-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I8b4rRTkTPk5moMlF9NdCoT1droxjNXkLDAQ2aqlaO01d+xvCyJQ93D9nyFhwuKb 1EIoh5gKlvwsF9XgtfUjhA== 0000950137-02-002269.txt : 20020418 0000950137-02-002269.hdr.sgml : 20020418 ACCESSION NUMBER: 0000950137-02-002269 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020418 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WABASH NATIONAL CORP /DE CENTRAL INDEX KEY: 0000879526 STANDARD INDUSTRIAL CLASSIFICATION: TRUCK TRAILERS [3715] IRS NUMBER: 521375208 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10883 FILM NUMBER: 02614222 BUSINESS ADDRESS: STREET 1: 1000 SAGAMORE PKWY S STREET 2: P O BOX 6129 CITY: LAFAYETTE STATE: IN ZIP: 47905 BUSINESS PHONE: 7657715310 MAIL ADDRESS: STREET 1: 1000 SAGAMORE PARKWAY SOUTH STREET 2: P O BOX 6129 CITY: LAFAYETTE STATE: IN ZIP: 47905 10-K/A 1 c68906a1e10-ka.txt AMENDMENT TO ANNUAL REPORT ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR COMMISSION FILE NUMBER 1-10883 ENDED DECEMBER 31, 2001 WABASH NATIONAL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 52-1375208 (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 1000 SAGAMORE PARKWAY SOUTH, 47905 LAFAYETTE, INDIANA (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (765) 771-5300 Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange Title of each class on which registered ------------------- ------------------- Common Stock, $.01 Par Value New York Stock Exchange Series A Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. |X| Yes. | | No. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. | | The aggregate market value of voting stock held by non-affiliates of the registrant as of April 10, 2002 was $234,228,768 based upon the closing price of the Company's common stock as quoted on the New York Stock Exchange composite tape on such date. The number of shares outstanding of the registrant's Common Stock and Series A Preferred Share Purchase Rights as of April 10, 2002 was 23,031,344. Part III of this Form 10-K incorporates by reference certain portions of the Registrant's Proxy Statement for its Annual Meeting of Stockholders to be held May 30, 2002. ================================================================================ EXPLANATORY NOTE: This amended and restated Form 10-K is for purposes of filing electronic copies of exhibits previously filed in paper pursuant to a temporary hardship exemption, to restate the index of exhibits included in Item 14(c) and to reflect other non-substantive changes. TABLE OF CONTENTS WABASH NATIONAL CORPORATION FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
PAGES ----- PART I. Item 1. Business.......................................................................... 3 Item 2. Properties........................................................................ 11 Item 3. Legal Proceedings................................................................. 11 Item 4 Submission of Matters to Vote of Security Holders................................. 12 Item 4A. Risk Factors...................................................................... 13 PART II. Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters.......... 15 Item 6. Selected Financial Data........................................................... 16 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................................................. 17 Item 7A. Quantitative and Qualitative Disclosures about Market Risk........................ 30 Item 8. Financial Statements and Supplementary Data....................................... 32 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.................................................................. 62 PART III. Item 10. Directors and Executive Officers of the Registrant................................ 62 Item 11. Executive Compensation............................................................ 63 Item 12. Security Ownership of Certain Beneficial Owners and Management.................... 63 Item 13. Certain Relationships and Related Transactions.................................... 63 PART IV. Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K................... 63 SIGNATURES .................................................................................. 66
2 PART I Disclosure Regarding Forward-Looking Statements. This report, including documents incorporated herein by reference, contains forward-looking statements. Additional written or oral forward-looking statements may be made by the Company from time to time in filings with the Securities and Exchange Commission or otherwise. The words "believe," "expect," "anticipate," and "project" and similar expressions identify forward-looking statements, which speak only as of the date the statement is made. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may include, but are not limited to, information regarding revenues, income or loss, capital expenditures, acquisitions, number of retail branch openings, plans for future operations, financing needs or plans, the impact of inflation and plans relating to services of the Company, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. Statements in this report, including those set forth in "The Company" and "Risk Factors," and in "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations", describe factors, among others, that could contribute to or cause such differences. ITEM 1--BUSINESS Wabash National Corporation ("Wabash" or "Company") designs, manufactures and markets standard and customized truck trailers and intermodal equipment under the Wabash(TM), Fruehauf(R) and RoadRailer(R) trademarks. The Company's wholly-owned subsidiary North American Trailer Centers(TM) (NATC) sells new and used trailers through its retail network, provides maintenance service for its own and competitors' trailers and related equipment, and offers rental, leasing and financing programs to its customers for new and used trailers. Wabash also purchases and produces aftermarket parts which its sells through its division Wabash National Parts as well as NATC. Wabash seeks to identify and produce proprietary products in the trucking, intermodal and rail industries that offer added value to customers and, therefore, have the potential to generate higher profit margins than those associated with standardized products. Wabash has developed and/or acquired several proprietary products and processes that, it believes, are recognized within its markets as providing additional value to users as compared to conventional product offerings. While the Company believes it is a competitive producer of standardized products, it emphasizes the development and manufacture of distinctive and more customized products and believes that it has the engineering and manufacturing capability to produce these products efficiently. The Company expects to continue a program of aggressive product development and selective acquisitions of quality proprietary products that distinguish the Company from its competitors and provide opportunities for enhanced profit margins. The Company's factory-owned retail distribution network provides opportunities to effectively distribute its products and also offers national service and support capabilities for customers. The retail sale of new and used trailers, aftermarket parts and maintenance service generally provides enhanced margin opportunities. The retail distribution network also offers long and short term leasing programs as well as financing products for new and used trailers. Wabash was incorporated in Delaware in 1991 and is the successor by merger to a Maryland corporation organized in 1985. Wabash operates in two segments: (1) manufacturing and (2) retail and distribution. Financial results by segment and financial information regarding geographic areas and export sales are discussed in detail within Footnote 7, Segment Reporting, of the accompanying Consolidated Financial Statements. Additional information concerning the Company can be found on the Company's website at www.wabashnational.com. Information on the website is not part of this Form 10-K. Manufacturing The Company believes that it is the largest United States manufacturer of truck trailers, including the Company's proprietary DuraPlate(R) and RoadRailer(R) trailers. 3 Wabash markets its products directly, and through independent dealers and company-owned retail locations to truckload and less-than-truckload (LTL) common carriers, private fleet operators, leasing companies, package carriers and intermodal carriers including railroads. The Company has established significant relationships as a supplier to many large customers in the transportation industry, including, but not limited to, the following: - Truckload Carriers: Schneider National, Inc.; Werner Enterprises, Inc.; Swift Transportation Corporation; J.B. Hunt Transport Services, Inc.; Dart Transit; Heartland Express, Inc.; Crete Carrier Corporation; Knight Transportation, Inc.; USXpress Enterprises, Inc.; Frozen Food Express Industries (FFE); KLLM, Inc.; Interstate Distributor Co. - Leasing Companies: Transport International Pool (TIP); Penske Truck Leasing; GATX Capital. - Private Fleets: Safeway; DaimlerChrysler; The Kroger Company; Foster Farms - Less-Than-Truckload Carriers: Roadway Express, Inc.; Old Dominion Freight Line, Inc.; USF Holland; GLS Leasco; Yellow Services, Inc. - Package Carriers: Federal Express Corporation - North American Intermodal Carriers and Railroads: Triple Crown Services (Norfolk Southern); National Rail Passenger Corp. (Amtrak); Burlington Northern Santa Fe Railroad); Canadian National Railroad; Transportacion Martima Mexicana (TMM). Retail and Distribution As of December 31, 2001 the Company had 47 factory-owned retail outlets mostly in major, metropolitan markets as well as 2 rental locations. During January 2001, the Company expanded its branch network through the acquisition of the Breadner Group of Companies, headquartered in Ontario, Canada. The Breadner Group has 10 branch locations in six Canadian Provinces and is the leading Canadian distributor of new trailers and related parts and service. As a result, the Company believes it has the largest company-owned distribution system in the industry that sells used trailers, aftermarket parts and maintenance service. The Company believes that the retail sale of new and used trailers, aftermarket parts and maintenance services will generally produce higher gross margins and tend to be more stable in demand than activities at the wholesale level. The Company also provides rental, leasing and financing programs primarily to retail customers for used trailers, through its subsidiaries, Apex Trailer Leasing and Rentals, L.P. and National Trailer Funding (the Finance Companies). Leasing can be less volatile than the sale of equipment while at the same time providing the Company with an additional channel of distribution for used trailers taken in trade on the sale of new trailers. Due to the strategic importance of the combined product lines of the retail and distribution segment, the Company intends to continue to place emphasis on this segment and has added retail outlets over the past few years either through acquisition or new construction. THE TRUCK TRAILER INDUSTRY The United States market for truck trailers and related products has historically been cyclical and has been affected by overall economic conditions in the transportation industry as well as regulatory changes. The year 2001 was one of the most difficult years in the industry's history. It is believed that the decline in shipments from 2000 represents the largest decline in history. This decline was a result of general economic conditions and motor-carrier specific problems combined to dramatically cut demand for new trailers. Management believes that customers historically have replaced trailers in cycles that run from approximately six to twelve years, depending on service and trailer type. Changes in both State and Federal regulation of the size, safety features and configuration of truck trailers have led to fluctuations in demand for trailers from time to time. However, the Company does not expect any significant market effects from changes in government regulation in the near term. 4 A large percentage of the new trailer market has historically been served by the ten largest truck trailer manufacturers, including the Company. Price, flexibility in design and engineering, product quality and durability, warranty, dealer service and parts availability are competitive factors in the markets served. Historically, there has been manufacturing over-capacity in the truck trailer industry. The following table sets forth domestic new trailer production for the Company, its nine largest competitors and for the trailer industry as a whole within the United States and Canada:
2001 2000 1999 1998 1997 1996 ------- ------- ------- ------- ------- ------- WABASH ....... 31,682 66,283 69,772 61,061 48,346(1) 36,517 Great Dane ... 21,650 46,698 58,454 50,513 37,237 25,730 Utility ...... 16,334 28,780 30,989 26,862 23,084 19,731 Trailmobile .. 13,858 28,089 31,329 23,918 18,239 11,094 Stoughton .... 6,250 15,050 14,673 11,750 11,700 8,300 Manac ........ 5,865 8,052 8,200 * * * Strick ....... 5,500 10,500 11,000 10,959 10,488 8,141 Hyundai ...... 5,413 6,261 5,716 5,200 3,445 2,007 Fontaine ..... 3,100 6,000 6,500 5,894 5,063 4,613 Transcraft ... 3,018 4,005 5,311 5,317 4,509 3,161 Total Industry 140,084 270,817 317,388 278,821 222,550 197,519
(1) Includes shipments of 1,467 units by Fruehauf in 1997 prior to the acquisition by Wabash of certain assets of Fruehauf. (2) Fontaine and Transcraft both build primarily platform types of trailers. * Data not available Sources: Individual manufacturer information provided by Southern Motor Cargo Magazine(C)1999 (for 1995-1998 data) and Trailer Body Builders Magazine(C)2002 (for 1999-2001 data). Industry totals provided by Southern Motor Cargo Magazine(C)1999 (for 1995-1998 data) and A.C.T. Research Company, L.L.C. (for 1999-2001 data). Several significant events occurred within this group of competitors during the year 2001. These events included the filing for Chapter 11 reorganization by Trailmobile LLC and the partial shutdown of many manufacturing facilities and production lines due to weak demand. Two companies formerly included in the top 10, HPA Monon and Dorsey Trailer, did not number among the top 10 producers in 2001. REGULATION Truck trailer length, height, width, maximum weight capacity and other specifications are regulated by individual states. The Federal Government also regulates certain safety features incorporated in the design of truck trailers, including new regulations in 1998 which require anti-lock braking systems (ABS) on all trailers produced beginning in March 1998 and certain rear bumper strength regulations effective at the beginning of 1998. Manufacturing operations are subject to environmental laws enforced by federal, state and local agencies. (See "Environmental Matters") PRODUCT LINES Manufacturing Segment Since its inception in 1985, the Company has expanded its product offerings from a single product into a broad line of transportation equipment and related products and services. As a result of its long-term relationships, the Company has been able to work closely with customers to create competitive advantages through development and production of productivity-enhancing transportation equipment. The sale of new trailers through the manufacturing segment represented approximately 59.2%, 76.0% and 76.6% of net sales during 2001, 2000 and 1999, respectively. The current transportation equipment product lines include the following: - DuraPlate(R) trailers. In late 1995, the Company introduced its DuraPlate(R) composite plate wall dry van trailer. Features of the new composite plate trailer include increased durability and greater strength than the aluminum plate trailer that it replaces. The composite material is a high-density vinyl core with a steel skin. DuraPlate(R) trailers are purchased by all segments of the dry van customer base, including truckload carriers, private fleets and LTL/Package Carriers (generally in a pup trailer version). The Company holds a number of patents regarding its composite trailer and believes this proprietary trailer will continue to become a greater source of business. 5 - Plate trailers. The aluminum plate trailer was introduced into the Company's product line in 1985. Since these trailers utilize thicker and more durable sidewalls than standard sheet and post or fiberglass reinforced plywood ("FRP") construction and avoid the use of interior liners, the life of the trailer is extended and maintenance costs are significantly reduced. In addition, the post used in constructing the sidewalls of the aluminum plate trailer is much thinner and therefore provides greater interior volume than a standard sheet and post trailer. Plate trailers are used primarily by truckload carriers. - RoadRailer(R) equipment. The RoadRailer(R) intermodal system is a patented bimodal technology consisting of a truck trailer and detachable rail "bogie" which permits a trailer to run both over the highway and directly on railroad lines. The Company believes that the RoadRailer(R) system can be operated more efficiently than alternative intermodal systems such as "piggyback" or "double-stack" railcars that require terminal operators to transfer vehicles or containers to railcars. By offering the bimodal technology in a number of variations, the Company believes it can increase its penetration of the intermodal market and enlarge its pool of potential customers. The current RoadRailer(R) product line includes both dry van and refrigerated "ReeferRailer(R)" trailers. The operation of RoadRailer(R) equipment on the railroads is regulated by the Federal Railroad Administration. - Refrigerated trailers. Refrigerated trailers were introduced into the product line in 1990. The Company's proprietary process for building these trailers involves injecting insulating foam in the sidewalls and roof in a single process prior to assembly, which improves both the insulation capabilities and durability of the trailers. These trailers are used by refrigerated carriers specializing in the movement of commodities that require controlled temperatures such as perishable food products. They are also used by private fleets such as those operated by large grocery companies. During 1995, the Company opened its refrigerated trailer manufacturing facility in Lafayette, Indiana. - Smooth aluminum vans and doubles. Smooth aluminum vans and doubles, also known as sheet and post trailers, were introduced into the product line in 1986 and are the standard trailer product purchased by customers in most segments of the trucking industry. These products represent the most common trailer sold throughout the Company's retail distribution network. - DuraPlate(R) domestic containers. During 2001 the Company entered the domestic container market through the introduction of a stackable 53 foot domestic container with DuraPlate(R) sidewalls. Domestic containers are utilized by intermodal carriers and are carried either on flat cars or stacked two-high in special "Double-Stack" railcars. The use of the proprietary DuraPlate(R) material provides significant advantages in customer appeal, cargo carrying capacity and damage resistance when compared to conventional domestic containers. With this introduction, the Company is the only supplier offering a complete line of intermodal equipment, including the domestic container, piggyback trailers and the RoadRailer(R) intermodal system. - Other. The Company's other transportation equipment includes container chassis, rollerbed trailers, soft-sided trailers, dumps, converter dollies and platform trailers. These items are either manufactured or are acquired, either on a private label or wholesale basis for distribution through our retail network or direct to customers. 6 Retail and Distribution Segment The Company believes it has the largest, company-owned retail and distribution network serving the truck trailer industry. Through its retail and distribution segment, the Company sells the following products: - Transportation Equipment - New. The Company sells new transportation equipment such as those products offered by the manufacturing segment including DuraPlate(R) and smooth aluminum dry van trailers and refrigerated trailers. The Company also sells specialty trailers not produced by the manufacturing segment including tank trailers, dump trailers, platform trailers built for Wabash and construction trailers. Customers for this equipment typically purchase in smaller quantities for local or regional transportation needs. The sale of new transportation equipment through the retail branch network represented approximately 11.9%, 6.3% and 8.1% of net sales during 2001, 2000 and 1999, respectively. - Aftermarket Parts and Service. The Company offers replacement parts and accessories and provides maintenance service both for its own and competitors' trailers and related equipment. The aftermarket parts business is less cyclical than trailer sales and generally has higher gross profit margins. The Company markets its aftermarket parts and services through its division, Wabash National Parts and through its wholly-owned subsidiary, North American Trailer Centers(TM). Management expects that the manufacture and sale of aftermarket parts and maintenance service will be a growing part of its product mix as the number and age of its manufactured trailers in service increases and the retail and distribution segment continues to grow. Sales of these products and services represented approximately 14.8%, 9.6% and 7.9% of net sales during 2001, 2000 and 1999, respectively. - Rental, Leasing and Finance. In 1991, the Company began to build its in-house capability to provide leasing programs to its customers through Wabash National Finance. In addition, in late 1998 the Company began offering a rental program for used trailers, primarily on a short-term basis, through its retail branch network. During 1999, the Company began a used trailer financing program through its subsidiary, National Trailer Funding. Through this program, the Company originates finance contracts primarily with small owner-operators with contracts typically ranging from 3 to 5 years in duration. As of December 31, 2001, the Company has a $15.9 million portfolio with an average yield of approximately 11%. In December 2000, the Company's wholly-owned subsidiary, Wabash National Finance Corporation, was merged into Apex Trailer Leasing and Rentals, L.P. as the Company consolidated its rental, leasing and finance activities into the retail and distribution segment as a separate retail product line. Leasing revenues represented approximately 4.9%, 2.5% and 1.6% of the Company's net sales during 2001, 2000 and 1999, respectively. - Transportation Equipment - Used. The Company sells used transportation equipment primarily taken in trade from its customers upon the sale of new trailers. The Company generally sells its used trailers directly through its retail and distribution segment. The ability to remarket used equipment promotes new sales by permitting trade-in allowances and offering customers an outlet for the disposal of used equipment. During 2001, used trailer values were adversely affected by the general economic slowdown and excess supply. The sale of used trailers represented approximately 8.5%, 5.6% and 5.8% of net sales during 2001, 2000 and 1999, respectively. CUSTOMERS The Company's customer base includes many of the nation's largest truckload common carriers, leasing companies, LTL common carriers, private fleet carriers, package carriers and domestic and international intermodal carriers including railroads. The Company believes it is the sole supplier of dry van and refrigerated trailers to approximately 15 customers. Sales to these 15 customers accounted for approximately 52.1%, 41.8% and 32.6% of the Company's new trailer sales in 2001, 2000 and 1999, respectively. The retail and distribution business primarily services small and mid-sized fleets and individual owner operators in which the credit risk varies significantly from customer to customer. International sales accounted for approximately 9.2%, 3.1% and 2.0% of net sales during 2001, 2000 and 1999, respectively. 7 The Company had one customer, J.B. Hunt Transport Services, Inc., which represented approximately 19.0% of net sales in 2001 and 11.4% of net sales in 2000. No other customer exceeded 10% of net sales in 2001, 2000 and 1999. The Company's net sales in the aggregate to its five largest customers were 34.4%, 30.5% and 22.2% of its net sales in 2001, 2000 and 1999, respectively. Truckload common carriers include large national lines as well as regional carriers. The large national truckload carriers, who continue to gain market share at the expense of both regional carriers and private fleets, typically purchase trailers in large quantities with highly individualized specifications. Trailers purchased by truckload common carriers including Schneider National, Inc., Werner Enterprises, Inc., Swift Transportation Corporation, J.B. Hunt Transport Services, Inc., Heartland Express, Inc., Dart Transit, Crete Carrier Corporation, Averitt Express, A-Hold, Star, Smith Transport, Knight Transportation, Inc., USXpress Enterprises, Inc., and Interstate Distributor Co. represented approximately 49.5%, 59.7% and 54.3% of the Company's new trailer sales in 2001, 2000 and 1999, respectively. LTL carriers have experienced consolidation in recent years and the industry is increasingly dominated by a few large national and several regional carriers. Since the Highway Reauthorization Act of 1983 mandated that all states permit the use of 28-foot double trailers, there has been a conversion of nearly all LTL carriers to doubles operations. Order sizes for LTL carriers tend to be in high volume and with standard specifications. LTL carriers who have purchased Company products include Roadway Express, Inc., Vitran Express, Old Dominion Freight Line, Inc., USF Holland, GLS Leasco, and Yellow Services, Inc. New trailer sales to LTL carriers accounted for approximately 5.3%, 10.5% and 9.1% of new trailer sales in 2001, 2000 and 1999, respectively. Private fleet carriers represent the largest segment of the truck trailer industry in terms of total units, but are dominated by small fleets of 1 to 100 trailers. Among the larger private fleets, such as those of the large retail chain stores, automotive manufacturers and paper products, truck trailers are often ordered with customized features designed to transport specialized commodities or goods. Among private fleets, the Company's customers include DaimlerChrysler, Caterpillar, Safeway, Foster Farms, A-Hold and The Kroger Company. New trailer sales to private fleets represented approximately 8.4%, 6.7% and 6.4% of new trailer sales in 2001, 2000 and 1999, respectively. Leasing companies include large national companies as well as regional and local companies. Among leasing companies, the Company's customers include Transport International Pool (TIP), National Semi-Trailer Corp., Lease Plan and Penske Truck Leasing. New trailer sales to leasing companies represented 3.2%, 4.2% and 6.0% of new trailer sales in 2001, 2000 and 1999, respectively. Customers for the Company's proprietary RoadRailer(R) products include North American intermodal carriers such as Triple Crown Services (a subsidiary of Norfolk Southern), Amtrak, Swift Transportation Corporation, Alliance Shippers, GATX Capital (in conjunction with Burlington Northern Santa Fe Corporation and Mark VII Transportation), Canadian National Railroad and Transportacion Martima Mexicana. New trailer sales of RoadRailer(R) products to these customers represented approximately 2.3%, 2.4% and 2.8% of new trailer sales in 2001, 2000 and 1999, respectively. In the United States, FedEx Corporation is one of two primary carriers dominating the package carrier industry. Package carriers have developed rigid specifications for their highly specialized trailers and have historically purchased trailers from a small number of suppliers, including Wabash. New trailer sales to package carriers represented approximately 3.7%, 0.7% and 0.8% of new trailer sales in 2001, 2000 and 1999, respectively. Retail sales of new trailers to independent operators through the Company's factory-owned distribution network provide the Company with access to smaller unit volume sales, which typically generate higher gross margins. Retail sales of new trailers represented approximately 16.8% (or 5.0% excluding the Breadner locations), 7.4% and 8.9% of total new trailer sales in 2001, 2000 and 1999, respectively. The balance of new trailer sales in 2001, 2000 and 1999 were made to dealers and household moving carriers. 8 MARKETING AND DISTRIBUTION The Company markets and distributes its products through the following channels: - factory direct accounts; - the factory-owned distribution network; and - independent dealerships. Factory direct accounts include larger full truckload, LTL, package and household moving carriers and certain private fleets and leasing companies. These are high volume purchasers. In the past, the Company has focused its resources on the factory direct market, where customers are highly aware of the life-cycle costs of trailer equipment and therefore are best equipped to appreciate the design and value-added features of the Company's product. Among the factory-direct customer base are national truckload fleets. These large carriers will generally purchase the largest trailer allowed by law in the areas that they intend to operate. These carriers are the largest customers of the composite plate trailers manufactured by the Company. In addition, larger LTL and private fleets buy factory direct with a great deal of customization. The Company's factory-owned distribution network generates retail sales of trailers as well as leasing and financing arrangements to smaller fleets and independent operators. This branch network enables the Company to provide maintenance and other services to customers on a nationwide basis and provides an outlet for used trailers taken in trade upon the sale of new trailers, which is a common practice with fleet customers. In addition to the 47 factory-owned retail outlets and 2 rental locations, the Company also sells its products through a nationwide network of approximately 80 full-line and 150 parts only independent dealerships, which generally serve the trucking and transport industry. The dealers primarily serve intermediate and smaller sized carriers and private fleets in the geographic region where the dealer is located and on occasion may sell to large fleets. The dealers may also perform service work for many of their customers. RAW MATERIALS The Company utilizes a variety of raw materials and components including steel, aluminum, lumber, tires and suspensions, which it purchases from a limited number of suppliers. Significant price fluctuations or shortages in raw materials or finished components may adversely affect the Company's results of operations. In 2001 and for the foreseeable future, the raw material used in the greatest quantity will be composite plate material for the Company's proprietary DuraPlate(R) trailer. The composite material is comprised of an inner and outer lining made of high strength steel surrounding a vinyl core. Currently both components are in ready supply. In August 1997, the Company completed construction of a composite material facility located in Lafayette, Indiana where the Company produces the composite plate material from steel and vinyl components. Due to the continued strong demand for the Company's DuraPlate(R) trailer, additional composite material manufacturing capacity was added to this facility in 2000. The Company believes the addition of this new facility will provide adequate capacity to meet its composite material requirements. During 1998, the Company acquired Cloud Corporation and Cloud Oak Flooring Company, Inc. (Wabash Wood Products), manufacturers of laminated hardwood floors for the truck body and trailer industry. During the course of 2000, the Company increased its hardwood flooring production capacity at its Harrison, Arkansas facility in order to accommodate 100% of the Company's trailer flooring needs. The central U.S. location of the Company's plants gives Wabash a competitive advantage in the transportation cost of inbound raw materials as well as the cost of delivery of finished product as customers often use trailers coming off the assembly line to deliver freight outbound from the Midwest. BACKLOG The Company's backlog of orders was approximately $142.1 million and $639.5 million at December 31, 2001 and 2000 respectively. Orders that comprise the backlog may be subject to changes in quantities, delivery, specifications and terms. During the third quarter of 2001 the Company modified its criteria for determining backlog to reflect: (1) only orders that have been confirmed by the customer in writing, and (2) orders that will be included in the Company's production schedule during the next 18 months. The backlog reported for December 31, 2000 has not been restated to reflect this new policy. The Company expects to fill a majority of its existing backlog of orders by the end of 2002. 9 PATENTS AND INTELLECTUAL PROPERTY The Company holds or has applied for 79 patents in the United States on various components and techniques utilized in its manufacture of truck trailers. In addition, the Company holds or has applied for 111 patents in 13 foreign countries including the European patent community. The Company's patents primarily relate to its proprietary DuraPlate(R) product and the Company believes that these patents offer the Company significant competitive advantages. The Company also holds or has applied for 44 trademarks in the United States as well as 41 trademarks in foreign countries. These trademarks include the Wabash(TM) and Fruehauf(R) brand names as well as trademarks associated with the Company's proprietary products such as the DuraPlate(R) trailer and the RoadRailer(R) trailer. RESEARCH AND DEVELOPMENT Research and development expenses are charged to earnings as incurred and were approximately $2.4 million, $2.4 million and $1.5 million in 2001, 2000 and 1999, respectively. ENVIRONMENTAL MATTERS The Company is aware of soil and ground water contamination at some of its facilities. Accordingly, the Company has recorded a reserve of approximately $0.9 million associated with environmental remediation at these sites. This reserve was determined based upon currently available information and management does not believe the outcome of these matters will be material to the consolidated annual results of operations or financial condition of the Company. In the second quarter 2000, the Company received a grand jury subpoena requesting certain documents relating to the discharge of wastewaters into the environment at a Wabash facility in Huntsville, Tennessee. The subpoena sought the production of documents and related records concerning the design of the facility's discharge system and the particular discharge in question. On May 16, 2001, the Company received a second grand jury subpoena that sought the production of additional documents relating to the discharge in question. The Company is fully cooperating with federal officials with respect to their investigation into the matter. At this time, the Company is unable to predict the outcome of federal grand jury inquiry into this matter, but does not believe it will result in a material adverse effect on its financial position or future results of operations; however, at this early stage of the proceedings, no assurance can be given as to the ultimate outcome of the case. On April 17, 2000, the Company received a Notice of Violation/Request for Incident Report from the Tennessee Department of Environmental Conservation (TDEC) with respect to the same matter. On September 6, 2000, the Company received an Order and Assessment from TDEC directing the Company to pay a fine of $100,000 for violations of Tennessee environmental requirements as a result of the discharge. The Company filed an appeal of the Order and Assessment on October 10, 2000. The Company is currently negotiating an agreed-upon Order with TDEC to resolve this matter. Future information and developments will require the Company to continually reassess the expected impact of these environmental matters. However, the Company has evaluated its total environmental exposure based on currently available data and believes that compliance with all applicable laws and regulations will not have a materially adverse effect on the consolidated financial position and annual results of operations. See Footnote 19 to the Consolidated Financial Statements for additional environmental information and the Company's accounting for such costs. EMPLOYEES As of December 31, 2001, the Company had approximately 3,500 employees, compared to approximately 5,200 employees as of December 31, 2000. The Company has no employees under a labor union contract as of December 31, 2001. The Company places a strong emphasis on employee relations through educational programs and quality control teams. The Company believes its employee relations are good. 10 ITEM 2--PROPERTIES MANUFACTURING FACILITIES The Company owns its main facility of 1.2 million sq. ft. in Lafayette, Indiana, which consists of truck trailer and composite material production, tool and die operations, research laboratories, management offices and headquarters. The Company also owns another trailer manufacturing facility in Lafayette, Indiana (572,000 sq. ft.) and a trailer flooring manufacturing facility in Harrison, Arkansas (456,000 sq. ft.). During 2001, the Company closed three of its manufacturing facilities. The facilities closed included two trailer manufacturing plants located in Ft. Madison, Iowa (255,000 sq. ft.) and Huntsville, Tennessee (287,000 sq. ft.) and a flooring operation in Sheridan, Arkansas (117,000 sq. ft.). At December 31, 2001, these properties are being held for sale and, accordingly, are classified in prepaid expenses and other in the accompanying Consolidated Balance Sheets. RETAIL AND DISTRIBUTION FACILITIES The Company leases a facility in St. Louis, Missouri (10,261 sq. ft.) that serves as headquarters for its retail and distribution segment. This location oversees the operation of 29 sales and service branches (4 of which are leased) and 18 locations that sell and rent used trailers (15 of which are leased.) These facilities are located throughout North America. The branch facilities consist of an office, parts warehouse and service space and generally range in size from 20,000 to 50,000 square feet per facility. Included in the amounts above, are 10 branch locations in six Canadian provinces acquired in January 2001. In addition, the Company owns an aftermarket parts distribution center in Lafayette, Indiana (300,000 sq. ft.) and subleases a former parts center in Montebello, California to a third party. The Company closed three retail branches in 2000 and two in 2001. At December 31, 2001 these properties are being held for sale and, accordingly, are classified in prepaid expenses and other in the accompanying Consolidated Balance Sheets. The Company owned properties are subject to security interests held by the Company's Bank and Senior Note Lenders. ITEM 3--LEGAL PROCEEDINGS There are certain lawsuits and claims pending against the Company that arose in the normal course of business. None of these claims are expected to have a material adverse effect on the Company's financial position or its results of operations. In March of 2001, Bernard Krone Industria e Comercio de Maquinas Agricolas Ltda. ("BK") filed suit against the Company in the Fourth Civil Court of Curitiba in the State of Parana, Brazil. This action seeks recovery of damages plus pain and suffering. Because of the bankruptcy of BK, this proceeding is now pending before the Second Civil Court of Bankruptcies and Creditors Reorganization of Curitiba, State of Parana (No.232/99). This case grows out of a joint venture agreement between BK and the Company, which was generally intended to permit BK and the Company to market the RoadRailer(R) trailer in Brazil and other areas of South America. When BK was placed into the Brazilian equivalent of bankruptcy late in the year 2000, the joint venture was dissolved. BK subsequently filed its lawsuit against the Company alleging that it was forced to terminate business with other companies because of the exclusivity and non-compete clauses purportedly found in the joint venture agreement. The lawsuit further alleges that Wabash did not properly disclose technology to BK and that Wabash purportedly failed to comply with its contractual obligations in terminating the joint venture agreement. In its complaint, BK asserts that it has been damaged by these alleged wrongs by the Company in the approximate amount of $8.4 million (U.S.). The Company answered the complaint in May of 2001, denying any wrongdoing and pointing out that, contrary to the allegation found in the complaint, a merger of the Company and BK, or the acquisition of BK by the Company, was never the purpose or intent of the joint venture agreement between the parties; the only purpose was the business and marketing arrangement as set out in the agreement. The Company also asserted a counterclaim in the amount of $351,000 (U.S.) representing monies advanced by the 11 Company to BK to permit BK to import certain trailers from Europe, which was to be reimbursed to the Company by BK. The counterclaim was based on the fact that this reimbursement never took place. The Company believes that the claims asserted against it by BK are without merit and intends to defend itself vigorously against those claims. It also believes that the claims asserted in its counterclaim are valid and meritorious and it intends to prosecute that claim. The Company believes that the resolution of this lawsuit will not have a material adverse effect on its financial position or future results of operations; however, at this early stage of the proceeding, no assurance can be given as to the ultimate outcome of the case. On September 17, 2001 the Company commenced an action against PPG Industries, Inc. ("PPG") in the United States District Court, Northern District of Indiana, Hammond Division at Lafayette, Civil Action No. 4:01 CV 55. In the lawsuit, the Company alleged that it has sustained substantial damages stemming from the failure of the PPG electrocoating system (the "E-coat system") and related products that PPG provided for the Company's Scott County Tennessee plant. The Company alleges that PPG is responsible for defects in the design of the E-coat system and defects in PPG products that have resulted in malfunctions of the E-coat system and poor quality coatings on numerous trailers. The Company further alleges that the failures of PPG's E-coat system and products substantially contributed to the decision to shut down the Scott County plant. PPG filed a Counterclaim in that action on or about November 8, 2001, seeking damages in excess of approximately $1.35 million based upon certain provisions of the November 3, 1998 Investment Agreement between it and the Company. The Company filed a Reply to the Counterclaim denying liability for the claims asserted. The Company believes that the claims asserted against it by PPG in the Counterclaim are without merit and intends to defend itself vigorously against those claims. It also believes that the claims asserted in its Complaint are valid and meritorious and it intends to prosecute those claims. The Company believes that the resolution of this lawsuit will not have a material adverse effect on its financial position or future results of operations; however, at this early stage of the proceeding, no assurance can be given as to the ultimate outcome of the case. In the second quarter 2000, the Company received a grand jury subpoena requesting certain documents relating to the discharge of wastewaters into the environment at a Wabash facility in Huntsville, Tennessee. The subpoena sought the production of documents and related records concerning the design of the facility's discharge system and the particular discharge in question. On May 16, 2001, the Company received a second grand jury subpoena that sought the production of additional documents relating to the discharge in question. The Company is fully cooperating with federal officials with respect to their investigation into the matter. At this time, the Company is unable to predict the outcome of the federal grand jury inquiry into this matter, but does not believe it will result in a material adverse effect on its financial position or future results of operations; however, at this early stage of the proceedings, no assurance can be given as to the ultimate outcome of the case. On April 17, 2000, the Company received a Notice of Violation/Request for Incident Report from the Tennessee Department of Environmental Conservation (TDEC) with respect to the same matter. On September 6, 2000, the Company received an Order and Assessment from TDEC directing the Company to pay a fine of $100,000 for violations of Tennessee environmental requirements as a result of the discharge. The Company filed an appeal of the Order and Assessment on October 10, 2000. The Company is currently negotiating an agreed-upon Order with TDEC to resolve this matter. The class action against the Company in United States District Court for the Northern District of Indiana entitled "In re Wabash National Corporation Securities Litigation", Civil Action No. 4:99-CV-0003-AS, originally filed in 1999 and previously reported by the Company in prior filings, was dismissed with prejudice in December 2001 in connection with a final settlement entered into by the parties, with no material effect on the Company's financial position or results of operations. ITEM 4--SUBMISSIONS OF MATTERS TO VOTE OF SECURITY HOLDERS None to report. 12 ITEM 4A--RISK FACTORS Investing in our securities involves a high degree of risk. In addition to the other information contained in this Form 10-K, including the reports we incorporate by reference, you should consider the following factors before investing in our securities: We Face Intense Competition. The truck trailer manufacturing industry is highly competitive. We compete with other truck trailer manufacturers of varying sizes, some of which may have greater financial resources than we do. Barriers to entry in the truck trailer manufacturing industry are low and, therefore, it is possible that additional competitors could enter the market at any time. Certain participants in the industry in which we compete may have manufacturing over-capacity and high leverage, and the industry has experienced a number of bankruptcies and financial stresses, all of which have resulted in significant pricing pressures. Our inability to compete effectively with existing or potential competitors would have a material adverse effect on our business, financial condition and results of operations. Our Business Is Cyclical and Has Been Adversely Affected By An Economic Downturn. The truck trailer manufacturing industry historically has been and is expected to continue to be cyclical and affected by overall economic conditions. New trailer production for the trailer industry as a whole decreased to 140,084 units in 2001 as compared to 270,817 units in 2000 and 317,388 units in 1999 and the current forecast for industry shipments in 2002 is between 120,000 and 160,000 units. Customers have historically replaced trailers in cycles that run from six to twelve years depending on service and trailer type. Poor economic conditions can adversely affect demand for new trailers and in the past have led to an overall aging of trailer fleets beyond this typical replacement cycle. Our business is likely to continue to be adversely affected unless economic conditions improve. Our New Technology and Products May Not Achieve Market Acceptance. We have recently introduced new products including the DuraPlate(R) composite plate trailer, constructed from a high density vinyl core with a steel skin. There can be no assurance that these or other new products or technologies will achieve sustained market acceptance. There can also be no assurance that new technologies or products introduced by competitors will not render our products obsolete or uncompetitive. We have taken steps to protect our proprietary rights in these new products. However, the steps we have taken to protect them may not be sufficient or may not be enforced by a court of law. If we are unable to protect our proprietary rights, other parties may attempt to copy or otherwise obtain and use our products or technology. If competitors are able to use our technology, our ability to compete effectively could be harmed. We Rely on the Strength of our Corporate Partnerships and the Success of Our Customers. We have corporate partnering relationships with a number of customers where we supply the requirements of these customers. To a significant extent, our success is dependent upon the continued strength of their relationships with us and the growth of our corporate partners. Our customers are often adversely affected by the same economic conditions that adversely affect us. Further, we often are unable to predict the level of demand for our products from these partners, or their timing of orders. The loss of a significant customer or unexpected delays in product purchases could have a material adverse effect on our business, financial condition and results of operations. Some of our Customers May be Financially Unstable. Some of our customers in the transportation industry are highly leveraged and have limited access to capital. Therefore, their continued existence may be uncertain. Our financial condition may be affected by the financial stability of these customers. We Have A Limited Number of Suppliers of Raw Materials and No Guarantee of Continued Availability of Raw Materials. We currently rely on a limited number of suppliers for certain key components in the manufacturing of truck trailers. The loss of our suppliers or the inability of the suppliers to meet our price, quality, quantity and delivery requirements could have a material adverse effect on our business, financial condition and results of operations. We Have Limited Capital Resources. Our ability to access the capital markets is dependent on perceived current and future business prospects, as well as the Company's current financial condition. The Company has experienced liquidity problems in the past and as of December 31, 2001, the Company was in violation of its financial covenants with certain of its lenders. While the Company believes it had addressed its liquidity problems by restructuring its 13 indebtedness, there can be no assurance that it will continue to be in compliance with the terms of its new debt agreements. In addition, there can be no assurance that the Company will have sufficient resources to meet its debt service requirements, working capital needs and capital resource requirements. If the Company is unable to comply with the terms of its new debt agreements, it could be forced to further modify its operations or it may be unable to continue as a going concern. (As the Company's lenders could foreclose on the Company's assets.) It is also dependent on the Company's ability to manage the business to meet lender's financial requirements. Accordingly, the Company is limited as to the availability of capital to fund future operations and expansions which could adversely effect the continuing operations of the Company. We Have a Single Manufacturing Location. Our primary manufacturing operations are located in Lafayette, Indiana. If the production in these facilities were unexpectedly disrupted for any length of time, it would have a material adverse effect on our business, financial condition and results of operations. Used Trailer Values May Decline. Used trailer values at any point in time are influenced by economic and industry conditions, as well as supply. The Company maintains inventories of used trailers, equipment held for lease, finance contracts secured by used trailers and has entered into residual guarantees and purchase commitments for used trailers as part of its normal business practices. Declines in the market value for used trailers or the need to dispose of excess inventories has had and could in the future have a material adverse effect on our business, financial condition and results of operations. We are Subject to Government Regulations That May Adversely Affect Our Profitability. The length, height, width, maximum weight capacity and other specifications of truck trailers are regulated by individual states. The Federal Government also regulates certain safety features incorporated in the design of truck trailers. Changes or anticipation of changes in these regulations can have a material impact on our customers, may defer customer purchasing decisions, may result in reengineering and may affect our financial results. In addition, we are subject to various environmental laws and regulations dealing with the transportation, storage, presence, use, disposal and handling of hazardous materials, discharge of stormwater and underground fuel storage tanks and may be subject to liability associated with operations of prior owners of acquired property. If we are found to be in violation of applicable laws or regulations, it could have a material adverse effect on our business, financial condition and results of operations. We May Not Be Successful in Integrating Businesses that We Acquire into Our Business. We have made and expect to make acquisitions of technology, businesses and product lines in the future. Our ability to expand successfully through acquisitions depends on many factors, including the successful identification and acquisition of products, technologies or businesses and management's ability to effectively integrate and operate the acquired products, technologies or businesses. We may compete for acquisition opportunities with other companies that have significantly greater financial and management resources. There can be no assurance that the Company will be successful in acquiring or integrating any such products, technologies or businesses. 14 PART II ITEM 5--MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS The Company's Common Stock is traded on the New York Stock Exchange (ticker symbol: WNC). The number of record holders of the Company's common stock at February 28, 2002, was 1,039. High and low stock prices and dividends for the last two years were:
DIVIDENDS DECLARED PER HIGH LOW COMMON SHARE ------ ------ ------------ 2001 Fourth Quarter .............. $ 8.74 $ 6.62 $ -- Third Quarter ............... $12.45 $ 6.32 $ 0.01 Second Quarter .............. $13.33 $ 9.75 $ 0.04 First Quarter ............... $12.00 $ 8.25 $ 0.04 2000 Fourth Quarter .............. $ 9.25 $ 7.25 $ 0.04 Third Quarter ............... $12.94 $ 8.31 $ 0.04 Second Quarter .............. $15.25 $10.50 $ 0.04 First Quarter ............... $17.88 $13.00 $ 0.04
On December 28, 2001, the Board of Directors suspended the Company's payment of common stock dividends. There is no assurance that these dividends will be paid in the future as they depend on future earnings, capital availability and financial conditions. 15 ITEM 6--SELECTED FINANCIAL DATA The following selected consolidated financial data with respect to the Company, for the five years in the period ended December 31, 2001, have been derived from the Company's consolidated financial statements, which have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports. The following information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included elsewhere herein.
