Obligor or otherwise required by contract
or law and unless otherwise instructed by the Agent, be applied as a Collection
of any Receivable of such Obligor (starting with the oldest such Receivable) to
the extent of any amounts then due and payable thereunder before being applied
to any other receivable or other obligation of such Obligor.
Section 6.3. Collection Notices. The Agent is authorized at
any time after the occurrence of a Servicer Default to date and to deliver to
the Collection Banks a Collection Notice under any Collection Agreement. The
Seller hereby transfers to the Agent for the benefit of the Purchasers,
effective when the Agent delivers such notice, the exclusive ownership and
control of the Collection Accounts. In case any authorized signatory of the
Seller whose signature appears on a Collection Agreement shall cease to have
such authority before the delivery of such notice, such Collection Notice shall
nevertheless be valid as if such authority had remained in force. The Seller
hereby authorizes the Agent, and agrees that the Agent shall be entitled to (i)
endorse the Seller's name on checks and other instruments representing
Collections from and after delivery of any Collection Notice, (ii) from and
after the occurrence of a Servicer Default, enforce the Receivables, the
related Contracts and the Related Security, and (iii) subject to the other
provisions of this Agreement, take such action as shall be necessary or
desirable to cause all cash, checks and other instruments constituting
Collections of Receivables to come into the possession of the Agent rather than
the Seller.
Section 6.4. Responsibilities of the Seller. Anything herein
to the contrary notwithstanding, the exercise by the Agent and the Purchasers
of their rights hereunder shall not release the Servicer or the Seller from any
of their duties or
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obligations with respect to any Receivables or under the related Contracts.
The Purchasers shall have no obligation or liability with respect to any
Receivables or related Contracts, nor shall any of them be obligated to perform
the obligations of the Seller.
Section 6.5. Receivables Reports. Not later than the third
Business Day prior to each Settlement Date, and at such other times as the
Agent shall reasonably request, the Servicer shall prepare and forward to the
Agent a Monthly Report.
ARTICLE VII
SERVICER DEFAULTS
Section 7.1. Servicer Default. The occurrence of any one or
more of the following events shall constitute a Servicer Default:
(a) The Servicer or the Seller shall fail to make any
payment or deposit when required hereunder or within one (1) Business Day of
the date when such payment is due if such payment is lost or misdirected after
no fault of the Servicer or Seller.
(b) The Servicer or the Seller shall fail to deliver any
Monthly Report within two (2) Business Days after written or telephonic notice
to the Servicer or Seller of such failure.
(c) The Servicer or the Seller shall fail to perform or
observe any other term, covenant or agreement hereunder (other than as referred
to in SECTION 7.1(a) or SECTION 7.1(b)) and such failure shall remain
unremedied for five (5) Business Days following written notice thereof to the
Servicer or the Seller, as applicable.
(d) Any representation, warranty, certification or
statement made by the Seller, the Servicer or either of the Originators in this
Agreement, any other Transaction Document or in any other document delivered
pursuant hereto shall prove to have been incorrect in any material respect when
made or deemed made.
(e) (i) The Seller or the Servicer shall generally not pay
its debts as such debts become due; (ii) the Seller or the Servicer shall admit
in writing its inability to pay its debts generally or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against the Seller or the Servicer seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its
property unless such proceeding or action is instituted by any Person other
than an Originator, the Seller or the Servicer, and is set aside or withdrawn
or ceases to be effective within sixty (60) days from the date of the filing of
such act or the making of such appointment; or (iii)
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the Seller or any Servicer shall take any corporate action to authorize any of
the actions set forth in above in clause (ii) of this subsection (e).
(f) (i) Either of the Originators shall fail to perform or
observe any term, covenant or agreement contained in any other Transaction
Document and such failure shall continue unremedied beyond any applicable grace
or cure period provided therein, or (ii) either of the Originators shall for
any reason cease to transfer, or cease to have the legal capacity or otherwise
be incapable of transferring, Receivables to the Seller, as purchaser under the
Sale Agreement, or (iii) any "EVENT OF PURCHASE AND SALE TERMINATION" shall
occur under the Sale Agreement.
(g) The aggregate Receivable Interests hereunder shall at
any time exceed 100%.
(h) A Change of Control shall occur.
(i) The Internal Revenue Service or the Pension Benefit
Guaranty Corporation files one or more tax or ERISA liens against the assets of
either of the Originators or the Seller and the same shall remain in effect for
any period of 15 consecutive days.
(j) The Dilution Ratio shall exceed the Dilution Ratio
Trigger for any Calculation Period.
(k) The 3-Month Average Loss-to-Liquidation Ratio shall
exceed the 3-Month Average Loss-to-Liquidation Ratio Trigger.
(l) The Delinquency Ratio shall exceed the Delinquency
Ratio Trigger for any Calculation Period.
(m) Wabash, if then acting as Servicer, shall commit an
event of default that remains uncured or unremedied for the applicable grace or
cure period under that certain Credit Agreement dated September 30, 1997 among
Wabash, as borrower, the lending institutions party thereto and NBD Bank, N.A.,
as administrative agent.
Section 7.2. Remedies. Upon the occurrence and during the
countenance of a Servicer Default, the Agent or Purchasers may either (i)
remove Seller as Servicer (to the extent such Servicer Default was caused by,
or arose as a result of the activities of, the Servicer), or (ii) if such
Servicer Default arose other than as described in SECTION 7.2(i), declare the
Termination Date to have occurred, whereupon the Termination Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Seller; PROVIDED, HOWEVER, that upon
the occurrence of a Servicer Default described in SECTION 7.1(e) above of an
actual or deemed entry of an order for relief with respect to the Seller under
the Federal Bankruptcy Code, the Termination Date shall automatically occur,
without demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Seller. Upon the occurrence of the Termination
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Date for any reason whatsoever, the Agent or Purchasers and their respective
assigns shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC,
which rights shall be cumulative.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Indemnities by the Seller. Without limiting any
other rights which the Agent or any Purchaser may have under the other
provisions of this Agreement, under the other Transaction Documents or under
applicable law, the Seller hereby agrees to indemnify the Agent and each
Purchaser and their respective officers, directors, agents and employees (each,
an "INDEMNIFIED PARTY") from and against any and all damages, losses, claims,
taxes, liabilities, costs, expenses and for all other amounts payable,
including reasonable attorneys' fees and disbursements (all of the foregoing
being collectively referred to as "INDEMNIFIED AMOUNTS") awarded against or
actually incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by a Purchaser of
an interest in the Receivables, EXCLUDING, HOWEVER:
(a) Indemnified Amounts to the extent final judgment of a court
of competent jurisdiction holds such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified
Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses
in respect of Receivables which are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
(c) taxes on or measured by the overall gross or net income of
such Indemnified Party to the extent that the computation of such
taxes is consistent with the Intended Characterization;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of the Seller or the Servicer or limit the recourse of the Purchasers
to the Seller or Servicer for amounts otherwise specifically provided to be
paid by the Seller or the Servicer under the terms of this Agreement or the
other Transaction Documents. Without limiting the generality of the foregoing
indemnification, the Seller shall indemnify the Agent and the Purchasers for
Indemnified Amounts (including, without limitation, losses in respect of
uncollectible Receivables, regardless of whether reimbursement therefor would
constitute recourse to the Seller or the Servicer) relating to or resulting
from:
(i) any representation or warranty made by the Seller,
either of the Originators or the Servicer for so long as Fruehauf or
an Affiliate thereof is the Servicer or Sub-Servicer, as applicable,
(or any officers of
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the foregoing) under or in connection with this Agreement, any other
Transaction Document, any Monthly Report or any other written
information or report delivered by any of the foregoing pursuant
hereto or thereto, which shall have been false or incorrect when made
or deemed made;
(ii) the failure by the Seller, either of the Originators
or the Servicer for so long as Fruehauf or an Affiliate thereof is the
Servicer or Sub-Servicer, as applicable, to comply with any applicable
law, rule or regulation with respect to any Receivable or Contract
related thereto, or the nonconformity of any Receivable or Contract
included therein with any such applicable law, rule or regulation;
(iii) any failure of the Seller, either of the Originators
or the Servicer for so long as Fruehauf or an Affiliate thereof is the
Servicer or Sub-Servicer, as applicable, to perform its duties or
obligations in accordance with the provisions of this Agreement or any
other Transaction Document;
(iv) any products liability or similar claim arising out of
or in connection with merchandise, insurance or services which are the
subject of any Contract;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of any Obligor to the payment
of any Receivable (including, without limitation, a defense based on
such Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale
of the merchandise or service related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vi) the commingling at any time by the Seller, the
Originators, the Servicer (for so long as Fruehauf or an Affiliate
thereof is the Servicer or Sub-Servicer, as applicable); or the
Sub-Servicer (for so long as Fruehauf or an Affiliate thereof is the
Servicer or Sub-Servicer, as applicable); of Collections of
Receivables with other funds;
(vii) any investigation, litigation or proceeding related to
or arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby or thereby, the use of the proceeds
of a purchase, the ownership of the Receivable Interests or any other
investigation, litigation or proceeding relating to the Seller or
either of the Originators in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated hereby or
thereby;
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(viii) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such Obligor being
immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding;
(ix) a Servicer Default described in SECTION 7.1(e);
(x) the failure to vest and maintain vested in the Agent,
for the benefit of the Purchasers, or to transfer to the Agent, for
the benefit of the Purchasers, legal and equitable title to, and
ownership of, a first priority perfected undivided percentage
ownership or security interest (to the extent of the Receivable
Interests contemplated hereunder) in the Receivables, the Related
Security and the Collections, free and clear of any Adverse Claim; or
(xi) any failure of the Seller to give reasonably
equivalent value to the applicable Originator under the Sale Agreement
in consideration of the transfer by such Originator of any Receivable,
or any attempt by any Person to void any such transfer under statutory
provisions or common law or equitable action, including, without
limitation, any provision of the federal Bankruptcy Code, 11 U.S.C.
