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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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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.
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
S-1
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
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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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"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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"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
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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,
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(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.
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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
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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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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
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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
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EXHIBIT VII
FORM OF INVOICE(S)
16
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EXHIBIT VIII
FORM OF MONTHLY REPORT
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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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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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(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.
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(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,
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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.
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first above written.
SPC WABASH
WABASH NATIONAL FUNDING
CORPORATION, WABASH NATIONAL CORPORATION,
a Missouri corporation a Delaware corporation
By: By:
-------------------------- -------------------
Name: Name:
Title: Title:
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ANNEX A
FORM OF ARTICLES OF INCORPORATION
24
58
ANNEX B
FORM OF BY-LAWS
25
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
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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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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:
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