Years Ended December 31, ------------------------------------------------------------------------- 2001(1) 2000 1999 1998 1997 ---- ---- ---- ---- ---- (Dollar amounts in thousands, except per share data) STATEMENT OF OPERATIONS DATA: Net sales .................................. $ 863,392 $ 1,332,172 $ 1,454,570 $ 1,292,259 $ 846,082 Cost of sales .............................. 982,605(2) 1,216,205(3) 1,322,852 1,192,968 778,620 --------- ----------- ----------- ----------- --------- Gross profit (loss) ................... (119,213) 115,967 131,718 99,291 67,462 Selling, general and administrative expenses 82,325 55,874 50,796 38,626 26,307 Restructuring charge ....................... 37,864 36,338 -- -- -- --------- ----------- ----------- ----------- --------- Income (loss) from operations ......... (239,402) 23,755 80,922 60,665 41,155 Interest expense ........................... (21,292) (19,740) (12,695) (14,843) (16,100) Accounts receivable securitization costs ... (2,228) (7,060) (5,804) (3,966) -- Equity in losses of unconsolidated affiliate (7,668) (3,050) (4,000) (3,100) (400) Restructuring charges, net ................. (1,590) (5,832) -- -- -- Foreign exchange losses, net ............... (1,706) -- -- -- -- Other, net ................................. (1,139) 877 6,310 (259) 1,135 --------- ----------- ----------- ----------- --------- Income (loss) before income taxes ..... (275,025) (11,050) 64,733 38,497 25,790 Provision (benefit) for income taxes ....... (42,857) (4,314) 25,891 15,226 10,576 --------- ----------- ----------- ----------- --------- Net income (loss) ..................... $(232,168) $ (6,736) $ 38,842 $ 23,271 $ 15,214 ========= =========== =========== =========== ========= Basic earnings (loss) per common share ..... $ (10.17) $ (0.38) $ 1.60 $ 1.00 $ 0.74 ========= =========== =========== =========== ========= Diluted earnings (loss) per common share ... $ (10.17) $ (0.38) $ 1.59 $ 0.99 $ 0.74 ========= =========== =========== =========== ========= Cash dividends declared per common share ... $ 0.09 $ 0.16 $ 0.1525 $ 0.1425 $ 0.13 ========= =========== =========== =========== =========
(1) The 2001 amounts reflect the results of operations for the 10 branches acquired from Breadner on January 5, 2001. (2) Includes used trailer inventory valuation charges of $62.1 million, a restructuring related charge of $3.7 million, and loss contingencies (1) and impairment charges related to the Company's leasing operations of $37.9 million. (3) Includes a $4.5 million charge related to the Company's restructuring activities.
Years Ended December 31, ---------------------------------------------------- 2001 2000 1999 1998 1997 ---- ---- ---- ---- ---- (Dollar amounts in thousands) BALANCE SHEET DATA: Working capital $111,299 $270,722 $228,751 $271,256 $280,212 Total equipment leased to others & finance contracts 160,098 108,451 130,626 117,038 103,222 Total assets 692,504 781,614 791,291 704,486 629,870 Total debt 334,703 238,260 167,881 168,304 236,028 Capital lease obligations 77,314 -- -- -- -- Stockholders' equity 130,985 367,233 379,365 345,776 226,516
16 ITEM 7--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion of Wabash National Corporation's (Wabash or the Company) historical results of operations and of its liquidity and capital resources should be read in conjunction with the consolidated financial statements and related notes thereto. Wabash designs, manufactures and markets standard and customized truck trailers under the Wabash(TM), Fruehauf(R) and RoadRailer(R) trademarks. The Company produces and sells aftermarket parts through its division, Wabash National Parts and its wholly-owned subsidiary, North American Trailer Centers(TM) (NATC). In addition to its aftermarket parts sales and service, NATC sells new and used trailers through its retail network as well as providing rental, leasing and finance programs to its customers for new and used trailers. OVERVIEW In 2001, the demand for new trailers in the United States declined substantially resulting in an industry decline of 48.3% in new production from 270,817 units in 2000 to 140,084 units in 2001. This decline resulted from overall economic conditions in the US economy, which reduced the level of freight tonnage shipped in 2001, and ongoing challenges in the motor-carrier industry principally caused by high fuel prices and lower revenues per mile due to intense competition for shipments. The Company's market share declined slightly to 22.6% during 2001. The Company's backlog declined from $639.5 million as of December 31, 2000 to $142.1 million as of December 31, 2001. This significant reduction in demand along with historical manufacturing over-capacity in the truck trailer industry resulted in significant losses being reported by the industry as a whole. Further impacting the Company was a significant decline in the demand for used trailers caused by the general economic and industry conditions previously discussed and the Company's excess supply of used trailers. The Company's supply of used trailers comes from accepting trade-ins of used trailers from its customers upon the sale of new trailers. The excess supply of used trailers was further impacted by the Company's backlog of new trailer orders totaling $639.5 million at December 31, 2000, in which the Company had previously agreed upon the pricing terms for the new trailers and the trade-in allowance for the used trailers. This excess supply and decline in demand coupled with the Company's decision to liquidate used trailers during the second half of 2001 resulted in significant used trailer market value declines during 2001. In response to the matters discussed above, during 2001, the Company closed two of its manufacturing facilities and two of its sales and services branches. As a result of these items, the Company incurred significant restructuring, impairment and inventory valuation charges (See notes 2, 4, 9 and 10 for details). Also, in January 2002, the Company completed its divestiture of ETZ, the majority shareholder of BTZ, a European Roadrailer(R) operating company based in Munich, Germany which had yet to achieve profitable operating results. As a result of these conditions, the Company reported a loss from operations of $239.4 million for the year ended December 31, 2001, compared to income from operations of $23.8 million for the year ended December 31, 2000. The losses reported for 2001 resulted in the Company being in technical violation of its financial covenants with certain of its lenders at December 31, 2001. In April 2002, the Company entered into an agreement with its lenders to restructure its existing revolving bank line of credit, Senior Series Notes and Rental Fleet Facility and to waive violations of certain financial covenants through March 30, 2002. The restructuring changes debt maturity and principal payment schedules, provides for all unencumbered assets to be pledged as collateral, increases interest rates, and requires the Company to meet newly established financial covenants (See note 13 for details regarding the debt restructuring). While the Company believes that industry conditions are likely to persist throughout 2002, the Company believes it has significantly restructured its operations and, based on its projections, the Company anticipates generating positive earnings before interest, taxes, depreciation and amortization in 2002. Although the Company believes that the assumptions underlying the 2002 projections are reasonable, there are risks related to further declines in market demand and reduced sales in the U.S. and Canada, adverse interest rate or currency movements, realization of anticipated cost reductions and levels of used trailer trade-ins that could cause actual results to differ from the projections. Should results continue to decline, the Company is prepared to take additional cost cutting actions. While there can be no assurance that the Company will achieve these results, the Company believes it has adequately modified its operations to be in compliance with its financial covenants throughout 2002 and believes that its existing sources of liquidity 17 combined with its operating results will generate sufficient liquidity such that the Company has the ability to meet its obligations as they become due throughout 2002. During 2001, the Company incurred losses of $73.4 related to the write-down and sale of used trailers as compared to $13.1 in 2000. These increased losses were the result of decreased demand for used equipment and the Company's excess supply of used trailer inventory which combined to decrease market values for equipment during 2001. The Company's supply of used trailers has grown significantly over the past two years as a result of large fleet trade deals with certain customers. During 2001 and 2000, the Company accepted approximately $135.5 million and $177.0 million in trade-ins of used trailers. During the third quarter, the Company, to reduce working capital in order to address liquidity concerns, changed its strategy to focus on the wholesale liquidation of used trailer inventory. This change in strategy enabled the Company to reduce working capital needs and generate cash, but resulted in further pressures in used trailer market values which resulted in losses included in the amounts above. During the third quarter of 2001, the Company recorded restructuring and other related charges totaling $40.5 million primarily related to the rationalization of the Company's manufacturing capacity resulting in the closure of the Company's platform manufacturing facility in Huntsville, Tennessee, and its dry van facility in Fort Madison, Iowa. In addition, the Company closed a parts distribution facility in Montebello, California. Included in the $40.5 million restructuring charge is the write-down of certain impaired fixed assets to their fair market value ($33.8 million charge), accrued severance benefits for approximately 600 employees ($0.9 million) and plant closure and other costs ($2.1 million). In addition, a $3.7 million charge is included in cost of sales related to inventory write-downs at the closed facilities. During the fourth quarter of 2001, the Company reduced its plant closure reserve by approximately $0.9 million as a result of the Company's ability to effectively control its closure costs. The Company's impairment charge reflects the write-down of certain long-lived assets that became impaired as a result of management's decision to close its operations at the two manufacturing plants discussed above. The impairment was computed in accordance with the provisions of SFAS 121. The estimated fair market value of the impaired assets totaled $6.7 million and was determined by management based upon economic conditions, potential alternative uses and potential markets for the assets which are held for sale and, accordingly, are classified in prepaid expenses and other in the accompanying Consolidated Balance Sheets. Depreciation has been discontinued on the assets held for sale pending their disposal. In December 2000, the Company recorded restructuring and other related charges totaling $46.6 million primarily related to the Company's exit from manufacturing products for export outside the North American market, international leasing and financing activities and the consolidation of certain domestic operations. Included in this total is $40.8 million that has been included as a component in computing income from operations. Specifically, $19.1 million of this amount represented the impairment of certain equipment subject to leases with the Company's international customers, $8.6 million represented losses recognized for various financial guarantees related to international financing activities, and $6.9 million was recorded for the write-down of other assets as well as charges associated with the consolidation of certain domestic operations including severance benefits of $0.2 million. Also included in the $40.8 million is a $4.5 million charge for inventory write-downs related to the restructuring actions which is included in cost of sales. The Company has recorded $5.8 million as a restructuring charge in Other Income (Expense) representing the write-off of the Company's remaining equity interest in ETZ for a decline in fair value that is deemed to be other than temporary. The total impairment charge recognized by the Company as a result of its restructuring activities was $26.7 million. This amount was computed in accordance with the provisions of SFAS 121. The estimated fair value of the impaired assets totaled $3.4 million and was determined by management based upon economic conditions and potential alternative uses and markets for the equipment. In January 2002, the Company completed its divestiture of ETZ. As a result of this divestiture the Company adjusted its restructuring reserve by $1.4 million during the fourth quarter. This adjustment primarily relates to the assumption of certain financial guarantees in connection with the divestiture. Under the provisions of SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, the Company has two reportable segments: manufacturing and retail and distribution. The manufacturing segment produces trailers and sells new trailers to customers who purchase trailers direct or through independent dealers and also produces trailers for the retail and distribution segment. The retail and distribution segment includes the sale, leasing and financing of new and used trailers, as well as the sale of 18 aftermarket parts and service through its retail branch network. In addition, the retail and distribution segment includes the sale of aftermarket parts through Wabash National Parts. The accounting policies of the segments are the same as those described in the summary of significant accounting policies except that the Company evaluates segment performance based on income from operations. The Company has not allocated certain corporate related charges such as administrative costs, interest expense and income taxes from the manufacturing segment to the Company's other reportable segments. The Company accounts for intersegment sales and transfers at cost plus a specified mark-up. Critical Accounting Policies A summary of the Company's critical accounting policies is as follows: Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that directly affect the amounts reported in its consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Revenue Recognition The Company recognizes revenue from the sale of trailers and aftermarket parts when risk of ownership is transferred to the customer. Revenue is generally recognized upon shipment. Customers that have requested to pick up their trailers are invoiced prior to taking physical possession when the customer has made a fixed commitment to purchase the trailers, the trailers have been completed and are available for pickup or delivery, the customer has requested in writing that the Company hold the trailers until the customer determines the most economical means of taking possession and the customer takes possession of the trailers within a specified time period. In such cases, the trailers, which have been produced to the customer specifications, are invoiced under the Company's normal billing and credit terms. The Company recognizes revenue from direct finance leases based upon a constant rate of return while revenue from operating leases is recognized on a straight-line basis in an amount equal to the invoiced rentals. Used Trailer Trade Commitments The Company has commitments with customers to accept used trailers on trade for new trailer purchases. As of December 31, 2001, the Company had approximately $25.7 million of outstanding trade commitments with customers. The net realizable value of these commitments was approximately $18.0 million as of December 31, 2001. The Company's policy is to recognize losses related to these commitments, if any, at the time the new trailer revenue is recognized. Accounts Receivable Accounts receivable as of December 31, 2001 and 2000 were $58.4 million and $49.3 million, respectively, and are shown net of allowance for doubtful accounts. Accounts receivable includes trade receivables and amounts due under finance contracts. Provisions to the allowance for doubtful accounts are charged to General and Administrative expenses on the Consolidated Statements of Operations. Inventories Inventories are primarily stated at the lower of cost, determined on the first-in, first-out (FIFO) method, or market. The cost of manufactured inventory includes raw material, labor and overhead. Inventories consist of the following (in thousands): December 31, 2001 2000 Raw materials and components ................ $ 38,235 $ 84,167 Work in progress ............................ 10,229 18,765 Finished goods .............................. 58,984 93,332 Aftermarket parts ........................... 22,726 33,566 Used trailers ............................... 60,920 100,496 $ 191,094 $ 330,326 19 The Company recorded used trailer inventory valuation adjustments totaling $62.1 million and $9.6 million during 2001 and 2000, respectively. These adjustments, which are reflected in cost of sales on the Consolidated Statements of Operations, were calculated in accordance with the Company's inventory valuation policies that are designed to state used trailers at the lower of cost or market. Long-Lived Assets Long-lived assets are reviewed for impairment in accordance with Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, whenever facts and circumstances indicate that the carrying amount may not be recoverable. Specifically, this process involves comparing an asset's carrying value to the estimated undiscounted future cash flows the asset is expected to generate over its remaining life. If this process were to result in the conclusion that the carrying value of a long-lived asset would not be recoverable, a write-down of the asset to fair value would be recorded through a charge to operations. Accrued Liabilities Accrued liabilities primarily represent accrued payroll related items, restructuring reserves, warranty reserves, loss contingencies related to used trailer residual commitments and self insurance reserves related to group insurance and workers compensation. Changes in the estimates of these reserves are charged or credited to income in the period determined. The Company is self-insured up to specified limits for medical and workers' compensation coverage. The self-insurance reserves have been recorded to reflect the undiscounted estimated liabilities, including claims incurred but not reported. The Company recognizes a loss contingency for used trailer residual commitments for the difference between the equipment's purchase price and its fair market value, when it becomes probable that the purchase price at the guarantee date will exceed the equipment's fair market value at that date. The Company's warranty policy generally provides coverage for components of the trailer the Company produces or assembles. Typically, the coverage period is one year for container chassis and specialty trailers and five years for dry freight, refrigerated and flat bed trailers. The Company's policy is to accrue the estimated cost of warranty coverage at the time of the sale. The warranty reserve at December 31, 2001 and 2000 was approximately $11.3 million and $5.2 million, respectively. 20 RESULTS OF OPERATIONS The following table sets forth certain operating data as a percentage of net sales for the periods indicated:
Percentage of Net Sales Years Ended December 31, -------------------------------- 2001 2000 1999 ------ ------ ------ Net sales .................................. 100.0% 100.0% 100.0% Cost of sales .............................. 113.8(1) 91.3(2) 90.9 ------ ------ ------ Gross profit ....................... (13.8) 8.7 9.1 General and administrative expense ......... 6.6 2.6 2.1 Selling expense ............................ 2.9 1.6 1.4 Restructuring charge ....................... 4.4 2.7 -- ------ ------ ------ Income from operations ............. (27.7) 1.8 5.6 Interest expense ........................... (2.5) (1.5) (0.9) Accounts receivable securitization costs ... (0.3) (0.5) (0.4) Equity in losses of unconsolidated affiliate (0.9) (0.2) (0.3) Restructuring charge ....................... (0.2) (0.4) -- Foreign exchange losses, net ............... (0.2) -- -- Other, net ................................. (0.1) -- 0.4 ------ ------ ------ Income (loss) before taxes ......... (31.9) (0.8) 4.4 Provision (benefit) for income taxes ....... (5.0) (0.3) 1.8 ------ ------ ------ Net income (loss) .................. (26.9)% (0.5)% 2.6% ====== ====== ======
(1) Includes used trailer inventory valuation charges of $62.1 million (7.2%), a restructuring related charge of $3.7 million (0.4%) and loss contingencies and impairment charges related to the Company's leasing operations of $37.9 million (4.4%). (2) Includes a $4.5 million charge (0.3%) related to the Company's restructuring activities. 2001 Compared to 2000 Net income (loss) for 2001 was ($232.2) million as compared to ($6.7) million in 2000. This sharp decrease was primarily driven by decreased new trailer sales, restructuring and impairment charges and losses related to used trailers. Net Sales The Company finished 2001 with net sales of approximately $863.4 million on a consolidated basis compared to $1,332.2 million in 2000. This decrease was the result of lower net sales in the manufacturing segment partially offset by increased net sales in the retail and distribution segment.
Years Ended December 31, ------------------------------- 2001 2000 % Change --------- ---------- -------- Net External Sales by Segment: (Dollar amounts in millions) Manufacturing ......... $ 518.2 $ 1,013.1 (48.9%) Retail and Distribution 345.2 319.1 8.2% --------- ---------- ----- Total Net Sales ............. $ 863.4 $ 1,332.2 (35.2%) ========= ========== =====
The manufacturing segment's external net sales decreased 48.9% (or $494.9 million) in 2001 compared to 2000 driven almost entirely by a 48.1% decrease in the number of units sold, from approximately 59,700 units in 2000 to approximately 31,000 units in 2001. In addition, the average selling price per new trailer sold decreased by approximately 1.2% in 2001 compared to 2000 from approximately $16,900 in 2000 to approximately $16,700 in 2001. These decreases were driven by unfavorable overall economic conditions in the trailer industry. The Company's market share in the U.S. trailer industry 21 decreased slightly during 2001 from approximately 24.5% in 2000 to approximately 22.8% in 2001. As of December 31, 2001, the Company's backlog of orders was approximately $142.1 million, as compared to $639.5 million as of December 31, 2000. The retail and distribution segment's external net sales increased by 8.2% (or $26.1 million) during 2001 compared to 2000. This increase was primarily driven by increased sales from new branch and rental centers opened and acquired during 2001. As on a same store basis net sales decreased by 21.7%. The total number of store locations as of December 31, 2001 was 47 as compared to 34 as of December 31, 2000. The addition of these new stores resulted in leasing revenues and new trailer sales increasing by approximately 29.8% (or $9.8 million) and 21.9% (or $18.5 million), respectively, in 2001 as compared to 2000. The increase in rental and leasing revenue reflects the Company's strategy to expand its rental and leasing operations. The increase in new trailer revenue was driven by a 41.9% increase in the number of units sold from approximately 4,300 units in 2000 to approximately 6,100 units in 2001, partially offset by a 14.7% decline in the average selling price from approximately $19,700 in 2000 to approximately $16,800 in 2001. Used trailer revenue was relatively flat in 2001 as compared to 2000. Gross Profit (Loss) The Company finished 2001 with gross profit (loss) as a percent of sales of (13.8%) on a consolidated basis as compared to 8.7% in 2000. As discussed below, both of the Company's segments contributed to this decrease.
Years Ended December 31, --------------------------------- 2001 2000 % Change --------- --------- -------- Gross Profit (Loss) by Segment: (Dollar amounts in millions) Manufacturing ......... $ (73.9) $ 86.7 (185%) Retail and Distribution (47.6) 31.5 (251%) Eliminations .......... 2.3 (2.2) 205% --------- --------- ---- Total Gross Profit (Loss) .... $ (119.2) $ 116.0 (203%) ========= ========= ====
The manufacturing segment's gross profit (loss) decreased by 185% (or $160.6 million) primarily as a result of the following factors: - the decrease in net sales previously discussed; - new trailer and used trailer inventory valuation adjustments of approximately $3.0 million and $62.1 million, respectively; - increased warranty expense of approximately $7.0 million; and - the impact of inventory write-downs related to the Company's 2001 restructuring actions of approximately $3.7 million These factors were offset somewhat by cost reductions realized from the Company's 2001 and 2000 restructuring actions. The retail and distribution segment's gross profit (loss) decreased by 251% (or $79.1 million) primarily as a result of the following factors: - decline in average selling prices for new trailer sales of 14.7%; - impairment of equipment held for lease along with certain loss contingencies recognized related to its leasing activities totaling approximately $37.9 million; - decline in used trailer margins of approximately $8.0 million primarily as a result of the liquidation of the Company's used trailer inventory - new trailer and aftermarket parts inventory valuation adjustments of approximately $3.5 million and $3.0 million, respectively; and - decline in the equipment held for lease utilization rate during 2001 These factors were somewhat offset by gross margins of approximately $2.8 million generated from the recently acquired Canadian branches. 22 Income (Loss) from Operations (before interest, taxes and other items) The Company finished 2001 with income (loss) from operations as a percent of sales of (27.7%) on a consolidated basis as compared to 1.8% in 2000. As discussed below, both of the Company's segments contributed to this decrease.
Years Ended December 31, --------------------------------- 2001 2000 % Change --------- --------- -------- Operating Income (Loss) by Segment: (Dollar amounts in millions) Manufacturing $ (148.7) $ 36.9 (502%) Retail and Distribution (93.0) (10.9) (753%) Eliminations 2.3 (2.2) 205% --------- --------- ------ Total Operating Income (Loss) $ (239.4) $ 23.8 (1,105%) ========= ========= ======
The manufacturing segment and the retail and distribution segment's income from operations decreased by 502% (or $185.6 million) and 753% (or $82.1 million), respectively, primarily as a result of the decrease in gross profit (loss) previously discussed along with increased bad debt expense. Bad debt expense for the manufacturing segment and retail and distribution segment increased by approximately $8.2 million and $8.7 million, respectively, in 2001 compared to 2000. This increase reflects deteriorating economic conditions in the transportation industry during 2001. The manufacturing segment also incurred higher expenses related to professional fees and employee separation pay. The retail and distribution segment also incurred increased selling, general and administrative expenses to support the Company's expanding rental and leasing business and to increase used trailer sales volume. Other Income (Expense) Interest expense totaled $21.3 million and $19.7 million for the years ended December 31, 2001 and 2000, respectively. The increase in interest expense primarily reflects higher borrowings under the Company's revolving credit facilities during 2001. Accounts receivable securitization costs related to the Company's accounts receivable securitization facility, decreased from $7.1 million in 2000 to $2.2 million in 2001 primarily as a result of decreased borrowings under this facility during 2001. Equity in losses of unconsolidated affiliate consists of the Company's interest in the losses of ETZ, a non-operating, European holding company, which is the majority shareholder of BTZ, a European RoadRailer(R) operating company based in Munich, Germany. As part of the Company's 2000 restructuring activities, the Company recorded a $5.8 million charge to Other Income (Expense) during 2000 and an additional $1.4 million charge in 2001, as part of its planned divestiture of this investment. In January 2001, in connection with its restructuring activities, the Company increased its ownership interest in ETZ from 25.1% to 100%. Accordingly, the Company's equity in losses of unconsolidated affiliate increased from $3.1 million in 2000 to $7.7 million in 2001 In January 2002, the Company completed its divestiture of ETZ. As a result of this divestiture, the Company will cease reflecting an ownership interest in ETZ's results of operations in 2002. Foreign currency transaction losses, net totaled $1.7 million and $0 for the years ended December 31, 2001 and 2000, respectively. These net losses were primarily a result of transaction gains and losses being recorded related to intercompany transactions between the Company and its recently acquired Canadian subsidiary, as well as U.S. denominated transaction between the Canadian subsidiary and unrelated parties. Other, net was $1.1 million in expense during 2001 compared to $0.9 million in income during 2000. Other, net primarily includes items such as interest income, gain or loss from the sale of fixed assets and other items Income Taxes The Company's effective tax rates were 15.6% and 39% of pre-tax income (loss) for 2001 and 2000, respectively. In 2001, the effective rate differed from the U.S. federal statutory rate of 35% primarily due to the recognition of a valuation allowance against deferred tax assets that the Company determined were more likely than not to be realized before expiration. In 2000, the effective rate differed from the U.S. Federal 23 Statutory rate primarily due to state taxes and the effects of permanent differences in financial and tax reporting of certain transactions. 2000 Compared to 1999 Net income (loss) for 2000 was ($6.7) million as compared to $38.8 million in 1999. This decrease was driven primarily by lower sales and the impact of restructuring and other related charges. Net Sales The Company finished 2000 with net sales of approximately $1.3 billion on a consolidated basis compared to $1.5 billion in 1999. As discussed below, both of the Company's segments contributed to this decrease.
Years Ended December 31, ---------------------------------- 2000 1999 % Change -------- -------- -------- Net External Sales by Segment: (Dollar amounts in millions) Manufacturing $1,013.1 $1,113.9 (9.0%) Retail and Distribution 319.1 340.7 (6.3%) -------- -------- ---- Total Net Sales $1,332.2 $1,454.6 (8.4%) ======== ======== ====
The manufacturing segment's external net sales decreased 9.0% (or $100.8 million) in 2000 compared to 1999, driven primarily by a 6.9% decrease in the number of units sold, from approximately 64,100 units in 1999 to approximately 59,700 units in 2000. In addition, the average selling price per new trailer sold decreased 1.7% during 2000 compared to 1999. The decrease in net sales during the period was primarily driven by the continued impact of a general slowing in freight tonnage, increased interest rates and continued high fuel prices within the transportation industry. As a result of these unfavorable conditions, the transportation industry continues to operate in a very difficult environment, which has caused new trailer orders to decrease. As of December 31, 2000, the Company's backlog of orders was approximately $0.7 billion, over $0.4 billion of which is related to the DuraPlate(R) trailer. The retail and distribution segment's external net sales decreased 6.3% (or $21.6 million) during 2000 compared to 1999 driven primarily by a 3.6% decline in same store sales during the periods along with the reduction of a branch location during 2000. The total number of store locations as of December 31, 2000 was 34 as compared to 35 as of December 31, 1999. Gross Profit The Company finished 2000 with gross profit as a percent of sales of 8.7% on a consolidated basis, as compared to 9.1% in 1999. As discussed below, both of the Company's segments contributed to this decrease.
Years Ended December 31, ------------------------------------------------- 2000 1999 % Change --------- ----------- --------- Gross Profit by Segment: (Dollar amounts in millions) Manufacturing $ 86.7 $ 99.6 (13.0%) Retail and Distribution 31.5 34.3 (8.2%) Eliminations (2.2) (2.2) 0.0% ------ -------- ----- Total Gross Profit $116.0 $ 131.7 (11.9%) ====== ======== =====
24 The manufacturing segment's gross profit decreased by 13.0% (or $12.9 million) primarily as a result of the following factors: - the decrease in net sales previously discussed; - start-up costs related to the state-of-the-art painting and coating system at its Huntsville, Tennessee plant; - increased depreciation and amortization primarily related to several projects completed and placed in service during the year; and - the impact of other charges related to restructuring. These factors were partially offset by the Company's strategy of increasing the proportion of revenues attributable to proprietary products, such as the DuraPlate(R) trailer. These proprietary products accounted for approximately 67% of production in 2000 as compared to 59% in 1999, and have been successful in generating higher gross profits than have historically been possible with a more traditional, commodity type product mix. The retail and distribution segment's gross profit decreased by 8.2% (or $2.8 million) primarily as a result of decreased net sales previously discussed. This decrease was partially offset somewhat by increased sales for aftermarket parts, service revenues and rental, leasing and finance revenues which typically have higher margins as compared to the segment as a whole. Income (Loss) from Operations (before interest, taxes and other items) The Company finished 2000 with income (loss) from operations as a percent of sales of 1.8% on a consolidated basis, as compared to 5.6% in 1999. As discussed below, both of the Company's segments contributed to this decrease.