Section 101 et seq.
Section 8.2. Increased Cost and Reduced Return.
(a) If after the date hereof, any Funding Source shall be
charged any fee, expense or increased cost on account of the adoption of any
applicable law, rule or regulation (including any applicable law, rule or
regulation regarding capital adequacy) or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency (a "REGULATORY CHANGE"): (i) which subjects any Funding Source to any
charge or withholding on or with respect to any Funding Agreement or a Funding
Source's obligations under a Funding Agreement, or on or with respect to the
Receivables, or changes the basis of taxation of payments to any Funding Source
of any amounts payable under any Funding Agreement (except for changes in the
rate of tax on the overall net income of a Funding Source) or (ii) which
imposes, modifies or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits with
or for the account of a Funding Source, or credit extended by a Funding Source
pursuant to a Funding Agreement or (iii) which imposes any other condition the
result of which is to increase the cost to a Funding Source of performing its
obligations under a Funding Agreement, or to reduce the rate of return on a
Funding Source's capital as a consequence of its obligations under a Funding
Agreement, or to reduce the amount of any sum received or receivable by a
Funding Source under a Funding Agreement or to require any payment calculated
by reference to the amount of interests or loans held or interest received by
it, then, upon demand by the Agent, the Seller shall pay to the Agent, for
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the benefit of the relevant Funding Source, such amounts charged to such
Funding Source or compensate such Funding Source for such reduction.
(b) Payment of any sum pursuant to SECTION 8.2(a) shall be
made by the Seller to the Agent, for the benefit of the relevant Funding
Source, not later than ten (10) days after any such demand is made. A
certificate of any Funding Source, signed by an authorized officer claiming
compensation under this SECTION 8.2 and setting forth the additional amount to
be paid for its benefit and explaining the manner in which such amount was
determined shall constitute prima facie evidence of the amount to be paid
absent manifest error.
Section 8.3. Costs and Expenses Relating to this Agreement.
The Seller shall pay to the Agent and Falcon on demand all reasonable
out-of-pocket expenses (including, without limitation, reasonable audit fees
and time charges of outside counsel for the Agent and the Purchasers) actually
incurred in connection with the preparation, execution, delivery of this
Agreement or any amendments thereto or waivers thereof, the transactions
contemplated hereby and the other documents to be delivered hereunder. The
Seller shall pay to the Agent on demand any and all costs and expenses of the
Agent and the Purchasers, including reasonable counsel fees and expenses
actually incurred in connection with the waiver of a Servicer Default, an
amendment following a Servicer Default or a Potential Servicer Default,
enforcement of this Agreement and the other Transaction Documents, and in
connection with any restructuring or workout of this Agreement and/or the other
Transaction Documents, or the administration of this Agreement following a
Servicer Default.
ARTICLE IX
THE AGENT
Section 9.1. Authorization and Action. Each Purchaser hereby
designates and appoints First Chicago to act as its agent hereunder and under
each other Transaction Document, and authorizes the Agent to take such actions
as agent on its behalf and to exercise such powers as are delegated to the
Agent by the terms of this Agreement and the other Transaction Documents
together with such powers as are reasonably incidental thereto. The Agent
shall not have any duties or responsibilities, except those expressly set forth
herein or in any other Transaction Document, or any fiduciary relationship with
any Purchaser, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of the Agent shall be read into this
Agreement or any other Transaction Document or otherwise exist for the Agent.
In performing its functions and duties hereunder and under the other
Transaction Documents, the Agent shall act solely as agent for the Purchasers
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller or any of its successors
or assigns. The Agent shall not be required to take any action which exposes
the Agent to personal liability or which is contrary to this Agreement, any
other Transaction Document or applicable law. The appointment and authority of
the Agent hereunder shall terminate upon the indefeasible payment in full of
all Aggregate Unpaids. Each Purchaser hereby
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authorizes the Agent to execute on behalf of such Purchaser (the terms of which
shall be binding on such Purchaser) each of the Uniform Commercial Code
financing statements, together with such other instruments or documents
determined by the Agent to be necessary or desirable in order to perfect,
evidence or more fully protect the interest of the Purchasers contemplated
hereunder.
Section 9.2. Delegation of Duties. The Agent may execute any
of its duties under this Agreement and each other Transaction Document by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 9.3. Exculpatory Provisions. Neither the Agent nor
any of its directors, officers, agents or employees shall be (i) liable for any
action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Transaction Document (except for
its, their or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Purchasers for any recitals,
statements, representations or warranties made by the Seller contained in this
Agreement, any other Transaction Document or any certificate, report, statement
or other document referred to or provided for in, or received under or in
connection with, this Agreement, or any other Transaction Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, or any other Transaction Document or any other document
furnished in connection herewith or therewith, or for any failure of the Seller
to perform its obligations hereunder or thereunder, or for the satisfaction of
any condition specified in ARTICLE IV, or for the perfection, priority,
condition, value or sufficiency or any collateral pledged in connection
herewith. The Agent shall not be under any obligation to any Purchaser to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, this Agreement or any
other Transaction Document, or to inspect the properties, books or records of
the Seller. The Agent shall not be deemed to have knowledge of a Servicer
Default or Potential Servicer Default unless the Agent has received notice from
the Seller or a Purchaser.
Section 9.4. Reliance by Agent. The Agent shall in all cases
be entitled to rely, and shall be fully protected in relying, upon any document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Seller), independent accountants and other experts selected by the Agent. The
Agent shall in all cases be fully justified in failing or refusing to take any
action under this Agreement or any other Transaction Document unless it shall
first receive such advice or concurrence of Falcon or the Required Investors or
all of the Purchasers, as applicable, as it deems appropriate and it shall
first be indemnified to its satisfaction by the Purchasers, PROVIDED THAT
unless and until the Agent shall have received such advice, the Agent may take
or refrain from taking any action, as the Agent shall deem advisable and in the
best interests of the
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Purchasers. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with a request of Falcon or the Required
Investors or all of the Purchasers, as applicable, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Purchasers.
Section 9.5. Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by the Agent
hereafter taken, including, without limitation, any review of the affairs of
the Seller, shall be deemed to constitute any representation or warranty by the
Agent. Each Purchaser represents and warrants to the Agent that it has and
will, independently and without reliance upon the Agent or any other Purchaser
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Seller
and made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.
Section 9.6. Reimbursement and Indemnification. The
Investors agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller (i) for any
amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller hereunder and (ii) for any other expenses incurred
by the Agent, in its capacity as Agent and acting on behalf of the Purchasers,
in connection with the administration and enforcement of this Agreement and the
other Transaction Documents.
Section 9.7. Agent in its Individual Capacity. The Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Seller or any Affiliate of the Seller as though
the Agent were not the Agent hereunder. With respect to the acquisition of
Receivable Interests pursuant to this Agreement, the Agent shall have the same
rights and powers under this Agreement as any Purchaser and may exercise the
same as though it were not the Agent, and the terms "Investor," "Purchaser,"
"Investors" and "Purchasers" shall include the Agent in its individual
capacity.
Section 9.8. Successor Agent. The Agent may, upon 10 days'
notice to the Seller and the Purchasers, and the Agent will, upon the direction
of all of the Purchasers (other than the Agent, in its individual capacity)
resign as Agent. If the Agent shall resign, then the Required Investors during
such 10-day period shall appoint from among the Purchasers a successor agent.
If for any reason no successor Agent is appointed by the Required Investors
during such 10-day period, then effective upon the termination of such 10-day
period, the Purchasers shall perform all of the duties of the Agent hereunder
and under the other Transaction Documents and the Seller shall make all
payments in respect of the Aggregate Unpaids directly to the applicable
Purchasers and for all purposes shall deal directly with the Purchasers. After
the effectiveness of any retiring Agent's resignation hereunder as Agent, the
retiring
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Agent shall be discharged from its duties and obligations hereunder and under
the other Transaction Documents and the provisions of this ARTICLE IX and
ARTICLE VIII shall continue in effect for its benefit with respect to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and under the other Transaction Documents.
ARTICLE X
ASSIGNMENTS; PARTICIPATIONS
Section 10.1. Assignments. (a) The Seller and each Investor
hereby (i) agree and consent to the complete or partial assignment by Falcon of
all of its rights under, interest in, title to and obligations under this
Agreement to the Agent for the benefit of the Investors pursuant to SECTION
2.1, and (ii) agree that they will not unreasonably withhold or delay their
consent to the complete or partial assignment by Falcon of all of its rights
under, interest in, title to and obligations under this Agreement to any other
special purpose receivables funding or purchasing conduit for which The First
National Bank of Chicago performs administrative functions. Upon any complete
or partial assignment made in accordance with the preceding sentence, Falcon
shall be released from its obligations so assigned. Further, the Seller and
each Investor hereby agree that any assignee of Falcon of this Agreement or all
or any of the Receivable Interests of Falcon shall have all of the rights and
benefits under this Agreement as if the term "FALCON" explicitly referred to
such party, and no such assignment shall in any way impair the rights and
benefits of Falcon hereunder. The Seller shall not have the right to assign
its rights or obligations under this Agreement.