Years Ended December 31, -------------------------------------------------- 2000 1999 % Change ---------- ---------- ----------- Operating Income by Segment: (Dollar amounts in millions) Manufacturing $ 36.9 $ 72.0 (48.8%) Retail and Distribution (10.9) 11.1 (198.2%) Eliminations (2.2) (2.2) 0.0% ------ ------- ------ Total Operating Profit $ 23.8 $ 80.9 (70.6%) ====== ======= ======
The manufacturing segment's income from operations decreased by 48.8% primarily because of a $22.8 million charge related to the Company's restructuring activities, as well as the decrease in gross profit previously discussed. The retail and distribution segment's income from operations decreased by $22.0 million due primarily to a $13.6 million charge related to the Company's restructuring activities and a $5.7 million increase in selling, general and administrative expenses. The increase in selling, general and administrative expenses primarily reflects increased selling expenses principally to support increased sales activity in its aftermarket parts, service and trailer rental, leasing and finance businesses. Other Income (Expense) Interest expense totaled $19.7 million and $12.7 million for the years ended December 31, 2000 and 1999, respectively. The increase in interest expense primarily reflects higher interest rates coupled with the issuance of additional term debt and higher borrowings under the Company's revolving credit facility during 2000 to fund increased investing activities and working capital requirements. Accounts receivable securitization costs related to the Company's receivable sale and servicing agreement increased from $5.8 million in 1999 to $7.1 million in 2000 primarily as a result of higher interest rates during the year. Equity in losses of unconsolidated affiliate consists of the Company's 25.1% interest in the losses of ETZ, a non-operating, European holding company, acquired in November 1997. ETZ is the majority 25 shareholder of BTZ, a European RoadRailer(R) operating company based in Munich, Germany, which began operations in 1996. As part of its restructuring activities, during the fourth quarter of 2000, the Company recorded a $5.8 million charge to Other Income (Expense) in order to reflect its planned divestiture of this investment. In January 2001, in connection with its restructuring activities, the Company assumed the remaining ownership interest in ETZ from the majority shareholder and in January 2002, the Company completed its divestiture of ETZ. Other, net totaled income of $0.9 million in 2000 compared to income of $6.3 million in 1999. Included in other, net for 1999 was the reversal of $3.5 million in an accrual related to the Company's favorable resolution of a tax dispute with the Internal Revenue Service. During September 2000, the Company's finance operation sold a portion of its leasing and finance portfolio to a large financial institution. Proceeds of the sale were approximately $20.8 million and resulted in a loss of approximately $0.9 million, which is reflected in Other, net in the accompanying Consolidated Statements of Income for 2000. Interest income was approximately $0.5 million and $0.8 million in 2000 and 1999, respectively. Income Taxes The Company's effective tax rates were 39.0% and 40.0% of pre-tax income (loss) for 2000 and 1999, respectively, and differed from the U.S. Federal Statutory rate of 35% due primarily to state taxes. LIQUIDITY AND CAPITAL RESOURCES At December 31, 2001, the Company had $11.1 million in cash and cash equivalents and $75 million outstanding under its $125 million revolving credit facility. As of December 31, 2001, the Company was in technical default with the minimum net worth and debt to capital covenants under the revolving credit facility and the minimum net worth covenants under its Senior Series Notes agreements. In April 2002, the Company renegotiated these agreements and received waivers of all covenant violations through March 30, 2002. Under the new agreements, substantially all of the Company's assets are pledged as collateral for the loans. The new agreements also require an increase in the cost of funds and impose new financial covenants. The Company believes that existing funds, cash generated from operations and availability of funds from its restructured credit facilities and accounts receivable securitization should be adequate to satisfy working capital needs, capital expenditure requirements, interest and principal repayments on debt for the foreseeable future. Management also anticipates the completion of the following transactions during 2002 that will provide additional financial resources for the Company: - Sale and leaseback of certain real property - $30 million; - Sale of idle assets currently held for sale - $10 million; and - Additional income tax refunds resulting from March 2002 tax law changes - $13 million. The Company received the $13 million income tax refund in April 2002, however, there can be no assurance that the proceeds from the other transactions will be available to the Company in 2002. The Company's ongoing liquidity will depend upon a number of factors including its ability to manage cash resources and meet the financial covenants under its new debt agreements. In the event the Company is unsuccessful in meeting its debt service obligations or if expectations regarding the management and generation of cash resources are not met, the Company would need to implement severe cost reductions, reduce capital expenditures, sell additional assets, restructure all or a portion of its existing debt and/or obtain additional financing. Debt Restructuring: In April 2002, the Company entered into an agreement with its lenders to restructure its existing revolving credit facility and Senior Series Notes and waive violations of its financial covenants through March 30, 2002. The amendment changes debt maturity and principal payment schedules; provides for all unencumbered assets to be pledged as collateral equally to the lenders; increases the cost of funds; and requires the Company to meet certain additional financial conditions, among other items. The amended agreements also contain restrictions on acquisitions and the payment of preferred stock dividends. 26 The Company's existing $125 million Revolving Credit facility was restructured into a $107 million term loan (Bank Term Loan) and an $18 million revolving credit facility (Bank Line of Credit). The Bank Term Loan and Bank Line of Credit both mature on March 30, 2004 and are secured by all of the unencumbered assets of the Company. The $107 million Bank Term Loan, of which approximately $29 million consists of outstanding letters of credit, requires monthly payments of principal of $3.0 million per annum in 2002, $13.8 million per annum in 2003, and $3.4 million per annum in 2004, with the balance due March 30, 2004. In addition, principal payments will be made from excess cash flow, as defined in the agreement, on a quarterly basis. Any such additional payments will reduce the balance of the Bank Term Loan due March 30, 2004. Interest on the $107 million Bank Term Loan is variable based upon the adjusted London Interbank Offered Rate ("LIBOR") plus 380 basis points and is payable monthly. Interest on the borrowings under the $18 million Bank Line of Credit is based upon adjusted LIBOR plus 355 basis points or the agent bank's alternative borrowing rate as defined in the agreement. As of December 31, 2001, the Company had $192 million of Senior Series Notes outstanding which originally matured in 2002 through 2008. As part of the restructuring, the original maturity dates for $72 million of Senior Series Notes, payable in 2002 through March 2004, have been extended to March 30, 2004. The maturity dates for the other $120 million of Senior Series Notes due subsequent to March 30, 2004, remain unchanged. As consideration for the extension of the maturity dates the Senior Series Notes are now secured by all of the unencumbered assets of the Company. In addition, monthly principal payments totaling $7.5 million in 2002, $33.8 million in 2003 and $8.4 million in 2004 will be made on a prorata basis to all Senior Series Notes. In addition, principal payments will be made from excess cash flow, as defined in the agreement, on a quarterly basis. Interest on the Senior Series Notes, which is payable monthly, increased by 325 basis points, effective April 2002, and ranges from 9.66% to 11.29%. In December 2000, the Company entered into a sale and leaseback facility with an independent financial institution related to its trailer rental fleet. The total facility size was $110 million and was syndicated in the first quarter of 2001. The facility's initial term expires in June 2002, has four annual renewal periods and contains financial covenants substantially identical to the Company's existing credit facilities. In April 2002, the Company entered into an agreement with the financial institutions that were a party to the sale and leaseback facility to waive financial covenant violations through March 30, 2002 and amend the terms of the existing agreement. The amendment provided for increased pricing and conforms the financial covenants to those in the amended Bank Term Loan, Bank Line of Credit and Senior Series Notes agreements described above. The initial term of the facility remains unchanged, expiring in June 2002, however, the annual renewal periods have been reduced to three, with the last renewal period being from July 2004 to January 2005. As a result of the amendments to the sale-leaseback facility, which had been accounted for as an operating lease, this facility was required to be included on the Consolidated Balance Sheet of the Company as of December 31, 2001. Accordingly, the trailer rental fleet has been recorded as equipment leased to others at its fair market value of approximately $42 million and a capital lease obligation of approximately $65 million, which reflects the unamortized lease value under this agreement. A non-cash charge to cost of sales of $23 million was recorded in the Consolidated Statements of Operations for the year ended December 31, 2001 related to the difference between the fair market values of the equipment and the unamortized lease value. Assuming all renewal periods are elected, the Company will make payments under this facility of $14.7 million, $14.2 million and $13.3 million in 2002, 2003 and 2004, respectively. In April 2002, the Company replaced its existing $100 million receivable securitization facility with a new two year $110 million Trade Receivables Facility. The new facility allows the Company to sell, without recourse, on an ongoing basis predominantly all of its domestic accounts receivable to a wholly-owned, bankruptcy remote special purpose entity (SPE). The SPE sells an undivided interest in receivables to an outside liquidity provider who, in turn, remits cash back to the SPE for receivables eligible for funding. This new facility includes financial covenants identical to those in the amended Bank Term Loan, Bank Line of Credit and Senior Series Notes agreements. The Company anticipates total fees to be incurred in 2002 in connection with restructuring its Bank Term Loan, Bank Line of Credit, Senior Series Notes, rental fleet facility and Trade Receivables Facility, discussed above, to be approximately $10 million. 27 The Company has future residual guarantees and purchase options of approximately $34.7 million and $104.5 million, respectively, related to certain new and used trailer transactions as well as certain production equipment. The majority of these do not come due until 2002 or after. To the extent that the value of the underlying property is less than the residual guarantee and it is likely that the value is not expected to recover, the Company has recorded a loss contingency. Contractual Obligations and Commercial Commitments: A summary of payments due by period of the Company's contractual obligations and commercial commitments as of December 31, 2001 is shown in the table below. The table reflects the obligations under the amended and restated credit agreement which was effective April 2002. A more complete description of these obligations and commitments is included in the Notes to the Consolidated Financial Statements. Contractual Cash Obligations
$ Millions 2002 2003 2004 2005 Thereafter Total - --------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- DEBT (excluding interest): Revolving Bank Line of Credit $ 14.6 $ -- $ -- $ -- $ -- $ 14.6 Receivable Securitization Facility* 17.7 -- -- -- -- 17.7 Mortgages & Other Notes Payable 17.9 3.4 3.4 4.1 6.6 35.4 Bank Term Loan 3.0 13.8 58.2 -- -- 75.0 Senior Series Notes 7.5 33.8 68.8 20.7 61.2 192.0 ---------- ---------- ---------- ---------- ---------- ---------- TOTAL DEBT $ 60.7 $ 51.0 $ 130.4 $ 24.8 $ 67.8 $ 334.7 ========== ========== ========== ========== ========== ========== OTHER: Capital Lease Obligations $ 27.2 $ 14.2 $ 13.3 $ 36.8 $ -- $ 91.5 Operating Leases 12.2 11.0 9.3 5.5 4.2 42.2 ---------- ---------- ---------- ---------- ---------- ---------- TOTAL OTHER $ 39.4 $ 25.2 $ 22.6 $ 42.3 $ 4.2 $ 133.7 ========== ========== ========== ========== ========== ========== TOTAL $ 100.1 $ 76.2 $ 153.0 $ 67.1 $ 72.0 $ 468.4 ========== ========== ========== ========== ========== ==========
*The Receivable Securitization Facility obligation reflects advances as of December 31, 2001 which will be refinanced under the new Trade Receivable Facility. Other Commercial Commitments
$ Millions 2002 2003 2004 2005 Thereafter Total - --------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- Letters of credit $ -- $ -- $ 29.0 $ -- $ -- $ 29.0 Residual guarantees 1.9 3.6 8.3 5.3 15.6 34.7 ---------- ---------- ---------- ---------- ---------- ---------- TOTAL $ 1.9 $ 3.6 $ 37.3 $ 37.3 $ 15.6 $ 63.7 ========== ========== ========== ========== ========== ==========
Explanation of Cash Flow The Company's cash position increased $6.9 million during 2001 from $4.2 million in cash and cash equivalents at December 31, 2000 to $11.1 million at December 31, 2001. This increase was due to cash provided by financing activities of $41.3 million partially offset by cash used in operating and investing activities of $34.4 million. Operating Activities: Net cash provided by operating activities of $6.4 million in 2001 is primarily the result of the net loss offset by changes in working capital along with the add back of non-cash charges for depreciation and amortization; restructuring and other related charges; provision for losses on accounts receivable; and inventory and contingency adjustments. 28 Changes in working capital provided $57.4 million of net cash. This resulted from a reduction in inventory that was partially offset by a corresponding decrease in accounts payable and accrued liabilities. In addition, refundable income taxes increased during the year. The net decrease in inventory was primarily due to overall lower levels of production resulting from reduced demand from customers as the transportation industry continued to be adversely impacted by unfavorable economic conditions. The Company reduced all components of manufacturing inventory and aftermarket parts during the year. Used trailer inventory balances, excluding the effects of non-cash valuation charges remained comparable to the prior year. Accounts payable decreased $47.6 million primarily due to the lower levels of production and an emphasis by management on cost containment. Refundable income taxes increased $20.1 million as the Company recorded a receivable for income taxes paid in previous years due to the utilization of a net operating loss carryback. Accrued liabilities increased approximately $13.2 million due in part to increase in warranty accruals. Investing Activities: Net cash used in investing activities of $40.8 million consisted of the following: Capital expenditures were $5.9 million during 2001 and were largely related to maintaining facilities. The Company invested approximately $70.4 million, net in its rental and operating lease portfolio in 2001 compared to $69.6 million in 2000. The increase in the Company's rental and operating lease portfolio primarily reflects the Company's strategy to expand its used trailer rental program and is offset somewhat by $40.0 million of proceeds from a sale and leaseback facility related to the Company's trailer rental facility and $9.7 million in proceeds received during the normal course of business. The Company's finance contract portfolio remained virtually unchanged. Additional investments in finance contracts of $18.7 million were partially offset by payments received of $6.8 million and the sale of approximately $10.8 million of contracts sold primarily to a large financial institution. In January 2001, the Company acquired the stock of the Breadner Group of Companies (the Breadner Group), headquartered in Kitchener, Ontario, Canada for approximately $6.3 million in cash, $10.0 million in long-term notes and the assumption of certain indebtedness. This transaction was accounted for as a purchase. The purchase price in excess of the fair value of assets purchased and liabilities assumed of approximately $13 million as been recorded as goodwill and is being amortized over a twenty-five year period. Financing Activities: Net cash provided by financing activities of $41.3 million in 2001 is primarily due to an increase in total debt of $46.0 million offset partially by the payment of common stock and preferred stock dividends of approximately $4.9 million. In connection with the aforementioned activity, the Company's total debt increased to $334.7 million at December 31, 2001 compared to $238.3 million at December 31, 2000. This increase is comprised of net increases in short-term borrowings under the Company's revolving credit facilities of $46.0 million, and non-cash transactions of approximately $18.9 million related to the acquisition of Breadner and approximately $31.5 million of indebtedness reflected in the current year which was previously accounted for as off-balance sheet financing. 29 INFLATION The Company has been generally able to offset the impact of rising costs through productivity improvements as well as selective price increases. As a result, inflation is not expected to have a significant impact on the Company's business. NEW ACCOUNTING PRONOUNCEMENTS The Company adopted SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities as amended by SFAS 137 and SFAS 138, as of January 1, 2001. These standards require that all derivative instruments be recorded on the balance sheet at fair value. The adoption of these standards did not have an effect on the Company's annual results of operations or its financial position. The Company adopted SFAS No. 142. Goodwill and Other Intangible Assets, as of January 1, 2002. This new standard changes the accounting for goodwill from an amortization method to an impairment-only approach, and introduces a new model for determining impairment charges. SFAS No. 142 requires completion of the initial step of a transitional impairment test within six months of the adoption of this standard and, if applicable, completion of the final step of the adoption by December 31, 2002. The Company is in the initial stages of evaluating the transitional impairment test and related impact, if any, to the Company's results of operations and financial position. Goodwill amortization expense was approximately $1.1 million, $0.6 million and $0.2 million, for 2001, 2000 and 1999, respectively. In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, Accounting for Asset Retirement Obligations with an effective date of June 15, 2002 which becomes effective for the Company on January 1, 2003. This Standard requires obligations associated with retirement of long-lived assets to be capitalized as part of the carrying value of the related asset. The Company does not believe the adoption of SFAS No. 143 will have a material effect on its financial statements. In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Effective January 1, 2002, this standard sets forth a single accounting model for the accounting and reporting for the impairment or disposal of long-lived assets. The Company is currently evaluating the provisions of SFAS No. 144 to determine the effect, if any, on its consolidated financial statements. ITEM 7A--QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In addition to the risks inherent in its operations, the Company has exposure to financial and market risk resulting from volatility in commodity prices, interest rates and foreign exchange rates. The following discussion provides additional detail regarding the Company's exposure to these risks. a. Commodity Price Risks The Company is exposed to fluctuation in commodity prices through the purchase of raw materials that are processed from commodities such as aluminum, steel, wood and virgin plastic pellets. Given the historical volatility of certain commodity prices, this exposure can significantly impact product costs. The Company manages aluminum and virgin plastic pellets price changes by entering into fixed price contracts with its suppliers prior to a customer sales order being finalized. Because the Company typically does not set prices for its products in advance of its commodity purchases, it can take into account the cost of the commodity in setting its prices for each order. To the extent that the Company is unable to offset the increased commodity costs in its product prices, the Company's results would be materially and adversely affected. b. Interest Rates As of December 31, 2001, the Company had approximately $75 million of London Interbank Rate (LIBOR) based debt outstanding under its Bank Line of Credit, $14.6 million of outstanding borrowings under its Canadian Revolving Line of Credit and $17.7 million of proceeds from its accounts receivable securitization facility, which also requires LIBOR based interest payments. A hypothetical approximately 1.0 million increase in interest expense over a one-year period. This sensitivity analysis does not account for the change 30 in the Company's competitive environment indirectly related to the change in interest rates and the potential managerial action taken in response to these changes. c. Foreign Exchange Rates The Company has historically entered into foreign currency forward contracts (principally against the German Deutschemark and French Franc) to hedge the net receivable/payable position arising from trade sales (including lease revenues) and purchases with regard to the Company's international activities. The Company does not hold or issue derivative financial instruments for speculative purposes. As of December 31, 2001, the Company had no foreign currency forward contracts outstanding. 31 ITEM 8--FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PAGES ----- Report of Independent Public Accountants...................................................... 33 Consolidated Balance Sheets as of December 31, 2001 and 2000.................................. 34 Consolidated Statements of Operations for the years ended December 31, 2001, 2000 and 1999.................................................................................... 35 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2001, 2000 and 1999........................................................................... 36 Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999.................................................................................... 37 Notes to Consolidated Financial Statements.................................................... 38
32 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders of Wabash National Corporation: We have audited the accompanying consolidated balance sheets of WABASH NATIONAL CORPORATION (a Delaware corporation) and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Wabash National Corporation and subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. ARTHUR ANDERSEN LLP Indianapolis, Indiana, April 12, 2002. 33 WABASH NATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)
December 31, ------------------------ ASSETS 2001 2000 --------- --------- CURRENT ASSETS: Cash and cash equivalents ................................. $ 11,135 $ 4,194 Accounts receivable, net .................................. 58,358 49,320 Current portion of finance contracts ...................... 10,646 11,544 Inventories ............................................... 191,094 330,326 Refundable income taxes ................................... 25,673 5,552 Prepaid expenses and other ................................ 17,231 18,478 --------- --------- Total current assets ........................... 314,137 419,414 --------- --------- PROPERTY, PLANT AND EQUIPMENT, net ................................. 170,330 216,901 --------- --------- EQUIPMENT LEASED TO OTHERS, net .................................... 109,265 52,001 --------- --------- FINANCE CONTRACTS, net of current portion .......................... 40,187 44,906 --------- --------- INTANGIBLE ASSETS, net ............................................. 43,777 31,123 --------- --------- OTHER ASSETS ....................................................... 14,808 17,269 --------- --------- $ 692,504 $ 781,614 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt ...................... $ 60,682 $ 12,134 Current maturities of capital lease obligations ........... 21,559 -- Accounts payable .......................................... 51,351 94,118 Accrued liabilities ....................................... 69,246 42,440 --------- --------- Total current liabilities ...................... 202,838 148,692 --------- --------- LONG-TERM DEBT, net of current maturities .......................... 274,021 226,126 --------- --------- LONG-TERM CAPITAL LEASE OBLIGATIONS, net of current maturities ..... 55,755 -- --------- --------- DEFERRED INCOME TAXES .............................................. -- 23,644 --------- --------- OTHER NONCURRENT LIABILITIES AND CONTINGENCIES ..................... 28,905 15,919 --------- --------- STOCKHOLDERS' EQUITY: Preferred stock, 482,041 shares issued and outstanding with an aggregate liquidation value of $30,600 ............ 5 5 Common stock, 23,013,847 and 23,002,490 shares issued and outstanding, respectively ........................ 230 230 Additional paid-in capital ................................ 236,804 236,660 Retained earnings (deficit) ............................... (104,469) 131,617 Accumulated other comprehensive loss ...................... (306) -- Treasury stock at cost, 59,600 common shares .............. (1,279) (1,279) --------- --------- Total stockholders' equity ..................... 130,985 367,233 --------- --------- $ 692,504 $ 781,614 ========= =========
The accompanying notes are an integral part of these Consolidated Statements. 34 WABASH NATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Years Ended December 31, ------------------------------------------- 2001 2000 1999 --------- ----------- ----------- NET SALES ........................................... $ 863,392 $ 1,332,172 $ 1,454,570 COST OF SALES ....................................... 982,605 1,216,205 1,322,852 --------- ----------- ----------- Gross profit (loss) .................. (119,213) 115,967 131,718 GENERAL AND ADMINISTRATIVE EXPENSES ................. 56,955 34,354 30,396 SELLING EXPENSES .................................... 25,370 21,520 20,400 RESTRUCTURING CHARGE ................................ 37,864 36,338 -- --------- ----------- ----------- Income (loss) from operations ........ (239,402) 23,755 80,922 OTHER INCOME (EXPENSE): Interest expense ........................... (21,292) (19,740) (12,695) Accounts receivable securitization costs ... (2,228) (7,060) (5,804) Equity in losses of unconsolidated affiliate (7,668) (3,050) (4,000) Restructuring charges ...................... (1,590) (5,832) -- Foreign exchange losses, net ............... (1,706) -- -- Other, net ................................. (1,139) 877 6,310 --------- ----------- ----------- Income (loss) before income taxes .... (275,025) (11,050) 64,733 PROVISION (BENEFIT) FOR INCOME TAXES ................ (42,857) (4,314) 25,891 --------- ----------- ----------- Net income (loss) .................... $(232,168) $ (6,736) $ 38,842 PREFERRED STOCK DIVIDENDS ........................... 1,845 1,903 2,098 --------- ----------- ----------- NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ............................. $(234,013) $ (8,639) $ 36,744 ========= =========== =========== EARNINGS (LOSS) PER SHARE: Basic .................................... $ (10.17) $ (0.38) $ 1.60 ========= =========== =========== Diluted .................................. $ (10.17) $ (0.38) $ 1.59 ========= =========== ===========
The accompanying notes are an integral part of these Consolidated Statements. 35 WABASH NATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DOLLARS IN THOUSANDS)
Preferred Stock Common Stock ------------------- -------------------- Shares Amount Shares Amount ------ ------ ------ ------ BALANCES, December 31, 1998 ....... 482,041 $ 5 22,965,090 $ 230 Net income for the year ........... -- -- -- -- Cash dividends declared: Common stock ($0.1525 per share) -- -- -- -- Preferred stock ................ -- -- -- -- Common stock issued under: Employee stock purchase plan ... -- -- 10,556 -- Employee stock bonus plan ...... -- -- 4,400 -- Stock option plan .............. -- -- 5,140 -- ------- ---------- ---------- ---------- BALANCES, December 31, 1999 ....... 482,041 $ 5 22,985,186 $ 230 Net loss for the year ............. -- -- -- -- Cash dividends declared: Common stock ($0.16 per share) . -- -- -- -- Preferred stock ................ -- -- -- -- Common stock issued under: Employee stock purchase plan ... -- -- 15,544 -- Employee stock bonus plan ...... -- -- 1,760 -- ------- ---------- ---------- ---------- BALANCES, December 31, 2000 ....... 482,041 $ 5 23,002,490 $ 230 Net loss for the year ............. -- -- -- -- Foreign currency translation ...... -- -- -- -- Cash dividends declared: Common stock ($0.09 per share) . -- -- -- -- Preferred stock ................ -- -- -- -- Common stock issued under: Employee stock purchase plan ... -- -- 7,138 -- Employee stock bonus plan ...... -- -- 1,960 -- Outside directors' compensation -- -- 2,259 -- ------- ---------- ---------- ---------- BALANCES, December 31, 2001 ....... 482,041 $ 5 23,013,847 $ 230 ======= ========== ========== ==========
Additional Retained Other Paid-In Earnings Comprehensive Treasury Capital (Deficit) Income (Loss) Stock Total ------- --------- ------------- -------- ----- BALANCES, December 31, 1998 ....... $ 236,127 $ 110,693 $ -- $ (1,279) $ 345,776 Net income for the year ........... -- 38,842 -- -- 38,842 Cash dividends declared: Common stock ($0.1525 per share) -- (3,502) -- -- (3,502) Preferred stock ................ -- (2,098) -- -- (2,098) Common stock issued under: Employee stock purchase plan ... 177 -- -- -- 177 Employee stock bonus plan ...... 79 -- -- -- 79 Stock option plan .............. 91 -- -- -- 91 ---------- ---------- -------- ---------- ---------- BALANCES, December 31, 1999 ....... $ 236,474 $ 143,935 $ -- $ (1,279) $ 379,365 Net loss for the year ............. -- (6,736) -- -- (6,736) Cash dividends declared: Common stock ($0.16 per share) . -- (3,679) -- -- (3,679) Preferred stock ................ -- (1,903) -- -- (1,903) Common stock issued under: Employee stock purchase plan ... 158 -- -- -- 158 Employee stock bonus plan ...... 28 -- -- -- 28 ---------- ---------- -------- ---------- ---------- BALANCES, December 31, 2000 ....... $ 236,660 $ 131,617 $ -- $ (1,279) $ 367,233 Net loss for the year ............. -- (232,168) -- -- (232,168) Foreign currency translation ...... -- -- (306) -- (306) Cash dividends declared: Common stock ($0.09 per share) . -- (2,073) -- -- (2,073) Preferred stock ................ -- (1,845) -- -- (1,845) Common stock issued under: Employee stock purchase plan ... 70 -- -- -- 70 Employee stock bonus plan ...... 27 -- -- -- 27 Outside directors' compensation 47 -- -- -- 47 ---------- ---------- -------- ---------- ---------- BALANCES, December 31, 2001 ....... $ 236,804 $ (104,469) $ (306) $ (1,279) $ 130,985 ========== ========== ========== ========== ==========
The accompanying notes are an integral part of these Consolidated Statements. 36 WABASH NATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)
Years Ended December 31, ----------------------------------- 2001 2000 1999 --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) .......................................................... $(232,168) $ (6,736) $ 38,842 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization .......................................... 32,143 30,051 21,773 Net (gain) loss on the sale of assets .................................. (504) 1,474 (864) Provision for losses on accounts receivable ............................ 20,959 4,088 2,829 Deferred income taxes .................................................. (14,441) (8,906) (6,947) Equity in losses of unconsolidated affiliate ........................... 7,183 3,050 4,000 Restructuring and other related charges ................................ 41,067 46,650 -- Cash used in restructuring ............................................. (6,988) -- -- Used trailer valuation charges ......................................... 62,134 9,600 -- Loss contingencies and impairment of equipment leased to others . ...... 37,900 -- -- Change in operating assets and liabilities, excluding effects of the acquisitions Accounts receivable .................................................. 1,790 52,709 (18,810) Inventories .......................................................... 107,755 (74,479) (37,573) Refundable income taxes .............................................. (20,121) (5,552) -- Prepaid expenses and other ........................................... 3,863 5,368 8,607 Accounts payable and accrued liabilities ............................. (34,443) (69,880) 55,537 Other, net ........................................................... 261 (1,106) (3,924) --------- --------- --------- Net cash provided by (used in) operating activities ............ 6,390 (13,669) 63,470 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ..................................................... (5,899) (60,342) (68,119) Net additions to equipment leased to others .............................. (70,444) (69,553) (11,828) Net additions to finance contracts ....................................... (18,662) (19,400) (28,762) Investment in unconsolidated affiliate ................................... (7,183) (3,706) (3,580) Acquisitions, net of cash acquired ....................................... (6,336) -- (12,413) Proceeds from sale of leased equipment and finance contracts ............. 60,556 60,845 12,927 Principal payments received on finance contracts ......................... 6,787 12,914 10,246 Proceeds from the sale of property, plant and equipment .................. 426 9,638 7,236 --------- --------- --------- Net cash used in investing activities .......................... (40,755) (69,604) (94,293) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from: Short-term revolver ...................................................... 428,776 512,300 244,200 Long-term debt ........................................................... -- 62,500 -- Common stock, net of expenses ............................................ 144 186 347 Payments: Short-term revolver ...................................................... (361,006) (500,299) (242,200) Long-term debt ........................................................... (21,738) (4,122) (10,651) Common stock dividends ................................................... (2,991) (3,679) (3,446) Preferred dividends ...................................................... (1,879) (1,903) (2,065) --------- --------- --------- Net cash provided by (used in) financing activities ............ 41,306 64,983 (13,815) --------- --------- --------- NET (DECREASE) INCREASE IN CASH .............................................. 6,941 (18,290) (44,638) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD ..................... 4,194 22,484 67,122 --------- --------- --------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD ........................... $ 11,135 $ 4,194 $ 22,484 ========= ========= =========
The accompanying notes are an integral part of these Consolidated Statements. 37 WABASH NATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. DESCRIPTION OF THE BUSINESS, INDUSTRY AND FINANCIAL CONDITIONS Wabash National Corporation (the Company) designs, manufactures and markets standard and customized truck trailers and intermodal equipment under the Wabash(TM), Fruehauf(R) and RoadRailer(R) trademarks. The Company produces and sells aftermarket parts through its division, Wabash National Parts, and its wholly-owned subsidiary, North American Trailer Centers(TM) (NATC). In addition to aftermarket parts sales and service revenues, NATC sells new and used trailers through its retail network and provides maintenance service for the Company's and competitors' trailers and related equipment. On January 5, 2001 NATC acquired Canadian branch locations in connection with the Breadner acquisition. The Company's other significant wholly-owned subsidiaries include Apex Trailer Leasing and Rentals, L.P. and National Trailer Funding (the Finance Companies), Cloud Corporation (Wabash Wood Products) and Europaische Trailerzug Beteiligungsgessellschaft mbH (ETZ). The Finance Companies provide rental, leasing and finance programs to their customers for new and used trailers through the retail and distribution segment. Wabash Wood Products manufactures hardwood flooring primarily for the Company's manufacturing segment. ETZ is a European RoadRailer(R) operation based in Munich, Germany and was divested in January 2002. In 2001, the demand for new trailers in the United States declined substantially resulting in an industry decline of 48.3% in new trailer production from 270,817 units in 2000 to 140,084 units in 2001. This decline resulted from overall economic conditions in the US economy, which reduced the level of freight tonnage shipped in 2001, and ongoing challenges in the motor-carrier industry principally caused by high fuel prices and lower revenues per mile due to intense competition for shipments. The Company's market share declined slightly to 22.6% during 2001. The Company's backlog declined from $639.5 million as of December 31, 2000 to $142.1 million as of December 31, 2001. This significant reduction in demand along with historical manufacturing over-capacity in the truck trailer industry resulted in significant losses being reported by the industry as a whole. Further impacting the Company was a significant decline in the demand for used trailers caused by the general economic and industry conditions previously discussed and the Company's excess supply of used trailers. The Company's supply of used trailers comes from accepting trade-ins of used trailers from its customers upon the sale of new trailers. The excess supply of used trailers was further impacted by the Company's backlog of new trailer orders totaling $639.5 million at December 31, 2000, in which the Company had previously agreed upon the pricing terms for the new trailers and the trade-in allowance for the used trailers. This excess supply and decline in demand coupled with the Company's decision to liquidate used trailers during the second half of 2001 resulted in significant used trailer market value declines during 2001. In response to the matters discussed above, during 2001, the Company closed two of its manufacturing facilities and two of its sales and services branches. As a result of these items, the Company incurred significant restructuring, impairment and inventory valuation charges (See notes 2, 4, 9 and 10 for details). Also, in January 2002, the Company completed its divestiture of ETZ, the majority shareholder of BTZ, a European Roadrailer(R) operating company based in Munich, Germany which had yet to achieve profitable operating results. As a result of these conditions, the Company reported a loss from operations of $239.4 million for the year ended December 31, 2001, compared to income from operations of $23.8 million for the year ended December 31, 2000. The losses reported for 2001 resulted in the Company being in technical violation of its financial covenants with certain of its lenders at December 31, 2001. In April 2002, the Company entered into an agreement with its lenders to restructure its existing revolving bank line of credit, Senior Series Notes and Rental Fleet Facility and to waive violations of certain financial covenants through March 30, 2002. The restructuring changes debt maturity and principal payment schedules, provides for all unencumbered assets to be pledged as collateral, increases interest rates, and requires the Company to meet newly established financial covenants (See note 13 for details regarding the debt restructuring). While the Company believes that industry conditions are likely to persist throughout 2002, the Company believes it has significantly restructured its operations and, based on its projections, the Company anticipates generating positive earnings before interest, taxes, depreciation and amortization in 2002. Although the Company believes that the assumptions underlying the 2002 projections are reasonable, there are risks related to further declines in market demand and reduced sales in the U.S. and Canada, adverse interest rate or currency movements, realization of anticipated cost reductions and levels of used trailer trade- 38 ins that could cause actual results to differ from the projections. Should results continue to decline, the Company is prepared to take additional cost cutting actions. While there can be no assurance that the Company will achieve these results, the Company believes it has adequately modified its operations to be in compliance with its financial covenants throughout 2002 and believes that its existing sources of liquidity combined with its operating results will generate sufficient liquidity such that the Company has the ability to meet its obligations as they become due throughout 2002. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of Consolidation The consolidated financial statements reflect the accounts of the Company and its wholly-owned and majority-owned subsidiaries with the exception of ETZ since the control of this subsidiary was deemed to be temporary. Accordingly, ETZ's operating results are included in Equity in Losses of Unconsolidated Affiliate in the Consolidated Statements of Operations. All significant intercompany profits, transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior periods to conform to the current year presentation. These reclassifications had no effect on net income (loss) for the periods previously reported. b. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that directly affect the amounts reported in its consolidated financial statements and accompanying notes. Actual results could differ from these estimates. c. Foreign Currency Accounting The financial statements of the Company's Canadian subsidiary have been translated into U.S. dollars in accordance with FASB Statement No. 52, Foreign Currency Translation. Assets and liabilities have been translated using the exchange rate in effect at the balance sheet date. Revenues and expenses have been translated using a weighted-average exchange rate for the period. The resulting translation adjustments are recorded as other comprehensive income (loss) in stockholders' equity. Gains or losses resulting from foreign currency transactions are included in Other Income (Expense) on the Company's Consolidated Statements of Operations. The Company recorded foreign currency losses of $1.7 million in 2001 and $0 during 2000 and 1999. d. Revenue Recognition The Company recognizes revenue from the sale of trailers and aftermarket parts when risk of ownership is transferred to the customer. Revenue is generally recognized upon shipment. Customers that have requested to pick up their trailers are invoiced prior to taking physical possession when the customer has made a fixed commitment to purchase the trailers, the trailers have been completed and are available for pickup or delivery, the customer has requested in writing that the Company hold the trailers until the customer determines the most economical means of taking possession and the customer takes possession of the trailers within a specified time period. In such cases, the trailers, which have been produced to the customer specifications, are invoiced under the Company's normal billing and credit terms. The Company recognizes revenue from direct finance leases based upon a constant rate of return while revenue from operating leases is recognized on a straight-line basis in an amount equal to the invoiced rentals. The Company had one customer that represented 19.0% of net sales in 2001 and 11.4% of net sales in 2000. No other customer exceeded 10% of its net sales in 2001, 2000 and 1999. The Company's net sales in the aggregate to its five largest customers were 34.4%, 30.5% and 22.2% of its net sales in 2001, 2000 and 1999, respectively. 39 e. Used Trailer Trade Commitments The Company has commitments with customers to accept used trailers on trade for new trailer purchases. As of December 31, 2001, the Company had approximately $25.7 million of outstanding trade commitments with customers. The net realizable value of these commitments was approximately $18.0 million as of December 31, 2001. The Company's policy is to recognize losses related to these commitments, if any, at the time the new trailer revenue is recognized. f. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments, which are readily convertible into cash and have maturities of three months or less. g. Accounts Receivable Accounts receivable as shown in the accompanying Consolidated Balance Sheets are net of allowance for doubtful accounts. Accounts receivable includes trade receivables and amounts due under finance contracts. Provisions to the allowance for doubtful accounts are charged to General and Administrative expenses on the Consolidated Statements of Operations. The activity in the allowance for doubtful accounts was as follows (in thousands):
Years Ended December 31, ------------------------------------------------------ 2001 2000 1999 ---------- ---------- ----------- Balance at Beginning of Year $ 3,745 $2,930 $2,251 Provision 20,959 4,088 2,829 Write-offs, net (10,223) (3,273) (2,150) -------- ------ ------ Balance at End of Year $ 14,481 $3,745 $2,930 ======== ====== ======
h. Inventories Inventories are primarily stated at the lower of cost, determined on the first-in, first-out (FIFO) method, or market. The cost of manufactured inventory includes raw material, labor and overhead. Inventories consist of the following (in thousands):
December 31, -------------------------- 2001 2000 -------- -------- Raw materials and components ............... $ 38,235 $ 84,167 Work in progress ........................... 10,229 18,765 Finished goods ............................. 58,984 93,332 Aftermarket parts .......................... 22,726 33,566 Used trailers .............................. 60,920 100,496 -------- -------- $191,094 $330,326 ======== ========
The Company recorded used trailer inventory valuation adjustments totaling $62.1 million and $9.6 million during 2001 and 2000, respectively. These adjustments, which are reflected in cost of sales on the Consolidated Statements of Operations, were calculated in accordance with the Company's inventory valuation policies that are designed to state used trailers at the lower of cost or market. 40 i. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Maintenance and repairs are charged to expense as incurred, and expenditures that extend the useful life of the asset are capitalized. Depreciation is recorded using the straight-line method over the estimated useful lives of the depreciable assets. Estimated useful lives are 331/3 years for buildings and building improvements and range from 3 to 10 years for machinery and equipment. Property, plant and equipment consist of the following (in thousands):
December 31, -------------------------- 2001 2000 --------- --------- Land ......................................... $ 27,907 $ 29,314 Buildings and building improvements .......... 92,987 109,596 Machinery and equipment ...................... 122,981 123,989 Construction in progress ..................... 817 18,587 --------- --------- 244,692 281,486 Less--Accumulated depreciation ............... (74,362) (64,585) --------- --------- $ 170,330 $ 216,901 ========= =========