(b) With the prior written consent of Falcon and the
Seller, which consent shall not be unreasonably withheld or delayed, any
Investor may at any time and from time to time assign to one or more Persons
(each, a "PURCHASING INVESTOR") all or any part of its rights and obligations
under this Agreement pursuant to an assignment agreement, in a form and
substance satisfactory to the Agent (the "ASSIGNMENT AGREEMENT"), executed by
such Purchasing Investor and such selling Investor. Each assignee of an
Investor must have a short-term debt rating of A-1 or better by Standard &
Poor's Ratings Group and P-1 by Moody's Investors Service, Inc. and must agree
to deliver to the Agent, promptly following any request therefor by the Agent
or Falcon, an enforceability opinion in form and substance satisfactory to the
Agent and Falcon. Upon delivery of the executed Assignment Agreement to the
Agent, such selling Investor shall be released from its obligations hereunder
to the extent of such assignment. Thereafter, the Purchasing Investor shall
for all purposes be an Investor party to this Agreement and shall have all the
rights and obligations of an Investor under this Agreement to the same extent
as if it were an original party hereto and no further consent or action by the
Seller, the Purchasers or the Agent shall be required.
(c) Each of the Investors agrees that in the event that it
shall cease to have a short-term debt rating of A-1 or better by Standard &
Poor's Corporation and P-1 by Moody's Investors Service, Inc. (an "AFFECTED
INVESTOR"), such Affected
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Investor shall be obliged, at the request of Falcon or the Agent, to assign all
of its rights and obligations hereunder to (i) another Investor or (ii) another
financial institution nominated by the Agent and acceptable to Falcon, and
willing to participate in this Agreement through the Liquidity Termination Date
in the place of such Affected Investor; PROVIDED THAT the Affected Investor
receives payment in full, pursuant to an Assignment Agreement, of an amount
equal to such Investor's Pro Rata Share of the Capital and Discount owing to
the Investors and all accruing but unpaid fees and other costs and expenses
payable in respect of its Pro Rata Share of the Receivable Interests.
Section 10.2. Participations. Any Investor may, in the
ordinary course of its business at any time sell to one or more Persons (each,
a "PARTICIPANT") participating interests in its Pro Rata Share of the
Receivable Interests of the Investors, its obligation to pay Falcon its
Acquisition Amounts or any other interest of such Investor hereunder.
Notwithstanding any such sale by an Investor of a participating interest to a
Participant, such Investor's rights and obligations under this Agreement shall
remain unchanged, such Investor shall remain solely responsible for the
performance of its obligations hereunder, and the Seller, Falcon and the Agent
shall continue to deal solely and directly with such Investor in connection
with such Investor's rights and obligations under this Agreement. Each
Investor agrees that any agreement between such Investor and any such
Participant in respect of such participating interest shall not restrict such
Investor's right to agree to any amendment, supplement, waiver or modification
to this Agreement, except for any amendment, supplement, waiver or modification
described in SECTION 11.1(b)(i).
ARTICLE XI
MISCELLANEOUS
Section 11.1. Waivers and Amendments. (a) No failure or delay
on the part of any party hereto in exercising any power, right or remedy under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The
rights and remedies herein provided shall be cumulative and nonexclusive of any
rights or remedies provided by law. Any waiver of this Agreement shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with the
provisions of this SECTION 11.1(b). Falcon, the Seller and the Agent, at the
direction of the Required Investors, may enter into written modifications or
waivers (with the consent of the Seller with respect to subsections (i)(e) and
(g)) of any provisions of this Agreement, PROVIDED, HOWEVER, that no such
modification or waiver shall:
(i) without the consent of each affected Purchaser, (A) extend
the Liquidity Termination Date or the date of any payment or deposit
of Collections
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by the Seller or the Servicer, (B) reduce the rate or extend the time
of payment of Discount (or any component thereof), (C) reduce any fee
payable to the Agent for the benefit of the Purchasers, (D) except
pursuant to ARTICLE X hereof, change the amount of the Capital of any
Purchaser, an Investor's Pro Rata Share or an Investor's Commitment,
(E) amend, modify or waive any provision of the definition of Required
Investors or this SECTION 11.1(b), (F) consent to or permit the
assignment or transfer by the Seller of any of its rights and
obligations under this Agreement, (G) change the definition of
"ELIGIBLE RECEIVABLE," "DILUTION RESERVE," "DISCOUNT & SERVICING
RESERVE," "LOSS RESERVE," "DILUTION RATIO," "DELINQUENCY RATIO,"
"LOSS-TO-LIQUIDATION RATIO," "3-MONTH AVERAGE LOSS-TO-LIQUIDATION
RATIO" OR "NET RECEIVABLES BALANCE", or (H) amend or modify any
defined term (or any defined term used directly or indirectly in such
defined term) used in clauses (A) through (G) above in a manner which
would circumvent the intention of the restrictions set forth in such
clauses; or
(ii) without the written consent of the then Agent, amend,
modify or waive any provision of this Agreement if the effect thereof
is to affect the rights or duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Investors, the
Agent may, with the consent of the Seller, amend this Agreement solely to add
additional Persons as Investors hereunder and (ii) without the consent of the
Seller, the Agent, the Required Investors and Falcon may enter into amendments
to modify any of the terms or provisions of ARTICLE II, ARTICLE IX, ARTICLE X
or SECTION 11.13, PROVIDED THAT such amendment has no negative impact upon the
Seller. Any modification or waiver made in accordance with this SECTION 11.1
shall apply to each of the Purchasers equally and shall be binding upon the
Seller, the Purchasers and the Agent.
Section 11.2. Notices.
(a) Except as provided in subsection (b) below, all
communications and notices provided for hereunder shall be in writing
(including bank wire, telecopy or electronic facsimile transmission or similar
writing) and shall be given to the other parties hereto at their respective
addresses or telecopy numbers set forth on the signature pages hereof or at
such other address or telecopy number as such party may hereafter specify for
the purpose of giving notice to such party. All such communications and
notices shall, when mailed, telecopied, telegraphed, telexed or cabled, be
effective when received through the mails, transmitted by telecopy, delivered
to the telegraph company, confirmed by telex answerback or delivered to the
cable company, respectively, except that communications and notices to the
Agent or any Purchaser pursuant to ARTICLE I or II shall not be effective until
received by the intended recipient.
(b) The Seller hereby authorizes the Agent to effect purchases
and Tranche Period and Discount Rate selections based on telephonic notices
made by any Person whom the Agent in good faith believes to be acting on behalf
of the Seller.
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The Seller agrees to deliver promptly to the Agent, upon request, a written
confirmation of each telephonic notice signed by an authorized officer of the
Seller. However, the absence of such confirmation shall not affect the
validity of such notice. If the written confirmation differs from the action
taken by the Agent, the records of the Agent shall govern absent manifest
error.
Section 11.3. Ratable Payments. If any Purchaser, whether by
setoff or otherwise, has payment made to it with respect to any portion of the
Aggregate Unpaids owing to such Purchaser (other than payments received
pursuant to SECTION 8.2 or 8.3) in a greater proportion than that received by
any other Purchaser entitled to receive a ratable share of such Aggregate
Unpaids, such Purchaser agrees, promptly upon demand, to purchase for cash
without recourse or warranty a portion of the Aggregate Unpaids held by the
other Purchasers so that after such purchase each Purchaser will hold its
ratable proportion of the Aggregate Unpaids; PROVIDED THAT if all or any
portion of such excess amount is thereafter recovered from such Purchaser, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
Section 11.4. Protection of Ownership Interests of the
Purchasers. (a) The Seller agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may reasonably
request, to perfect, protect or more fully evidence the Receivable Interests,
or to enable the Agent or the Purchasers to exercise and enforce their rights
and remedies hereunder. At any time after the occurrence of a Servicer Default
and the replacement of the Seller as Servicer, the Agent may, or the Agent may
direct the Seller to, notify the Obligors of Receivables, and at the Seller's
expense, of the ownership interests of the Purchasers under this Agreement and
may also direct that payments of all amounts due or that become due under any
or all Receivables be made directly to the Agent or its designee. The Seller
shall, at any Purchaser's written request, withhold the identity of such
Purchaser in any such notification.
(b) If the Seller or the Servicer fails to perform any of
its obligations hereunder, the Agent or any Purchaser may (but shall not be
required to) perform, or cause performance of, such obligation; and the Agent's
or such Purchaser's reasonable costs and expenses incurred in connection
therewith shall be payable by the Seller (if the Servicer that fails to so
perform is the Seller or an Affiliate thereof) as provided in SECTION 8.3, as
applicable. In the event of such a failure to perform, the Seller and the
Servicer each irrevocably authorizes the Agent at any time and from time to
time in the sole discretion of the Agent, and appoints the Agent as its
attorney-in-fact, to act on behalf of the Seller and the Servicer (i) to
execute on behalf of the Seller as debtor and to file financing statements
necessary or desirable in the Agent's sole discretion to perfect and to
maintain the perfection and priority of the interest of the Purchasers in the
Receivables and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority
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of the interests of the Purchasers in the Receivables. This appointment is
coupled with an interest and is irrevocable.
Section 11.5. Confidentiality.
(a) The Seller shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of the contents of this
Agreement and of the other confidential proprietary information with respect to
the Agent and Falcon and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that the Seller and its officers and employees may
disclose such information to the Agent and to the Seller's external accountants
and attorneys and as required by any applicable law or order of any judicial or
administrative proceeding. In addition, the Seller may disclose any such
nonpublic information pursuant to any law, rule, regulation, direction, request
or order of any judicial, administrative or regulatory authority or proceedings
(whether or not having the force or effect of law).
(b) Each of the Agent and the Purchasers shall maintain
and shall cause each of its employees and officers to maintain the
confidentiality of this Agreement and the Sale Agreement and the other
confidential proprietary information with respect to the Seller and the
Originators and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein. Anything herein to the contrary notwithstanding, the
Seller hereby consents to the disclosure of any nonpublic information with
respect to it and the Originators: (i) to the Agent and the Purchasers, (ii) by
the Agent or the Purchasers to any prospective or actual assignee or
participant of any of them or (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to Falcon or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which First
Chicago acts as the administrative agent and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing, PROVIDED
THAT each such Person (i) is informed of the confidential nature of such
information in a manner consistent with the practice of the Agent for the
making of such disclosures generally to Persons of such type, and (ii) agrees
that its use of such information shall be limited to purposes related to such
Person's acquisition and/or funding of Receivable Interests, or providing
liquidity or credit enhancement therefor, or rating Commercial Paper used to
fund Receivable Interests. In addition, the Purchasers and the Agent may
disclose any such nonpublic information pursuant to any law, rule, regulation,
direction, request or order of any judicial, administrative or regulatory
authority or proceedings (whether or not having the force or effect of law).
Section 11.6. Bankruptcy Petition. The Seller, the Agent and
each Investor hereby covenants and agrees that, prior to the date which is one
year and one day after the payment in full of all outstanding senior
indebtedness of Falcon, it will not institute against, or join any other Person
in instituting against, Falcon any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or
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other similar proceeding under the laws of the United States or any state of
the United States.
Section 11.7. Limitation of Liability. Except with respect to
any claim arising out of the willful misconduct or gross negligence of Falcon,
the Agent or any Investor, no claim may be made by the Seller, the Servicer or
any other Person against Falcon, the Agent or any Investor or any assignee or
parties part of any of them or their respective Affiliates, directors,
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and the Seller hereby waives, releases, and
agrees not to sue upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
Section 11.8. CHOICE OF LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF ILLINOIS.
Section 11.9. CONSENT TO JURISDICTION. THE SELLER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY THE
SELLER PURSUANT TO THIS AGREEMENT AND THE SELLER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST THE SELLER
IN THE COURTS OF ANY OTHER JURISDICTION WHEREIN ANY ASSETS OF THE SELLER OR
EITHER OF THE ORIGINATORS MAY BE LOCATED. ANY JUDICIAL PROCEEDING BY THE
SELLER AGAINST THE AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR A
PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY
THE SELLER PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.
Section 11.10. WAIVER OF JURY TRIAL. THE AGENT, THE SELLER
AND EACH PURCHASER HEREBY WAIVES 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
THIS AGREEMENT, ANY DOCUMENT EXECUTED BY THE SELLER PURSUANT TO THIS AGREEMENT
OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
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Section 11.11. Integration; Survival of Terms. This
Agreement, the Collection Agreement(s) and the Fee Letter contain the final and
complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter hereof superseding
all prior oral or written understandings. The provisions of ARTICLE VIII and
SECTION 11.6 shall survive any termination of this Agreement.
Section 11.12. Counterparts; Severability. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 11.13. First Chicago Roles. Each of the Investors
acknowledges that First Chicago and certain of its Affiliates including (First
Chicago Capital Markets, Inc.) act, or may in the future act, (i) as
administrative agent for Falcon, (ii) as issuing and paying agent for the
Commercial Paper, (iii) to provide credit or liquidity enhancement for the
timely payment for the Commercial Paper and (iv) to provide other services from
time to time for Falcon (collectively, the "FIRST CHICAGO ROLES"). Without
limiting the generality of this SECTION 11.13, each Investor hereby
acknowledges and consents to any and all First Chicago Roles and agrees that in
connection with any First Chicago Role, First Chicago may take, or refrain from
taking, any action which it, in its discretion, deems appropriate, including,
without limitation, in its role as administrative agent for Falcon, the giving
of notice to the Agent of a mandatory purchase pursuant to SECTION 2.1.
Section 11.14. Characterization.
(a) It is the intention of the parties hereto that each
Purchase hereunder shall constitute a transfer, which Purchase shall provide
the applicable Purchaser with the full benefits of ownership of the applicable
Receivable Interest. Except as specifically provided in this Agreement, each
transfer of a Receivable Interest hereunder is made without recourse to the
Seller; PROVIDED, HOWEVER, that (i) the Seller shall be liable to each
Purchaser and the Agent for all representations, warranties and covenants made
by the Seller pursuant to the terms of this Agreement, and (ii) such transfer
does not constitute and is not intended to result in an assumption by any
Purchaser or the Agent or any assignee thereof of any obligation of the Seller
or either of the Originators or any other person arising in connection with the
Receivables, the Related Security, or the related Contracts, or any other
obligations of the Seller or either of the Originators.
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<PAGE> 46
(b) If the conveyance by the Seller to the Purchasers of
interests in Receivables hereunder shall be characterized as a secured loan and
not a sale, it is the intention of the parties hereto that this Agreement shall
constitute a security agreement under applicable law, and that the Seller shall
be deemed to have granted to the Agent for the ratable benefit of the
Purchasers a duly perfected security interest in all of the Seller's right,
title and interest in, to and under the Receivables, the Collections, each
Collection Account, all Related Security, all payments on or with respect to
such Receivables, all other rights relating to and payments made in respect of
the Receivables, and all proceeds of any thereof prior to all other liens on
and security interests therein. After a Servicer Default, the Agent and the
Purchasers shall have, in addition to the rights and remedies which they may
have under this Agreement, all other rights and remedies provided to a secured
creditor after default under the UCC and other applicable law, which rights and
remedies shall be cumulative.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date hereof.
WABASH NATIONAL FUNDING CORPORATION
By:
---------------------------------------
Name:
Title:
Address for Notices:
12813 Flushing Meadows drive
St. Louis, MO 63131
Attention: Steven M. Old, Vice President
Phone:(314) 822-1113
Fax: (314) 822-7627
FALCON ASSET SECURITIZATION CORPORATION
By:
---------------------------------------
Authorized Signatory
c/o The First National Bank
of Chicago
Asset-Backed Finance
Suite 0596, 1-21
One First National Plaza
Chicago, Illinois 60670-0596
Attention: Surveillance Unit
Fax: (312) 732-3205
S-11
<PAGE> 48
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
By:
---------------------------------------
Authorized Agent
The First National Bank of Chicago
Asset-Backed Finance
One First National Plaza
Suite 0596, 1-21
Chicago, Illinois 60670
Attention: Credit Manager
Fax: (312) 732-4487
INVESTORS:
Commitment
----------
$83,000,000 NBD BANK, N.A.
By:
---------------------------------------
Authorized Agent
One Indiana Square
Suite 7028
Indianapolis, IN 46266
Attention: Leo G. (Skip) Watson
Fax: (317) 266-6042
=================
PURCHASE LIMIT
$83,000,000
S-22
<PAGE> 49
EXHIBIT I
DEFINITIONS
AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE
FOLLOWING MEANINGS (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO BOTH THE SINGULAR
AND PLURAL FORMS OF THE TERMS DEFINED):
"3-MONTH AVERAGE LOSS-TO-LIQUIDATION RATIO" means, on any date
of determination, the average of the Loss-to-Liquidation Ratios for the three
Calculation Periods then most recently ended.
"3-MONTH AVERAGE LOSS-TO-LIQUIDATION RATIO TRIGGER" shall have
the meaning specified in the Fee Letter.
"ACQUISITION AMOUNT" means, on the date of any purchase from
Falcon of Receivable Interests pursuant to SECTION 2.1, (i) with respect to
each Investor other than First Chicago, the lesser of (a) such Investor's Pro
Rata Share of the Falcon Transfer Price and (b) such Investor's unused
Commitment and (ii) with respect to First Chicago, the difference between (a)
the Falcon Transfer Price and (b) the aggregate amount payable by all other
Investors on such date pursuant to clause (i) above.
"ADJUSTED LIQUIDITY PRICE" means, in determining the Falcon
Transfer Price for any Receivable Interest, an amount equal to:
RI x [DC + [NDR/1.07]]
WHERE:
RI = the undivided percentage interest evidenced
by such Receivable Interest;
DC = the Deemed Collections; and
NDR = the Outstanding Balance of all Receivables
which are not Defaulted Receivables.
Each of the foregoing shall be determined from the most recent Monthly Report
received from the Servicer.
"ADVERSE CLAIM" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such
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Person), controlled by, or under direct or indirect common control with such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of the other Person, whether through ownership of
voting securities, by contract or otherwise.
"AGENT" means First Chicago in its capacity as agent for the
Purchasers pursuant to ARTICLE IX, and not in its individual capacity as an
Investor, and any successor Agent appointed pursuant to ARTICLE IX.
"AGGREGATE RESERVES" means, on any date of determination, the
sum of the Loss Reserve, the Dilution Reserve and the Discount & Servicing
Reserve.
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the
sum of all accrued and unpaid Discount, Capital and all other amounts owed
(whether due or accrued) hereunder or under the Fee Letter to the Agent and the
Purchasers at such time.
"AGREEMENT" means this Receivables Purchase Agreement, as it
may be amended, restated or otherwise modified and in effect from time to time.