j. Equipment Leased to Others Equipment leased to others at December 31, 2001 and December 31, 2000 was $109.3 million and $52.0 million, net of accumulated depreciation of $9.4 million and $11.4 million, respectively. Additions to Equipment leased to others is classified in investing activities on the Consolidated Statements of Cash Flows. The equipment leased to others is depreciated over the estimated life of the equipment or the term of the underlying lease arrangement, not to exceed 15 years, with a 20% residual value or a residual value equal to the estimated market value of the equipment at lease termination. Depreciation expense on equipment leased to others was $9.6 million, $10.9 million and $7.5 million for 2001, 2000 and 1999, respectively. k. Intangible Assets Intangible assets, of $43.8 million and $31.1 million net of accumulated amortization of $15.1 million and $12.2 million at December 31, 2001 and December 31, 2000, respectively, primarily consist of goodwill and other intangible assets associated with recent acquisitions. The Company has amortized goodwill on a straight-line basis over periods ranging from 25 to 40 years and all other intangible assets over periods ranging from 3 to 20 years. See New Accounting Pronouncements below for a discussion of what impact the adoption of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, will have on the Company's consolidated financial statements. l. Capitalized Software The Company capitalizes the cost of computer software developed or obtained for internal use in accordance with statement of Position No. 98-1, Accounting for the Costs of Computer Software Development or Obtained for Internal Use. Software costs capitalized, net of accumulated amortization, were $6.3 million and $8.1 million as of December 31, 2001 and December 31, 2000, respectively, and are included in other assets on the Consolidated Balance Sheets. Capitalized software is amortized using the straight-line method over 3 to 5 years. m. Long-Lived Assets Long-lived assets are reviewed for impairment in accordance with Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, whenever facts and circumstances indicate that the carrying amount may not be recoverable. Specifically, this process involves comparing an asset's carrying value to the estimated undiscounted future cash flows the asset is expected to generate over its remaining life. If this process were to result in the conclusion that the carrying value of a long-lived asset would not be recoverable, a write-down of the asset to fair value would be recorded through a charge to operations. 41 n. Accrued Liabilities Accrued liabilities primarily represent accrued payroll related items, restructuring reserves, warranty reserves, loss contingencies related to used trailer residual commitments and self insurance reserves related to group insurance and workers compensation. Changes in the estimates of these reserves are charged or credited to income in the period determined. The Company is self-insured up to specified limits for medical and workers' compensation coverage. The self-insurance reserves have been recorded to reflect the undiscounted estimated liabilities, including claims incurred but not reported. The Company recognizes a loss contingency for used trailer residual commitments for the difference between the equipment's purchase price and its fair market value, when it becomes probable that the purchase price at the guarantee date will exceed the equipment's fair market value at that date. The Company's warranty policy generally provides coverage for components of the trailer the Company produces or assembles. Typically, the coverage period is one year for container chassis and specialty trailers and five years for dry freight, refrigerated and flat bed trailers. The Company's policy is to accrue the estimated cost of warranty coverage at the time of the sale. The warranty reserve at December 31, 2001 and 2000 was approximately $11.3 million and $5.2 million, respectively. o. Income Taxes The Company determines its provision or benefit for income taxes under the asset and liability method. The asset and liability method measures the expected tax impact at current enacted rates of future taxable income or deductions resulting from differences in the tax and financial reporting bases of assets and liabilities reflected in the Consolidated Balance Sheets. Future tax benefits of tax losses and credit carryforwards are recognized as deferred tax assets. Deferred tax assets are reduced by a valuation allowance to the extent the Company concludes there is uncertainty as to their realization. p. Comprehensive Income (loss) Comprehensive income (loss) for the Company includes net income (loss) and foreign currency translation adjustments. The Company's net income (loss) and total comprehensive income (loss) were $(232.2) million and $(232.5) million, respectively for 2001. Net income (loss) and comprehensive income (loss) were equal in 2000 and 1999. q. New Accounting Pronouncements The Company adopted SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities as amended by SFAS 137 and SFAS 138, as of January 1, 2001. These standards require that all derivative instruments be recorded on the balance sheet at fair value. The adoption of these standards did not have an effect on the Company's annual results of operations or its financial position. The Company adopted SFAS No. 142. Goodwill and Other Intangible Assets, as of January 1, 2002. This new standard changes the accounting for goodwill from an amortization method to an impairment-only approach, and introduces a new model for determining impairment charges. SFAS No. 142 requires completion of the initial step of a transitional impairment test within six months of the adoption of this standard and, if applicable, completion of the final step of the adoption by December 31, 2002. The Company is in the initial stages of evaluating the transitional impairment test and related impact, if any, to the Company's results of operations and financial position. Goodwill amortization expense was approximately $1.1 million, $0.6 million and $0.2 million, for 2001, 2000 and 1999, respectively. In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, Accounting for Asset Retirement Obligations with an effective date of June 15, 2002 which becomes effective for the Company on January 1, 2003. This standard requires obligations associated with retirement of long-lived assets to be capitalized as part of the carrying value of the related asset. The Company does not believe the adoption of SFAS No. 143 will have a material effect on its financial statements. 42 In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Effective January 1, 2002, this standard sets forth a single accounting model for the accounting and reporting for the impairment or disposal of long-lived assets. The Company is currently evaluating the provisions of SFAS No. 144 to determine the effect, if any, on its consolidated financial statements. 3. FAIR VALUE OF FINANCIAL INSTRUMENTS SFAS No. 107 Disclosures About Fair Value of Financial Instruments, requires disclosure of fair value information for certain financial instruments. The differences between the carrying amounts and the estimated fair values, using the methods and assumptions listed below, of the Company's financial instruments at December 31, 2001, and 2000 were immaterial. Cash and Cash Equivalents, Accounts Receivable and Accounts Payable. The carrying amounts reported in the Consolidated Balance Sheets approximate fair value. Long-Term Debt and Capital Lease Obligations. The fair value of long-term debt and capital lease obligations, including the current portion, is estimated based on current quoted market prices for similar issues or debt with the same maturities. The interest rates on the Company's bank borrowings under its long-term revolving bank line of credit agreement are adjusted regularly to reflect current market rates. The carrying values of the Company's long-term borrowings approximate fair value. 4. RESTRUCTURING AND OTHER RELATED CHARGES a. 2001 Restructuring Plan During the third quarter of 2001, the Company recorded restructuring and other related charges totaling $40.5 million primarily related to the rationalization of the Company's manufacturing capacity resulting in the closure of the Company's platform trailer manufacturing facility in Huntsville, Tennessee, and its dry van facility in Fort Madison, Iowa. In addition, the Company closed a parts distribution facility in Montebello, California. Included in the $40.5 million restructuring charge is the write-down of certain impaired fixed assets to their fair market value ($33.8 million charge), accrued severance benefits for approximately 600 employees ($0.9 million) and plant closure and other costs ($2.1 million). In addition, a $3.7 million charge is included in cost of sales related to inventory write-downs at the closed facilities. During the fourth quarter of 2001, the Company reduced its plant closure reserve by approximately $0.9 million as a result of the Company's ability to effectively control its closure costs. This reduction is reflected in non-cash utilization below. The Company's impairment charge reflects the write-down of certain long-lived assets that became impaired as a result of management's decision to close its operations at the two manufacturing plants discussed above. The impairment was computed in accordance with the provisions of SFAS 121. The estimated fair market value of the impaired assets totaled $6.7 million and was determined by management based upon economic conditions, potential alternative uses and potential markets for the assets which are held for sale and, accordingly, are classified in prepaid expenses and other in the accompanying Consolidated Balance Sheets. Depreciation has been discontinued on the assets held for sale pending their disposal. Details of the restructuring charges and reserve for the 2001 Restructuring Plan are as follows (in thousands):
Utilized Original --------------------- Balance Provision Cash Non-cash 12/31/01 --------- -------- -------- -------- Restructuring Costs: Impairment of long-term assets $ 33,842 $ -- $(33,842) $ -- Plant closure costs 1,763 (613) (850) 300 Severance benefits 912 (912) -- -- Other 305 (105) -- 200 -------- -------- -------- -------- $ 36,822 $ (1,630) $(34,692) $ 500 ======== ======== ======== ======== Inventory write-down $ 3,714 $ -- $ (3,714) $ -- -------- -------- -------- -------- Total restructuring & other related charges $ 40,536 $ (1,630) $(38,406) $ 500 ======== ======== ======== ========
43 b. 2000 Restructuring Plan In December 2000, the Company recorded restructuring and other related charges totaling $46.6 million primarily related to the Company's exit from manufacturing products for export outside the North American market, international leasing and financing activities and the consolidation of certain domestic operations. Included in this total is $40.8 million that has been included as a component in computing income from operations. Specifically, $19.1 million of this amount represented the impairment of certain equipment subject to leases with the Company's international customers, $8.6 million represented losses recognized for various financial guarantees related to international financing activities, and $6.9 million was recorded for the write-down of other assets as well as charges associated with the consolidation of certain domestic operations including severance benefits of $0.2 million. Also included in the $40.8 million is a $4.5 million charge for inventory write-downs related to the restructuring actions which is included in cost of sales. The Company has recorded $5.8 million as a restructuring charge in Other Income (Expense) representing the write-off of the Company's remaining equity interest in ETZ for a decline in fair value that is deemed to be other than temporary. The total impairment charge recognized by the Company as a result of its restructuring activities was $26.7 million. This amount was computed in accordance with the provisions of SFAS 121. The estimated fair value of the impaired assets totaled $3.4 million and was determined by management based upon economic conditions and potential alternative uses and markets for the equipment. In January 2002, the Company completed its divestiture of ETZ. As a result of this divestiture the Company adjusted its restructuring reserve by $1.4 million during the fourth quarter. This adjustment primarily relates to the assumption of certain financial guarantees in connection with the divestiture. Details of the restructuring charges and reserve for the 2000 Restructuring Plan are as follows (in thousands):
Utilized Original Additional ------------------------- Balance Provision Provision 2000(1) 2001(1) 12/31/01 --------- ---------- -------- -------- -------- Restructuring of majority-owned operations: Impairment of long-term assets $ 20,819 $ -- $(20,819) $ -- $ -- Loss related to equipment guarantees 8,592 -- -- (3,394) 5,198 Write-down of other assets & other charges 6,927 -- (4,187) (1,381) 1,359 -------- -------- -------- -------- -------- $ 36,338 $ -- $(25,006) $ (4,775) $ 6,557 -------- -------- -------- -------- -------- Restructuring of minority interest operations: Impairment of long-term assets $ 5,832 $ -- $ (5,832) $ -- $ -- Financial Guarantees $ -- $ 1,381 $ -- $ -- $ 1,381 Inventory write-down and other charges $ 4,480 $ -- $ (3,897) $ (583) $ -- -------- -------- -------- -------- -------- Total restructuring and other related charges $ 46,650 $ 1,381 $(34,735) $ (5,358) $ 7,938 ======== ======== ======== ======== ========
(1) The amounts utilized in 2000 were all non-cash related while the amounts utilized in 2001 represented the cash elements of the restructuring charge. The Company's total restructuring reserves were $8.4 million and $11.9 million at December 31, 2001 and 2000, respectively. These reserves are included in accrued liabilities in the accompanying Consolidated Balance Sheets. The Company anticipates that these reserves will be adequate to cover the remaining charges to be incurred in 2002. 5. ACQUISITIONS AND DIVESTITURE a. Acquisitions On January 5, 2001, the Company acquired the Breadner Group of Companies (the Breadner Group) in a stock purchase agreement (the Breadner Acquisition). The Breadner Group is headquartered in Kitchener, Ontario, Canada and has ten branch locations in six Canadian Provinces. The Breadner Group is the leading Canadian distributor of new trailers as well as a provider of new trailer services and aftermarket parts. The Breadner Group had revenues and income from operations of approximately $135 million and $2.3 million (US Dollars), respectively for its fiscal year ended September 30, 2000 and employs approximately 130 associates. For financial statement purposes, the Breadner Acquisition was accounted for as a purchase, and accordingly, the Breadner Group's assets and liabilities were recorded at fair value. The Breadner Group's operating results are included in the Consolidated Financial Statements since the date of 44 acquisition. The aggregate consideration for this transaction included approximately $6.3 million in cash and $10.0 million in a long-term note and the assumption of certain liabilities. The long-term note has an annual interest rate of 7.25% and scheduled principal payments are due quarterly April 2001 through January 2006. The excess of the purchase price over the underlying assets acquired was approximately $13.0 million and is being amortized on a straight-line basis over twenty-five years. On December 1, 1999, the Company acquired Apex Trailer Service, Inc., Apex Trailer and Truck Equipment Sales, Inc. and Apex Rentals, Inc. (the Apex Group) in a stock purchase agreement (the Apex Acquisition). For financial statement purposes, the Apex Acquisition was accounted for as a purchase, and accordingly, the Apex Group's assets and liabilities were recorded at fair value and the operating results are included in the consolidated financial statements since the date of acquisition. The Apex Group has four branch locations. These branches sell new and used trailers, aftermarket parts and provide service work. The aggregate consideration for this transaction included approximately $12.4 million in cash and the assumption of $11.3 million in liabilities. Included in the $11.3 million of assumed liabilities was $8.2 million of debt, of which the Company retired $6.8 million immediately following the acquisition using cash from operations. The excess of the purchase price over the underlying assets acquired was approximately $1.8 million and is being amortized on a straight line basis over twenty-five years. b. Divestiture On November 4, 1997, the Company purchased a 25.1% equity interest in Europaische Trailerzug Beteiligungsgessellschaft mbH (ETZ). ETZ is the majority shareholder of Bayerische Trailerzug Gesellschaft fur Bimodalen Guterverkehr mbH (BTZ), a European RoadRailer(R) operation based in Munich, Germany, which began operations in 1996 and has incurred operating losses since inception. The Company paid approximately $6.2 million for its ownership interest in ETZ during 1997 and made additional capital contributions of $7.2 million, $3.7 million and $3.6 million during 2001, 2000 and 1999, respectively. During 2001, 2000 and 1999, the Company recorded approximately $7.7 million, $3.1 million and $4.0 million, respectively, for its share of ETZ losses and the amortization of the premiums. Such amounts are recorded as Equity in losses of unconsolidated affiliate on the accompanying Consolidated Statements of Operations. In January 2001, in connection with its restructuring activities, the Company assumed the remaining ownership interest in ETZ from the majority shareholder with the intent to pursue an orderly divestiture of ETZ. Because control of this subsidiary was deemed to be temporary, 100% of ETZ's 2001 operating results have been recorded as Equity in Losses of Unconsolidated affiliate in the Consolidated Statements of Operations for 2001. In January 2002, the Company completed the divestiture of ETZ. 45 6. EARNINGS (LOSS) PER SHARE Earnings (loss) per share (EPS) are computed in accordance with SFAS No. 128, Earnings per Share. A reconciliation of the numerators and denominators of the basic and diluted EPS computations, as required by SFAS No. 128, is presented below. Neither stock options nor convertible preferred stock were included in the computation of diluted EPS for 2001 and 2000 since the inclusion of these items would have resulted in an antidilutive effect (in thousands except per share amounts):
Net Income (Loss) Weighted Available to Average Earnings (Loss) Common Shares Per Share --------- ------ --------- 2001 Basic $(234,013) 23,006 $ (10.17) Options -- -- Preferred Stock -- -- --------- ------ --------- Diluted $(234,013) 23,006 $ (10.17) ========= ====== ========= 2000 Basic $ (8,639) 22,990 $ (0.38) Options -- -- Preferred Stock -- -- --------- ------ --------- Diluted $ (8,639) 22,990 $ (0.38) ========= ====== ========= 1999 Basic $ 36,744 22,973 $ 1.60 Options -- 30 Preferred Stock (Series B only) 1,151 823 --------- ------ --------- Diluted $ 37,895 23,826 $ 1.59 ========= ====== =========
7. SEGMENTS AND RELATED INFORMATION a. Segment Reporting Under the provisions of SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, the Company has two reportable segments: manufacturing and retail and distribution. The manufacturing segment produces and sells new trailers to the retail and distribution segment or to customers who purchase trailers direct or through independent dealers. The retail and distribution segment includes the sale, leasing and financing of new and used trailers, as well as the sale of aftermarket parts and service through its retail branch network. In addition, the retail and distribution segment includes the sale of aftermarket parts through Wabash National Parts. 46 The accounting policies of the segments are the same as those described in the summary of significant accounting policies except that the Company evaluates segment performance based on income from operations. The Company has not allocated certain corporate related charges such as administrative costs, interest expense and income taxes from the manufacturing segment to the Company's other reportable segment. The Company accounts for intersegment sales and transfers at cost plus a specified mark-up. Reportable segment information is as follows (in thousands):
Retail and Combined Consolidated Manufacturing Distribution Segments Eliminations Totals -------------- ------------ ----------- ------------ ------------ 2001 Revenues External customers $ 518,212 $ 345,180 $ 863,392 $ -- $ 863,392 Intersegment sales 61,854 2,427 64,281 (64,281) -- ----------- ----------- ----------- ----------- ----------- Total Revenues $ 580,066 $ 347,607 $ 927,673 $ (64,281) $ 863,392 =========== =========== =========== =========== =========== Depreciation & amortization 18,191 13,952 32,143 -- 32,143 Restructuring charge from operations 37,493 371 37,864 -- 37,864 Income (Loss) from operations (148,727) (92,975) (241,702) 2,300 (239,402) Interest income 178 171 349 -- 349 Interest expense 20,235 1,057 21,292 -- 21,292 Equity in losses of unconsolidated affiliate 7,668 -- 7,668 -- 7,668 Restructuring charge included in other 1,590 -- 1,590 -- 1,590 Income tax (benefit) (42,038) (819) (42,857) -- (42,857) Investment in unconsolidated affiliate -- -- -- -- -- Capital expenditures 4,463 1,436 5,899 -- 5,899 Assets 710,683 389,263 1,099,946 (407,442) 692,504 2000 Revenues External customers $ 1,013,108 $ 319,064 $ 1,332,172 $ -- $ 1,332,172 Intersegment sales 83,796 1,141 84,937 (84,937) -- ----------- ----------- ----------- ----------- ----------- Total Revenues $ 1,096,904 $ 320,205 $ 1,417,109 $ (84,937) $ 1,332,172 =========== =========== =========== =========== =========== Depreciation & amortization 16,390 13,661 30,051 -- 30,051 Restructuring charge from operations 22,771 13,567 36,338 -- 36,338 Income (Loss) from operations 36,897 (10,926) 25,971 (2,216) 23,755 Interest income 340 174 514 -- 514 Interest expense 18,632 1,108 19,740 -- 19,740 Equity in losses of unconsolidated affiliate 3,050 -- 3,050 -- 3,050 Restructuring charge included in other 5,832 -- 5,832 -- 5,832 Income tax (benefit) (4,314) -- (4,314) -- (4,314) Investment in unconsolidated affiliate -- -- -- -- -- Capital expenditures 48,712 11,630 60,342 -- 60,342 Assets 846,740 407,915 1,254,655 (473,041) 781,614 1999 Revenues External customers $ 1,113,872 $ 340,698 $ 1,454,570 $ -- $ 1,454,570 Intersegment sales 92,537 640 93,177 (93,177) -- ----------- ----------- ----------- ----------- ----------- Total Revenues $ 1,206,409 $ 341,338 $ 1,547,747 $ (93,177) $ 1,454,570 =========== =========== =========== =========== =========== Depreciation & amortization 13,332 8,441 21,773 -- 21,773 Restructuring charge from operations -- -- -- -- -- Income (Loss) from operations 71,976 11,127 83,103 (2,181) 80,922 Interest income 820 -- 820 -- 820 Interest expense 12,163 532 12,695 -- 12,695 Equity in losses of unconsolidated affiliate 4,000 -- 4,000 -- 4,000 Restructuring charge included in other -- -- -- -- -- Income tax expense 25,891 -- 25,891 -- 25,891 Investment in unconsolidated affiliate 5,176 -- 5,176 -- 5,176 Capital expenditures 54,945 13,174 68,119 -- 68,119 Assets 768,017 355,890 1,123,907 (332,616) 791,291
b. Geographic Information International sales accounted for approximately 9.2%, 3.1% and 2.0% of net sales during 2001, 2000 and 1999, respectively. These sales consisted primarily of new trailer sales made to Canadian customers. Sales to Canada accounted for approximately 8.6%, 1.4% and 1.5% of net sales during 2001, 2000 and 1999. 47 As previously discussed, the Company acquired a Canadian subsidiary in January, 2001. At December 31, 2001, the amount reflected in property, plant and equipment net of accumulated depreciation related to this subsidiary was approximately $2.0 million. Fixed assets utilized outside of North America during 2001, 2000 and 1999 were immaterial. 8. ACCOUNTS RECEIVABLE SECURITIZATION On October 1, 2001, the Company entered into a $100 million Conduit Securitization Facility (the A/R Facility) to replace its previous Accounts Receivable Securitization Facility. Under the terms of the A/R Facility the Company sells, on a revolving basis, virtually all of its domestic accounts receivable to a wholly-owned, bankruptcy-remote special purpose entity (SPE). The SPE sells an undivided interest in receivables to an outside liquidity provider who in turn remits cash back to the Company's SPE for receivables eligible for funding. As of December 31, 2001, the amount outstanding under the A/R Facility was $17.7 million and the amount outstanding under the Company's previous facility as of December 31, 2000 was $69.4 million. As of December 31, 2001, the Company was in violation of its covenants under this facility. Therefore, all amounts under this facility were due and payable. Accordingly, the Company has reflected the $17.7 million outstanding under this facility as accounts receivable and current maturities of long-term debt on the Consolidated Balance Sheet as of December 31, 2001. In April 2002, the Company replaced this facility with a new $110 million Trade Receivables Facility. Under the terms of the Trade Receivables Facility, the Company sells, on a revolving basis, predominately all of its domestic accounts receivable to a wholly-owned, bankruptcy remote SPE. The SPE sells an undivided interest in receivables to an outside liquidity provider who, in turn, remits cash back to the Company's SPE for receivables eligible for funding. This new facility includes financial covenants identical to the Company's debt obligations as discussed in Note 13. Proceeds advanced under the Company's A/R Facility are used to provide liquidity in order to fund operations. The cash flows related to this securitization are reflected as cash flows from operating activities in the accompanying Consolidated Statements of Cash Flows. 9. EQUIPMENT LEASED TO OTHERS The Finance Companies and NATC have equipment on lease under both short-term and long-term lease arrangements with their customers. This equipment includes trailers manufactured by the Company and used trailers acquired on trade. Equipment on short-term lease represents lease contracts that are less than one year and typically run month-to-month, while long-term leases have terms ranging from one to five years in duration. Items being leased include both Company-owned equipment, which is reflected on the Consolidated Balance Sheets, as well as equipment that was sold by the Company and then simultaneously leased back to the Company which are accounted for as operating leases. a. Equipment On Balance Sheet The Company's Equipment leased to others, net was approximately $109.3 million and $52.0 million at December 31, 2001 and 2000, respectively. During 2001, the market values of used trailers declined significantly. This decline led the Company to perform an impairment analysis in accordance with SFAS 121 of its Equipment Leased to Others. This analysis indicated that the undiscounted future cash flows of this equipment was not sufficient to recover the carrying amount of certain portions of this equipment. Therefore, the Company recorded an impairment charge of approximately $10.5 million to reduce these assets to fair value. This charge is included in Cost of Sales in the Consolidated Statements of Operations. During 2000, the Company entered into a sale and leaseback facility with an independent financial institution related to its rental equipment. As of December 31, 2000, the Company had $31 million of equipment financed through this facility which was accounted for as an operating lease. As of December 31, 2001, the Company was in technical default of financial covenants under this facility resulting in the unamortized lease value being due and payable. As of December 31, 2001, the Company had $65.2 million of equipment financed under this facility. In April 2002, the facility was amended which resulted in a new lease. The new lease has been accounted for as a capital lease (see Note 10). Accordingly, the Company has 48 reflected the unamortized lease value as a capital lease obligation of $65.2 million in the Consolidated Balance Sheet as of December 31, 2001. The leased equipment was recorded at fair value of $42.2 million in the Consolidated Balance Sheet as of December 31, 2001. The $23.0 million difference between the unamortized lease value and the fair value of the leased equipment was recorded as a charge to cost of sales in the Consolidated Statements of Operations for the year ended December 31, 2001. The future minimum lease payments to be received by the Finance Companies and NATC under these lease transactions as of December 31, 2001 are as follows (in thousands):
Receipts -------- 2002 ................ $ 7,279 2003 ................ 5,398 2004 ................ 4,106 2005 ................ 3,049 2006 ................ 2,387 Thereafter .......... 4,116 ------- $26,335 =======
b. Equipment Off Balance Sheet In certain situations, the Finance Companies have sold equipment leased to others to independent financial institutions and simultaneously leased the equipment back under operating leases. All of this equipment has been subleased to customers under long-term arrangements, typically five years. As of December 31, 2001, the unamortized lease value of equipment financed under these arrangements was approximately $24 million. Additionally, while these arrangements do not contain financial covenants, certain non-financial covenants such as provisions for cross default and material adverse changes are contained in these arrangements. Rental payments made by the Finance Companies under these types of transactions totaled $9.3 million, $9.1 million and $8.8 million during 2001, 2000 and 1999, respectively. The future minimum noncancellable lease payments the Company is required to make under the above mentioned transactions along with rents to be received under various sublease arrangements as of December 31, 2001 are as follows (in thousands):
Payments Receipts -------- -------- 2002 ......... $ 5,674 $ 5,752 2003 ......... 5,674 5,702 2004 ......... 4,657 4,233 2005 ......... 1,145 1,916 2006 ......... -- 953 Thereafter ... -- 50 ------- ------- $17,150 $18,606 ======= =======
The Company has end-of-term purchase options and residual guarantees related to these transactions. These purchase options totaled $10.9 million and $24.9 million as of December 31, 2001 and 2000, respectively. These residual guarantees totaled $4.3 million and $14.8 million as of December 31, 2001 and 2000, respectively. The Company recognizes a loss when the Company's operating lease payments exceed the anticipated rents from the sublease arrangements with customers. Included in the receipts above is approximately $12.3 million to be received from a single customer. During 2001, the Company recorded a loss, which was included in cost of sales, related to this customer of approximately $4.4 million. This amount represents the anticipated shortfall of sublease revenues from operating lease payments. 49 10. CAPITAL LEASES The Company entered into two capital lease arrangements in 2001, which expire in 2002 and 2005. During December 2000, the Company entered into a sale and leaseback facility with an independent financial institution related to its rental equipment. As of December 31, 2000, the Company had $31.0 million of equipment financed through this facility which was accounted for as an operating lease. Rent expense related to this lease was approximately $9.2 million in 2001 and $0 in 2000 and 1999. As of December 31, 2001, the Company was in technical default of financial covenants under this facility resulting in the unamortized lease value being due and payable. In April 2002, the facility was amended which resulted in a new lease. In accordance with statement of Financial Accounting Standards (SFAS) No. 13, Accounting for Leases, the new lease will be accounted for as a capital lease. Accordingly, the Company has reflected the unamortized lease value as a capital lease obligation of $65.2 million in the Consolidated Balance Sheet as of December 31, 2001. The leased equipment was recorded at fair value of $42.2 million in the Consolidated Balance Sheet as of December 31, 2001. The $23.0 million difference between the unamortized lease value and the fair value of the leased equipment was recorded as a charge to Cost of Sales in the Consolidated Statement of Operations for the year ended December 31, 2001. This new capital lease has financial covenants identical to the Company's debt as discussed in Footnote 13. During 2001 the Company renewed a lease for a corporate aircraft. This lease arrangement expires in 2002 and has been reflected as a capital lease. Assets recorded under capital lease arrangements included in property, plant and equipment and equipment leased to others on the Consolidated Balance Sheets consist of the following (in thousands):
December 31, ------------------------ 2001 2000 ------- ------- Property, Plant and Equipment, net $11,503 $ -- Equipment Leased to Others, net 42,233 -- ------- ------- $53,736 $ -- ======= =======
Accumulated depreciation recorded on leased assets at December 31, 2001 was $0.1 million. Depreciation expense recorded on leased assets in 2001 was $0.1 million. Future minimum lease payments under capital leases are as follows (in thousands):
Amounts -------- 2002 .............................. $ 27,152 2003 .............................. 14,203 2004 .............................. 13,326 2005 .............................. 36,829 2006 .............................. -- Thereafter ........................ -- -------- $ 91,510 Amount representing interest ...... (14,196) -------- Capital lease obligations ......... 77,314 Obligations due within one year ... (21,559) -------- Long-term capital lease obligations $ 55,755 ========
11. OTHER LEASE ARRANGEMENTS a. Equipment Financing The Company has entered into agreements for the sale and leaseback of certain production equipment at its manufacturing locations. As of December 31, 2001, the unamortized lease value related to these agreements was approximately $24.5 million. Under these agreements, the initial lease terms expired during 2001. The Company elected to renew these agreements and anticipates renewing them through their maximum lease terms (2004-2008). Future minimum lease payments related to these arrangements is approximately $4.2 million per year and the end of term residual guarantees and purchase options are $2.4 million and $3.6 million, respectively. These agreements contain no financial covenants; however, they do 50 contain non-financial covenants including cross default provisions which could be triggered if the Company is not in compliance with covenants in other debt or leasing arrangements. Total rent expense for these leases in 2001, 2000 and 1999 was $3.1 million, $1.0 million and $1.5 million, respectively. b. Other Lease Commitments The Company leases office space, manufacturing, warehouse and service facilities and equipment under operating leases expiring through 2007. Future minimum lease payments required under these other lease commitments as of December 31, 2001 are as follows (in thousands):
Amounts ------- 2002 .............................................. $2,352 2003 .............................................. 1,096 2004 .............................................. 462 2005 .............................................. 130 2006 .............................................. 15 Thereafter ........................................ 15 ------ $4,070 ======
Total rental expense under operating leases was $8.2 million, $7.9 million, and $5.4 million for 2001, 2000 and 1999, respectively. 12. FINANCE CONTRACTS The Finance Companies provide financing for the sale of new and used trailers to its customers. The financing is principally structured in the form of finance leases, typically for a five-year term. Finance contracts, as shown on the accompanying Consolidated Balance Sheets, are as follows (in thousands):
December 31, ---------------------------- 2001 2000 -------- -------- Lease payments receivable .............. $ 53,151 $ 53,351 Estimated residual value ............... 6,589 11,041 -------- -------- 59,740 64,392 Unearned finance charges ............... (11,563) (13,666) -------- -------- 48,177 50,726 Other, net ............................. 2,656 5,724 -------- -------- 50,833 56,450 Less: current portion .................. (10,646) (11,544) -------- -------- $ 40,187 $ 44,906 ======== ========
Other, net. Other, net includes equipment subject to capital lease that is awaiting customer pick-up. The net amounts under such arrangements totaled $0.6 million and $2.3 million at December 31, 2001 and 2000, respectively. In addition, Other, net also includes the sale of certain finance contracts with full recourse provisions. As a result of the recourse provision, the Finance Companies have reflected an asset and offsetting liability totaling $2.1 million and $3.4 million at December 31, 2001 and December 31, 2000, respectively, in the Company's Consolidated Balance Sheets as a Finance Contract and Other Noncurrent Liabilities and Contingencies. The future minimum lease payments to be received from finance contracts as of December 31, 2001 are as follows (in thousands):
Amounts ------- 2002 ................................................ $19,003 2003 ................................................ 11,489 2004 ................................................ 8,643 2005 ................................................ 5,483 2006 ................................................ 3,908 Thereafter .......................................... 4,625 ------- $53,151 =======
51 13. DEBT In April 2002, the Company entered into an agreement with its lenders to restructure its existing revolving credit facility and Senior Series Notes and waive violations of its financial covenants through March 30, 2002. The amendment changes debt maturity and principal payment schedules; provides for all unencumbered assets to be pledged as collateral equally to the lenders; increases the cost of funds; and requires the Company to meet certain financial conditions, among other things. The amended agreements also contain certain restrictions on acquisitions and the payment of preferred stock dividends. The following reflects the terms of the amended credit agreement. a. Long-term debt consists of the following (in thousands):
DECEMBER 31, ------------------------- 2001 2000 --------- --------- Revolving Bank Line of Credit ................................ $ 14,642 $ 20,000 Receivable Securitization Facility, Note 8 ................... 17,700 -- Mortgage and Other Notes Payable (3.0% - 8.17%, Due 2002-2008) 35,362 18,260 Bank Term Loan (Due March 2004) .............................. 75,000 -- Series A Senior Notes (9.66%, Due March 2004) ................ 50,000 50,000 Series C-H Senior Notes (10.41% - 10.8%, Due 2004-2008) ...... 92,000 100,000 Series I Senior Notes (11.29%, Due 2005-2007) ................ 50,000 50,000 --------- --------- 334,703 238,260 Less: Current maturities ........................ (60,682) (12,134) --------- --------- $ 274,021 $ 226,126 ========= =========
b. Maturities of long-term debt at December 31, 2001, are as follows (in thousands):
Amounts -------- 2002 ............................................... $ 60,682 2003 ............................................... 50,975 2004 ............................................... 130,445 2005 ............................................... 24,712 2006 ............................................... 15,924 Thereafter ......................................... 51,965 -------- $334,703 ========
c. Revolving Bank Line of Credit and Bank Term Loan The Company's existing $125 million Revolving Credit Facility was restructured into a $107 million term loan (Bank Term Loan) and $18 million revolving credit facility (Bank Line of Credit). The Bank Term Loan and Bank Line of Credit both mature on March 30, 2004 and are secured by all of the unencumbered assets of the Company. The $107 million Bank Term Loan, of which approximately $29 million consists of outstanding letters of credit, requires monthly payments of $3.0 million per annum in 2002, $13.8 million per annum in 2003 and $3.4 million per annum in 2004, with the balance due March 30, 2004. In addition, principal payments will be made from excess cash flow, as defined in the agreement, on a quarterly basis. Any such additional payments will reduce the balance of the loan due March 30, 2004. Interest on the $107 million Bank Term Loan is variable based upon the adjusted London Interbank Offered Rate ("LIBOR") plus 380 basis points and is payable monthly. Interest on the borrowings under the $18 million Bank Line of Credit is based upon LIBOR plus 355 basis points or the agent bank's alternative borrowing rate as defined in the agreement. The Company pays a commitment fee on the unused portion of this facility at a rate of 50 basis points per annum. At December 31, 2001, the Company had $75 million outstanding under the Bank Term Loan, after letters of credit, at an interest rate of 2.4375%. The Company had available credit under the Bank Line of Credit of approximately $18 million. The Company has a revolving bank line of credit in Canada that permits the Company to borrow up to CDN $20 million. This revolver is secured by certain FTSI Canada Accounts Receivable balances and 52 new and used Canadian inventory. Interest payable on such borrowings is variable based on the London Interbank Rate (LIBOR) plus 50 to 150 basis points, as defined, or a prime rate of interest as defined. The Company pays a commitment fee on the unused portion of this facility at rates of 15 to 30 basis points per annum, as defined. As a result of noncompliance with the financial covenants in its other debt agreements, the Company was in technical default under this agreement at December 31, 2001 and will pay off the balance on this credit line in 2002. At December 31, 2001, the Company had borrowings of USD $14.6 million under this facility at a weighted average interest rate of 3.13%. d. Senior Notes As of December 31, 2001 the Company had $192 million of Senior Series Notes outstanding which originally matured in 2002 through 2008. As part of the restructuring, the original maturity dates for $72 million of Senior Series Notes, payable in 2002 through March 2004, have been extended to March 30, 2004. The maturity dates for the other $120 million of Senior Series Notes due subsequent to March 30, 2004, remain unchanged. The Senior Series Notes are secured by all of the unencumbered assets of the Company. Monthly principal payments totaling $7.5 million in 2002, $33.8 million in 2003 and $8.4 million in 2004 will be made on a prorata basis to all Senior Series Notes. In addition, principal payments will be made from excess cash flow, as defined in the agreement, on a quarterly basis. Interest on the Senior Series Notes, which is payable monthly, increased by 325 basis points, effective April 2002, and ranges from 9.66% to 11.29%. e. Mortgage and Other Notes Payable Mortgage and other notes payable includes debt incurred in connection with the acquisition discussed in Note 5, an obligation associated with the exercise of an equipment purchase option under an operating lease secured by the equipment and other term borrowings secured by property. f. Covenants Prior to the new debt agreements, the Company was required under various loan agreements to meet certain financial covenants. As of December 31, 2001, the Company was not in compliance with certain of these financial covenants. The Company has obtained waivers from the lenders for this non-compliance through March 30, 2002. The Company's new debt agreements contain restrictions on excess cash flow, the amount of new finance contracts the Company can enter into (not to exceed $5 million within any twelve month period), and other restrictive covenants. These other restrictive covenants contain minimum requirements related to the following items, as defined in the agreement: Earnings Before Interest, Taxes, Depreciation and Amortization; quarterly equity positions; debt to asset ratios; interest coverage ratios; and capital expenditure amounts. These covenants will become effective in April of 2002 and become more restrictive in 2003. 53 14. STOCKHOLDERS' EQUITY a. Capital Stock
DECEMBER 31, -------------- (Dollars in thousands) 2001 2000 ---- ---- Preferred Stock - $0.01 par value, 25,000,000 shares authorized: Series A Junior Participating Preferred Stock 300,000 shares authorized, 0 shares issued and outstanding $ -- $ -- Series B 6% Cumulative Convertible Exchangeable Preferred Stock, 352,000 shares authorized, issued and outstanding at December 31, 2001 and 2000 ($17.6 million aggregate liquidation value) 4 4 Series C 5.5% Cumulative Convertible Exchangeable Preferred Stock, 130,041 shares authorized, issued and outstanding at December 31, 2001 and 2000 ($13.0 million aggregate liquidation value) 1 1 ---- ---- Total Preferred Stock $ 5 $ 5 ---- ---- Common Stock - $0.01 par value, 75,000,000 shares authorized, 23,013,847 and 23,002,490 shares issued and outstanding at December 31, 2001 and 2000, respectively $230 $230 ==== ====
The Series B 6% Cumulative Convertible Exchangeable Preferred Stock is convertible at the discretion of the holder, at a conversion price of $21.38 per share, into up to approximately 823,200 shares of common stock. This conversion is subject to adjustment for dilutive issuances and changes in outstanding capitalization by reason of a stock split, stock dividend or stock combination. The Series C 5.5% Cumulative Convertible Exchangeable Preferred Stock is convertible at the discretion of the holder, at a conversion price of $35.00 per share, into up to approximately 371,500 shares of common stock, subject to adjustment. The Board of Directors has the authority to issue up to 25 million shares of unclassified preferred stock and to fix dividends, voting and conversion rights, redemption provisions, liquidation preferences and other rights and restrictions. b. Stockholders' Rights Plan On November 7, 1995, the Board of Directors adopted a Stockholder Rights Plan (the "Rights Plan"). The Rights Plan is designed to deter coercive or unfair takeover tactics, to prevent a person or group from gaining control of the Company without offering fair value to all shareholders and to deter other abusive takeover tactics, which are not in the best interest of stockholders. Under the terms of the Rights Plan, each share of common stock is accompanied by one right; each right entitles the stockholder to purchase from the Company, one one-thousandth of a newly issued share of Series A Preferred Stock at an exercise price of $120. The rights become exercisable ten days after a public announcement that an acquiring person or group (as defined in the Plan) has acquired 20% or more of the outstanding Common Stock of the Company (the Stock Acquisition Date) or ten days after the commencement of a tender offer which would result in a person owning 20% or more of such shares. The Company can redeem the rights for $.01 per right at any time until ten days following the Stock Acquisition Date (the 10-day period can be shortened or lengthened by the Company). The rights will expire in November 2005, unless redeemed earlier by the Company. 54 If, subsequent to the rights becoming exercisable, the Company is acquired in a merger or other business combination at any time when there is a 20% or more holder, the rights will then entitle a holder to buy shares of the Acquiring Company with a market value equal to twice the exercise price of each right. Alternatively, if a 20% holder acquires the Company by means of a merger in which the Company and its stock survives, or if any person acquires 20% or more of the Company's Common Stock, each right not owned by a 20% or more shareholder, would become exercisable for Common Stock of the Company (or, in certain circumstances, other consideration) having a market value equal to twice the exercise price of the right. 15. STOCK-BASED INCENTIVE PLANS a. Stock Option and Stock Related Plans The Company has stock incentive plans that provide for the issuance of stock appreciation rights (SAR) and the granting of common stock options to officers and other eligible employees. During 2001, the company adopted a SAR Plan giving eligible participants the right to receive, upon exercise thereof, the excess of the fair market value of one share of stock on the date of exercise over the exercise price of the SAR as determined by the Company. All SARs granted expire ten years after the date of grant. As of December 31, 2001 the Company had granted 130,000 SAR at a weighted average exercise price of $8.64. SARs require the Company to continually adjust compensation expense for the changes in the fair market value of the Company's stock. During 2001, expense recorded related to SARs was not material. The Company has two non-qualified stock option plans (the 1992 and 2000 Stock Option Plans) which allow eligible employees to purchase shares of common stock at a price not less than market price at the date of grant. Under the terms of the Stock Option Plans, up to an aggregate of 3,750,000 shares are reserved for issuance, subject to adjustment for stock dividends, recapitalizations and the like. Options granted to employees under the Stock Option Plans become exercisable in annual installments over three years for options granted under the 2000 Plan and five years for options granted under the 1992 Plan. Options granted to non-employee Directors of the Company are fully vested on the date of grant and are exercisable six months thereafter. All options granted expire ten years after the date of grant. The Company has elected to follow APB No. 25, Accounting for Stock Issued to Employees, in accounting for its stock options and, accordingly, no compensation cost has been recognized for stock options in the consolidated financial statements. Had compensation cost for these plans been determined consistent with SFAS No. 123, Accounting for Stock-Based Compensation, the Company's net income (loss) available to common would have been ($235.9) million (($10.25) Basic and Diluted EPS) in 2001, ($10.6) million (($0.46) Basic and Diluted EPS) in 2000 and $35.2 million ($1.53 Basic and Diluted EPS) in 1999. A summary of stock option activity and weighted-average exercise prices for the periods indicated are as follows:
Number of Weighted-Average Options Exercise Price --------- ---------------- Outstanding at December 31, 1998 .............. 1,198,260 $ 21.57 --------- ---------- Granted ............................... 537,375 21.52 Exercised ............................. (5,140) 17.76 Cancelled ............................. (11,590) 20.05 Outstanding at December 31, 1999 .............. 1,718,905 21.57 --------- ---------- Granted ............................... 277,500 7.50 Exercised ............................. -- -- Cancelled ............................. (76,780) 20.43 Outstanding at December 31, 2000 .............. 1,919,625 19.59 --------- ---------- Granted ............................... 89,500 9.47 Exercised ............................. -- -- Cancelled ............................. (231,400) 16.79 Outstanding at December 31, 2001 .............. 1,777,725 $ 19.39 ========= ==========
55 The following table summarizes information about stock options outstanding at December 31, 2001:
Weighted Weighted Weighted Range of Average Average Number Average Exercise Number Remaining Exercise Exercisable Exercise Prices Outstanding Life Price at 12/31/01 Price - ----------------------------------------------------------------------------------- $ 7.25 to $10.49 269,500 9.1 yrs. $ 7.59 71,536 $ 7.38 $10.50 to $15.49 339,000 6.4 yrs. $15.08 208,000 $15.26 $15.50 to $22.99 786,225 5.2 yrs. $20.34 535,125 $19.77 $23.00 to $33.50 383,000 4.1 yrs. $29.78 346,000 $29.90
Using the Black-Scholes option valuation model, the estimated fair values of options granted during 2001, 2000 and 1999 were $5.20, $3.54 and $11.12 per option, respectively. Principal assumptions used in applying the Black-Scholes model were as follows:
Black-Scholes Model Assumptions 2001 2000 1999 - ------------------------------- ---- ---- ---- Risk-free interest rate .............. 5.07% 5.32% 6.06% Expected volatility .................. 45.58% 45.38% 43.95% Expected dividend yield .............. 1.26% 2.21% 0.74% Expected term ........................ 10 yrs. 10 yrs. 7 yrs.