"ARRANGEMENT FEE" shall have the meaning specified in the Fee
Letter.
"BASE RATE" means a rate per annum equal to the corporate base
rate, prime rate or base rate of interest, as applicable, announced by the
Reference Bank from time to time, changing when and as such rate changes;
PROVIDED, HOWEVER, that from and after the occurrence of a Servicer Default and
for so long as such Servicer Default is continuing, the "BASE RATE" shall equal
the sum of the corporate base rate, prime rate or base rate of interest, as
applicable, announced by the Reference Bank from time to time, plus 2% per
annum, changing when and as such rate changes.
"BUSINESS DAY" means any day on which banks are not authorized
or required to close in New York, New York or Chicago, Illinois and The
Depository Trust Company of New York is open for business, and, if the
applicable Business Day relates to any computation or payment to be made with
respect to the LIBO Rate, any day on which dealings in dollar deposits are
carried on in the London interbank market.
"CALCULATION PERIOD" means each full or partial calendar month
which elapses during the term of this Agreement. The first Calculation Period
shall commence on the date of the initial Purchase and the final Calculation
Period shall terminate on the Facility Termination Date.
"CAPITAL" means, at any time, the sum of the aggregate Purchase
Prices paid to the Seller by the Purchasers, minus the sum of the aggregate
amount of Collections and other payments received by the Agent which in each
case are applied to reduce such Capital; PROVIDED THAT the Capital shall be
restored in the amount of any Collections or payments so received and applied
if at any time the distribution of
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such Collections or payments are rescinded or must otherwise be returned for
any reason.
"CHANGE OF CONTROL" means (i) any Person or Persons acting in
concert shall acquire beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934) of 20% or more of the outstanding shares of voting stock of either of the
Originators; or (ii) during any period of twelve (12) consecutive months,
commencing before or after the date hereof, individuals who at the beginning of
such twelve-month period were directors of an Originator shall cease for any
reason to constitute a majority of the board of directors of such Originator;
or (iii) Wabash shall cease to own, free and clear of all Adverse Claims, all
of the outstanding shares of voting stock of the Seller on a fully-diluted
basis.
"CHARGED-OFF RECEIVABLE" means any Receivable or any portion of
such a Receivable: (i) as to which the Obligor thereof has taken any action,
or suffered any event to occur, of the type described in SECTION 7.1(e) (as if
references to the Seller therein refer to such Obligor); or (ii) which,
consistent with the Credit and Collection Policy, should be written off the
Seller's books as uncollectible.
"COLLECTION ACCOUNT" means each concentration account, a
depositary account, lock-box account or similar account in which any
Collections are collected or deposited.
"COLLECTION AGREEMENT" means, in the case of any actual or
proposed Collection Account, an agreement in substantially the form of EXHIBIT
VI hereto.
"COLLECTION BANK" means, at any time, any of the banks or other
financial institutions holding one or more Collection Accounts.
"COLLECTION DATE" means that date following the Termination
Date which is one year and one day after the date which (i) the Outstanding
Balance of all Receivables sold hereunder has been reduced to zero and (ii) the
Originators have paid to the Seller all indemnities, adjustments and other
amounts which may be owed hereunder in connection with the Purchases.
"COLLECTION NOTICE" means a notice from the Agent to a
Collection Bank in the form attached to the applicable Collection Agreement.
"COLLECTIONS" means, (a) with respect to any Receivable, all
cash collections and other cash proceeds in respect of such Receivable,
including, without limitation, all cash proceeds of Related Security with
respect to such Receivable and (b) all payments of principal and interest made
under the Parent Demand Note.
"CONTRACT" means, with respect to any Receivable, any and all
Invoices and other agreements pursuant to which goods or services are ordered
from or provided by an Originator.
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"COMMERCIAL PAPER" means promissory notes of Falcon issued in
the commercial paper market.
"COMMITMENT" means, for each Investor, the commitment of such
Investor to purchase its Pro Rata Share of (i) Receivable Interests from the
Seller and (ii) Receivable Interests from Falcon, such Pro Rata Share not to
exceed, in the aggregate, the amount set forth opposite such Investor's name on
the signature pages of this Agreement, as such amount may be modified in
accordance with the terms hereof.
"CONCENTRATION LIMIT" means for any Obligor and its Affiliates
considered as if they were one and the same Obligor, an amount equal to (i)
4.50%, multiplied by (ii) the aggregate Outstanding Balance of all Eligible
Receivables at such time; PROVIDED, HOWEVER, that the Agent may from time to
time designate other higher amounts (each, a "SPECIAL CONCENTRATION LIMIT") for
any Obligor or class of Receivables, it being understood and agreed that the
Agent, Falcon or the Required Investors may, upon not less than three Business
Days' notice to the Seller, cancel any Special Concentration Limit. As of the
date of this Agreement, a $10,000,000 Special Concentration Limit has been
established for each of the following Obligors: Schneider National, Inc.,
Werner Enterprises, Swift Transportation Company and Triple Crown.
"CONTINGENT OBLIGATION" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees, endorses,
contingently agrees to purchase or provide funds for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or liability
of any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person, or otherwise assures any
creditor of such other Person against loss, including, without limitation, any
comfort letter, operating agreement, take-or-pay contract or application for a
letter of credit.
"CONTRACT" means, collectively, with respect to any Receivable,
any and all instruments, bills of lading, Invoices or other writings which
evidence such Receivable or any goods or services underlying such Receivable.
"CREDIT AND COLLECTION POLICY" means the Seller's credit and
collection policies and practices relating to Contracts and Receivables
existing on the date hereof and summarized in EXHIBIT VII hereto, as modified
from time to time in accordance with this Agreement.
"DEEMED COLLECTIONS" means, in connection with the transfer by
Falcon of any Receivable Interest to the Investors pursuant to SECTION 2.1, the
total aggregate of all amounts owing to Falcon pursuant to SECTION 1.8 and
SECTION 8.1 relating to such Receivable Interest.
"DEFAULT FEE" means with respect to any amount due and payable
by the Seller hereunder or under the Fee Letter, an amount equal to interest on
any such
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<PAGE> 53
amount at a rate per annum equal to 2% above the Base Rate without giving
effect to the proviso contained in the definition of "Base Rate" set forth
herein; PROVIDED, HOWEVER, that such interest rate will not at any time exceed
the maximum rate permitted by applicable law.
"DEFAULTED RECEIVABLE" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for 90 days or more from the original
due date for such payment; (ii) as to which the Obligor thereof has taken any
action, or suffered any event to occur, of the type described in SECTION 7.1(e)
(as if references to the Seller therein refer to such Obligor); (iii) as to
which the Obligor thereof, if a natural person, is deceased; or (iv) which has
been identified by the applicable Originator as uncollectible.
"DELINQUENT RECEIVABLE" means a Receivable (other than a
Defaulted Receivable) as to which any payment, or part thereof, remains unpaid
for more than 60 days but less than 90 days from the original due date for such
payment.
"DELINQUENCY RATIO" means, for any Calculation Period, the
ratio (expressed as a percentage) of (i) (A) the sum of (A) the aggregate
Outstanding Balance of all Delinquent Receivables as of the last day of such
Calculation Period PLUS (B) the aggregate Outstanding Balance of all Defaulted
Receivables as of the last day of such Calculation Period, to (ii) the
aggregate Outstanding Balance of all Receivables as of the last day of such
Calculation Period.
"DELINQUENCY RATIO TRIGGER" shall have the meaning specified in
the Fee Letter.
"DILUTION RATIO" means, as of the last day of any Calculation
Period, a percentage equal to (i) the aggregate amount of Dilutions which
occurred during such Calculation Period and the immediately preceding
Calculation Period, DIVIDED BY (ii) the aggregate Outstanding Balance of the
Receivables as of the last day of the Calculation Period ended 2 months prior
to the date of determination.
"DILUTION RATIO TRIGGER" shall have the meaning specified in
the Fee Letter.
"DILUTION RESERVE" shall have the meaning specified in the Fee
Letter.
"DILUTIONS" means, at any time, the aggregate amount of
reductions in the Outstanding Balances of the Receivables as a result of any
setoff, discount, rebate, trade-in-credit, credit memo, inter-company entry,
adjustment or otherwise, other than (i) cash Collections on account of the
Receivables, and (ii) charge-offs less the aggregate amount of customer
deposits at such time.
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"DISCOUNT" means, for any Tranche Period:
DR x C x AD
----
360
WHERE:
DR = the Discount Rate for such Tranche Period;
C = the portion of the Capital allocated to such
Tranche Period; and
AD = the actual number of days elapsed during such
Tranche Period;
PROVIDED THAT no provision of this Agreement shall require the payment or
permit the collection of Discount in excess of the maximum permitted by
applicable law; and PROVIDED FURTHER, that Discount for any Tranche Period
shall not be considered paid by any distribution to the extent that at any time
all or a portion of such distribution is rescinded or must otherwise be
returned for any reason.
"DISCOUNT RATE" means the LIBO Rate minus 2 basis points or the
Base Rate, as applicable.
"DISCOUNT & SERVICING RESERVE" shall have the meaning specified
in the Fee Letter.
"EARLY COLLECTION FEE" means, for any Tranche Period during
which the portion of the Capital allocated to such Tranche Period is reduced or
is terminated prior to the date on which it was originally scheduled to end
(including, without limitation, by virtue of the final proviso in the
definition of "TRANCHE PERIOD"), the difference, if any, of (i) the Discount
that would have accrued during the remainder of the Tranche Period subsequent
to the date of such reduction or termination on the Capital allocated to such
Tranche Period if such reduction or termination had not occurred, over (ii) the
sum of (a) to the extent all or a portion of such Capital is allocated to
another Tranche Period, the Discount actually accrued on such Capital for the
new Tranche Period, and (b) to the extent such Capital is not allocated to
another Tranche Period, the income, if any, actually received from investing
the portion of such Capital not so allocated. In the event that the amount
referred to in clause (ii) exceeds the amount referred to in clause (i), the
relevant Purchaser or Purchasers agree to pay to the Seller the difference.
"ELIGIBLE RECEIVABLE" means, at any time:
(1) a Receivable the Obligor of which (a) if a natural
person, is a resident of the United States or, if a corporation or
other business organization,
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<PAGE> 55
is organized under the laws of the United States or any political
subdivision thereof and has its chief executive office in the United
States, (b) if a corporation or other business organization (other
than as described in the foregoing clause (a)) is organized under the
laws of Canada (other than Quebec) and has its principal executive
office in Canada (other than Quebec) and is denominated in U.S.
Dollars, PROVIDED, HOWEVER, that such Receivable shall not be an
Eligible Receivable if more than 5% of Net Receivables at the time of
any calculation hereunder are from corporations organized in Canada,
(c) is not an Affiliate of any of the parties hereto and (d) is not a
government or a governmental subdivision or agency,
(2) a Receivable the Obligor of which is not an Obligor of
Receivables of which more than 50% of the aggregate Outstanding
Balance is more than 90 days past their respective due dates,
PROVIDED, HOWEVER, that the foregoing criterion shall not be
applicable to Receivables of Special Obligors,
(3) a Receivable which is not a Defaulted Receivable,
(4) a Receivable which arises under a Contract that
requires payment within 60 days after the original Invoice date
therefor and has not had its payment terms extended,
(5) a Receivable which is an account receivable
representing all or part of the sales price of merchandise, insurance
and services within the meaning of Section 3(c)(5) of the Investment
Company Act of 1940, as amended;
(6) a Receivable which is an "account" within the meaning
of Section 9-106 of the UCC of all applicable jurisdictions,
(7) a Receivable which is denominated and payable only in
United States dollars in the United States,
(8) a Receivable which arises under Contract, which,
together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the related
Obligor enforceable by the Seller and its assignees against such
Obligor in accordance with its terms,
(9) a Receivable which arises under a Contract which (a)
does not require the Obligor under such Contract to consent to the
transfer, sale or assignment of the rights of the applicable
Originator or any of its assignees under such Contract and (b) is not
subject to a confidentiality provision that would have the effect of
restricting the ability of the Agent or any Purchaser to exercise its
rights under this Agreement, including, without limitation, its right
to review the Contract,
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(10) a Receivable which arises under a Contract that
contains an obligation to pay a specified sum of money, contingent
only upon the sale of the underlying goods or services by the
applicable Originator,
(11) a Receivable which is not subject to any right of
rescission, set-off (in respect of all or any portion of the
Outstanding Balance thereof then being proposed for inclusion in Net
Receivables Balance as of any date), counterclaim, any other defense
(including defenses arising out of violations of usury laws) of the
applicable Obligor or the applicable Originator or any other Adverse
Claim,
(12) a Receivable as to which the applicable Originator has
satisfied and fully performed all obligations on its part with respect
to such Receivable required to be fulfilled by it, and no further
action is required to be performed by any Person with respect thereto
other than payment thereon by the applicable Obligor,
(13) a Receivable all right, title and interest to and in
which has been validly transferred by the applicable Originator
directly to the Seller under and in accordance with the Sale
Agreement, and the Seller has good and marketable title thereto free
and clear of any Adverse Claim,
(14) a Receivable which, together with the Contract related
thereto, was created in compliance with each, and does not contravene
any, law, rule or regulation applicable thereto (including, without
limitation, any law, rule and regulation relating to truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy) in any material respect
which would limit the collectibility of such Receivable or give rise
to a claim for money damages against the applicable Originator, the
Seller or any of the Seller's assignees and with respect to which no
part of the Contract related thereto is in violation of any such law,
rule or regulation,
(15) a Receivable which satisfies all applicable
requirements of the Credit and Collection Policy,
(16) a Receivable which was generated in the ordinary
course of an Originator's business in connection with the sale of
semi-trailers and related parts and services to the applicable Obligor
by such Originator,
(17) a Receivable as to which the Agent has not notified the
Seller that the Agent has reasonably determined that such Receivable
or class of Receivables is not acceptable as an Eligible Receivable,
including, without limitation, because such Receivable arises under a
Contract that is not acceptable to the Agent, and
(18) that portion of a Receivable that is not a federal excise
tax or sales tax.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EVENT OF PURCHASE AND SALE TERMINATION" shall have the meaning
set forth in the Sale Agreement.
"EXCESS CONCENTRATION BALANCES" means, on any day, the portion
of the aggregate Outstanding Balance of Eligible Receivables owing from an
Obligor and its Affiliates (considered as if they were a single Obligor) as
shown on the most recent Monthly Report, which exceeds the applicable
Concentration Limit or Special Concentration Limit.
"FACILITY ACCOUNT" means the Seller's account no. 51-11404 at
First Chicago.
"FACILITY FEE" shall have the meaning specified in the Fee
Letter.
"FACILITY TERMINATION DATE" means the earlier to occur of (i) a
Liquidity Termination Date or (ii) March 31, 1999 unless extended by mutual
agreement of the parties.
"FALCON RESIDUAL" means the sum of the Falcon Transfer Price
Reductions.
"FALCON TRANSFER PRICE" means, with respect to an assignment by
Falcon of any Receivable Interest to the Agent for the benefit of the Investors
pursuant to SECTION 2.1, the sum of (i) the lesser of (a) the Capital of such
Receivable Interest and (b) the Adjusted Liquidity Price of such Receivable
Interest and (ii) all accrued and unpaid Discount.
"FALCON TRANSFER PRICE REDUCTION" means, in connection with the
assignment of a Receivable Interest by Falcon to the Agent for the benefit of
the Investors, the positive difference between (i) the Capital of such
Receivable Interest and (ii) the Adjusted Liquidity Price for such Receivable
Interest.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate per annum equal for each day during such period equal
to (a) 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 for such day (or, if such day is not a Business
Day, for the preceding Business Day) by the Federal Reserve Bank of New York in
the Composite Closing Quotations for U.S. Government Securities; or (b) if such
rate is not so published for any day which is a Business Day, the average of
the quotations at approximately 10:30 a.m. (Chicago time) for such day on such
transactions received by the Reference Bank from three federal funds brokers of
recognized standing selected by it.
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<PAGE> 58
"FEE LETTER" means that certain letter agreement dated as of
March 31, 1998 between the Seller and the Agent, as heretofore or hereafter
amended or modified and in effect from time to time.
"FINANCE CHARGES" means, with respect to a Contract, any
finance, interest, late payment charges or similar charges owing by an Obligor
pursuant to such Contract.
"FIRST CHICAGO" means The First National Bank of Chicago in its
individual capacity and its successors.
"FRUEHAUF" means Fruehauf Trailer Services, Inc., a Delaware
corporation, and its successors.
"FUNDING AGREEMENT" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Falcon.
"FUNDING SOURCE" means (i) any Investor or (ii) any insurance
company, bank or other financial institution providing liquidity, credit
enhancement or back-up purchase support or facilities to Falcon.
"INCREMENTAL PURCHASE" means a Purchase of one or more
Receivable Interests which increases the total outstanding Capital hereunder.
"INDEBTEDNESS" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price
of property or services (other than accounts payable arising in the ordinary
course of such Person's business payable on terms customary in the trade),
(iii) obligations, whether or not assumed, secured by liens or payable out of
the proceeds or production from property now or hereafter owned or acquired by
such Person, (iv) obligations which are evidenced by notes, acceptances, or
other instruments, (v) capitalized lease obligations, (vi) net liabilities
under interest rate swap, exchange or cap agreements, (vii) Contingent
Obligations and (viii) liabilities in respect of unfunded vested benefits under
plans covered by Title IV of ERISA.
"INTENDED CHARACTERIZATION" means, for income tax purposes, the
characterization of the acquisition by the Purchasers of Receivable Interests
as a loan or loans by the Purchasers to the Seller secured by the Receivables,
the Related Security and the Collections.
"INVOICE" means, collectively, with respect to any Receivable,
any and all instruments, bills of lading, invoices or other writings which
evidence such Receivable or the goods (if any) underlying such Receivable.
"INVESTOR PERCENTAGE" means the percentage of outstanding
Capital being funded by the Investors.
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<PAGE> 59
"INVESTORS" means the financial institutions listed on the
signature pages of this Agreement under the heading "Investors" and their
respective successors and assigns.
"LIBO RATE" means the rate per annum equal to the sum of (i)
(a) the rate at which deposits in U.S. Dollars are offered by the Reference
Bank 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 the relevant
Tranche Period, such deposits being in the approximate amount of the Capital of
the Receivable Interest to be funded or maintained, divided by (b) one minus
the Reserve Requirement (expressed as a decimal) applicable to such Tranche
Period plus (ii) 1.00% per annum. The LIBO Rate shall be rounded, if
necessary, to the next higher 1/16 of 1%.
"LIQUIDATION DAY" means, for any Receivable Interest, the
earliest to occur of (i) the day on which the conditions precedent set forth in
SECTION 4.2 are not satisfied, (ii) any Business Day so designated by the
Seller or Falcon after the occurrence of the Termination Date and (iii) the
Business Day immediately prior to the occurrence of a Servicer Default set
forth in SECTION 7.1(e).