b. Other Stock Plans During 1993, the Company adopted its 1993 Employee Stock Purchase Plan (the "Purchase Plan"), which enables eligible employees of the Company to purchase shares of the Company's $0.01 par value common stock. Eligible employees may contribute up to 15% of their eligible compensation toward the semi-annual purchase of common stock. The employees' purchase price is based on the fair market value of the common stock on the date of purchase. No compensation expense is recorded in connection with the Purchase Plan. During 2001, 7,138 shares were issued to employees at an average price of $9.77 per share. At December 31, 2001, there were 247,048 shares available for offering under this Purchase Plan. During 1997, the Company adopted its Stock Bonus Plan (the "Bonus Plan"). Under the terms of the Bonus Plan, common stock may be granted to employees under terms and conditions as determined by the Board of Directors. During 2001, 1,960 shares were issued to employees at an average price of $14.14. At December 31, 2001 there were 476,680 shares available for offering under this Bonus Plan. 16. EMPLOYEE 401(K) SAVINGS PLAN Substantially all of the Company's employees are eligible to participate in a defined contribution plan that qualifies under Section 401(k) of the Internal Revenue Code. The Plan provides for the Company to match, in cash, a percentage of each employee's contributions under various formulas. The Company's matching contribution and related expense for the plan was approximately $1.0 million, $1.5 million and $1.4 million for 2001, 2000 and 1999, respectively. 56 17. SUPPLEMENTAL CASH FLOW INFORMATION Selected cash payments and non cash activities were as follows (in thousands):
DECEMBER 31, --------------------------------------- 2001 2000 1999 -------- -------- -------- Cash paid during the year for: Interest ............................................................ $ 20,230 $ 19,694 $ 13,954 Income taxes paid (refunded, net) ................................... (7,047) 18,064 20,319 -------- -------- -------- Non cash transactions: Capital lease obligation incurred (Note 10) ......................... 77,363 -- -- Purchase option exercised related to equipment Guarantees (Note 13e) ............................................ 13,825 -- -- Receivable Securitization Facility (Note 8) ......................... 17,700 -- -- Acquisitions, net of cash acquired: Fair value of assets acquired ................................. 59,012 -- 23,698 Liabilities assumed ........................................... (52,676) -- (11,285) -------- -------- -------- Net cash paid ............................................ $ (6,336) $ -- $(12,413) ======== ======== ========
18. INCOME TAXES a. Provisions for Income Taxes The consolidated income tax provision for 2001, 2000 and 1999 consists of the following components (in thousands):
2001 2000 1999 -------- -------- -------- Current: U.S. Federal and Foreign ............................................ $(28,416) $ 3,196 $ 28,769 State ............................................................... -- 1,396 4,069 Deferred ................................................................ (14,441) (8,906) (6,947) -------- -------- -------- Total consolidated provision (benefit) .................................. $(42,857) $ (4,314) $ 25,891 ======== ======== ========
The Company's effective tax rates were 15.6%, 39.0% and 40.0% of pre-tax income/(loss) for 2001, 2000 and 1999, respectively, and differed from the U.S. Federal statutory rate of 35% as follows:
2001 2000 1999 --------- --------- --------- Pretax book income/(loss) .............................. $(275,025) $ (11,050) $ 64,733 Federal tax expense (benefit) at 35% statutory rate (96,259) $ (3,868) $ 22,657 State, local income taxes .......................... (554) 591 2,397 Foreign income taxes - rate differential ........... (142) -- -- Valuation allowance ................................ 55,305 -- -- Other .............................................. (1,207) (1,037) 837 --------- --------- --------- Total income tax expense/(benefit) ..................... $ (42,857) $ (4,314) $ 25,891 ========= ========= =========
57 b. Deferred Taxes Deferred income taxes are primarily due to temporary differences between financial and income tax reporting for the depreciation of property, plant and equipment and equipment under lease, the recognition of income from assets under finance leases, charges the Company recorded in 2000 and 2001 related to the restructuring of certain operations, and tax credits and losses carried forward. The Company has a federal tax net operating loss carryforward of $86.8 million, which will expire in 2022 if unused. The Company has various tax credit carryforwards which will expire beginning in 2021 if unused. Under Statement of Financial Accounting Standards 109, deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has determined that a valuation allowance is necessary and, accordingly, has recorded a valuation allowance for all deferred tax assets as of December 31, 2001. The components of deferred tax assets and deferred tax liabilities as of December 31, 2001 and 2000 were as follows (in thousands):
2001 2000 -------- -------- Deferred tax (assets): Rentals on Finance Leases .............................. $(21,241) $(18,651) Leasing Difference ..................................... (10,284) (7,912) Operations Restructuring ............................... (26,428) (18,194) Tax credits and loss carryforwards ..................... (36,394) -- Other .................................................. (60,789) (12,481) Deferred tax liabilities: Book-Tax Basis Differences-Property, Plant and Equipment 68,343 48,158 Earned Finance Charges on Finance Leases ............... 10,138 9,241 Other .................................................. 21,350 14,280 -------- -------- Net deferred tax liability/(asset), before valuation allowance . $(55,305) $ 14,441 -------- -------- Valuation allowance ............................................ $ 55,305 $ -- -------- -------- Net deferred tax liability/(asset) ............................. $ -- $ 14,441 ======== ========
c. Change in Tax Laws In March 2002, Congress enacted the Job Creation and Worker Assistance Act of 2002 which allows corporate taxpayers who incur net operating losses in tax years ending in 2001 and 2002 to carry back such losses to offset federal taxable income generated in the previous five years. The Company received a refund of federal income taxes of approximately $13 million in April 2002 related to the carryback of losses incurred during 2001 to tax years ended 1996, 1997 and 1998. The benefit associated with this tax law change will be recorded in 2002. The additional carryback period will reduce the amount of federal tax net operating losses available for carryforward to $52.1 million. 19. COMMITMENTS AND CONTINGENCIES a. Litigation Various lawsuits, claims and proceedings have been or may be instituted or asserted against the Company arising in the ordinary course of business, including those pertaining to product liability, labor and health related matters, successor liability, environmental and possible tax assessments. While the amounts claimed could be substantial, the ultimate liability cannot now be determined because of the considerable uncertainties that exist. Therefore, it is possible that results of operations or liquidity in a particular period could be materially affected by certain contingencies. However, based on facts currently available, management believes that the disposition of matters that are pending or asserted will not have a material adverse effect on the Company's financial position or its annual results of operations. 58 In March of 2001, Bernard Krone Industria e Comercio de Maquinas Agricolas Ltda. ("BK") filed suit against the Company in the Fourth Civil Court of Curitiba in the State of Parana, Brazil. This action seeks recovery of damages plus pain and suffering. Because of the bankruptcy of BK, this proceeding is now pending before the Second Civil Court of Bankruptcies and Creditors Reorganization of Curitiba, State of Parana (No.232/99). This case grows out of a joint venture agreement between BK and the Company, which was generally intended to permit BK and the Company to market the Roadrailer(R) trailer in Brazil and other areas of South America. When BK was placed into the Brazilian equivalent of bankruptcy late in the year 2000, the joint venture was dissolved. BK subsequently filed its lawsuit against the Company alleging that it was forced to terminate business with other companies because of the exclusivity and non-compete clauses purportedly found in the joint venture agreement. The lawsuit further alleges that Wabash did not properly disclose technology to BK and that Wabash purportedly failed to comply with its contractual obligations in terminating the joint venture agreement. In its complaint, BK asserts that it has been damaged by these alleged wrongs by the Company in the approximate amount of $8.4 million (U.S.). The Company answered the complaint in May of 2001, denying any wrongdoing and pointing out that, contrary to the allegation found in the complaint, a merger of the Company and BK, or the acquisition of BK by the Company, was never the purpose or intent of the joint venture agreement between the parties; the only purpose was the business and marketing arrangement as set out in the agreement. The Company also asserted a counterclaim in the amount of $351,000 (U.S.) representing monies advanced by the Company to BK to permit BK to import certain trailers from Europe, which was to be reimbursed to the Company by BK. The counterclaim was based on the fact that this reimbursement never took place. The Company believes that the claims asserted against it by BK are without merit and intends to defend itself vigorously against those claims. It also believes that the claims asserted in its counterclaim are valid and meritorious and it intends to prosecute that claim. The Company believes that the resolution of this lawsuit will not have a material adverse effect on its financial position or future results of operations; however, at this early stage of the proceeding, no assurance can be given as to the ultimate outcome of the case. On September 17, 2001 the Company commenced an action against PPG Industries, Inc. ("PPG") in the United States District Court, Northern District of Indiana, Hammond Division at Lafayette, Civil Action No. 4:01 CV 55. In the lawsuit, the Company alleged that it has sustained substantial damages stemming from the failure of the PPG electrocoating system (the "E-coat system") and related products that PPG provided for the Company's Scott County Tennessee plant. The Company alleges that PPG is responsible for defects in the design of the E-coat system and defects in PPG products that have resulted in malfunctions of the E-coat system and poor quality coatings on numerous trailers. The Company further alleges that the failures of PPG's E-coat system and products substantially contributed to the decision to shut down the Scott County plant. PPG filed a Counterclaim in that action on or about November 8, 2001, seeking damages in excess of approximately $1.35 million based upon certain provisions of the November 3, 1998 Investment Agreement between it and the Company. The Company filed a Reply to the Counterclaim denying liability for the claims asserted. The Company believes that the claims asserted against it by PPG in the Counterclaim are without merit and intends to defend itself vigorously against those claims. It also believes that the claims asserted in its Complaint are valid and meritorious and it intends to prosecute those claims. The Company believes that the resolution of this lawsuit will not have a material adverse effect on its financial position or future results of operations; however, at this early stage of the proceeding, no assurance can be given as to the ultimate outcome of the case. In the second quarter of 2000, the Company received a grand jury subpoena requesting certain documents relating to the discharge of wastewaters into the environment at a Wabash facility in Huntsville, Tennessee. The subpoena sought the production of documents and related records concerning the design of the facility's discharge system and the particular discharge in question. On May 16, 2001, the Company received a second grand jury subpoena that sought the production of additional documents relating to the discharge in question. The Company is fully cooperating with federal officials with respect to their investigation into the matter. At this time, the Company is unable to predict the outcome of the federal grand jury inquiry into this matter, but does not believe it will result in a material adverse effect on its financial 59 position or future results of operations; however, at this early stage of the proceedings, no assurance can be given as to the ultimate outcome of the case. On April 17, 2000, the Company received a Notice of Violation/Request for Incident Report from the Tennessee Department of Environmental Conservation (TDEC) with respect to the same matter. On September 6, 2000, the Company received an Order and Assessment from TDEC directing the Company to pay a fine of $100,000 for violations of Tennessee environmental requirements as a result of the discharge. The Company filed an appeal of the Order and Assessment on October 10, 2000. The Company is currently negotiating an agreed-upon Order with TDEC to resolve this matter. The class action against the Company in United States District Court for the Northern District of Indiana entitled "In re Wabash National Corporation Securities Litigation", Civil Action No. 4:99-CV-0003-AS, originally filed in 1999 and previously reported by the Company in prior filings, was dismissed with prejudice in December 2001 in connection with a final settlement entered into by the parties, with no material effect on the Company's financial position or results of operations. b. Environmental The Company generates and handles certain material, wastes and emissions in the normal course of operations that are subject to various and evolving Federal, state and local environmental laws and regulations. The Company assesses its environmental liabilities on an on-going basis by evaluating currently available facts, existing technology, presently enacted laws and regulations as well as experience in past treatment and remediation efforts. Based on these evaluations, the Company estimates a lower and upper range for the treatment and remediation efforts and recognizes a liability for such probable costs based on the information available at the time. As of December 31, 2001 and 2000, the estimated potential exposure for such costs ranges from approximately $0.5 million to approximately $1.7 million, for which the Company has a reserve of approximately $0.9 million. These reserves were primarily recorded for exposures associated with the costs of environmental remediation projects to address soil and ground water contamination as well as the costs of removing underground storage tanks at its branch service locations. The possible recovery of insurance proceeds has not been considered in the Company's estimated contingent environmental costs. Future information and developments will require the Company to continually reassess the expected impact of these environmental matters. However, the Company has evaluated its total environmental exposure based on currently available data and believes that compliance with all applicable laws and regulations will not have a materially adverse effect on the consolidated financial position or results of operations of the Company. c. Used Trailer Restoration Program During 1999, the Company reached a settlement with the IRS related to federal excise tax on certain used trailers restored by the Company during 1996 and 1997. The Company has continued the restoration program with the same customer since 1997. The customer has indemnified the Company for any potential excise tax assessed by the IRS for years subsequent to 1997. As a result, the Company has recorded a liability and a corresponding receivable of approximately $8.3 million and $7.9 million in the accompanying Consolidated Balance Sheets at December 31, 2001 and 2000, respectively. During 2001, the IRS completed its federal excise tax audit of 1999 and 1998 resulting in an assessment of approximately $5.4 million. The Company believes it is fully indemnified for this liability and that the related receivable is fully collectible. d. Letters of Credit As of December 31, 2001, the Company had standby letters of credit totaling approximately $29.0 million issued in connection with certain foreign sales transactions and other domestic purposes. 60 e. Royalty Payments The Company is obligated to make quarterly royalty payments in accordance with a licensing agreement related to the development of the Company's composite plate material used on its proprietary DuraPlate(R) trailer. The amount of the payments varies with the production volume of usable material, but requires minimum royalties of $0.5 million annually through 2005. Payments for 2001, 2000 and 1999 were $1.4 million, $2.1 million and $2.4 million, respectively. f. Used Trailer Residual Guarantees and Purchase Commitments In connection with certain new trailer sale transactions, the Company has entered into residual value guarantees and purchase option agreements with customers or financing institutions whereby the Company agrees to guarantee an end-of-term residual value or has an option to purchase the used equipment at a pre-determined price. Under these guarantees, future payments which may be required as of December 31, 2001 and 2000 totaled approximately $28.1 million and $37.5 million, respectively are as follows (in thousands):
Purchase Option Guarantee Amount --------------- ---------------- 2002 ............................... $ 9,416 $ 1,878 2003 ............................... 20,596 3,617 2004 ............................... 44,800 5,057 2005 ............................... 13,465 4,571 2006 ............................... 1,748 10,475 Thereafter ......................... -- 2,463 ------- ------- $90,025 $28,061 ======= =======
20. CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) The following is a summary of the unaudited quarterly results of operations for fiscal years 2001, 2000 and 1999 (Dollars in thousands except per share amounts).
First Second Third Fourth Quarter Quarter Quarter Quarter --------- --------- --------- --------- 2001 Net Sales .................... $ 242,629 $ 212,172 $ 241,945 $ 166,646 Gross loss ................... (1,743) (26) (32,733) (84,711) Net loss ..................... (17,730) (18,117) (61,373)(3) (134,948)(4) Basic loss per share(1) ...... $ (0.79) $ (0.81) $ (2.69) $ (5.88) Diluted loss per share(1) .... $ (0.79) $ (0.81) $ (2.69) $ (5.88) 2000 Net Sales .................... $ 352,848 $ 358,729 $ 345,818 $ 274,777 Gross profit ................. 34,423 34,045 29,512 17,987 Net income (loss) ............ 9,132 7,515 4,992 (28,375)(2) Basic earnings (loss) per share(1) $ 0.38 $ 0.31 $ 0.20 $ (1.25) Diluted earnings (loss) per share(1) $ 0.38 $ 0.31 $ 0.20 $ (1.25) 1999 Net Sales .................... $ 341,624 $ 380,203 $ 374,708 $ 358,035 Gross profit ................. 27,225 34,099 35,039 35,354 Net income ................... 6,367 10,347 10,365 11,762 Basic earnings per share(1) .. $ 0.26 $ 0.42 $ 0.43 $ 0.49 Diluted earnings per share(1) $ 0.26 $ 0.42 $ 0.43 $ 0.49
(1) Earnings (loss) per share are computed independently for each of the quarters presented. Therefore, the sum of the quarterly earnings per share may differ from annual earnings per share due to rounding. (2) The fourth quarter 2000 results include restructuring and other related charges of $46.6 million ($28.5 million, net of tax). (3) The third quarter 2001 results include restructuring and other related charges of $40.5 million ($25.6 million, net of tax). (4) The fourth quarter 2001 results include loss contingencies and impairment charge related to the Company's leasing operations of $37.9 million and used trailer inventory valuation of $18.6 million. 61 ITEM 9--CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10--DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The Company hereby incorporates by reference the information contained under the heading "Election of Directors" from its definitive Proxy Statement to be delivered to stockholders of the Company in connection with the 2002 Annual Meeting of Stockholders to be held May 30, 2002. The following are the executive officers of the Company:
NAME AGE POSITION ---- --- -------- Richard E. Dessimoz(1)... 54 Acting Chief Executive Officer and DirectoR Mark R. Holden(1)........ 42 Senior Vice President--Chief Financial Officer and Director Arthur R. Brown.......... 50 Senior Vice President--Chief Operating Officer Rodney P. Ehrlich........ 55 Senior Vice President--Product Development Lawrence J. Gross........ 47 Senior Vice President--Marketing Derek L. Nagle........... 51 Senior Vice President and President of North American Trailer Centers(TM)
(1) Member of the Executive Committee of the Board of Directors Richard E. Dessimoz. Mr. Dessimoz has been Acting Chief Executive Officer of the Company since July 2001 and Vice President and Chief Executive Officer of Wabash National Finance Corporation since its inception in December 1991. Mr. Dessimoz has been a Director of the Company since December 1995. Mark R. Holden. Mr. Holden has been Senior Vice President--Chief Financial Officer since October 2001 and a member of the Office of the Chief Executive Officer since July 2001. Mr. Holden has served as Vice President--Chief Financial Officer and Director of the Company since May 1995 and Vice President--Controller of the Company since 1992. Arthur R. Brown. Mr. Brown has been Senior Vice President-Chief Operating Officer of the Company since October 2001 and Vice President-Chief Operating Officer since August 2001. Prior to his employment with the Company, Mr. Brown served as Vice President of Fram/Autolite Operations for Honeywell Corporation since April 1998 and as Director of Operations for Vickers, Inc. from November 1995 to April 1998. Rodney P. Ehrlich. Mr. Rodney Ehrlich has been Senior Vice President--Product Development of the Company since October 2001. Mr. Ehrlich was Vice President-Engineering and has been in charge of the Company's engineering operations since the Company's founding. Lawrence J. Gross. Mr. Gross has been Senior Vice President--Marketing since October 2001. Mr. Gross had been Vice President--Marketing of the Company since December 1994. Previously he served as President of the Company's RoadRailer(R)division since joining the Company in July 1991. Prior to his employment by the Company, he was employed as Vice President--Marketing from 1985 until 1990 by Chamberlain of Connecticut, Inc., a licensor of bimodal technology, and as Vice President--Marketing until he began his employment with the Company. Derek L. Nagle. Mr. Nagle has been Senior Vice President of the Company since October 2001. Mr. Nagle has served as Vice President of the Company and President of North American Trailer Centers(TM)since the Company's acquisition of certain Fruehauf assets in April 1997. Prior to his employment by the Company, he held various senior executive positions. Fruehauf Trailer Corporation filed for bankruptcy protection in October 1996. Officers are elected for a term of one year and serve at the discretion of the Board of Directors. 62 ITEM 11--EXECUTIVE COMPENSATION The Company hereby incorporates by reference the information contained under the heading "Compensation" from its definitive Proxy Statement to be delivered to the stockholders of the Company in connection with the 2002 Annual Meeting of Stockholders to be held May 30, 2002. ITEM 12--SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The Company hereby incorporates by reference the information contained under the heading "Beneficial Ownership of Common Stock" from its definitive Proxy Statement to be delivered to the stockholders of the Company in connection with the 2002 Annual Meeting of Stockholders to be held on May 30, 2002. ITEM 13--CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Company hereby incorporates by reference the information contained under the heading "Related Party Transaction" from its definitive Proxy Statement to be delivered to the stockholders of the Company in connection with the 2002 Annual Meeting of Stockholders to be held on May 30, 2002. PART IV ITEM 14--EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) Financial Statements: The Company has included all required financial statements in Item 8 of this Form 10-K. The financial statement schedules have been omitted as they are not applicable or the required information is included in the Notes to the consolidated financial statements. For the year ended December 31, 2000, ETZ was a significant subsidiary under Rule 3-09 of Regulation S-X. Therefore, the Company was required to file audited financial statements of ETZ for the year ended December 31, 2000 by June 30, 2001. The Company has received audited financial statements under German generally accepted accounting principles for the year ended December 31, 2000, but has not been able to obtain these financial statements in conformity with accounting principles generally accepted in the United States. For the year ended December 31, 2001, ETZ was not a significant subsidiary under Rule 3-09 of Regulation S-X. The Company divested ETZ in January 2002. (b) Reports on Form 8-K: (c) Exhibits: The following exhibits are filed with this Form 10-K or incorporated herein by reference to the document set forth next to the exhibit listed below: 2.01 Purchase Agreement dated March 31, 1997, as amended (Incorporated by reference from Exhibit 2.01 to Registrant's Form 8-K filed in May 1, 1997) 3.01 Certificate of Incorporation of the Company (1) 3.02 Certificate of Designations of Series A Junior Participating Preferred Stock (1) 3.03 Amended and restated By-laws of the Company (19) 3.04 Certificate of Designations of Series B 6% Cumulative Convertible Exchangeable Preferred Stock (5) 3.05 Certificate of Designations of Series C 5.5% Convertible Exchangeable Preferred Stock (8) 4.01 Specimen Stock Certificate (16) 4.02 First Amendment to Shareholder Rights Agreement dated October 21, 1998 (9) 4.03 Form of Indenture for the Company's 6% Convertible Subordinated Debentures due 2007 (5) 4.04 Second Amendment to Shareholder Rights Agreement dated December 18, 2000 (13) 10.01 Loan Agreement, Mortgage, Security Agreement and Financing Statement between Wabash National Corporation and City of Lafayette dated as of August 15, 1989 (1) 10.02 1992 Stock Option Plan (1) 10.03 Real Estate Sale Agreement by and between Kraft General Foods, Inc. and Wabash National Corporation, dated June 1, 1994 (2) 10.04 6.41% Series A Senior Note Purchase Agreement dated January 31, 1996, between certain Purchasers and Wabash National Corporation (3) 63 10.05 Master Loan and Security Agreement in the amount of $10 million by Wabash National Finance Corporation in favor of Fleet Capital Corporation dated December 27, 1995 (3) 10.06 First Amendment to the 6.41% Series A Senior Note Purchase Agreement dated January 31, 1996 between certain Purchasers and Wabash National Corporation (4) 10.07 Series B-H Senior Note Purchase Agreement dated December 18, 1996 between certain Purchasers and Wabash National Corporation (4) 10.08 Revolving Credit Loan Agreement dated September 30, 1997, between NBD Bank, N.A. and Wabash National Corporation (6) 10.09 Investment Agreement and Shareholders Agreement dated November 4, 1997, between ETZ (Europaische Trailerzug Beteiligungsgesellschaft mbH) and Wabash National Corporation (6) 10.10 Receivable Sales Agreement between the Company and Wabash Funding Corporation and the Receivables Purchase Agreement between Wabash Funding Corporation and Falcon Asset Securitization Corporation (7) 10.11 Indemnification Agreement between the Company and Roadway Express, Inc. (10) 10.12 364-day Credit Agreement dated June 22, 2000, between Bank One, Indiana, N.A., as administrative agent and Wabash National Corporation (11) 10.13 Series I Senior Note Purchase Agreement dated September 29, 2000, between Prudential Insurance Company and Wabash National Corporation (12) 10.14 Share Transfer Agreement dated December 12, 2000, between Bayerische Kapitalbeteiligungsgesellschaft mBH and Wabash National Corporation (15) 10.15 Participation Agreement and Equipment Lease between Apex Trailer Leasing and Rentals, L.P., as Lessee, and Wabash Statutory Trust, as Lessor, dated December 29, 2000 (15) 10.16 2000 Stock Option Plan (16) 10.17 Consulting and Non-Competition Agreement dated July 16, 2001 between Donald J. Ehrlich and Wabash National Corporation (17) 10.18 Employment Contract dated August 13, 2001 between Arthur R. Brown and the Company (19) 10.19 Originators Receivables Sale Agreement dated October 4, 2001 between Wabash National LP and NOAMTC, Inc. as originators and Wabash National Financing LLC, Receivable Sales Agreement dated October 4, 2001 between Wabash Financing LLC and WNC Funding LLC and the Receivables Purchase Agreement dated October 4, 2001 between WNC Funding LLC and North Coast Funding Corporation (18) 10.20 2001 Stock Appreciation Rights Plan (18) 10.21 Asset Purchase Agreement dated January 11, 2002, between Bayerische Trailerzug Gesellschaft fur Bimodalen Guterverkehr mbH (ETZ) and Wabash National Corporation (19) 10.22 Share Purchase Agreement dated January 11, 2002, between Brennero Trasporto Rotaia S.p.A. and Bimodal Verwaltungs Gesellschaft mbH (collectively the "Purchasers") and Wabash National Corporation (the Seller) (19) 10.23 Master Amendment Agreement dated April 11, 2002 between the Company and various financial institutions (19) 10.24 Amended and Restated 9.66% Series A Senior Secured Notes Purchase Agreement dated April 12, 2002, between certain purchasers and the Company (19) 10.25 Amended and Restated Series C-H Senior Secured Notes purchase Agreement dated April 12, 2002, between certain purchasers and the Company (19) 10.26 Amended and Restated Series I 11.29% Senior Secured Note Purchase Agreement dated April 12, 2002, between Prudential Insurance Company and the Company (19) 10.27 Amended and Restated Credit Agreement dated April 11, 2002 between Bank One, Indiana, NA, as administrative agent and the Company (19) 10.28 Receivables Purchase and Servicing Agreement dated April 11, 2002 between General Electric Capital Corporation, as initial Purchaser and as Agent and the Company (19) 10.29 Receivables Sale and Contribution Agreement dated April 11, 2002 between Wabash National Corporation as Performance Guarantor, NOAMTC, Inc. and Wabash National LP, as originators and WNC Receivables, LLC, as Buyer (19) 10.30 Annex X to the Receivables Sale and Contribution Agreement and Receivables purchase and Servicing Agreement each dated April 11, 2002 (19) 21.00 List of Significant Subsidiaries (19) 23.01 Consent of Arthur Andersen LLP (19) 99.01 Representation Letter Concerning Arthur Andersen LLP (19) (1) Incorporated by reference to the Registrant's Registration Statement on Form S-1 (No. 33-42810) or the Registrant's Registration Statement on Form 8-A filed December 6, 1995 (item 3.02 and 4.02) (2) Incorporated by reference to the Registrant's Form 10-Q for the quarter ended June 30, 1994. 64 (3) Incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 1995 (4) Incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 1996 (5) Incorporated by reference to the Registrant's Form 10-Q for the quarter ended March 31, 1997 (6) Incorporated by reference to the Registrant's Form 10-Q for the quarter ended September 30, 1997 (7) Incorporated by reference to the Registrant's Form 8-K filed on April 14, 1998 (8) Incorporated by reference to the Registrant's Form 10-Q for the quarter ended September 30, 1998 (9) Incorporated by reference to the Registrant's Form 8-K filed on October 26, 1998 (10) Incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 1999 (11) Incorporated by reference to the Registrant's Form 10-Q for the quarter ended June 30, 2000 (12) Incorporated by reference to the Registrant's Form 10-Q for the quarter ended September 30, 2000 (13) Incorporated by reference to the Registrant's Amended Form 8-A filed January 18, 2001 (14) Incorporated by reference to the Registrant's Form 8-K filed on February 5, 2002 (15) Incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 2000 (16) Incorporated by reference to the Registrant's Form 10-Q for the quarter ended March 31, 2001 (17) Incorporated by reference to the Registrant's Form 10-Q for the quarter ended June 30, 2001 (18) Incorporated by reference to the Registrant's Form 10-Q for the quarter ended September 30, 2001 (19) Filed herewith The Registrant undertakes to provide to each shareholder requesting the same a copy of each Exhibit referred to herein upon payment of a reasonable fee limited to the Registrant's reasonable expenses in furnishing such Exhibit. 65 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS AMENDED REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED. WABASH NATIONAL CORPORATION April 17, 2002 By: /s/ Mark R. Holden ----------------------------------------------- Mark R. Holden Senior Vice President - Chief Financial Officer (Principal Accounting Officer) and Duly Authorized Officer 66 EX-3.03 3 c68906a1ex3-03.txt AMENDED AND RESTATED BY-LAWS OF THE COMPANY EXHIBIT 3.03 WABASH NATIONAL CORPORATION AMENDED AND RESTATED BYLAWS ADOPTED AS OF ____________________, 2001 TABLE OF CONTENTS
Page ---- 1. OFFICES....................................................................... 1 1.1. Registered Office...................................................... 1 1.2. Other Offices.......................................................... 1 2. MEETINGS OF STOCKHOLDERS...................................................... 1 2.1. Place of Meetings...................................................... 1 2.2. Annual Meetings........................................................ 1 2.3. Special Meetings....................................................... 2 2.4. Notice of Meetings..................................................... 2 2.5. Waivers of Notice...................................................... 2 2.6. Notice of Business..................................................... 3 2.6.1. Annual Meeting.................................................. 3 2.6.2. Notice Procedures............................................... 3 2.6.3. Public Announcement............................................. 5 2.7. List of Stockholders................................................... 5 2.8. Quorum at Meetings..................................................... 5 2.9. Voting and Proxies..................................................... 6 2.10. Required Vote.......................................................... 7 2.11. Action Without a Meeting............................................... 7 3. DIRECTORS..................................................................... 8 3.1. Powers................................................................. 8 3.2. Number and Election.................................................... 8 3.3. Nomination of Directors................................................ 8 3.3.1. Annual Meetings................................................. 8 3.3.2. Special Meetings of Stockholders................................ 11 3.3.3. Public Announcement............................................. 11 3.4. Vacancies.............................................................. 12 3.5. Meetings............................................................... 12 3.5.1. Regular Meetings................................................ 12 3.5.2. Special Meetings................................................ 12 3.5.3. Telephone Meetings.............................................. 13 3.5.4. Action Without Meeting.......................................... 13 3.5.5. Waiver of Notice of Meeting..................................... 13 3.6. Quorum and Vote at Meetings............................................ 13 3.7. Committees of Directors................................................ 13 3.8. Compensation of Directors.............................................. 14 4. OFFICERS...................................................................... 14 4.1. Positions.............................................................. 14
- i - 4.2. Chairperson............................................................ 15 4.3. President.............................................................. 15 4.4. Vice President......................................................... 15 4.5. Secretary.............................................................. 16 4.6. Assistant Secretary.................................................... 16 4.7. Treasurer.............................................................. 16 4.8. Assistant Treasurer.................................................... 16 4.9. Term of Office......................................................... 16 4.10. Compensation........................................................... 17 4.11. Fidelity Bonds......................................................... 17 5. CAPITAL STOCK................................................................. 17 5.1. Certificates of Stock; Uncertificated Shares........................... 17 5.2. Lost Certificates...................................................... 17 5.3. Record Date............................................................ 18 5.3.1. Actions by Stockholders......................................... 18 5.3.2. Payments........................................................ 19 5.4. Stockholders of Record................................................. 19 6. INDEMNIFICATION; INSURANCE.................................................... 19 6.1. Authorization of Indemnification....................................... 19 6.2. Right of Claimant to Bring Action Against the Corporation.............. 20 6.3. Non-exclusivity........................................................ 21 6.4. Survival of Indemnification............................................ 21 6.5. Insurance.............................................................. 21 7. GENERAL PROVISIONS............................................................ 22 7.1. Inspection of Books and Records........................................ 22 7.2. Dividends.............................................................. 22 7.3. Reserves............................................................... 22 7.4. Execution of Instruments............................................... 23 7.5. Fiscal Year............................................................ 23 7.6. Seal................................................................... 23 7.7. Amendment.............................................................. 23
- ii- AMENDED AND RESTATED BYLAWS OF WABASH NATIONAL CORPORATION 1. OFFICES 1.1. REGISTERED OFFICE The registered office of the Corporation shall be in Wilmington, Delaware, and the registered agent in charge thereof shall be [Corporation Service Company]. 1.2. OTHER OFFICES The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or as may be necessary or useful in connection with the business of the Corporation. 2. MEETINGS OF STOCKHOLDERS 2.1. PLACE OF MEETINGS All meetings of the stockholders shall be held at such place as may be fixed from time to time by the Board of Directors, the Chairperson or the President. Notwithstanding the foregoing, the Board of Directors may determine that the meeting shall not be held at any place, but may instead be held by means of remote communication. 2.2. ANNUAL MEETINGS Unless directors are elected by written consent in lieu of an annual meeting, the Corporation shall hold annual meetings of stockholders, on such date and at such time as shall be designated from time to time by the Board of Directors, the Chairperson or the President, at which stockholders shall elect a Board of Directors and transact such other business as may properly be brought before the meeting. If a written consent electing directors is less than unanimous, such action by written consent may be in lieu of holding an annual meeting only if all of the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action. 2.3. SPECIAL MEETINGS Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Board of Directors, the Chairperson or the President. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice (except to the extent that such notice is waived or is not required as provided in the Delaware General Corporation Law or these Bylaws). 2.4. NOTICE OF MEETINGS Notice of any meeting of stockholders, stating the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and (if it is a special meeting) the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting (except to the extent that such notice is waived or is not required as provided in the General Corporation Law of the State of Delaware (the "DELAWARE GENERAL CORPORATION LAW") or these Bylaws). Such notice shall be given in accordance with, and shall be deemed effective as set forth in, Sections 222 and 232 (or any successor section or sections) of the Delaware General Corporation Law. 2.5. WAIVERS OF NOTICE Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these Bylaws, a written waiver thereof signed by the person or persons entitled to said notice, or a waiver thereof by electronic transmission by the person entitled to said notice, delivered to the Corporation, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance of a stockholder at a meeting shall constitute a waiver of notice (1) of such meeting, except when the stockholder at the beginning of the meeting objects to holding the meeting or transacting business at -2- the meeting, and (2) (if it is a special meeting) of consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the stockholder objects to considering the matter at the beginning of the meeting. 2.6. NOTICE OF BUSINESS 2.6.1. ANNUAL MEETING At an annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (i) pursuant to the Corporation's notice of meeting (or any supplement thereto), (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who is a stockholder of record at the time of giving of the notice provided for in this SECTION 2.6, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this SECTION 2.6. 2.6.2. NOTICE PROCEDURES (a) For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not later than the close of business on the ninetieth day nor earlier than the close of business on the one hundred twentieth day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than thirty days before or more than thirty days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one hundred twentieth day prior to such annual meeting and not later than the close of business on the later of the ninetieth day prior to such annual meeting or the tenth day following the day on which public disclosure of the date of the meeting was first made. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. (b) A stockholder's notice to the Secretary shall set forth (A) as to each matter the stockholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the Corporation, the -3- language of the proposed amendment), (iii) any material interest in such business of such stockholder and such beneficial owner, if any, on whose behalf the proposal is made, and (iv) any other information relating to such business that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies in support of such proposal or is otherwise required pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner, (ii) the class or series and number of shares of the Corporation which are owned beneficially and of record by such stockholder and by such beneficial owner, (iii) a description of all arrangements or understandings between such stockholder and/or beneficial owner and any other person or persons (including their names) pursuant to which the proposal(s) are to be made by such stockholder, (iv) a representation that such stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose the items of business set forth in its notice, (v) a representation whether the stockholder or the beneficial owner, if any, intends or is a part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation's outstanding capital stock required to approve or adopt the proposal and/or (b) otherwise to solicit proxies from stockholders in support of such proposal, and (vi) any other information relating to such stockholder or beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies in support of such proposal pursuant to Regulation 14A under the Exchange Act. (c) Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at an annual stockholder meeting except in accordance with the procedures set forth in this SECTION 2.6. The timing requirements for advance notice of a proposal set forth in this SECTION 2.6 shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his or her intention to present a proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act and such stockholder's proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. Except as otherwise provided by law, the Chair of the meeting has the power and authority to and shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of these Bylaws, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be -4- transacted. Notwithstanding the foregoing provisions of this SECTION 2.6, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section. Nothing in this SECTION 2.6 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. 2.6.3. PUBLIC ANNOUNCEMENT For purposes of this Section 2.6, "public announcement" shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. 2.7. LIST OF STOCKHOLDERS After the record date for a meeting of stockholders has been fixed, at least ten days before such meeting, the officer who has charge of the stock ledger of the Corporation shall make a list of all stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder (but not the electronic mail address or other electronic contact information, unless the Board of Directors so directs) and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten days prior to the meeting: (1) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (2) during ordinary business hours, at the principle place of business of the Corporation. If the meeting is to be held at a place, then such list shall also, for the duration of the meeting, be produced and kept open to the examination of any stockholder who is present at the time and place of the meeting. If the meeting is to be held solely by means of remote communication, then such list shall also be open to the examination of any stockholder during the whole time of the meeting on reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. 2.8. QUORUM AT MEETINGS Stockholders may take action on a matter at a meeting only if a quorum exists with respect to that matter. Except as otherwise provided by statute or by the Certificate of Incorporation, the holders of a majority of the shares entitled to vote at the meeting, and who are present in person or represented by proxy, shall -5- constitute a quorum at all meetings of the stockholders for the transaction of business. Where a separate vote by a class or series or classes or series is required, a majority of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter. Once a share is represented for any purpose at a meeting (other than solely to object (1) to holding the meeting or transacting business at the meeting, or (2) (if it is a special meeting) to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice), it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for the adjourned meeting. The holders of a majority of the voting shares represented at a meeting, whether or not a quorum is present, may adjourn such meeting from time to time. 2.9. VOTING AND PROXIES Unless otherwise provided in the Delaware General Corporation Law or in the Corporation's Certificate of Incorporation, and subject to the other provisions of these Bylaws, each stockholder shall be entitled to one vote on each matter, in person or by proxy, for each share of the Corporation's capital stock that has voting power and that is held by such stockholder. No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed appointment of proxy shall be irrevocable if the appointment form states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. If authorized by the Board of Directors, and subject to such guidelines as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication, participate in a meeting of stockholders and be deemed present in person and vote at such meeting whether such meeting is held at a designated place or solely by means of remote communication, provided that (1) the Corporation implements reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (2) the Corporation implements reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (3) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action is maintained by the Corporation. -6- 2.10. REQUIRED VOTE When a quorum is present at any meeting of stockholders, all matters shall be determined, adopted and approved by the affirmative vote (which need not be by ballot) of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote with respect to the matter, unless the proposed action is one upon which, by express provision of statutes or of the Certificate of Incorporation, a different vote is specified and required, in which case such express provision shall govern and control with respect to that vote on that matter. Where a separate vote by a class or classes is required, the affirmative vote of the holders of a majority of the shares of such class or classes present in person or represented by proxy at the meeting shall be the act of such class. Notwithstanding the foregoing, directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. 2.11. ACTION WITHOUT A MEETING Any action required or permitted to be taken at a stockholders' meeting may be taken without a meeting, without prior notice and without a vote, if the action is taken by persons who would be entitled to vote at a meeting and who hold shares having voting power equal to not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote were present and voted. The action must be evidenced by one or more written consents describing the action taken, signed by the stockholders entitled to take action without a meeting, and delivered to the Corporation in the manner prescribed by the Delaware General Corporation Law for inclusion in the minute book. No consent shall be effective to take the corporate action specified unless the number of consents required to take such action are delivered to the Corporation within sixty days of the delivery of the earliest-dated consent. A telegram, cablegram or other electronic transmission consenting to such action and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this SECTION 2.11, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (1) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (2) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram or electronic -7- transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is delivered to the Corporation in accordance with Section 228(d)(1) of the Delaware General Corporation Law. Written notice of the action taken shall be given in accordance with the Delaware General Corporation Law to all stockholders who do not participate in taking the action who would have been entitled to notice if such action had been taken at a meeting having a record date on the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation. 3. DIRECTORS 3.1. POWERS The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things, subject to any limitation set forth in the Certificate of Incorporation or as otherwise may be provided in the Delaware General Corporation Law. 3.2. NUMBER AND ELECTION The number of directors which shall constitute the whole board shall not be fewer than three nor more than twelve. Thereafter, within the limits above specified, the number of directors shall be determined by resolution of the Board of Directors. 3.3. NOMINATION OF DIRECTORS The directors shall be elected at the annual meeting of the stockholders, except as provided in SECTION 3.4 hereof, and each director elected shall hold office until such director's successor is elected and qualified or until the director's earlier death, resignation or removal. Directors need not be stockholders. Only persons who are nominated in accordance with the procedures set forth in the Bylaws shall be eligible to serve as directors. 3.3.1. ANNUAL MEETINGS. -8- (a) Nominations of persons for election to the Board of Directors may be made at an annual meeting of stockholders only (1) pursuant to the Corporation's notice of meeting (or any supplement thereto), (2) by or at the direction of the Board of Directors or (3) by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this SECTION 3.3.1, who shall be entitled to vote for the election of directors at the meeting and who complies with the notice procedures set forth in this SECTION 3.3.1. (b) (1) Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not later than the close of business on the ninetieth day nor earlier than the close of business on the one hundred twentieth day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than thirty days before or more than thirty days after such anniversary, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one hundred twentieth day prior to such annual meeting and not later than the close of business on the later of the ninetieth day prior to such annual meeting or the tenth day following the day on which public disclosure of the date of the meeting was first made. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. (2) Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Corporation which are beneficially owned by the person and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner, (ii) the class or series and number of shares of the Corporation which are owned beneficially and of record by such stockholder and by such beneficial owner, (iii) a description of all arrangements or understandings between such stockholder and/or beneficial owner and each proposed nominee and -9- any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person named in its notice, (v) a representation whether the stockholder or the beneficial owner, if any, intends or is a part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation's outstanding capital stock required to elect the nominee and/or (b) otherwise to solicit proxies from stockholders in support of such nomination, and (vi) any other information relating to such stockholder or beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Regulation 14A under the Exchange Act. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee, or any other information as the Board of Directors may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation. (3) No person shall be eligible to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in this Bylaw and unless qualified under the other provisions of these Bylaws. Except as otherwise provided by law, the Chair of the meeting has the power and authority to and shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this SECTION 3.3, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting of stockholders of the Corporation to present a nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation. Notwithstanding the foregoing provisions of this SECTION 3.3, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this SECTION 3.3. Nothing in this SECTION 3.3 shall be deemed to affect any rights of the holders of any series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation. (c) Notwithstanding anything in the second sentence of paragraph (b) of this SECTION 3.3.1 to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public -10- announcement by the Corporation naming the nominees for the additional directorships at least one hundred days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this SECTION 3.3 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation. 3.3.2. SPECIAL MEETINGS OF STOCKHOLDERS. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (1) by or at the direction of the Board of Directors or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time the notice provided for in this SECTION 3.3.2 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election and who complied with the notice procedures set forth in this SECTION 3.3.2. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice required by SECTION 3.3.1(B) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth day prior to such special meeting and not later than the close of business on the later of the ninetieth day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. 3.3.3. PUBLIC ANNOUNCEMENT For purposes of this SECTION 3.3, "public announcement" shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. -11- 3.4. VACANCIES Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by the affirmative vote of a majority of the directors then in office, although fewer than a quorum, or by a sole remaining director. Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series may be filled by the affirmative vote of a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Each director so chosen shall hold office until the next election of directors of the class to which such director was appointed, and until such director's successor is elected and qualified, or until the director's earlier death, resignation or removal. In the event that one or more directors resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office until the next election of directors, and until such director's successor is elected and qualified, or until the director's earlier death, resignation or removal. 3.5. MEETINGS 3.5.1. REGULAR MEETINGS Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors. 3.5.2. SPECIAL MEETINGS Special meetings of the Board may be called by the Chairperson or President on one day's notice to each director, either personally or by telephone, express delivery service (so that the scheduled delivery date of the notice is at least one day in advance of the meeting), telegram, facsimile transmission, electronic mail (effective when directed to an electronic mail address of the director), or other electronic transmission, as defined in Section 232(c) (or any successor section) of the Delaware General Corporation Law (effective when directed to the director), and on five days' notice by mail (effective upon deposit of such notice in the mail). The notice need not describe the purpose of a special meeting. -12- 3.5.3. TELEPHONE MEETINGS Members of the Board of Directors may participate in a meeting of the board by any communication by means of which all participating directors can simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting. 3.5.4. ACTION WITHOUT MEETING Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if the action is taken by all members of the Board. The action must be evidenced by one or more consents in writing or by electronic transmission describing the action taken, signed (if in writing) by each director, and delivered to the Corporation for inclusion in the minute book. 3.5.5. WAIVER OF NOTICE OF MEETING A director may waive any notice required by statute, the Certificate of Incorporation or these Bylaws before or after the date and time stated in the notice. Except as set forth below, the waiver must be in writing, signed by the director entitled to the notice, or made by electronic transmission by the director entitled to the notice, and delivered to the Corporation for inclusion in the minute book. Notwithstanding the foregoing, a director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless the director at the beginning of the meeting objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting. 3.6. QUORUM AND VOTE AT MEETINGS At all meetings of the board, a quorum of the Board of Directors consists of a majority of the total number of directors prescribed pursuant to SECTION 3.2 of these Bylaws. The vote of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation or by these Bylaws. 3.7. COMMITTEES OF DIRECTORS The Board of Directors may designate one or more committees, each committee to consist of one or more directors. The Board may designate one or more -13- directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present and not disqualified from voting, whether or not such member or members constitute a quorum, may, by unanimous vote, appoint another member of the Board of Directors to act at the meeting in the place of such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to approving or adopting, or recommending to the stockholders, any action or matter expressly required by the Delaware General Corporation Law to be submitted to stockholders for approval or adopting, amending or repealing any bylaw of the Corporation; and unless the resolution designating the committee, these bylaws or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors, when required. Unless otherwise specified in the Board resolution appointing the Committee, all provisions of the Delaware General Corporation Law and these Bylaws relating to meetings, action without meetings, notice (and waiver thereof), and quorum and voting requirements of the Board of Directors apply, as well, to such committees and their members. 3.8. COMPENSATION OF DIRECTORS The Board of Directors shall have the authority to fix the compensation of directors. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. 4. OFFICERS 4.1. POSITIONS The officers of the Corporation shall be a Chairperson, a President, a Secretary and a Treasurer, and such other officers as the Board of Directors (or an officer authorized by the Board of Directors) from time to time may appoint, -14- including one or more Vice Chairmen, Executive Vice Presidents, Vice Presidents, Assistant Secretaries and Assistant Treasurers. Each such officer shall exercise such powers and perform such duties as shall be set forth below and such other powers and duties as from time to time may be specified by the Board of Directors or by any officer(s) authorized by the Board of Directors to prescribe the duties of such other officers. Any number of offices may be held by the same person, except that in no event shall the President and the Secretary be the same person. As set forth below, each of the Chairperson, President, and/or any Vice President may execute bonds, mortgages and other contracts under the seal of the Corporation, if required, except where required or permitted by law to be otherwise executed and except where the execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. 4.2. CHAIRPERSON The Chairperson shall (when present) preside at all meetings of the Board of Directors and stockholders, and shall ensure that all orders and resolutions of the Board of Directors and stockholders are carried into effect. The Chairperson may execute bonds, mortgages and other contracts, under the seal of the Corporation, if required, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. 4.3. PRESIDENT The President shall be the chief operating officer of the Corporation and shall have full responsibility and authority for management of the day-to-day operations of the Corporation, subject to the authority of the Board of Directors and Chairperson. The President may execute bonds, mortgages and other contracts, under the seal of the Corporation, if required, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. 4.4. VICE PRESIDENT In the absence of the President or in the event of the President's inability or refusal to act, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the -15- President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. 4.5. SECRETARY The Secretary shall have responsibility for preparation of minutes of meetings of the Board of Directors and of the stockholders and for authenticating records of the Corporation. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors. The Secretary or an Assistant Secretary may also attest all instruments signed by any other officer of the Corporation. 4.6. ASSISTANT SECRETARY The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there shall have been no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of the Secretary's inability or refusal to act, perform the duties and exercise the powers of the Secretary. 4.7. TREASURER The Treasurer shall be the chief financial officer of the Corporation and shall have responsibility for the custody of the corporate funds and securities and shall see to it that full and accurate accounts of receipts and disbursements are kept in books belonging to the Corporation. The Treasurer shall render to the Chairperson, the President, and the Board of Directors, upon request, an account of all financial transactions and of the financial condition of the Corporation. 4.8. ASSISTANT TREASURER The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there shall have been no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurer's inability or refusal to act, perform the duties and exercise the powers of the Treasurer. 4.9. TERM OF OFFICE The officers of the Corporation shall hold office until their successors are chosen and qualify or until their earlier resignation or removal. Any officer may -16- resign at any time upon written notice to the Corporation. Any officer elected or appointed by the Board of Directors may be removed at any time, with or without cause, by the affirmative vote of a majority of the Board of Directors. 4.10. COMPENSATION The compensation of officers of the Corporation shall be fixed by the Board of Directors or by any officer(s) authorized by the Board of Directors to prescribe the compensation of such other officers. 4.11. FIDELITY BONDS The Corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise. 5. CAPITAL STOCK 5.1. CERTIFICATES OF STOCK; UNCERTIFICATED SHARES The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution that some or all of any or all classes or series of the Corporation's stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates, and upon request every holder of uncertificated shares, shall be entitled to have a certificate (representing the number of shares registered in certificate form) signed in the name of the Corporation by the Chairperson, President or any Vice President, and by the Treasurer, Secretary or any Assistant Treasurer or Assistant Secretary of the Corporation. Any or all the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar whose signature or facsimile signature appears on a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. 5.2. LOST CERTIFICATES The Board of Directors, Chairperson, President or Secretary may direct a new certificate of stock to be issued in place of any certificate theretofore issued by -17- the Corporation and alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming that the certificate of stock has been lost, stolen or destroyed. When authorizing such issuance of a new certificate, the board or any such officer may, as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner's legal representative, to advertise the same in such manner as the board or such officer shall require and/or to give the Corporation a bond or indemnity, in such sum or on such terms and conditions as the board or such officer may direct, as indemnity against any claim that may be made against the Corporation on account of the certificate alleged to have been lost, stolen or destroyed or on account of the issuance of such new certificate or uncertificated shares. 5.3. RECORD DATE 5.3.1. ACTIONS BY STOCKHOLDERS In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty days nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, unless the Board of Directors fixes a new record date for the adjourned meeting. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by the Delaware General Corporation Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner prescribed by Section 213(b) of the Delaware General Corporation Law. If no record -18- date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Delaware General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. 5.3.2. PAYMENTS In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. 5.4. STOCKHOLDERS OF RECORD The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, to receive notifications, to vote as such owner, and to exercise all the rights and powers of an owner. The Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise may be provided by the Delaware General Corporation Law. 6. INDEMNIFICATION; INSURANCE 6.1. AUTHORIZATION OF INDEMNIFICATION Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether by or in the right of the Corporation or otherwise (a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, partner (limited or general) or agent of another corporation or of a partnership, joint venture, limited liability company, trust or -19- other enterprise, including service with respect to an employee benefit plan, shall be (and shall be deemed to have a contractual right to be) indemnified and held harmless by the Corporation (and any successor to the Corporation by merger or otherwise) to the fullest extent authorized by, and subject to the conditions and (except as provided herein) procedures set forth in the Delaware General Corporation Law, as the same exists or may hereafter be amended (but any such amendment shall not be deemed to limit or prohibit the rights of indemnification hereunder for past acts or omissions of any such person insofar as such amendment limits or prohibits the indemnification rights that said law permitted the Corporation to provide prior to such amendment), against all expenses, liabilities and losses (including attorneys' fees, judgments, fines, ERISA taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, that the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person (except for a suit or action pursuant to SECTION 6.2 hereof) only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. Persons who are not directors or officers of the Corporation and are not so serving at the request of the Corporation may be similarly indemnified in respect of such service to the extent authorized at any time by the Board of Directors of the Corporation. The indemnification conferred in this SECTION 6.1 also shall include the right to be paid by the Corporation (and such successor) the expenses (including attorneys' fees) incurred in the defense of or other involvement in any such proceeding in advance of its final disposition; provided, however, that, if and to the extent the Delaware General Corporation Law requires, the payment of such expenses (including attorneys' fees) incurred by a director or officer in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer to repay all amounts so paid in advance if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this SECTION 6.1 or otherwise; and provided further, that, such expenses incurred by other employees and agents may be so paid in advance upon such terms and conditions, if any, as the Board of Directors deems appropriate. 6.2. RIGHT OF CLAIMANT TO BRING ACTION AGAINST THE CORPORATION If a claim under SECTION 6.1 is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring an action against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such action. It shall be a defense to any such action (other than an action brought to enforce a -20- claim for expenses incurred in connection with any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed or is otherwise not entitled to indemnification under SECTION 6.1, but the burden of proving such defense shall be on the Corporation. The failure of the Corporation (in the manner provided under the Delaware General Corporation Law) to have made a determination prior to or after the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law shall not be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Unless otherwise specified in an agreement with the claimant, an actual determination by the Corporation (in the manner provided under the Delaware General Corporation Law) after the commencement of such action that the claimant has not met such applicable standard of conduct shall not be a defense to the action, but shall create a presumption that the claimant has not met the applicable standard of conduct. 6.3. NON-EXCLUSIVITY The rights to indemnification and advance payment of expenses provided by SECTION 6.1 hereof shall not be deemed exclusive of any other rights to which those seeking indemnification and advance payment of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. 6.4. SURVIVAL OF INDEMNIFICATION The indemnification and advance payment of expenses and rights thereto provided by, or granted pursuant to, SECTION 6.1 hereof shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee, partner or agent and shall inure to the benefit of the personal representatives, heirs, executors and administrators of such person. 6.5. INSURANCE The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the -21- Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, partner (limited or general) or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, against any liability asserted against such person or incurred by such person in any such capacity, or arising out of such person's status as such, and related expenses, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of the Delaware General Corporation Law. 7. GENERAL PROVISIONS 7.1. INSPECTION OF BOOKS AND RECORDS Any stockholder, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office or at its principal place of business. 7.2. DIVIDENDS The Board of Directors may declare dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation and the laws of the State of Delaware. 7.3. RESERVES The directors of the Corporation may set apart, out of the funds of the Corporation available for dividends, a reserve or reserves for any proper purpose and may abolish any such reserve. -22- 7.4. EXECUTION OF INSTRUMENTS All checks, drafts or other orders for the payment of money, and promissory notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. 7.5. FISCAL YEAR The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. 7.6. SEAL The corporate seal shall be in such form as the Board of Directors shall approve. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced. 7.7. AMENDMENT These by-laws may be amended or repealed by the Board of Directors at any meeting or by the stockholders casting 66 2/3% of the outstanding stock of the Corporation entitled to vote thereon at any meeting. * * * * * The foregoing Bylaws were adopted by the Board of Directors on _________________, 2001. ________________________________ Secretary -23- EX-10.18 4 c68906a1ex10-18.txt EMPLOYMENT CONTRACT DATED 8/13/01 EXHIBIT 10.18 August 13, 2001 Arthur R. Brown 8103 North Bridge Way Maumee, OH 43537 Dear Art: On behalf of Wabash National, I am pleased to offer you the position of Vice President & Chief Operating Officer located in Lafayette, IN. In this position, you will report directly to the Chief Executive Officer. As the VP & COO, you will be considered a full partner peer with top management and will be allowed to recruit and build your team. The functions reporting to you will be: All Manufacturing encompassing four (4) manufacturing locations (Indiana, Iowa, Arkansas, Tennessee), Industrial Engineering, Purchasing, Manufacturing Engineering and Quality. The MINIMUM base salary for this exempt position is $25,000 per monthly pay period, which converts to $300,000 annually. In addition, you will receive a guaranteed bonus in the amount of $100,000 for FY2001. This amount will be paid to you in February 2002. Going forward, you will be eligible to participate in the annual Bonus Plan with a minimum target level of 50% of your base annual salary. This offer of employment includes the following terms and conditions: - - You must successfully complete and pass a company provided drug screen and physical - - You are eligible for Wabash National benefits beginning your first day of employment - - A sign on bonus equal to $100,000 will be paid to you within thirty (30) days from the start of your employment - - Four (4) weeks of annual vacation. You will receive a prorated amount of eight (8) days for the balance of FY 2001 - - Wabash National will cover the full cost to enter and complete the Executive MBA program at Purdue University regardless of employment status as long as you are not released for gross misconduct or voluntarily terminate your employment - - Stock options - 5k restricted stock and 10k options, each vesting over three (3) years - 100k of Phantom, or equivalent, stock issued immediately at the start of employment at current market price - vesting will be over three (3) years - - If your employment terminates for any reason at the discretion of the Company, other than for reasons of gross misconduct (i.e., theft, fraud, etc.), you will vest automatically in all restricted stock, stock options and Phantom Stock - - Full relocation package to include all closing costs on both ends, moving all goods, storage, temporary living for ninety (90) days, home buy out and 3 points, reimbursement will be grossed up for tax purposes - - You will be guaranteed 2 years of employment from your date of hire, or pay in lieu of, if released. In addition, you will be guaranteed a two (2) year severance package (base salary) if you are released from employment by the company for any reason other than gross misconduct All associates of Wabash National are considered employees at will. Nothing contained in this offer of employment or any other document provided to you is intended to be, nor should be, construed as a guarantee that employment, compensation, or any benefit will be continued for any period of time greater than those stipulated in this document. Art, provided you are in agreement and understand the terms and conditions of this employment offer, please endorse the enclosed copy of this letter and return to me. We are pleased to make you this offer and look forward to your joining our Wabash National Team. If you have any questions, please feel free to contact me at 765-771-5300. Best Regards, Richard E. Dessimoz Acting CEO I understand and accept the terms and conditions contained in this employment offer. - --------------------------- ------------------- Arthur R. Brown Date EX-10.21 5 c68906a1ex10-21.txt ASSET PURCHASE AGREEMENT DATED 1/11/02 EXHIBIT 10.21 TRANSLATION FROM THE GERMAN LANGUAGE ASSET PURCHASE AGREEMENT (THE "AGREEMENT") JANUARY 11, 2002 between 1. BAYERISCHE TRAILERZUG GESELLSCHAFT FUR BIMODALEN GUTERVERKEHR MBH, Poccistrasse 7, D-80336 Munich (the "Purchaser" or "BTZ" ), and 2. WABASH NATIONAL CORPORATION, 1000 Sagamore Parkway South, Lafayette, Indiana 47905, U.S.A. (the "SELLER" or "WABASH"). The Purchaser and the Seller, as the case may be, each are referred to herein as a "PARTY" and collectively as the "PARTIES". TRANSLATION FROM THE GERMAN LANGUAGE WHEREAS (1) The Purchaser is a company with limited liability under German law with its registered seat in Munich, Germany, and is registered in the Commercial Register Munich under registration number HRB 97439. (2) The Seller is a corporation under the laws of Delaware, with its commercial seat in Lafayette, Indiana, U.S.A. (3) ETZ Europaische Trailerzug Beteiligungsgesellschaft mbH ("ETZ" or the "COMPANY") is a company with limited liability under German law with its registered seat in Munich, Germany, registered under registration number HRB 106942 in the Commercial Register Munich. As of this date Brennero Trasporto Rotaio S.p.A., Bimodal and Wabash have concluded a Framework Agreement (the "FRAMEWORK AGREEMENT"). (4) In execution of the respective terms and conditions of the Framework Agreement, the Seller wishes to sell the Purchaser, and the Purchaser wishes to purchase from the Seller the assets listed in Annex ./1 to the Framework Agreement. NOW, THEREFORE, in consideration of the mutual promises made herein and mutual benefits to be derived from this Agreement, the Parties hereto agree as follows: ARTICLE I DEFINITIONS Except if expressly stated otherwise in this Agreement, the defined terms in this Agreement shall have the same meaning as in the Framework Agreement. The defined terms in this Agreement shall have the meaning as set out below: AGREEMENT This asset purchase agreement. FRAMEWORK AGREEMENT The framework agreement between the Parties as of this date. PURCHASE PRICE The aggregate purchase price for the Acquired Assets pursuant to Article IV of this Agreement. PURCHASER BTZ Bayerische Trailerzug Gesellschaft fur bimodalen Guterverkehr mbH. PARTIES Wabash and BTZ.
2 TRANSLATION FROM THE GERMAN LANGUAGE ARTICLE II PURCHASE (1) The assets to be sold are existing trailers and bogies as listed in Annex ./1 to the Framework Agreement (the "ACQUIRED ASSETS") owned by the Seller and currently operated by BTZ. (2) The Seller hereby sells to the Purchaser, and the Purchaser purchases from the Seller the Acquired Assets at the Purchase Price and under the conditions provided in this Agreement. (3) The Purchaser hereby undertakes to pay the Purchase Price set forth in Article IV to the Seller pursuant to the terms and conditions provided in this Agreement. ARTICLE III TRANSFER OF ACQUIRED ASSETS (1) This Agreement shall be enter into force upon effectiveness of the Framework Agreement. The Purchaser and the Seller agree that ownership in the Acquired Assets shall pass from the Seller to the Purchaser upon effectiveness of this Agreement and upon fulfilment of the financing obligation pursuant to Article IV of the Framework Agreement. (2) As of the date as indicated in Paragraph (1) of this Article III above, the Seller shall transfer to the Purchaser the Acquired Assets including the letters pursuant to Annex ./1 of the Framework Agreement. In the event of the Seller not being in direct possession (unmittelbarer Besitz) of the Acquired Assets, the Seller hereby assigns its claim for redelivery (Herausgabeanspruch) against the respective possessor (Besitzer) to the Purchaser. The Seller will use its best knowledge to make efforts to support the bank financing provided for under the Framework Agreement by entering into a so-called remarketing agreement in conformity with banking and referring to the Acquired Assets, such remarketing agreement corresponding to existing remarketing agreements entered into with KfW and Deutsche Bank. ARTICLE IV PURCHASE PRICE (1) The Purchase Price for the Acquired Assets sold pursuant to Article II above shall be in the total amount of (euro) 1,-- (Euro one) plus, if applicable, VAT (the "PURCHASE PRICE"). (2) The Purchase Price shall be due as of the date of this Agreement and shall be paid by the Purchaser to the Seller in cash. 3 TRANSLATION FROM THE GERMAN LANGUAGE ARTICLE V LIMITATION OF WARRANTY/EXCLUSION OF FURTHER CLAIMS Unless otherwise expressly provided in this Agreement or the Framework Agreement the following shall apply: (1) The Acquired Assets are sold "as is- where is" out of the property of the Seller, unencumbered by third party rights. All necessary and/or required technical examinations, in particular the main technical check ups and examinations of the breaks (Haupt- und Bremsuntersuchung) have been conducted in due manner and time. Considering the inspection performed by the Purchaser and the continued use of the Acquired Assets by it, any contractual liability or liability based on statue of the Seller in terms of material defects (Sachmangel) is expressly excluded. The Seller shall, however, be liable for defect of title (Rechtsmangelhaftung) according to the relevant provisions of statutory law. Rescission from (Rucktritt) and unwinding of (Wandlung) the Agreement is excluded, unless otherwise provided in the Agreement. (2) Notwithstanding Paragraph (1) of this Article V above, the provisions of the Framework Agreement shall apply to the type and volume of liability arising under this Agreement. ARTICLE VI CONFIDENTIALITY (1) The Parties agree that the existence and the substance of this Agreement including all Annexes hereto shall remain confidential and, subject to the requirements of mandatory law, shall not be announced or otherwise disclosed without the prior written consent of the other Party. (2) All communications, in particular addressed to the media, to customers, to suppliers or to distributors, shall be agreed upon in advance by the Parties. (3) This obligation of confidentiality shall not apply to information that is generally available to the public, or is required to be disclosed by law, court order or request by any governmental or regulatory authority. ARTICLE VII COSTS, STAMP DUTIES AND TAXES (1) All costs resulting from negotiation and drafting of this Agreement, including but not limited to fees charged by advisers in legal, accountancy and financial matters, shall be borne by such Party where they occurred and shall not be reimbursable by the other Party. (2) The Purchaser and the Seller shall respectively bear 50% of any transfer and sales taxes and fees, including but not limited to, notarial fees in connection with this Agreement. The Purchaser undertakes to file the transaction documents with the relevant authorities, to the extent necessary, for the assessment of transfer taxes, stamp duties and other public dues. 4 TRANSLATION FROM THE GERMAN LANGUAGE ARTICLE VIII GENERAL PROVISIONS (1) This Agreement and the Framework Agreement including its Annexes contain the entire agreement between the Parties relating to the transaction contemplated by this Agreement. They supersede respectively replace any previous agreements between the Parties relating to this transaction. Each of the Parties confirms that by agreeing to enter into this Agreement it does not rely on any representation, warranty or other assurance except as expressly set out in this Agreement. (2) The Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or construction of this Agreement. (3) This Agreement shall not be amended or completed orally and shall not be amended or discharged in whole or in part, otherwise than by an instrument in writing signed by the Parties or their successors or assignees. (4) Except as otherwise provided in this Agreement, any failure of any of the Parties to comply with any obligation, covenant, agreement or condition of this Agreement may be waived by the Party or Parties entitled to the benefits of such obligation, covenant, agreement or condition only by an instrument in writing signed by the Party granting such waiver. Such waiver or failure to insist upon strict compliance with any such obligation, covenant, agreement or condition shall not operate as a waiver of any other obligation, covenant, agreement or condition and shall not be deemed to represent any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any Party to this Agreement, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth above. (5) Should any provision of this Agreement become wholly or partly invalid or unenforceable, this will not affect the validity or enforceability of the remaining provisions hereof. In this event, the Parties shall start negotiations without undue delay with a view to amend this Agreement so that the invalid or unenforceable provision shall be substituted by a valid or enforceable provision the essence and purpose of which comes as close as possible to the invalid or unenforceable provision. (6) The failure of any Party to enforce or exercise, at any time or for any period of time, any term of, or any right or remedy arising pursuant to, or under this Agreement, does not constitute and shall not be construed as, a waiver of such term or right or remedy and shall in no way affect the Parties' right to enforce or exercise such term or right or remedy at a later time, provided that such right is not time barred or precluded. Any waiver to this effect must be expressly in writing. (7) Neither this Agreement nor any of the rights, benefits or obligations hereunder shall be susceptible of assignment by any of the Parties hereto without the prior written consent of the other Parties. (8) This Agreement is executed in two counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement has been produced in the German language; any translations of this 5 TRANSLATION FROM THE GERMAN LANGUAGE Agreement are for working purposes only and shall have no influence on the construction of the Agreement. (9) All notices under this Agreement shall be in writing and shall be sent to the following addresses per registered or certified mail or by confirmed facsimile transmission: For the Seller: WABASH National Corporation, Tel.:+765 771 5300 1000 Sagamore Parkway South, email: rich.dessimoz@wabashnational.com Lafayette, Indiana 47905, U.S.A. Attn.: Mr Rich Dessimoz, CEO For the Purchaser: Bayerische Trailerzug Gesellschaft fur bimodalen Guterverkehr mbH, Poccistrasse 7, D-80336 Munich Attn.: Management Board (10) All such notices shall be deemed received upon (i) actual receipt thereof by the addressee, (ii) actual delivery thereof to the appropriate address or (iii) in the case of a facsimile transmission, upon transmission thereof by the sender and by return facsimile by the addressee confirming that the number of pages constituting the notice have been received without error. In the case of notices sent by facsimile transmission, the sender shall contemporaneously send a copy of the notice by registered mail to the addressee at the address provided for above. However, such mailing shall in no way alter the time at which the facsimile notice is deemed received. ARTICLE IX APPLICABLE LAW (1) This Agreement shall be governed by and construed in accordance with the laws of Germany, without giving effect to the principles of conflicts of law thereof. The applicability of the provisions of the United Nations Convention on Contracts for the International Sale of Goods expressly excluded. (2) The courts of Munich shall have exclusive jurisdiction to decide on all litigations arising under and in connection with this Agreement including all its Annexes. [reminder of the following page intentionally left blank] 6 TRANSLATION FROM THE GERMAN LANGUAGE Munich, 11 January, 2002 FOR THE SELLER _____________________________ _______________________________ FOR THE PURCHASER _____________________________ _______________________________ Agreeing to the contents of this Agreement: ____________________________________ Bimodal Verwaltungs Gesellschaft mbH 7 EX-10.22 6 c68906a1ex10-22.txt SHARE PURCHASE AGREEMENT DATED 1/11/02 EXHIBIT 10.22 TRANSLATION FROM THE GERMAN LANGUAGE SHARE PURCHASE AGREEMENT(1) (THE "AGREEMENT") 11 JANUARY 2002 between 1. BRENNERO TRASPORTO ROTAIA S.P.A., Brennerstrasse 7, I-39100 Bozen, Italy ("STR"), 2. BIMODAL VERWALTUNGS GESELLSCHAFT MBH, Rhondorfer Strasse 85, D-53604 Bad Honnef, Germany ("BIMODAL"), (collectively the "PURCHASERS") and 3. WABASH NATIONAL CORPORATION, 1000 Sagamore Parkway South, Lafayette. Indiana 47905, U.S.A. ("WABASH" or the "SELLER"). The Purchasers and the Seller, as the case may be, each are referred to herein as a "PARTY" and collectively as the "PARTIES". - ---------- (1) This Agreement has to be executed in the form of a German notarial deed. TRANSLATION FROM THE GERMAN LANGUAGE WHEREAS (1) The Company is a company with limited liability under German law, with its registered seat in Munich, Germany, registered under the registration number HRB 10642 in the Commercial Register Munich with a fully paid up nominal share capital of DEM 17,357,000,-- (in words: German Mark seventeen million three hundred fifty-seven thousand). (2) STR is a joint stock corporation under Italian law registered under registration number 01667390213 in the Commercial Register Bozen, Italy and having its commercial seat in Bozen, Italy. (3) Bimodal is a company with limited liability under German law which until present had been registered in the commercial register of the District Court of Frankfurt (Amtsgericht Frankfurt) under registration number HRB 53240 under the name of "Blitz F01-901 GmbH", which had had its registered seat in Frankfurt/Main and the name of which has been changed to "Bimodal Verwaltungs GmbH" by a shareholders' resolution certified by a notary public, but not registered so far and the seat of which has been transferred to Bad Honnef. (4) The Seller is a corporation under the laws of Delaware, with its registered seat in Lafayette, Indiana, U.S.A., owning 100% of the shares (Geschaftsanteile) in the Company (the "SHARES"). (5) As of this date, the Seller and the Purchasers have concluded a Framework Agreement (the "FRAMEWORK AGREEMENT"). In execution of the respective terms and conditions of the Framework Agreement the Seller wishes to sell and transfer, and the Purchasers together wish to purchase and acquire 100% of the Shares in the Company representing the entire nominal share capital of the Company under the terms and conditions of this Agreement. STR wishes to purchase 49% of the Shares and Bimodal wishes to purchase 51% of the Shares. NOW, THEREFORE, in consideration of the mutual promises made herein and the mutual benefits to be derived form this Agreement, and in execution of the Framework Agreement the Parties hereto agree as follows: ARTICLE I DEFINITIONS Except if expressly defined otherwise in this Agreement, the defined terms in this Agreement shall have the same meaning as in the Framework Agreement entered into between the Parties as of this date (the "FRAMEWORK AGREEMENT"). The defined terms in this Agreement shall have the meaning as set out below: 2 TRANSLATION FROM THE GERMAN LANGUAGE AGREEMENT This Share Purchase Agreement. FRAMEWORK AGREEMENT The Framework Agreement between Wabash, STR and Bimodal as of this date. PURCHASE PRICE The Purchase Price for all the Shares in the Company pursuant to Article III.