"LIQUIDITY TERMINATION DATE" means, March 31, 1999 or such
later date as all Investors and the Seller shall mutually agree.
"LOSS RESERVE" shall have the meaning specified in the Fee
Letter.
"LOSS-TO-LIQUIDATION RATIO" means, for any Calculation Period,
a percentage equal to: (i) the aggregate amount of Receivables which became
Charged-Off Receivables plus Net Increase in Defaulted Receivables during such
Calculation Period, divided by (ii) the aggregate amount of Collections during
such Calculation Period.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the financial condition, business or operations of the Seller, (ii) the
ability of the Seller to perform its obligations under any Transaction
Document, (iii) the legality, validity or enforceability of any Transaction
Document (other than the Collection Agreements) or any Collection Agreement
relating to a Collection Account into which a material portion of Collections
are deposited, (iv) the Agent's interest, on behalf of the Purchasers, in the
Receivables generally or in any significant portion of the Receivables, the
Related Security or the Collections with respect thereto, or (v) the
collectibility of the Receivables generally or of any material portion of the
Receivables.
"MONTHLY REPORT" means a report, in substantially the form of
EXHIBIT V hereto (appropriately completed), furnished by the Servicer to the
Agent pursuant to SECTION 6.5.
"NET RECEIVABLES BALANCE" means, at any time, the Outstanding
Balances of all Eligible Receivables at such time less the aggregate amount of
all Excess Concentration Balances.
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<PAGE> 60
"NET WORTH" means, as of the last Business Day of each
Calculation Period preceding any date of determination, an amount equal to (a)
the aggregate Outstanding Balance of the Receivables owned by Seller at such
time, OVER (b) THE SUM OF (i) the aggregate Capital outstanding at such time,
PLUS (ii) the aggregate outstanding principal balance of the Subordinated
Loans.
"OBLIGOR" means a Person obligated to make payments pursuant to
a Contract.
"ORIGINATOR" means each of Wabash and Fruehauf.
"OUTSTANDING BALANCE" of any Receivable at any time means the
then outstanding principal balance thereof, and shall exclude any interest or
Finance Charges thereon, without regard to whether any of the same shall have
been capitalized.
"PARENT DEMAND NOTE" means a demand promissory note made by
Wabash in favor of the Seller.
"PERSON" means an individual, partnership, corporation,
association, trust, limited liability company, joint venture or any other
entity, or organization, including a government or political subdivision or
agent or instrumentality thereof.
"POTENTIAL SERVICER DEFAULT" means an event which, with the
passage of time or the giving of notice, or both, would constitute a Servicer
Default.
"PRO RATA SHARE" means, for each Investor, the Commitment of
such Investor divided by the Purchase Limit, adjusted as necessary to give
effect to the application of the terms of SECTION 2.5.
"PURCHASE" means the sale by the Seller hereunder to the Agent
for the benefit of one or more Purchasers of a Receivable Interest. Each
Purchase shall either be an Incremental Purchase or a Reinvestment.
"PURCHASE DATE" means each Business Day on which a Purchase or
Reinvestment occurs pursuant to the terms of this Agreement (which Business
Day, except for the initial Purchase, shall be a Settlement Date).
"PURCHASE LIMIT" means the aggregate of the Commitments of the
Investors hereunder. As of the initial Purchase Date, the Purchase Limit shall
be $83,000,000.
"PURCHASE PRICE" means, with respect to any Incremental
Purchase of a Receivable Interest, the amount paid to the Seller for such
Receivable Interest.
"PURCHASER" means, Falcon or an Investor, as applicable.
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<PAGE> 61
"RECEIVABLE" means the indebtedness and other obligations owed
(at the time it arises, and before giving effect to any transfer or conveyance
contemplated under the Transaction Documents) to an Originator, whether
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of semi-trailers and related parts and
services by such Originator to commercial customers and includes, without
limitation, the obligation to pay any Finance Charges with respect thereto.
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual Invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction.
"RECEIVABLE INTEREST" means, at any time, an undivided
percentage ownership interest associated with a designated amount of Capital,
Discount Rate and Tranche Period selected pursuant to SECTION 1.3 in (i) all
Receivables arising prior to the time of the most recent computation or
recomputation of such undivided interest pursuant to SECTION 1.4, (ii) all
Related Security with respect to such Receivables, and (iii) all Collections
with respect to, and other proceeds of, such Receivables. Such undivided
percentage interest shall equal:
C
------------
NRB-AR
where:
C = the Capital of such Receivable Interest.
AR = the Aggregate Reserves.
NRB = the Net Receivables Balance.
"RECORDS" means, with respect to any Receivable, all Contracts
and other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor of the related Obligor.
"REDUCTION PERCENTAGE" means, for any Receivable Interest
acquired by the Investors from Falcon for less than the Capital of such
Receivable Interest, a percentage equal to (i) one, MINUS (ii) a fraction the
numerator of which is the Falcon Transfer Price Reduction for such Receivable
Interest and the denominator of which is the Capital of such Receivable
Interest.
"REFERENCE BANK" means NBD Bank, N.A., or such other bank as
the Agent shall designate with the consent of the Seller.
"REINVESTMENT" has the meaning specified in SECTION 1.6.
15
<PAGE> 62
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the Seller's interest in any goods (if
any), the sale of which gave rise to such Receivable, and any and all
insurance contracts with respect thereto,
(ii) all customer deposits and other security
interests or liens and property subject thereto from time to time, if
any, purporting to secure payment of such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise, together with
all financing statements and security agreements describing any
collateral securing such Receivable,
(iii) all guaranties, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to
the Contract related to such Receivable or otherwise,
(iv) all Records related to such Receivable,
(v) all of the Seller's right, title and interest
in, to and under the Sale Agreement;
(vi) all of the Seller's right, title and interest
in, to and under each Contract executed in connection therewith in
favor of or otherwise for the benefit of the Seller; and
(vii) all proceeds of any of the foregoing.
"REQUIRED INVESTORS" means, at any time, Investors with
Commitments in excess of 66-2/3% of the Purchase Limit.
"RESERVE REQUIREMENT" means the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other reserves)
which is imposed against the Reference Bank in respect of Eurocurrency
liabilities, as defined in Regulation D of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of the Seller now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock or in any junior class of stock
to the Seller, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of capital stock of the Seller now or hereafter
outstanding, (iii) any payment or prepayment of principal of, premium, if any,
or interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to the Subordinated Loans (as defined in the Sale
Agreement), (iv) any
16
<PAGE> 63
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of capital stock of the Seller now or hereafter
outstanding, and (v) any payment of management fees by the Seller.
"SALE AGREEMENT" means that certain Receivables Sale Agreement
dated as of March 31, 1998, by and between the Originators, as sellers, and the
Seller, as buyer, as the same may be amended, restated and/or otherwise
modified from time to time in accordance with the terms thereof and hereof.
"SECTION" means a numbered section of this Agreement, unless
another document is specifically referenced.
"SELLER" has the meaning set forth in the preamble to this
Agreement.
"SERVICER" means at any time the Person then authorized
pursuant to ARTICLE VI of this Agreement to service, administer and collect
Receivables.
"SERVICER DEFAULT" has the meaning specified in SECTION 7.1.
"SERVICER FEE" means, for any Calculation Period, a servicing
and collection fee computed pursuant to the following formula:
SFP x C x (AD/360)
where:
SFP = the Servicer Fee Percentage;
C = the average daily Capital on total
Receivables outstanding during such
Calculation Period; and
AD = the actual number of days in such Calculation
Period.
"SERVICER FEE PERCENTAGE" means 1% or such other percentage as
may be agreed upon between the Agent and the Servicer as an arms-length rate
for the Servicer Fee.
"SETTLEMENT DATE" means the 18th day of each month after the
initial Purchase Date (or if any such day is not a Business Day, the Settlement
Date shall occur on the next succeeding Business Day).
"SPECIAL OBLIGOR" means an Obligor listed on ANNEX A hereto, as
the same may be amended or modified from time to time.
"SUBORDINATED LOAN" has the meaning set forth in the Sale
Agreement.
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<PAGE> 64
"SUBORDINATED NOTE" has the meaning set forth in the Sale
Agreement.
"SUBSCRIPTION AGREEMENT" means the Stockholder and Subscription
Agreement in substantially the form of EXHIBIT IX to the Sale Agreement, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"SUB-SERVICER" has the meaning set forth in the Sale Agreement.
"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 partnership, association, limited liability company,
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 Subsidiary of the Seller.
"TERMINATION DATE" means (i) for any Receivable Interest, the
Facility Termination Date, and (ii) solely with respect to a Receivable
Interest of Falcon, that Business Day so designated by the Seller or Falcon by
notice to the other.
"TRANCHE PERIOD" means, with respect to any Receivable
Interest:
(a) if Discount for such Receivable Interest is calculated
on the basis of the LIBO Rate, a period of one, two or three months
(or six months with respect to Investors), or such other period as may
be mutually agreeable to the Agent and the Seller, commencing on a
Business Day selected by the Seller or the Agent pursuant to this
Agreement. Such Tranche Period shall end on the day in the succeeding
calendar month which corresponds numerically to the beginning day of
such Tranche Period; PROVIDED, HOWEVER, that if there is no such
numerically corresponding day in such succeeding month, such Tranche
Period shall end on the last Business Day of such succeeding month;
and
(b) if Discount for such Receivable Interest is calculated
on the basis of the Base Rate, a period of 30 days commencing on a
Business Day selected by the Seller.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, PROVIDED,
HOWEVER, that in the case of Tranche Periods corresponding to the LIBO Rate, if
such next succeeding Business Day falls in a new month, such Tranche Period
shall end on the immediately preceding Business Day. In the case of any
Tranche Period for any Receivable Interest which commences before the Facility
Termination Date or the Termination Date and would otherwise end on a date
occurring after such date, such Tranche Period shall end on the Facility
Termination Date or Termination Date, as applicable. The duration of any
Tranche Period which commences after a Servicer Default shall be of such
duration as selected by the Agent.
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<PAGE> 65
"TRANSACTION DOCUMENTS" means, collectively, this Agreement,
the Sale Agreement, the Subordinated Note, the Subscription Agreement, each
Collection Agreement and all other instruments, documents and agreements
executed and delivered by the Seller or either of the Originators in connection
herewith or with the Sale Agreement.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
"WABASH" means Wabash National Corporation, a Delaware
corporation, and its successors.
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. ALL
TERMS USED IN ARTICLE 9 OF THE UCC IN THE STATE OF ILLINOIS, AND NOT
SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS DEFINED IN SUCH ARTICLE 9.
CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN ARE
USED WITH THE MEANINGS ATTRIBUTED THERETO IN THE SALE AGREEMENT.
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<PAGE> 66
EXHIBIT IV
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished pursuant to that
certain Receivables Purchase Agreement dated as of March 31, 1998, among Wabash
National Funding Corporation (the "SELLER"), various Purchasers and The First
National Bank of Chicago, as Agent (the "AGREEMENT"). Capitalized terms used
and not otherwise defined herein are used with the meanings attributed thereto
in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________________ of the Seller;
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and the Seller's Receivables during the period ended
_____________; and
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes an Servicer Default or a Potential Servicer Default, as each such
term is defined under the Agreement, during or at the end of the aforementioned
period[, except as set forth below].
[Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which has been taken, is being taken, or is
proposed to take with respect to each such condition or event:]
The foregoing certifications, together with the computations
set forth in SCHEDULE I hereto in support hereof, are made and delivered on and
as of [insert date].
--------------------------
[Name]
20
<PAGE> 67
Schedule of Computations under Sections 7.1(j)-(l)
in Support of Compliance Certificate
of Wabash National Funding Corporation dated ____________
21
<PAGE> 68
EXHIBIT V
FORM OF MONTHLY REPORT
22
<PAGE> 69
EXHIBIT VI
FORM OF COLLECTION AGREEMENT
[On letterhead of Wabash National Funding Corporation]
__________, 19__
[Date]
[Collection Bank Name and Address]
Attention: ________________
Re: Wabash National Funding Corporation
[Insert applicable Originator Name]
Ladies and Gentlemen:
You have exclusive control of P.O. Box ___________, [city],
[state] [zip] (the "LOCK-BOX") for the purpose of receiving mail and
processing payments therefrom pursuant to that certain lock-box services
agreement dated ____________, 19__ between you and [Originator Name] (the
"AGREEMENT"). You hereby confirm your agreement to perform the services
described therein. Among the services you have agreed to perform therein is to
endorse all checks and other evidences of payment, and credit such payments to
checking account no. ___________ maintained with you in the name of [Originator
Name] (the "EXISTING ACCOUNT").
[Originator Name] (the "ORIGINATOR") hereby transfers and
assigns all of its right, title and interest in and to, and exclusive ownership
and control over, the Lock-Box to Wabash National Funding Corporation ("SPC").
Originator and SPC hereby request that from and after March 31, 1998, in lieu
of being deposited in the Existing Account, all checks and other evidences of
payment that are sent to the Lock-Box be endorsed and deposited in SPC's
account no. _____________ (the "LOCK-BOX ACCOUNT") in the name of "Wabash
National Funding Corporation, as 'Collection Agent' for the benefit of The
First National Bank of Chicago, as Agent under that certain Receivables
Purchase Agreement dated as of March 31, 1998 among SPC, various purchasers and
The First National Bank of Chicago, as Agent".
SPC hereby irrevocably instructs you, and you hereby agree,
that upon receiving notice from The First National Bank of Chicago, as Agent
(the "AGENT") in the form attached hereto as Annex A: (i) the name of the
Lock-Box Account will be changed to "The First National Bank of Chicago, as
Agent" (or any designee of the Agent), and the Agent will have exclusive
ownership of and access to such Lock-Box
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<PAGE> 70
Account, and neither Originator, SPC nor any of their respective affiliates
will have any control of such Lock-Box Account or any access thereto, (ii) you
will either continue to send the funds from the Lock-Box to the Lock-Box
Account, or will redirect the funds as the Agent may otherwise request, (iii)
you will transfer monies on deposit in the Lock-Box Account, at any time, as
directed by the Agent, (iv) all services to be performed by you under the
Agreement will be performed on behalf of the Agent, and (v) all correspondence
or other mail which you have agreed to send to either Originator or SPC will be
sent to the Agent at the following address:
The First National Bank of Chicago, as Agent
Suite 0596, 1-21
One First National Plaza
Chicago, Illinois 60670
Attention: Credit Manager, Asset-Backed Finance
Moreover, upon such notice, the Agent will have all rights and
remedies given to Originator or SPC under the Agreement. Each of Originator
and SPC agrees, however, to continue to pay all fees and other assessments due
thereunder at any time.
You hereby acknowledge that monies deposited in the Lock-Box
Account or any other account established with you by the Agent for the purpose
of receiving funds from the Lock-Box are subject to the liens of the Agent for
itself and as agent under the Receivables Purchase Agreement, and will not be
subject to deduction, set-off, banker's lien or any other right you or any
other party may have against Originator or SPC, except that you may debit the
Lock-Box Account for any items deposited therein that are returned or otherwise
not collected and for all charges, fees, commissions and expenses incurred by
you in providing services hereunder, all in accordance with your customary
practices for the charge back of returned items and expenses.
This letter agreement and the rights and obligations of the
parties hereunder will be governed by and construed and interpreted in
accordance with the laws of the State of Illinois. This letter agreement may
be executed in any number of counterparts and all of such counterparts taken
together will be deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between the
parties, and may not be altered, modified, terminated or amended in any
respect, nor may any right, power or privilege of any party hereunder be waived
or released or discharged, except upon execution by all parties hereto of a
written instrument so providing. In the event that any provision in this
letter agreement is in conflict with, or inconsistent with, any provision of
the Agreement, this letter agreement will exclusively govern and control. Each
party agrees to take all actions reasonably requested by any other party to
carry out the purposes of this letter agreement or to preserve and protect the
rights of each party hereunder.
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<PAGE> 71
Please indicate your agreement to the terms of this letter
agreement by signing in the space provided below. This letter agreement will
become effective immediately upon execution of a counterpart of this letter
agreement by all parties hereto.
<TABLE>
<S> <C>
Very truly yours,
[ORIGINATOR NAME]
By:
------------------------------
Name:
Title:
WABASH NATIONAL FUNDING CORPORATION
By:
------------------------------
Name:
Title:
Acknowledged and agreed to
this day of , 199 :
------- ----------- -
[COLLECTION BANK]
By:
-----------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
By
----------------------------------------
Authorized Agent
</TABLE>
25
<PAGE> 72
EXHIBIT VIII
FORM OF PURCHASE NOTICE
[SELLER'S LETTERHEAD]
______________, 199__
VIA FACSIMILE: 312/732-4487
The First National Bank of Chicago
One First National Plaza, 21st Floor
Asset-Backed Finance
Chicago, Illinois 60670-0596
Attention: Treasury
RE: PURCHASE NOTICE
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement
dated as of March 31, 1998, by and among Wabash National Funding Corporation
(the "SELLER"), the Investors, Falcon Asset Securitization Corporation
("FALCON"), and The First National Bank of Chicago, as Agent (the "AGREEMENT").
Capitalized terms used herein shall have the meanings assigned to such terms in
the Agreement.
The Agent is hereby notified of the following Incremental
Purchase:
Purchase Price: $___________________
Date of Purchase: ____________________
Requested Discount Rate: [LIBO Rate] [Base Rate]
Requested initial Tranche Period: _____ days [months]1/
- --------------
1. "Months" is only applicable to LIBO Tranches.
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<PAGE> 73
Please credit the Purchase Price in immediately
available funds to our Facility Account [and then wire-transfer the
Purchase Price in immediately available funds on the above-specified
date of purchase to:
[Account Name]
[Account No.]
[Bank Name & Address]
[ABA #]
Reference:
Telephone advice to: [Name] @ tel. no. ( ) ]
Please advise [Name] at telephone no. ( ) ___________ if
Falcon will not be making this purchase.
Very truly yours,
WABASH NATIONAL FUNDING CORPORATION
By:
-------------------------
Name:
Title:
27
<PAGE> 74
ANNEX A
SPECIAL OBLIGORS
- -Schneider National, Inc.
- -Werner Enterprises
- -Swift Transportation Company
- -United Parcel Service, Inc.
- -Heartland Express, Inc.
- -Triple Crown Services Co.
- -Knight Transportation Co.
- -Central Transport
- -Safeway
- -Crete Carriers
- -Yellow Freight
- -US Xpress
- -Wicks Truck Trailers
28
<PAGE> 75
SCHEDULE I
CLOSING DOCUMENTS
[see Sale Agreement]
29