ARTICLE II SALE AND TRANSFER OF SHARES (1) The Seller as the sole shareholder of ETZ, waiving any and all requirements in terms of form and time of a shareholders' meeting, hereby resolves to pool all shares of ETZ into one single share of the nominal value of DEM 17,357,000.00. (2) For the purpose of transfer pursuant to Paragraph 3, the Seller hereby divides the share of ETZ of the nominal value of DEM 17,357,000.00 into one share of the nominal value of DEM 8,852,160.00 and into one share of the nominal value of DEM 8,504,960.00. The Seller as the sole shareholder of ETZ, waiving all requirements in terms of form and time of a shareholders' meeting, hereby resolves that the division pursuant the first sentence shall be agreed upon. (3) The seller sells and transfers to Bimodal, which accepts this, a share of a nominal value of DEM 8,852,160.00. The Seller sells and transfers to STR, which accepts this, a share of a nominal value of DEM 8,504,960.00. (4) The Seller as the sole shareholder of ETZ, waiving any and all requirements in terms of form and time of a shareholders' meeting, that the transfer of shares pursuant to Paragraph 3 shall be agreed upon. (5) The transfer of shares pursuant to Paragraph 3 shall be effective upon the effectiveness of the Framework Agreement. (6) The transfer of shares pursuant to Paragraph 3 shall become effective on the basis of the law of obligations (schuldrechliche Wirkung) as of January 1, 2002, including any and all corresponding dividends (Gewinnbezugsrecht), irrespective of the fact that they were distributed or not. ARTICLE III PURCHASE PRICE (1) The purchase price for the Shares sold pursuant to Article II (1) above shall be in the amount of (euro) 1.-- (in words: Euro one) (the "PURCHASE PRICE"). (2) The Purchase Price shall be due on the date of this Agreement and shall jointly be paid by the Purchasers to the Seller free of any charges and fees. 3 TRANSLATION FROM THE GERMAN LANGUAGE ARTICLE IV EXCLUSION OF FURTHER CLAIMS UNLESS OTHERWISE PROVIDED FOR IN EXPRESS TERMS IN THIS AGREEMENT OR THE FRAMEWORK AGREEMENT, THE PROVISIONS OF THE FRAMEWORK AGREEMENT SHALL APPLY IN TERMS OF THE TYPE AND SCOPE OF LIABILITY UNDER THIS AGREEMENT. ARTICLE V CONFIDENTIALITY (1) The Parties agree that the existence and substance of this Agreement, including all Annexes thereto, shall remain confidential and, notwithstanding the requirements of mandatory law, shall not be announced or otherwise disclosed without the prior written consent of the other Party. (2) All communications, especially to the media, to customers, to suppliers, distributors, or authorized dealers shall be agreed upon in advance by the Parties. (3) This obligation of confidentiality shall not apply to information that is generally available to the public, or is required to be disclosed by law, court order or request by any governmental or regulatory authority. ARTICLE VI COSTS AND TAXES (1) All costs resulting from negotiation and drafting of this Agreement, including but not limited to fees charged by legal, accountancy and financial advisors, shall be borne by such Party where they occurred and shall not be reimbursable by the other Party or the Company. (2) The Purchaser and the Seller shall respectively bear 50% of any transfer and sales taxes and fees, including but not limited to, notarial fees in connection with this Agreement. ARTICLE VII GENERAL PROVISIONS (1) This Agreement and the Framework Agreement including its Annexes contain the entire agreement between the Parties relating to the transaction contemplated by this Agreement and supersede and replace any previous agreements between the Parties relating to this transaction. Each of the Parties acknowledges that in agreeing to enter into this Agreement it has not relied on any representation, warranty or other assurance except as expressly set out in this Agreement or the Framework Agreement. 4 TRANSLATION FROM THE GERMAN LANGUAGE (2) The Article and Section headings contained in this Agreement are solely for the purpose of reference, are not of the agreement between the Parties and shall not in any way affect the meaning or construction of this Agreement. (3) This Agreement shall not be amended orally and shall not be amended or discharged in whole or in part, otherwise than by an instrument in writing signed by the Parties or their successors or their assignees. (4) If one or several provisions of this Agreement should be or become invalid or unenforceable, the remaining provisions hereof shall not be affected thereby. The invalid or unenforceable provision shall be deemed to be replaced by such valid or enforceable provision as the Parties hereto would have chosen upon entering into this Agreement in order to reach the commercial effect of the provision to be replaced if they had foreseen the invalidity or unenforceability at the time of the conclusion of this Agreement. The foregoing shall also apply to matters as to which this Agreement is silent (Lucke am Vertrag). If a provision of this Agreement should be held invalid by a competent court or arbitration tribunal because of the scope of its coverage (such as territory, subject matter, time period or amount), said provision shall not be deemed to be completely invalid but shall be deemed to be valid with the permissible scope that is nearest to the scope originally agreed upon. (5) Except as otherwise provided in this Agreement, any failure of any of the Parties to comply with any obligation, covenant, agreement or condition of this Agreement may be waived by the Party or Parties entitled to the benefits thereof only by a written instrument signed by the Party granting such waiver, but such waiver or failure to insist upon strict compliance with any such obligation, covenant, agreement or condition shall not be deemed a waiver of any other obligation, covenant, agreement or condition or any subsequent or other failure. IWhenever this Agreement requires or permits consent by or on behalf of any Party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth herein. (6) This Agreement has been produced in the German language; any translations thereof are for working purposes only and shall have no influence on the interpretation of the Agreement. (7) Neither this Agreement nor any of the rights, interests or obligations hereunder shall be susceptible of assignment by any of the Parties hereto without the prior written consent of the other Party. (8) All notices under this Agreement shall be in writing and shall be sent to the following addresses per registered or certified mail or by confirmed facsimile transmission: For the Seller: WABASH National Corporation, Tel: +7657715300 1000 Sagamore Parkway South, email: rich.dessimoz@wabashnational.com Lafayette, Indiana 47905, U.S.A. Attn.: Rich Dessimoz 5 TRANSLATION FROM THE GERMAN LANGUAGE For STR: Brennero Trasporto Rotoia S.p.A. Tel.: [...] Brennerstrasse 7, I-39100 Bozen, Fax.: [...] Italy Email: [...] Attn.: [...] For Bimodal: Bimodal Verwaltungs Gesellschaft Tel.: [...] mbH, Rhondorfer Strasse 85, D-53604 Fax.: [...] Bad Honnef, Germany Email: [...] Attn.: [...] All such notices shall he deemed received upon (i) actual receipt thereof by the addressee, (ii) actual delivery thereof to the appropriate address or (iii) in the case of a facsimile transmission, upon transmission thereof by the sender and by return facsimile by the addressee confirming that the number of pages constituting the notice have been received without error. In the case of notices sent by facsimile transmission, the sender shall contemporaneously send a copy of the notice by registered mail to the addressee at the address provided for above. However, such mailing, shall in no way alter the time at which the facsimile notice is deemed received. ARTICLE VIII APPLICABLE LAW (1) This Agreement shall be governed by and construed in accordance with the laws of Germany, without giving effect to the principles of conflicts of law thereof. The application of the United Nations Convention on Contracts for the International Sale of Goods shall expressly be excluded. (2) The courts of Munich shall have exclusive jurisdiction to decide on all litigations arising under and in connection with this Agreement including all its Annexes. (3) The Agreement has to be executed in the way the Framework Agreement is executed. [Reminder of page intentionally left blank] 6 TRANSLATION FROM THE GERMAN LANGUAGE Munich, 11 January 2002 ON BEHALF OF THE SELLER _____________________________ _______________________________ [...] [...] ON BEHALF OF STR _____________________________ _______________________________ [...] [...] ON BEHALF OF BIMODAL _____________________________ _______________________________ [...] [...] 7 EX-10.23 7 c68906a1ex10-23.txt MASTER AMENDMENT AGREEMENT DATED 4/11/02 EXHIBIT 10.23 EXECUTION COPY MASTER AMENDMENT AGREEMENT dated as of April 11, 2002 among APEX TRAILER LEASING & RENTALS, L.P., as Lessee WABASH NATIONAL CORPORATION, as Guarantor WABASH STATUTORY TRUST - 2000, as Lessor STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity except as provided herein, but solely as Trustee THE INSTITUTIONS INDICATED IN SCHEDULE I, as Tranche A Lenders FLEET CAPITAL CORPORATION, as Tranche B Lender FLEET CAPITAL CORPORATION, as Owner Participant FLEET CAPITAL CORPORATION, as Collateral Agent and FLEET CAPITAL CORPORATION, as Administrative Agent TABLE OF CONTENTS
PAGE ---- ARTICLE I DEFINITIONS; WAIVER.......................................... 1 SECTION 1.1 Use of Defined Terms................................... 1 SECTION 1.2 Waiver of Rights....................................... 2 ARTICLE II AMENDMENTS................................................... 2 SECTION 2.1 Amendments to the Participation Agreement.............. 2 (a) Amendments to Section 6.1(e).............................. 2 (b) Deletion of Section 6.1(f)................................ 3 (c) Deletion of Section 6.1(g)................................ 3 (d) Amendments to Section 6.1................................. 3 (e) Deletion of Section 2.3(q)................................ 4 (f) Amendment to Section 10.1(b).............................. 4 (g) Amendments to Section 13.................................. 5 SECTION 2.2 Amendments to Appendix A to the Participation Agreement. ............................................ 5 (a) Amendment to Definition of "Applicable Margin"............ 5 (b) Addition of Definition of "Bank Group".................... 6 (c) Addition of Definition of "Credit Agreement".............. 6 (d) Addition of Definition of "Custodian"..................... 6 (e) Amendment to Definition of "Initial Letter of Credit.".... 6 (f) Amendment to Definition of "Interest Rate"................ 6 (g) Amendment to Definition of "Letter of Credit"............. 7 (h) Amendment to Definition of "Letter of Credit Amount"...... 7 (i) Amendment to Definition of "Maturity Date"................ 7 (j) Addition of Definition of "Master Equipment Lease Agreement." ........................................ 7 (k) Addition of Definition of "Master Equipment Lease Parties." .......................................... 7 (l) Addition of Definition of "Noteholder".................... 8 (m) Addition of Definition of "Note Purchase Agreement"....... 8 (n) Addition of the Definition of "Receivables Group."........ 8 (o) Amendment to Definition of "Receivables Purchase Agreement." .............................................. 8 (p) Addition of the Definition of "Reserve Amount"............ 8 (q) Addition of the Definition of "Restructuring Fee"......... 9
-i- TABLE OF CONTENTS (continued)
PAGE ---- SECTION 2.3 Amendments to the Lease................................ 9 (a) Amendment to Section 1.4.................................. 9 (b) Deletion of Article VI.................................... 9 (c) Amendment to Section 9.2(ii) of the Lease................. 9 (d) Amendment to Section 13.1 of the Lease.................... 10 (e) Amendment to Section 17.1 of the Lease.................... 10 ARTICLE III CLOSING CONDITIONS........................................... 11 SECTION 3.1 Amendment Closing Date................................. 11 SECTION 3.2 Closing Conditions..................................... 12 (a) Amendments to Credit Agreement and Note Purchase Agreements ...................................... 12 (b) Restructuring Fee......................................... 12 (c) Termination and Replacement of Limited Power of Attorney.................................................. 12 (d) Collateral Estate......................................... 12 (e) Representations and Warranties............................ 12 (f) Closing Proceedings....................................... 12 (g) Opinions of Counsel....................................... 13 (h) Preliminary Desktop Appraisal............................. 13 (i) Establishment of Account for Reserve Amount............... 13 (j) Fees and Expenses......................................... 13 ARTICLE IV MISCELLANEOUS PROVISIONS..................................... 13 SECTION 4.1 Ratification of and References to the Operative Documents ................................... 13 SECTION 4.2 Headings, Etc.......................................... 13 SECTION 4.3 Counterparts........................................... 13 SECTION 4.4 Governing Law; Entire Agreement........................ 14 SECTION 4.5 Instructions to the Trustee............................ 14
-ii- TABLE OF CONTENTS (continued)
Page ---- SCHEDULE I Institutions Participating as Tranche A Lenders APPENDIX 1 TO SCHEDULE II Definitions for the purposes of Schedule II SCHEDULE II Financial Covenants SCHEDULE III Excepted Representations and Warranties EXHIBIT A Form of Authorized Officer's Certificate of Compliance EXHIBIT B Form of Power of Attorney
-iii- MASTER AMENDMENT AGREEMENT THIS MASTER AMENDMENT AGREEMENT (this "Amendment"), dated as of April 11, 2002, to the Amended and Restated Participation Agreement (the "Participation Agreement"), dated as of March 30, 2001, and the Amended and Restated Equipment Lease (the "Lease"), dated as of March 30, 2001, is entered into by and among APEX TRAILER LEASING & RENTALS, L.P., a Delaware limited partnership, as the Lessee (in such capacity, together with its permitted successors, the "Lessee"); WABASH NATIONAL CORPORATION, a Delaware corporation, as guarantor (the "Guarantor"); WABASH STATUTORY TRUST - 2000, a Connecticut statutory trust, as Lessor (together with its permitted successors and assigns, the "Lessor"); STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity, except as set forth herein, but solely as Trustee (the "Trustee" and in its individual capacity, the "Trust Company"); the Institutions indicated in Schedule I as "Tranche A Lenders" (each, together with its permitted successors and assigns, a "Tranche A Lender," and together with the other Tranche A Lenders, the "Tranche A Lenders"), FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Fleet Capital"), as the Tranche B Lender (in such capacity, together with its permitted successors and assigns, the "Tranche B Lender", and together with the Tranche A Lenders, the "Lenders"); FLEET CAPITAL, as the Owner Participant (in such capacity, together with its permitted successors and permitted assigns, the "Owner Participant", and together with the Lenders, the "Participants"); FLEET CAPITAL, as administrative agent for the Lenders (in such capacity, together with its permitted successors and assigns, the "Administrative Agent"); and FLEET CAPITAL, as collateral agent for the Lenders (in such capacity, together with its permitted successors and assigns, the "Collateral Agent"). W I T N E S S E T H: WHEREAS, the Lessee, the Lessor, the Guarantor, the Trustee, the Lenders, the Owner Participant, the Administrative Agent, and the Collateral Agent have heretofore entered into a certain Participation Agreement dated March 30, 2001; WHEREAS, the Lessee and the Lessor have heretofore entered into a certain Lease dated as of March 30, 2001; WHEREAS, the Lessee, the Lessor, the Guarantor, the Trustee, the Lenders, the Owner Participant, the Administrative Agent, and the Collateral Agent now desire to amend the Participation Agreement and the Lessee and Lessor now desire to amend the Lease. NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I DEFINITIONS; WAIVER SECTION 1.1 Use of Defined Terms. Capitalized terms used but not otherwise defined in this Amendment have the respective meanings specified in Appendix A to the Participation Agreement; and the rules of interpretation set forth in Appendix A to the Participation Agreement shall apply to this Amendment. SECTION 1.2 Waiver of Rights. The Participants, Lessor, Collateral Agent and Administrative Agent hereby waive their right to declare a Lease Event of Default under Section 13.1(e) of the Lease arising from a breach by Lessee or Guarantor of Sections 6.1(e)(ii), (e)(iii), (e)(v) (insofar as such provision relates to existing Lease Events of Default and not to future Unmatured Lease Defaults or Lease Events of Default), (f) or (g) of the Participation Agreement in consideration for the amendments set forth herein. ARTICLE II AMENDMENTS SECTION 2.1 Amendments to the Participation Agreement. (a) Amendments to Section 6.1(e). Section 6.1(e) of the Participation Agreement is hereby amended to include the following provisions after Section 6.1(e)(v): (vi) as soon as available and in any event, within thirty (30) days after the last day of each calendar month, or within forty five (45) days after the last day of each calendar month to the extent such calendar month constitutes a quarter end, (x) a copy of Lessee's balance sheet and related statements of income, retained income and cash flows, of Lessee for such month, setting forth in each case in comparative form the figures for the previous month, all in reasonable detail, and certified by the chief financial officer, treasurer or corporate controller of Lessee as being complete and correct, prepared in accordance with generally accepted accounting principles and fairly presenting Lessee's financial condition and results of operations; (y) to the extent available, a copy of the Guarantor's consolidated balance sheet, and related consolidated statements of income, retained income and cash flows, of Guarantor and its consolidated subsidiaries for such month, setting forth in each case in comparative form the figures for the previous month, all in reasonable detail, and certified by the chief financial officer, treasurer or corporate controller of Guarantor as being complete and correct, prepared in accordance with generally accepted accounting principles and fairly presenting Guarantor's financial condition and results of operations; and (z) an Authorized Officer's Certificate of each of the Lessee and the Guarantor, in each case in the form attached hereto as Exhibit A (with appropriate insertions), stating that such Obligor has duly performed and complied with all conditions contained in the Financial Covenants attached hereto in Schedule II required to be performed or complied with by it; (vii) as soon as available and in any event within fifteen (15) days after the last day of each calendar month, (x) a copy of all information relating to the 2 Equipment subject to the Lease and (y) a report indicating the status, sale or other disposition of each Unit of Equipment for such month; (viii) in the course of each calendar month, all information concerning the business or financial condition of the Lessee or the Guarantor as is provided to (and at the same time as is provided to) the Bank Group, the Receivables Group, the Master Equipment Lease Parties or any of the Noteholders; and (ix) in the course of each calendar month, all other information as is provided to (and at the same time as is provided to) the Bank Group, the Receivables Group, the Master Equipment Lease Parties or any of the Noteholders. (b) Deletion of Section 6.1(f). Section 6.1(f) of the Participation Agreement is hereby deleted. (c) Deletion of Section 6.1(g). Section 6.1(g) of the Participation Agreement is hereby deleted. (d) Amendments to Section 6.1. Section 6.1 of the Participation Agreement is hereby amended to include the following additional provisions after Section 6.1(h): (i) Inspection. Within thirty (30) days after the Amendment Closing Date, each of the Guarantor and the Lessee shall permit, at its sole cost and expense, (i) any authorized representative designated by the Administrative Agent or any Lender to visit and inspect any of the Equipment subject to the Lease, to examine, audit, check and make copies of its financial and accounting records, books, journals, orders, receipts and any other correspondence and other data relating to its business or the transactions contemplated by this Participation Agreement, and to discuss their affairs, finance and accounts with their directors, officers, employees and certified public accountants, and (ii) the Collateral Agent or any of its agents or representatives to conduct a comprehensive field audit of its books, records, properties and assets, including without limitation the Equipment subject to the Lease, all upon reasonable notice, at such reasonable times during normal business hours. (j) Reserve Amount. The Reserve Amount shall be maintained until the earlier to occur of (i) the Maturity Date, and (ii) the Lien of the Collateral Agent against the Collateral Estate having been fully discharged in accordance with the terms of the Operative Documents. (k) Letter of Credit. Throughout the remaining Term, the Lessee shall provide to the Collateral Agent a Letter of Credit in the Letter of Credit Amount. The Letter of Credit shall provide that (a) the issuer of the Letter of Credit shall, 3 at least thirty (30) days prior to the expiration of the Letter of Credit (and, in the case of any expiration date scheduled to occur in the twelve (12) month period preceding the Termination Date (as defined in the Credit Agreement), at least eighty one (81) days prior to such Termination Date), provide written notice to the Collateral Agent of the date upon which the Letter of Credit is set to expire and whether the Letter of Credit has been renewed; and (b) the Collateral Agent may draw upon the Letter of Credit in the event of (i) a Lease Event of Default, or (ii) receipt by the Collateral Agent of notice from the issuer of the Letter of Credit that the Letter of Credit will expire and has not been renewed. During the Term, the Lessee shall maintain the Letter of Credit in an amount equal to the Letter of Credit Amount and the Letter of Credit shall in all respects be in form and substance satisfactory to the Participants. Without limiting the Lessor's right to declare a Lease Event of Default and exercise its remedies pursuant to Section 13 of the Lease, if the Collateral Agent shall draw on the Letter of Credit the proceeds thereof shall be immediately applied to the prepayment of the Loans and Equity Investments without any further notice or action by the Lessor or the Collateral Agent. (l) Financial Covenants. The Lessee or Guarantor, as the case may be, shall comply in all respects with the financial covenants set forth on Schedule II hereto. (m) Other Indebtedness. The Lessee and the Guarantor shall not amend, modify or supplement, or permit any Subsidiary to amend, modify or supplement (or consent to any amendment, modification or supplement of), any document, agreement or instrument evidencing the $192,000,000 aggregate principal amount of the Guarantor's Senior Notes, Series C through I, due 2004-2008 (collectively the "Senior Notes"), the NatCity Lease Agreement (as defined in the Intercreditor Agreement with respect to the Credit Agreement), the Receivables Purchase Agreement, the Note Purchase Agreements or the Credit Agreement (or any replacements, substitutions or renewals thereof) or pursuant to which any such Indebtedness is issued where such amendment, modification or supplement provides for the following or which has any of the following effects: (i) increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest; (ii) shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions; (iii) shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness; (iv) increases the rate of interest accruing on such Indebtedness; 4 (v) provides for the payment of additional fees or increases existing fees; (vi) amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Lessee or the Guarantor or a Subsidiary of either the Lessee or the Guarantor from taking certain actions) in a manner which is more onerous or more restrictive to the Lessee or the Guarantor (or any Subsidiary of either of them) or which is otherwise materially adverse to the Lessee or the Guarantor and/or the Participants or, in the case of adding covenants, which places additional restrictions on the Lessee or the Guarantor (or a Subsidiary of either of them) or which requires the Lessee or the Guarantor or any such Subsidiary to comply with more restrictive covenants than the covenants set forth herein or which requires the Lessee or the Guarantor to better its financial performance from that set forth in the financial covenants set forth herein; (vii) amends, modifies or adds any covenant in a manner which, when taken as a whole, is materially adverse to the Lessee or the Guarantor and/or the Participants; (viii) amends, modifies or supplements any subordination provisions thereof; (ix) amends or modifies the limitations on transfer provided therein; or (x) amends or modifies the Collateral Documents (as defined in the Credit Agreement) in any manner adverse to the Participants. (e) Deletion of Section 2.3(q). Section 2.3(q) of the Participation Agreement is hereby deleted. (f) Amendment to Section 10.1(b). Section 10.1(b) of the Participation Agreement is hereby amended and restated to read as follows: The Lessee shall pay or cause to be paid when due (i) the fees described in Section 4.5 and in the Syndication Agreement, (ii) all reasonable out-of-pocket expenses of the Trustee, the Administrative Agent and the Participants (including reasonable attorneys' fees and legal expenses of one special counsel representing the Administrative Agent, the Lessor, and the Lenders, under this Participation Agreement and the other Operative Documents), (iii) all costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by the Administrative Agent, the Trustee, or any Participant in entering into any future amendments or supplements with respect to any of the Operative Documents, whether or not such amendments or supplements are ultimately entered into, or 5 giving of waivers of consents hereto or thereto, (iv) all costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by the Administrative Agent, the Trustee or any Participant in connection with any purchase or sale of any part of the Equipment by the Lessee or the Lessor, respectively, or any other Person pursuant to the Lease, (v) all costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by the Administrative Agent, the Trustee or any Participant in connection with any substitution, exchange, purchase or sale of any Equipment by the Lessee or the Lessor, respectively, or any other Person pursuant to the Lease, (vi) all costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by any of the other parties hereto in respect of (x) the enforcement of any of their rights or remedies against the Lessee, or the Guarantor under any of the Operative Documents or (y) the negotiation of any restructuring or "work-out" with the Lessee, or the Guarantor, whether or not consummated, of any obligations of the Lessee, or the Guarantor under the Operative Documents (including the Restructuring Fee and costs associated with due diligence and perfection with respect to the Collateral Estate), plus any default premiums charged by the Participants in connection with such restructuring or "work-out" (it being understood that the Participants may charge such premium only in the event that a premium has been charged to the Guarantor by the Bank Group and/or Noteholders under the Credit Agreement and Note Purchase Agreements on the same basis), (vii) all fees and expenses (including, without limitation, its attorneys' fees) incurred by the Participants in connection with the negotiation and documentation of transferring to a third-party Custodian the original certificates of title to the Equipment, (viii) all costs and expenses (including attorneys' fees and legal expenses) incurred by any Participant, the Trustee, the Collateral Agent or the Administrative Agent with respect to the establishment and maintenance of the Reserve Amount with the Collateral Agent designated by the Participants, (ix) all costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by any Participant, the Trustee, the Collateral Agent or the Administrative Agent with respect to the inspection of the Equipment or operations of the Lessee or Guarantor in accordance with Section 6.1(j), and (x) all fees, costs and expenses of the Custodian, the Collateral Agent and any permitted appraiser. (g) Amendments to Section 13. Section 13 of the Participation Agreement is hereby amended to include an additional provision such that the new Section 13.18 will read as follows: Appointment of Custodian. The Participants hereby agree to appoint Custodian to act for them as the custodian in connection with the transfer of physical possession of the original certificates of title for each Unit of Equipment subject to the Lease on the transfer date. All costs and expenses (including attorneys' fees and legal expenses) incurred by any Participant, the Lessor, the Collateral Agent or the Administrative Agent with respect to the custodial arrangement required by this Section 13.18 shall be borne by the Lessee. As soon 6 as practicable but in any event within sixty (60) days of the Amendment Closing Date, the Lessee shall have transferred to Custodian physical possession of the original certificates of title to the Units of Equipment then subject to the Lease, in accordance with the terms of Section 9.2(ii) of the Lease and shall have entered into a custodial arrangement in form and substance satisfactory to the Participants. The Custodian may be replaced at any time by the Participants in their sole discretion. SECTION 2.2 Amendments to Appendix A to the Participation Agreement. (a) Amendment to Definition of "Applicable Margin". The definition of "Applicable Margin" in Appendix A to the Participation Agreement is hereby amended and restated to read as follows: "Applicable Margin" means, (a) with respect to the Tranche A and Tranche B Eurodollar Loans, 380 basis points per annum, (b) with respect to the Eurodollar Equity Investments, 475 basis points per annum, and (c) with respect to any Base Rate Loan(s)/Equity Investments, 150 basis points per annum. (b) Addition of Definition of "Bank Group". The following definition of the term "Bank Group" is hereby added to Appendix A to the Participation Agreement: "Bank Group" means Bank One, Indiana, N.A., as administrative agent and the institutions from time to time party to the Credit Agreement. (c) Addition of Definition of "Credit Agreement". The following definition of the term "Credit Agreement" is hereby added to Appendix A to the Participation Agreement: "Credit Agreement" means that certain Credit Agreement dated September 30, 1997 among the Guarantor and the Bank Group, as subsequently amended or restated. (d) Addition of Definition of "Custodian". The following definition of the term "Custodian" is hereby added to Appendix A to the Participation Agreement: "Custodian" means the financial institution acting as custodian or any other financial institution appointed by the Participants in accordance with the terms of Section 13.18 of the Participation Agreement. (e) Amendment to Definition of "Initial Letter of Credit." 7 The definition of "Initial Letter of Cerdit" in Appendix A to the Participation Agreement is hereby amended and restated to read as follows: "Initial Letter of Credit" means the Irrevocable Standby Letter of Credit issued by Bank One, Indiana, N.A. dated December 29, 2000 in the original principal amount of $7,770,000, as such amount has been subsequently increased to $21,345,000 and the term extended from time to time. (f) Amendment to Definition of "Interest Rate". The definition of "Interest Rate" in Appendix A to the Participation Agreement is hereby amended and restated to read as follows: "Interest Rate" means: (a) with respect to Tranche A Loans (i) that are Eurodollar Loan(s)/Equity Investments, the Adjusted Eurodollar Rate plus the Applicable Margin for such Tranche A Loans and (ii) that are Base Rate Loan(s)/Equity Investments, the Base Rate plus the Applicable Margin; and (b) with respect to Tranche B Loans (i) that are Eurodollar Loan(s)/Equity Investments, the Adjusted Eurodollar Rate plus the Applicable Margin for such Tranche B Loans and (ii) that are Base Rate Loan(s)/Equity Investments, the Base Rate plus the Applicable Margin. (g) Amendment to Definition of "Letter of Credit". The definition of "Letter of Credit" in Appendix A to the Participation Agreement is hereby amended and restated to read as follows: "Letter of Credit" means the Initial Letter of Credit as amended and extended, or a replacement irrevocable standby letter of credit from a bank with a credit rating that is satisfactory to the Lenders, in each case in favor of the Collateral Agent in an amount equal to the Letter of Credit Amount, and complying with Section 6.1(k) of the Participation Agreement. (h) Amendment to Definition of "Letter of Credit Amount". The definition of "Letter of Credit Amount" in Appendix A to the Participation Agreement is hereby amended and restated to read as follows: "Letter of Credit Amount" means an amount equal to $21,345,000. (i) Amendment to Definition of "Maturity Date". The definition of "Maturity Date" in Appendix A to the Participation Agreement is hereby amended and restated to read as follows: 8 "Maturity Date" means January 31, 2005. (j) Addition of Definition of "Master Equipment Lease Agreement." The following definition of the term "Master Equipment Lease Agreement" is hereby added to Appendix A to the Participation Agreement: "Master Equipment Lease Agreement" means that certain Master Lease Equipment Agreement as of December 30, 1996 between National City Leasing Corporation and Wabash National Finance Corporation. (k) Addition of Definition of "Master Equipment Lease Parties." The following definition of the term "Master Equipment Lease Parties is hereby added to Appendix A to the Participation Agreement: "Master Equipment Lease Parties" means the parties to the Master Equipment Lease Agreement dated as of December 30, 1996. (l) Addition of Definition of "Noteholder". The following definition of the term "Noteholder" is hereby added to Appendix A to the Participation Agreement: "Noteholder" or "Noteholders" means the Noteholder or Noteholders under the Note Purchase Agreements. (m) Addition of Definition of "Note Purchase Agreement". The following definition of the term "Note Purchase Agreement" is hereby added to Appendix A to the Participation Agreement: "Note Purchase Agreement" or "Note Purchase Agreements" means any of those certain Note Purchase Agreements dated as of December 1, 1996 among the Guarantor and the Noteholders thereunder as subsequently amended or restated. (n) Addition of the Definition of "Receivables Group." The following definition of the term "Receivables Group" is hereby added to Appendix A to the Participation Agreement: "Receivables Group" means the parties to the Receivables Purchase Agreement dated as of April 11, 2002. (o) Amendment to Definition of "Receivables Purchase Agreement." The following definition of the term "Receivables Purchase Agreement" is hereby amended and restated to read as follows: 9 "Receivables Purchase Agreement" means that certain Receivables Purchase Agreement dated as of April 11, 2002 among WNC Receivables, LLC, as Seller, Wabash Financing LLC, as Servicer, WNC Receivables Management Corporation, as Independent Member, and General Electric Capital Corporation, as Initial Purchaser and as Agent (all capitalized terms used in this definition having the meaning set forth in such Receivables Purchase Agreement). (p) Addition of the Definition of "Reserve Amount". The following definition of the term "Reserve Amount" is hereby added to Appendix A to the Participation Agreement: "Reserve Amount" means $350,000.00. (q) Addition of the Definition of "Restructuring Fee". The following definition of the term "Restructuring Fee" is hereby added to Appendix A to the Participation Agreement: "Restructuring Fee" means the fully-earned and non-refundable one-time fee paid by the Lessee in consideration for restructuring the transactions contemplated in the Participation Agreement, as follows: (a) with respect to the Owner Participant, the product of 50 basis points times the total amount outstanding on the Equity Investments, and (b) with respect to each Lender, the product of 50 basis points times the total amount outstanding under its respective Loan. SECTION 2.3 Amendments to the Lease. (a) Amendment to Section 1.4. Section 1.4 of the Lease is hereby amended and restated to read as follows: Renewal Terms. So long as no Unmatured Lease Default or Lease Event of Default shall have occurred and be continuing, Lessee may, as provided in Section 17.2 hereof, renew this Lease as to all, but not less than all of the Units for one or more consecutive one year renewal terms (each one-year (or shorter period) term, a "Renewal Term"), provided, however, that (i) Lessee only may elect one Renewal Term at a time and (ii) notwithstanding anything to the contrary contained herein, Lessee only shall be entitled to elect a total of two (2) Renewal Terms after the Amendment Closing Date; provided, however, that in any event the expiration date of such Renewal Terms shall not end after the Maturity Date. The Renewal Term shall commence upon the day following the Initial Lease Term Expiration Date or upon the day following the expiration of the immediately preceding Renewal Term, as the case may be. The Termination Value payable during the Renewal Term in respect of any Unit of Equipment 10 suffering an Event of Loss shall be in an amount as determined on Schedule I to the applicable Lease Supplements. (b) Deletion of Article VI. Article VI of the Lease is hereby deleted. (c) Amendment to Section 9.2(ii) of the Lease. Section 9.2(ii) of the Lease is hereby amended by the addition of the following provision: As soon as practicable but in any event within sixty (60) days after the Amendment Closing Date, the Lessee shall transfer possession of the original certificates of title and current filings and applications for certificates of title, with respect to each Unit of Equipment to the Custodian. (d) Amendment to Section 13.1 of the Lease. Section 13.1 of the Lease is hereby amended to include the addition of the following Lease Event Default: (o) the Lessee shall have failed to comply with its obligations under Section 13.18 of the Participation Agreement. (e) Amendment to Section 17.1 of the Lease. Section 17.1 of the Lease is hereby amended and restated to read as follows: SECTION 17.1.Early Termination Option for any or all of the Equipment. (a) At any time during the Term of this Lease, and so long as no Lease Event of Default shall have occurred and be continuing hereunder, Lessee shall have the option to terminate this Lease with respect to any or all of the Equipment. To exercise such option, Lessee shall give Lessor an irrevocable written notice of Lessee's intention to terminate this Lease with respect to any such Unit or Units of Equipment, which notice shall (i) state that Lessee desires to terminate this Lease as to the relevant Unit or Units of Equipment and refer specifically to this Section 17.1, and (ii) specify the date for such termination (which, if all Units of Equipment are being terminated, shall be the next Payment Date after the date of such notice, but in no event after the Expiration Date, and if less than all Units of Equipment are being terminated, the date set forth in such notice (in either case, such date, the "Early Termination Date")). Upon such election and satisfaction of the terms and conditions set forth in this Section 17.1, this Lease shall terminate with respect to any such Unit or Units of Equipment on the Early Termination Date. Notwithstanding the foregoing, in the event Lessee shall fail to perform its obligations in accordance with this Section 17.1, this Lease and each of the obligations and duties of Lessee shall continue as if such notice shall never have been delivered unless otherwise agreed to by Lessor and 11 Lessee shall be responsible for all costs and expenses incurred by Lessor, Owner Participant, Collateral Agent, Administrative Agent and any Lenders in connection therewith. (b) For purposes of this Section 17.1, "Early Termination Payment" means an amount equal to (i) the Termination Value of each Unit or all Units of Equipment, as the case may be, computed as of the Early Termination Date, plus (ii) all Basic Rent then due and owing with respect to each such Unit or all Units of Equipment, as the case may be, plus (iii) all other Rent due for each such Unit or all Units of Equipment, as the case may be, on the Early Termination Date, plus (iv) all accrued and unpaid Rent owing for periods prior to the Early Termination Date, plus (v) any Break Costs associated with such early termination. (c) Upon payment in full of the Early Termination Payment and satisfaction of all other conditions set forth herein in connection with a termination of this Lease with respect to all of the Equipment pursuant to this Section 17.1, Lessor shall convey to Lessee or its designee its title thereto pursuant to one or more instruments reasonably satisfactory to the parties thereto but subject to the following sentence. Lessor's sale of the Equipment hereunder shall be on an as-is, where-is basis, without any recourse to, or representation or warranty by, Lessor except as to its ownership thereof and the absence of any Lien placed on the Equipment by or through Lessor, Owner Participant, any Lender or any successor thereto. Lessee shall pay, or reimburse Lessor for the payment of, all applicable Taxes imposed as a result of such sale, and all fees, costs and expenses of such sale incurred by Lessor, and any other amounts for which, if not paid, Lessor will be liable or which, if not paid, would constitute a Lien on the Equipment and such obligation shall survive the termination of this Lease. (d) Upon satisfaction of all other conditions set forth herein in connection with a termination of this Lease with respect to some but not all of the Equipment (a "Partial Termination"), Lessee may request of the Collateral Agent that Custodian promptly provide the certificates of title to such Equipment to Lessee; provided that Lessee shall have notified the Collateral Agent, Administrative Agent and Custodian by Authorized Officer's Certificate of the circumstances of such Partial Termination. On the last Business Day of each calendar month, the Lessee shall pay directly to the Collateral Agent an amount equal to the Early Termination Payment with respect to the Unit or Units of Equipment terminated (as specified in the notice provided by the Lessee) in the course of such month. The aggregate value of all Units of Equipment terminated in any calendar month shall not exceed the Reserve Amount and all Early Termination Payments shall be applied to the amounts outstanding under the Loans and the Equity Investments in inverse order of maturity. Lessor's sale of the Equipment hereunder shall be on an as-is, where-is basis, without any recourse to, or representation or warranty by, Lessor except as to its ownership thereof and the absence of any Lien placed on the Equipment by or through 12 Lessor, Owner Participant, any Lender or any successor thereto. Lessee shall pay, or reimburse Lessor for the payment of, all applicable Taxes imposed as a result of such sale, and all fees, costs and expenses of such sale incurred by Lessor, and any other amounts for which, if not paid, Lessor will be liable or which, if not paid, would constitute a Lien on the Equipment and such obligation shall survive the termination of this Lease. ARTICLE III CLOSING CONDITIONS SECTION 3.1 Amendment Closing Date. Subject to the terms and conditions set forth in this Article III, the amendments described herein shall become effective on April 11, 2002 at the offices of Sidley Austin Brown & Wood, Chicago, IL (the "Amendment Closing Date"). SECTION 3.2 Closing Conditions. The obligation of each of the Participants to perform its agreements on the Amendment Closing Date shall be subject to the fulfillment to the reasonable satisfaction of, or the waiver in writing by, the Participants of the following conditions precedent on or prior to such Amendment Closing Date: (a) Amendments to Credit Agreement and Note Purchase Agreements. On or before the Amendment Closing Date, the amendments to the Credit Agreement, the Receivables Purchase Agreement, the Master Equipment Lease Agreement and Note Purchase Agreements providing for covenants of the Guarantor no more restrictive than the covenants set forth herein and entered into by the Guarantor with the Bank Group, the Receivables Group, the Master Equipment Lease Parties and the Noteholders shall have been duly executed and delivered by the parties thereto and such amendments shall be in full force and effect and no default shall exist in the performance by any party of any of its obligations under such agreements. (b) Restructuring Fee. On or before the Amendment Closing Date, the Lessee shall have paid to the Participants the Restructuring Fee and, to the extent such items have been invoiced, the costs and expenses set forth in Sections 10.1(b)(vi)(y), 10.1(b)(vii), 10.1(b)(viii), 10.1(b)(ix) and 10.1(b)(x) of the Participation Agreement. (c) Termination and Replacement of Limited Power of Attorney. On or before the Amendment Closing Date, in consideration of the amendments agreed to herein, the Limited Power of Attorney granted by the Lessor to the Lessee dated as of December 29, 2000 shall terminate without any further action and in accordance with its terms and the Lessor shall grant to the Lessee a replacement power of attorney substantially in the form of Exhibit B hereto, effective during the period commencing on the Amendment Closing Date and ending sixty (60) days thereafter. (d) Collateral Estate. The interests of the Collateral Agent in and to the Equipment and the Collateral Estate with respect thereto shall remain secured for the benefit of the Collateral Agent and protected as against any claims from the Bank Group, the Receivables 13 Group, the Master Equipment Lease Parties, the Noteholders, or any other lenders, creditors or noteholders by the Lessee. (e) Representations and Warranties. On the Amendment Closing Date, with the exception of those disclosed on Schedule III hereto, the representations and warranties of the Lessee and the Guarantor set forth in the Operative Documents (or in certificates delivered pursuant thereto) executed by any thereof shall be true and correct in all respects as though made on and as of such date, except to the extent such representations or warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all respects on and as of such earlier date. (f) Closing Proceedings. All proceedings taken in connection with the Amendment Closing Date and all documents and instruments to be delivered thereon or relating thereto shall be reasonably satisfactory to each of the Participants and its counsel, and each of the Participants and its counsel shall have received copies of such documents as each of the Participants or its counsel may reasonably request in connection therewith, all in form and substance reasonably satisfactory to each of the Participants and its counsel. (g) Opinions of Counsel. Each of the Participants, the Lessor, the Collateral Agent and the Administrative Agent shall have received (i) the favorable written opinions, in form and scope satisfactory to the Participants, of counsel to the Lessee and the Guarantor confirming the matters set forth in the opinions such firm delivered to the Bank Group or the Noteholders under the Credit Agreement or the Note Purchase Agreements to which the Lessee or the Guarantor are a party, and (ii) the favorable written opinions dated the Amendment Closing Date and addressed to each of the Participants, the Lessor, the Administrative Agent and the Collateral Agent from counsel to the Lessee and the Guarantor to the effect that this Amendment constitutes the legal, valid and binding agreement of the Lessee and the Guarantor, is enforceable against the Lessee and the Guarantor and as to such other matters as the Participants, the Lessor, the Administrative Agent and the Collateral Agent may require. (h) Preliminary Desktop Appraisal. The Collateral Agent shall have been indemnified in full for the costs and expenses incurred by it in connection with the preliminary desktop appraisal performed by Taylor & Martin, Inc. (i) Establishment of Account for Reserve Amount. On or before the Amendment Closing Date, the Lessee shall have established an account with the Collateral Agent and deposited therein an amount equal to the Reserve Amount as security for the benefit of the Collateral Agent. (j) Fees and Expenses. The Lessee shall have paid all the fees, costs and expenses incurred by Mayer, Brown, Rowe & Maw, as counsel to the Participants, the Collateral Agent and the Administrative Agent hereunder, in connection with the execution and delivery of this Amendment. ARTICLE IV MISCELLANEOUS PROVISIONS 14 SECTION 4.1 Ratification of and References to the Operative Documents. This Amendment shall be deemed to be an amendment to the Participation Agreement and the Lease and as such agreements are amended hereby, are hereby ratified, approved and confirmed in each and every respect. All references to any such Operative Document in any other document, instrument, agreement or writing shall hereafter be deemed to refer to such Operative Document as amended hereby. SECTION 4.2 Headings, Etc. The Table of Contents and headings of the various Articles, Sections and clauses of this Amendment are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof. SECTION 4.3 Counterparts. This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. SECTION 4.4 Governing Law; Entire Agreement. THIS AMENDMENT AND EACH OTHER OPERATIVE DOCUMENT EXECUTED IN CONNECTION HEREWITH SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING ANY CONFLICT-OF-LAW OR CHOICE-OF-LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF THE INTERNAL LAWS OF ANY OTHER JURISDICTION) AS TO ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. This Amendment and the other Operative Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto. SECTION 4.5 Instructions to the Trustee. The undersigned Participants, Collateral Agent and Administrative Agent hereby authorize and direct the Trustee to enter into, execute and deliver this Amendment and perform all of the obligations of the Trustee and Lessor hereunder. 15 IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT to be executed by their respective officers thereunto duly authorized as of the date and year first above written. APEX TRAILER LEASING & RENTALS, L.P., as Lessee By: Wabash National Corporation, General Partner By:_______________________________ Name: Title: WABASH NATIONAL CORPORATION, as Guarantor By:_____________________________________ Name: Title: WABASH STATUTORY TRUST - 2000 By: STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity but solely in its capacity as Trustee By:_____________________________________ Name: Title: 16 STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity, except as provided herein, but solely as Trustee By:_____________________________________ Name: Title: U.S. BANK, NATIONAL ASSOCIATION (formerly known as FIRSTAR BANK, N.A.) as Tranche A Lender By:_____________________________________ Name: Title: GENERAL ELECTRIC CAPITAL CORPORATION, as Tranche A Lender By:_____________________________________ Name: Title: 17 NATIONAL CITY BANK OF INDIANA, as Tranche A Lender By:____________________________________ Name: Title: FLEET CAPITAL CORPORATION, as Tranche B Lender By:_____________________________________ Name: FLEET CAPITAL CORPORATION, as Owner Participant By:_____________________________________ Name: Title: FLEET CAPITAL CORPORATION, as Administrative Agent By:_____________________________________ Name: Title: FLEET CAPITAL CORPORATION, as Collateral Agent By:_____________________________________ Name: Title: 18 SCHEDULE I TO MASTER AMENDMENT AGREEMENT INSTITUTIONS PARTICIPATING AS TRANCHE A LENDERS TRANCHE A LENDERS: U.S. Bank, National Association (formerly known as Firstar Bank, N.A.) 7th & Washington, 7th Floor St. Louis, MO 63101 Attention: Alan R. Milster Vice President Phone: (314) 418-2468 Fax: (314) 418-2135 E-mail: alan.r.milster@usbank.com National City Bank of Indiana One National City Center Suite 200E Indianapolis, IN 46255 Attention: Lex Curry Phone: (317) 267-3668 Fax: (317) 267-8899 Email: lex.curry@national-city.com General Electrical Capital Corporation 980 Washington Street Suite 123 Dedham, MA 02026 Attention: Moira Duncan Phone: 781-467-7007 Fax: 781-407-0183 Email: moira.duncan@gecapital.com 19 SCHEDULE II TO MASTER AMENDMENT AGREEMENT FINANCIAL COVENANTS For purposes of this Schedule II to the Master Amendment Agreement, capitalized terms used herein and not otherwise defined shall have (a) the meanings set forth in Appendix 1 to this Schedule II, or (b) to the extent such term is not defined in such Appendix 1, the meanings set forth in Appendix A to the Participation Agreement. Financial Covenants. The Lessee or the Guarantor, as the case may be, shall comply with the following: 1. Minimum Consolidated Tax Adjusted Equity. If the Guarantor shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Guarantor shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below:
Minimum Consolidated Tax Fiscal Quarter Ending Adjusted Equity --------------------- ------------------------ March 31, 2003 $ 99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 and each fiscal quarter thereafter $ 96,504,000
2. Minimum Consolidated Equity. If the Guarantor shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Guarantor shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below:
Minimum Consolidated Fiscal Quarter Ending Equity --------------------- -------------------- March 31, 2003 $87,882,000 June 30, 2003 $90,461,000 September 30, 2003 $94,751,000 December 31, 2003 and each fiscal quarter thereafter $84,077,000
3. Maximum Leverage Valuation Ratio. The Guarantor shall not permit, as of the last day of each of the fiscal quarters specified below, the Leverage Valuation Ratio to exceed the applicable "Maximum Leverage Valuation Ratio" specified below:
Maximum Leverage Fiscal Quarter Ending Valuation Ratio --------------------- ---------------- June 30, 2002 0.95 to 1 September 30, 2002 0.95 to 1 December 31, 2002 0.95 to 1 March 31, 2003 0.85 to 1 June 30, 2003 0.80 to 1 September 30, 2003 0.80 to 1 December 31, 2003 and each fiscal quarter thereafter 0.75 to 1
4. Minimum Consolidated EBITDA. (i) The Guarantor shall, as of the last day of each of the fiscal quarters of the Guarantor occurring in calendar year 2002, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such fiscal quarter, at an amount not less than $20,000,000. (ii) The Guarantor shall, as of the last day of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending:
Minimum Rolling 12 Month Month Ending Consolidated EBITDA ------------ ------------------------ January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000
2 January 31, 2004 and each calendar month thereafter $42,539,000
5. Minimum Interest Coverage Ratio. The Guarantor shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Guarantor (commencing with the fiscal quarter ending on or about March 31, 2003), for the period of four consecutive fiscal quarters then ending, to be less than 1.25 to 1. 6. Maximum Capital Expenditures. The Lessee and the Guarantor will not, and will not permit any of their respective Subsidiaries to, expend for Capital Expenditures during any fiscal year of the Guarantor in excess of $6,000,000 in the aggregate for each of the Lessee, the Guarantor and such Subsidiaries. 7. Maximum Finance Contracts. The Lessee and the Guarantor will not, and will not permit any of their respective Subsidiaries to, enter into any new Finance Contract if and to the extent that the sum of such Finance Contract (a) when added to the aggregate amount of all Finance Contracts entered into by the Lessee or the Guarantor or such Subsidiaries during the twelve (12) month period that commences on the Amendment Closing Date exceeds $5,000,000 or (b) when added to the aggregate amount of all Finance Contracts entered into by the Lessee or the Guarantor or such Subsidiaries during the twelve (12) month period that commences on the first (1st) anniversary of the Amendment Closing Date exceeds $5,000,000. 3 APPENDIX 1 TO SCHEDULE II TO MASTER AMENDMENT AGREEMENT DEFINITIONS "AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting principles as in effect from time to time in the United States, applied in a manner consistent with those used in preparing the financial statements referred to in Section 6.1(e) of the Participation Agreement. "CAPITAL EXPENDITURES" means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including Capitalized Leases and purchase money Indebtedness to the extent permitted hereunder) by the Lessee, the Guarantor and their Subsidiaries during that period that, in conformity with Agreement Accounting Principles, are required to be included in or reflected by the property, plant, equipment or similar fixed asset accounts reflected in the consolidated balance sheet of the Lessee, the Guarantor and their Subsidiaries. "CAPITALIZED LEASE" of a Person (as defined herein) means any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles. "CAPITALIZED LEASE OBLIGATIONS" of a Person (as defined herein) means the amount of the obligations of such Person under Capitalized Leases which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles. "CASH EQUIVALENTS" means (i) marketable direct obligations issued or unconditionally guaranteed by the government of the United States; (ii) domestic and Eurodollar certificates of deposit and time deposits, bankers' acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, or its branches or agencies and having capital and surplus in an aggregate amount not less than $500,000,000 (fully protected against currency fluctuations for any such deposits with a term of more than ten (10) days); (iii) shares of money market, mutual or similar funds having net assets in excess of $500,000,000 maturing or being due or payable in full not more than one hundred eighty (180) days after the Guarantor's acquisition thereof and the investments of which are limited to investment grade securities (i.e., securities rated at least Baa by Moody's Investors Service, Inc. or at least BBB by Standard & Poor's Ratings Group) and (iv) commercial paper of United States banks and bank holding companies and their subsidiaries and United States finance, commercial, industrial or utility companies which, at the time of acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better) by Moody's Investors Service, Inc.; provided that the maturities of such Cash Equivalents shall not exceed 365 days. "CONSOLIDATED EBITDA" means, for any period, on a consolidated basis for the Guarantor and its consolidated Subsidiaries, the sum of the amounts for such period, without duplication, of (i) Consolidated Operating Income, plus (ii) charges against income for foreign taxes and U.S. income taxes to the extent deducted in computing Consolidated Operating Income, plus (iii) Interest Expense to the extent deducted in computing Consolidated Operating Income, plus (iv) depreciation expense to the extent deducted in computing Consolidated Operating Income, plus (v) amortization expense, including, without limitation, amortization of goodwill and other intangible assets to the extent deducted in computing Consolidated Operating Income, plus (vi) other non-cash charges (in an aggregate amount not in excess of $15,000,000 during any fiscal year of the Borrower) in accordance with Agreement Accounting Principles to the extent deducted in computing Consolidated Operating Income, minus (x) the total interest income of the Borrower and its Subsidiaries to the extent included in computing Consolidated Operating Income minus (y) the total tax benefit reported by the Borrower and its Subsidiaries to the extent included in computing Consolidated Operating Income. "CONSOLIDATED EQUITY" means as of the date of any determination thereof, the total stockholders' equity of the Lessee, the Guarantor and their Subsidiaries on a consolidated basis, all as determined in accordance with Agreement Accounting Principles. "CONSOLIDATED OPERATING INCOME" means, with reference to any period, the net operating income (or loss) of the Lessee, the Guarantor and their Subsidiaries for such period (taken as a cumulative whole on a consolidated basis) including without limitation all restructuring expenses for such period (exclusive of "other income/expenses" as reflected in the Guarantor's consolidated statement of income of the Lessee, the Guarantor and their Subsidiaries for such period and related to non-operating and non-recurring income and expenses), as determined in accordance with Agreement Accounting Principles, after eliminating all offsetting debits and credits between the Lessee, the Guarantor and their Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Lessee, the Guarantor and their Subsidiaries in accordance with Agreement Accounting Principles. "CONSOLIDATED TAX ADJUSTED EQUITY" means as of the date of any determination thereof, Consolidated Equity plus the cumulative federal, state and local income tax benefit reported by the Guarantor in accordance with Agreement Accounting Principles. "CONSOLIDATED TOTAL ASSETS" means as of the date of any determination thereof, total assets of the Guarantor and its Subsidiaries determined on a consolidated basis in accordance with Agreement Accounting Principles. "FINANCE CONTRACTS" means any chattel paper originated by the Lessee, the Guarantor or any of their Subsidiaries pursuant to a bona fide sale in the ordinary course of business with a customer or any Subsidiary. "INDEBTEDNESS" means, with respect to any Person (as defined in this Appendix A), without duplication, (a) its liabilities for borrowed money, including reimbursement obligations (contingent or otherwise) with respect to letters of credit; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but ii including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) its Capitalized Lease Obligations; (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) its Off-Balance Sheet Liabilities (as defined in the Credit Agreement); (f) its Receivables Facility Attributed Indebtedness; and (g) any Contingent Obligation (as defined in the Credit Agreement)of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof. Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under Agreement Accounting Principles. In no event shall Indebtedness include Unfunded Liabilities (as defined in the Credit Agreement) of any Plan of the Guarantor and its Subsidiaries, which amount, as of December 31, 2001, was zero. "INTEREST COVERAGE RATIO" means, as of any date the same is to be determined, the ratio of (i) Consolidated EBITDA as of such date for (A) in the case of calculating Consolidated EBITDA for each relevant month in the Guarantor's fiscal year ending on or about December 31, 2002, the cumulative period of months ending on and after April 30, 2002 and (B) in the case of calculating Consolidated EBITDA for each month thereafter, the period of four consecutive fiscal quarters then ending to (ii) Interest Expense during the same applicable periods. "INTEREST EXPENSE" means, for any period, the total interest expense of the Lessee, the Guarantor and their consolidated Subsidiaries, whether paid or accrued (including the total interest expense under a Permitted Receivables Transfer), including interest expense not payable in cash (including amortization or write-off of debt discount and debt issuance costs and commissions and discounts and other fees and charges associated with Indebtedness (including the Obligations)), all as determined in conformity with Agreement Accounting Principles. "LEVERAGE VALUATION RATIO" means, as of any date the same is to be determined, the ratio of (i) the sum of the aggregate outstanding principal amount of the Obligations (excluding L/C Obligations, as such term is defined in the Credit Agreement) and the Indebtedness under the Note Purchase Agreements to (ii) Consolidated Total Assets only to the extent consisting of cash and Cash Equivalents, net inventory, net prepaid and other expenses and net property, plant and equipment as of such date, in all cases as determined in accordance with Agreement Accounting Principles. iii "OBLIGATIONS" means, for purposes of this Schedule II to the Master Amendment Agreement, all the Loans (as defined in the Credit Agreement), advances, debts, liabilities, obligations, covenants and duties owing by the Guarantor to the Administrative Agent (as defined in the Credit Agreement), any Lender (as defined in the Credit Agreement), the Issuing Lender (as defined in the Credit Agreement), any Affiliate (as defined in the Credit Agreement) of any of the foregoing or any Indemnitee (as defined in the Credit Agreement), of any kind or nature, present or future, arising under the Credit Agreement, the Notes (as defined in the Credit Agreement), the PIK Notes (as defined in the Credit Agreement) or any other Loan Document (as defined in the Credit Agreement), whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term includes, without limitation, all interest, charges, expenses, fees, attorneys' fees and disbursements, paralegals' fees (in each case whether or not allowed), and any other sum chargeable to the Guarantor under the Credit Agreement or any other Loan Document (as defined in the Credit Agreement). "PERMITTED RECEIVABLES TRANSFER" means (i) a sale or other transfer by any Originator to WNC Receivables, LLC, a Delaware limited liability company and a wholly-owned Subsidiary of the Guarantor ("WNC") of "Receivables," and "Collections" under, and as such terms are defined in, the Receivables Sale Agreement, in accordance with the terms of the Receivables Sale Agreement, and/or (ii) a sale by WNC to purchasers of "Purchaser Interests" under, and as such term is defined in, the Receivables Purchase Agreement, in accordance with the terms of the Receivables Purchase Agreement. "PERSON" means, for the purposes of this Schedule II to the Master Amendment Agreement, any individual, corporation, firm, enterprise, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company or other entity of any kind, or any government or political subdivision or any agency, department or instrumentality thereof. "RECEIVABLES FACILITY ATTRIBUTED INDEBTEDNESS" means the amount of obligations outstanding under a receivables purchase facility on any date of determination that would be characterized as principal if such facility were structured as a secured lending transaction rather than as a purchase. iv SCHEDULE III TO MASTER AMENDMENT AGREEMENT EXCEPTED REPRESENTATIONS AND WARRANTIES The following representation set forth is Section 9.1(e) of the Participation Agreement is excluded from Section 3.2(e) of the Master Amendment Agreement: Material Adverse Change. There has been no change since September 30,2000 in the business, Property, financial condition or results of operations of the Guarantor and its Subsidiaries which could reasonably be expected to have a Material Adverse Effect other than certain restructuring charges to be taken in the fourth calendar quarter of 2000 up to $50,000,000 on a pre-tax basis. EXHIBIT A TO MASTER AMENDMENT AGREEMENT FORM OF AUTHORIZED OFFICER'S CERTIFICATE OF COMPLIANCE To: The Participants, Lessor and Collateral Agent to the Master Amendment Agreement Described Below This Compliance Certificate is furnished pursuant to that certain Master Amendment Agreement dated as of April 11, 2002 (as amended, modified, renewed or extended from time to time, the "Agreement") among APEX TRAILER LEASING & RENTALS, L.P., a Delaware limited partnership, as the Lessee (in such capacity, together with its permitted successors, the "Lessee"); WABASH NATIONAL CORPORATION, a Delaware corporation, as guarantor (the "Guarantor"); WABASH STATUTORY TRUST - 2000, a Connecticut statutory trust, as Lessor (together with its permitted successors and assigns, the "Lessor"); STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity, except as set forth therein, but solely as Trustee (the "Trustee" and in its individual capacity, the "Trust Company"); the Institutions indicated in Schedule I thereto as "Tranche A Lenders" (each, together with its permitted successors and assigns, a "Tranche A Lender," and together with the other Tranche A Lenders, the "Tranche A Lenders"), FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Fleet Capital"), as the Tranche B Lender (in such capacity, together with its permitted successors and assigns, the "Tranche B Lender", and together with the Tranche A Lenders, the "Lenders"); FLEET CAPITAL, as the Owner Participant (in such capacity, together with its permitted successors and permitted assigns, the "Owner Participant", and together with the Lenders, the "Participants"); FLEET CAPITAL, as administrative agent for the Lenders (in such capacity, together with its permitted successors and assigns, the "Administrative Agent"); and FLEET CAPITAL, as collateral agent for the Lenders (in such capacity, together with its permitted successors and assigns, the "Collateral Agent"). Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the duly elected ________________ of the [Lessee] [Guarantor] and the [Chief Financial Officer] [Treasurer]; 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 the [Lessee] [Guarantor] and its Subsidiaries during the accounting period covered by the attached financial statements; 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 a Lease Event of Default or Unmatured Lease Default 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; and 4. Schedule I and Schedule II attached hereto set forth financial data and computations evidencing the [Lessee] [Guarantor]'s compliance with certain covenants of the Agreement and the Excess Cash Flow during the accounting period covered by the attached financial statements, all of which data and computations are true, complete and correct. Described below are the exceptions, if any, to paragraph 3, listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the [Lessee] [Guarantor] has taken, is taking, or proposes to take with respect to each such condition or event: ________________________________________________________________________________ ________________________________________________________________________________ 2 The foregoing certifications, together with the computations set forth in Schedule I and Schedule II hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this _____ day of __________, ____. ________________________________ [Insert Name of Officer] 3 [Wabash National Corporation] [Apex Trailer Leasing & Rentals, L.P.] Quarterly Compliance Certificate Worksheet COMPLIANCE CERTIFICATE QUARTERLY SCHEDULE OF COMPLIANCE AS OF _______________, 2002 (DOLLARS IN THOUSANDS) A. EXCESS CASH FLOW 1. Actual Amount: a. of Cash & Cash Equivalents $ -- a. Remaining in Super Revolver $ -- b. Remaining in A/R Facility $ -- --------- c. Total Available Liquidity (a+b+c) $ -- 2. Projected Amount: a. Liquidity Amount (Sec. 1.1.17) $ -- b. Cash Basket $ 5,000 --------- c. Total Projected Liquidity Amount (a+b) $ 5,000 3. Cash Flow Available for Debt Paydown (1d - 2c) $ (5,000) B. MAXIMUM LEVERAGE VALUATION RATIO 1. Actual Amount: a. Term Debt (Notes & Bank Debt) b. Revolver (Super Revolver) --------- c. Total Debt (a+b) $ -- d. Cash and Cash Equivalents e. Net Inventory f. Net Prepaid and Other Expenses g. Net PP&E --------- h. Total Assets (d+e+f+g) $ -- i. Leveraged Ratio (c/h) 0.00x 2. Minimum Required Amount x C. MAXIMUM CAPITAL EXPENDITURES 1. Actual Amount: a. Capital Expenditures (Year-to-Date) $ -- 2. Maximum Annual Allowed Amount $ 6,000 D. MAXIMUM FINANCE CONTRACTS 1. Actual Amount: a. Finance Contracts (Year-To-Date) $ -- 2. Maximum Annual Allowed Amount $ 5,000
4 [Wabash National Corporation] [Apex Trailer Leasing & Rentals, L.P.] Monthly Compliance Certificate Worksheet COMPLIANCE CERTIFICATE MONTHLY SCHEDULE OF COMPLIANCE AS OF _________, 2003 (DOLLARS IN THOUSANDS) A. MINIMUM CONSOLIDATED LAST TWELVE MONTH ("LTM") EBITDA 1. Actual Amount: a. Consolidated Operating Income $ -- b. Foreign and Domestic Taxes Deducted in Operating Income $ -- c. Interest Expense Deducted in Operating Income $ -- d. Other Non-Cash Charges Deducted in Operating Income $ -- (Aggregate Annual Amount not in Excess of $15,000,000) e. Depreciation Expense Deducted in Operating Income $ -- f. Amortization Expense Deducted in Operating Income $ -- g. Interest Income Included in Operating Income $ -- h. Total Tax Benefit Included in Operating Income $ -- i. Consolidated EBITDA (a+b+c+d+e+f-g-h) $ -- 2. Minimum Required Amount $ --
5 [Wabash National Corporation] [Apex Trailer Leasing & Rentals, L.P.] Quarterly Compliance Certificate Worksheet COMPLIANCE CERTIFICATE QUARTERLY SCHEDULE OF COMPLIANCE AS OF _________, 2003 (DOLLARS IN THOUSANDS) A. EXCESS CASH FLOW 1. Actual Amount: a. Sum of Cash & Cash Equivalents $ -- b. Availability Remaining in Super Revolver $ -- c. Availability Remaining in A/R Facility $ -- --------- d. Total Available Liquidity (a+b+c) $ -- 2. Projected Amount: a. Projected Liquidity Amount (Sec. 1.1.17) $ -- b. Additional Cash Basket $ 5,000 --------- c. Total Projected Liquidity Amount (a+b) $ 5,000 3. Excess Cash Flow Available for Debt Paydown (1d - 2c) $ (5,000) B. MINIMUM TAX ADJUSTED CONSOLIDATED EQUITY 1. Actual Amount: a. Consolidated Equity $ -- b. Deferred Income Taxes $ -- --------- c. Consolidated Tax Adjusted Equity(a-b) $ -- 2. Minimum Required Amount $ -- C. MINIMUM CONSOLIDATED EQUITY 1. Actual Amount: a. Consolidated Equity $ -- b. Minimum Required Amount $ -- D. MAXIMUM LEVERAGE VALUATION RATIO 1. Actual Amount: a. Term Debt (Notes & Bank Debt) $ -- b. Revolver (Super Revolver) $ -- --------- c. Total Debt (a+b) $ --
6 d. Cash and Cash Equivalents $ -- e. Net Inventory $ -- f. Net Prepaid and Other Expenses $ -- g. Net PP&E $ -- --------- h. Total Assets (d+e+f+g) $ -- i. Leverage Ratio (c/h) x --------- 2. Minimum Required Amount x --------- E. MINIMUM INTEREST COVERAGE RATIO 1. Actual Amount: a. Cumulative Consolidated Operating Income $ -- b. Cumulative Depreciation Expense $ -- c. Cumulative Amortization Expense $ -- d. Cumulative Consolidated EBITDA (a+b+c) $ -- e. Cumulative Interest Expense $ -- f. Interest Coverage Ratio (d/e) x --------- 2. Minimum Allowed Amount -- F. MAXIMUM CAPITAL EXPENDITURES 1. Actual Amount: a. Capital Expenditures (Year-to-Date) $ -- 2. Maximum Annual Allowed Amount $ 6,000 G. MAXIMUM FINANCE CONTRACTS 1. Actual Amount: a. Finance Contracts (Year-To-Date) $ -- 2. Maximum Annual Allowed Amount $ 5,000
7 A. MAXIMUM OTHER UNSECURED INDEBTEDNESS 1. Actual Amount $_____________ 2. Maximum Permitted Amount: $ 3,000,000 B. SALES OF ASSETS 1. Actual Amount: a. Total amount of sales of assets in current fiscal year to date (See Schedule II for detail) $_____________ 2. Maximum Permitted Amount: $ 5,000,000 C. SALES OF ASSETS BY APEX TRAILER LEASING & RENTALS, L.P. ("APEX") 1. Actual Amount: a. Total amount of sales of assets in current fiscal year to date (See Schedule II for detail) $_____________ 2. Maximum Permitted Amount: a. Total Assets of APEX at end of prior fiscal year $_____________ b. Intangible assets -_____________ c. Tangible Assets of APEX at end of prior fiscal year =$____________ x 0.50 d. Maximum Permitted Amount =$____________ D. INVESTMENTS For each new Investment pursuant to Section 6.3(D)(vii) of the Credit Agreement during the most recent fiscal quarter covered by this Certificate, complete the following: 1. Date and brief description of nature of new Investment: ______________________________________________________ ______________________________________________________ 2. Actual Amount: a. Amount of new Investment $_____________
8 b. Amount of existing Investments +_____________ c. Total Investments =$____________ 3. Maximum Permitted Amount: $ 5,000,000 E. LEASES 1. Actual Amount of Leases: $_____________ 2. Maximum Permitted Amount: $ 5,000,000
9 SCHEDULE II TO COMPLIANCE CERTIFICATE Schedule of Compliance as of __________, ____ (Dollars in Thousands) A. Sales of Assets [List separate sales and amounts] $_____________ _____________ _____________ _____________ _____________ Total $_____________
10 EXHIBIT B TO MASTER AMENDMENT AGREEMENT FORM OF POWER OF ATTORNEY Reference is made to the Master Amendment Agreement, dated as of April 11, 2002 (the "Master Amendment") among APEX TRAILER LEASING & RENTALS, L.P., a Delaware limited partnership, as the Lessee (in such capacity, together with its permitted successors, the "Lessee"); WABASH NATIONAL CORPORATION, a Delaware corporation, as guarantor (the "Guarantor"); WABASH STATUTORY TRUST - 2000, a Connecticut statutory trust, as Lessor (together with its permitted successors and assigns, the "Lessor"); STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity, except as set forth therein, but solely as Trustee (the "Trustee" and in its individual capacity, the "Trust Company"); the Institutions indicated in Schedule I to the Master Amendment as "Tranche A Lenders" (each, together with its permitted successors and assigns, a "Tranche A Lender," and together with the other Tranche A Lenders, the "Tranche A Lenders"), FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Fleet Capital"), as the Tranche B Lender, in such capacity, together with its permitted successors and assigns, the "Tranche B Lender", and together with the Tranche A Lenders, the "Lenders"); FLEET CAPITAL, as the Owner Participant (in such capacity, together with its permitted successors and permitted assigns, the "Owner Participant", and together with the Lenders, the "Participants"); FLEET CAPITAL, as administrative agent for the Lenders (in such capacity, together with its permitted successors and assigns, the "Administrative Agent"); and FLEET CAPITAL, as collateral agent for the Lenders (in such capacity, together with its permitted successors and assigns, the "Collateral Agent"), and the Amended and Restated Equipment Lease, dated as of March 30, 2001 (the "Lease") between Lessor and Lessee pursuant to which Lessor has leased to Lessee certain Units of Equipment described in each Lease Supplement and consisting of vehicles subject to certificates of title registered in various states of the United States. Terms not otherwise defined herein shall have the meanings set forth in either (a) Appendix A to the Amended and Restated Participation Agreement, dated as of March 30, 2001 (the "Participation Agreement") among the Lessor, the Lessee, the Trustee, the Lenders, the Owner Participant, the Collateral Agent and the Administrative Agent, or (b) the Master Amendment. Pursuant to Section 9.2 of the Lease, Lessee is required to deliver to the Collateral Agent, any and all necessary motor vehicle certificates of title with lien notations thereon with respect to each Unit of Equipment. In order to facilitate the sale of the Units of Equipment pursuant to the terms and conditions of the Lease, Collateral Agent is entering into this Limited Power of Attorney upon the terms and conditions set forth herein. Notwithstanding anything to the contrary contained in the Lease, until the earlier to occur of (i) a Lease Event of Default or (ii) a material adverse change in the business, financial condition or results of operations of Guarantor and its Subsidiaries taken as a whole in the reasonable discretion of Collateral Agent, the undersigned Fleet Capital Corporation, as Collateral Agent hereby grants to the President, the Treasurer and the Corporate Controller from time to time of Wabash National Corporation, solely in its capacity as the general party of Apex Trailer Leasing & Rentals L.P., as Lessee, a Limited Power of Attorney to act as agent on behalf of the Lessor and Collateral Agent regarding procurement of and changes to certificates of title (including the notation of the lienholder thereon) with respect to the Units of Equipment in connection with all sales and other dispositions thereof expressly permitted and in accordance with the provisions of the Lease for a term not to exceed sixty (60) days after the Amendment Closing Date. Upon the earlier to occur of (a) the occurrence of an event described in clauses (i) and (ii) above, and (b) the expiration of the sixty (60) day term of this Limited Power of Attorney, this Limited Power of Attorney shall immediately cease and Lessee shall deliver or cause to be delivered to the Custodian each and every original certificate of title with respect to all Units of Equipment then subject to the Lease to the address of the Custodian without any further act or deed by Collateral Agent, Custodian or Lessor. 2 IN WITNESS WHEREOF, the undersigned has executed this LIMITED POWER OF ATTORNEY as of April 11, 2002. FLEET CAPITAL CORPORATION By:_________________________________ Name: Robert E. Merrill Title: Vice President State of Rhode Island ) ) ss. County of ) I certify that I know or have satisfactory evidence that Robert E. Merrill signed this Limited Power of Attorney and acknowledged it to be his free and voluntary act and deed for the uses and purposes hereinabove mentioned. Dated April __, 2002 _______________________________________ Notary Public for said County and State My Commission Expires:_________________ EX-10.24 8 c68906a1ex10-24.txt AMENDED AND RESTATED SECURED NOTES PURCHASE AGMT EXHIBIT 10.24 ================================================================================ WABASH NATIONAL CORPORATION $50,000,000 9.66% Series A Senior Secured Notes due March 30, 2004 -------------- AMENDED AND RESTATED NOTE PURCHASE AGREEMENT ------------- Dated as of April 12, 2002 ================================================================================ TABLE OF CONTENTS
PAGE ---- SECTION 1. AMENDMENT AND RESTATEMENT; GUARANTIES; SECURITY....................1 Section 1.1 Amendment and Restatement of Note Purchase Agreement and Notes........................................1 Section 1.2 Guaranty...................................................2 Section 1.3 Security for the Notes and Note Guaranty...................2 Section 1.4 Intercreditor Agreement....................................2 SECTION 2. ISSUANCE AND EXCHANGE..............................................2 Section 2.1 Issuance and Exchange of Notes.............................2 SECTION 3. CLOSING............................................................2 SECTION 4. CONDITIONS TO CLOSING..............................................3 Section 4.1 Representations and Warranties.............................3 Section 4.2 Performance; No Default....................................3 Section 4.3 Compliance Certificates....................................3 Section 4.4 Opinions of Counsel........................................3 Section 4.5 Exchange Permitted By Applicable Law, etc..................3 Section 4.6 Exchange of Other Notes....................................4 Section 4.7 Payment of Special Counsel Fees............................4 Section 4.8 Private Placement Number...................................4 Section 4.9 Changes in Corporate Structure.............................4 Section 4.10 Collateral Documents; Related Transactions; Amendment Fee..4 Section 4.11 PIK Notes..................................................5 Section 4.12 Consent of Other Creditors.................................5 Section 4.13 Proceedings and Documents..................................6 SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................6 Section 5.1 Organization; Power and Authority..........................6 Section 5.2 Authorization, etc.........................................6 Section 5.3 Disclosure.................................................6 Section 5.4 Organization and Ownership of Shares of Subsidiaries.......7 Section 5.5 Financial Statements.......................................8 Section 5.6 Compliance with Laws, Other Instruments, etc...............8 Section 5.7 Governmental Authorizations, etc...........................8 Section 5.8 Litigation; Observance of Agreements, Statutes and Orders..8 Section 5.9 Taxes......................................................9 Section 5.10 Title to Property; Leases..................................9
i Section 5.11 Licenses, Permits, etc.....................................9 Section 5.12 Compliance with ERISA.....................................10 Section 5.13 Margin Regulations........................................11 Section 5.14 Existing Indebtedness; Existing Liens; Existing Investments...............................................11 Section 5.15 Status under Certain Statutes.............................11 Section 5.16 Environmental Matters.....................................11 Section 5.17 Credit Agreement Representations..........................12 Section 5.18 Restructuring Fees........................................12 SECTION 6. REPRESENTATIONS OF THE PURCHASER..................................12 Section 6.1 Purchase for Investment...................................12 Section 6.2 Source of Funds...........................................13 SECTION 7. INFORMATION AS TO COMPANY.........................................14 Section 7.1 Financial and Business Information........................14 Section 7.2 Inspection................................................18 Section 7.3 Information Required by Rule 144A.........................19 SECTION 8. PREPAYMENT OF THE NOTES...........................................19 Section 8.1 Required Prepayments......................................19 Section 8.2 Optional Prepayments with Make-Whole Price................20 Section 8.3 Allocation of Partial Prepayments.........................21 Section 8.4 Maturity; Surrender, etc..................................21 Section 8.5 Purchase of Notes.........................................21 Section 8.6 Make-Whole Amount.........................................21 SECTION 9. AFFIRMATIVE COVENANTS.............................................23 Section 9.1 Existence, Etc............................................23 Section 9.2 Powers....................................................23 Section 9.3 Compliance with Laws, Etc.................................23 Section 9.4 Payment of Taxes and Claims...............................23 Section 9.5 Intentionally Omitted.....................................24 Section 9.6 Inspection of Property; Books and Records; Discussions....24 Section 9.7 ERISA Compliance..........................................24 Section 9.8 Maintenance of Properties; Insurance......................24 Section 9.9 Environmental Compliance..................................25 Section 9.10 Foreign Employee Benefit Compliance.......................25 Section 9.11 Maintenance of Rights.....................................25 Section 9.12 Conduct of Business.......................................26 Section 9.13 Subsidiary Documentation..................................26 Section 9.14 Collateral Documents......................................26 Section 9.15 Restructuring Consultant..................................27 Section 9.16 Chief Restructuring Officer...............................28 SECTION 10. NEGATIVE COVENANTS; FINANCIAL COVENANTS...........................28
ii Section 10.1 Fiscal Year 2004 Covenants................................28 Section 10.2 Negative Covenants........................................29 Section 10.3 Financial Covenants.......................................36 Section 10.4 Additional Negative Covenants.............................40 SECTION 11. EVENTS OF DEFAULT.................................................44 SECTION 12. REMEDIES ON DEFAULT, ETC..........................................48 Section 12.1 Acceleration..............................................48 Section 12.2 Other Remedies............................................48 Section 12.3 Rescission................................................49 Section 12.4 No Waivers or Election of Remedies, Expenses, etc.........49 SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.....................49 Section 13.1 Registration of Notes.....................................49 Section 13.2 Transfer and Exchange of Notes............................50 Section 13.3 Replacement of Notes......................................50 SECTION 14. PAYMENTS ON NOTES.................................................50 Section 14.1 Place of Payment..........................................50 Section 14.2 Home Office Payment.......................................51 SECTION 15. EXPENSES, ETC.....................................................51 Section 15.1 Transaction Expenses......................................51 Section 15.2 Survival..................................................52 SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT......52 SECTION 17. AMENDMENT AND WAIVER..............................................52 Section 17.1 Requirements..............................................52 Section 17.2 Solicitation of Holders of Notes..........................52 Section 17.3 Binding Effect, etc.......................................53 Section 17.4 Notes Held by Company, etc................................53 SECTION 18. NOTICES...........................................................53 SECTION 19. REPRODUCTION OF DOCUMENTS.........................................54 SECTION 20. CONFIDENTIAL INFORMATION..........................................54 SECTION 21. SUBSTITUTION OF PURCHASER.........................................55 SECTION 22. MISCELLANEOUS.....................................................55 Section 22.1 Successors and Assigns....................................56 Section 22.2 Payments Due on Non-Business Days.........................56 Section 22.3 Severability..............................................56 Section 22.4 Construction..............................................56 Section 22.5 Counterparts..............................................56 Section 22.6 Governing Law.............................................56
iii Section 22.7 WAIVER OF JURY TRIAL......................................57
iv SCHEDULE A -- Information Relating to Purchasers SCHEDULE B -- Defined Terms SCHEDULE 4.9 -- Changes in Corporate Structure SCHEDULE 5.3 -- Disclosure Materials SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock SCHEDULE 5.5 -- Financial Statements SCHEDULE 5.8 -- Certain Litigation SCHEDULE 5.11 -- Patents, etc. SCHEDULE 5.14 -- Existing Indebtedness; Existing Liens; Existing Investments SCHEDULE 9.1 -- Inactive Subsidiaries SCHEDULE 10.2(b) -- Property Held for Sale SCHEDULE B19 -- Projections EXHIBIT 1 -- Form of 9.66% Series A Senior Secured Note due March 30, 2004 EXHIBIT 2 -- Form of Deferral Fee Note EXHIBIT 3 -- Form of Make-Whole Note EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Company EXHIBIT 4.4(b) -- Form of Opinion of Counsel for the Company EXHIBIT 4.4(c) -- Form of Opinion of Special Counsel for the Collateral Agent EXHIBIT 7.1(a) -- Form of Officer's Certificate EXHIBIT 7.1(b) -- Form of Compliance Certificate v WABASH NATIONAL CORPORATION 1000 SAGAMORE PARKWAY SOUTH LAFAYETTE, INDIANA 47905 9.66% Series A Senior Secured Notes due March 30, 2004 Dated as of April 12, 2002 TO EACH OF THE PURCHASERS LISTED IN THE ATTACHED SCHEDULE A: Ladies and Gentlemen: Wabash National Corporation, a Delaware corporation (the "Company"), agrees with you as set forth below. Reference is made to SCHEDULE B attached hereto for capitalized terms used herein and not otherwise defined herein. References to a "SCHEDULE" or an "EXHIBIT" are, unless otherwise specified, to a SCHEDULE or an EXHIBIT attached to this Agreement. SECTION 1. AMENDMENT AND RESTATEMENT; GUARANTIES; SECURITY. Section 1.1 Amendment and Restatement of Note Purchase Agreement and Notes. The Purchasers and the Company are parties to those certain separate and several Note Purchase Agreements each dated as of January 31, 1996, as amended by the First Amendment dated as of March 1, 1998, the Second Amendment dated as of September 30, 1999, and the Third Amendment dated as of November 30, 2000 (as so amended, collectively, the "Original Note Purchase Agreement"), pursuant to which the Company authorized the issue and sale of, and the Purchasers purchased from the Company $50,000,000 aggregate principal amount of its 6.41% Series A Senior Notes due January 31, 2003 (the "Original Notes"). On the Closing (as defined below) the Company will amend and restate the Original Notes in the form of EXHIBIT 1. Reference in this Agreement to the "Notes" shall be a reference to the Original Notes as amended and restated in the form of EXHIBIT 1 together with the applicable PIK Notes related thereto described below. On the Closing the Company will issue the PIK Notes in the form of EXHIBITS 2 and 3 to you in accordance with the terms and provisions of SECTION 4.11. The Notes shall be substantially in the form set out in EXHIBITS 1-3, respectively, with such changes therefrom, if any, as may be approved by you and the Company. The Company and the Purchasers now desire to amend and restate the Original Note Purchase Agreement and the Original Notes to, among other things, (a) amend certain covenants and related definitions, (b) provide for collateral to secure the obligations represented by the Notes and the Note Guaranty and (c) make certain other changes to the Original Note Purchase Agreement. Section 1.2 Guaranty. The payment and performance obligations of the Company under and pursuant to the Original Note Purchase Agreement and the Original Notes are fully and unconditionally guaranteed by each of the Guarantors pursuant to the Note Guaranty dated as of September 30, 1999 (the "Original Note Guaranty"). The Purchasers have required as a condition to the execution and delivery of this Agreement that the Guarantors execute and deliver an Amended and Restated Note Guaranty dated the date hereof (the "Note Guaranty") to the Purchasers under and pursuant to which the Guarantors shall fully and unconditionally guaranty the payment and performance obligations of the Company under this Agreement and the Notes. Section 1.3 Security for the Notes and Note Guaranty. The Notes and the obligations of the Guarantors under the Note Guaranty shall be secured, equally and ratably with the other Secured Obligations, by the Collateral Documents. Section 1.4 Intercreditor Agreement. The Collateral described in the Collateral Documents shall be held by Bank One, N.A., as Collateral Agent for the benefit of the Purchasers and the other Secured Parties pursuant to the Intercreditor Agreement. SECTION 2. ISSUANCE AND EXCHANGE. Section 2.1 Issuance and Exchange of Notes. Subject to the terms and conditions of this Agreement, the Company will issue the amended and restated Notes to each Purchaser upon surrender by it of the Original Notes for cancellation by the Company. Contemporaneously with entering into this Agreement, the Company is entering into separate Amended and Restated Note Purchase Agreements (the "Other Agreements") identical with this Agreement with each of the other purchasers named in SCHEDULE A (the "Other Purchasers"), providing for the issue and exchange, as the case may be, to each of the Other Purchasers of Notes in the principal amount specified opposite its name in SCHEDULE A. Your obligation hereunder, and the obligations of the Other Purchasers under the Other Agreements, are several and not joint obligations, and you shall have no obligation under any Other Agreement and no liability to any Person for the performance or nonperformance by any Other Purchaser thereunder. SECTION 3. CLOSING. The issue and exchange of the Notes to be issued to you and the Other Purchasers shall occur at the offices of Schiff Hardin & Waite, 7200 Sears Tower, Chicago, Illinois 60606 at 10:00 a.m. Central time, at a closing (the "Closing") on April 12, 2002 or on such other Business Day thereafter on or prior to April 15, 2002 as may be agreed upon by the Company and you and the Other Purchasers. If at the Closing the Company shall fail to tender such Notes to you as provided above in this SECTION 3, or any of the conditions specified in SECTION 4 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment. SECTION 4. CONDITIONS TO CLOSING. 2 Your obligation to exchange the Original Notes for the Notes to be issued to you at the Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions: Section 4.1 Representations and Warranties. The representations and warranties of the Company in this Agreement shall be correct when made and at the time of the Closing. Section 4.2 Performance; No Default. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and after giving effect to the issue and exchange of the Notes no Default or Event of Default shall have occurred and be continuing. Section 4.3 Compliance Certificates. (a) Officer's Certificate. The Company shall have delivered to you an Officer's Certificate, dated the date of the Closing, certifying that the conditions specified in SECTIONS 4.1, 4.2 and 4.9 have been fulfilled. (b) Secretary's Certificate. The Company shall have delivered to you a certificate certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and the Agreements. Section 4.4 Opinions of Counsel. You shall have received opinions in form and substance satisfactory to you, dated the date of the Closing (a) from Baker & Daniels, independent counsel for the Company, substantially in the form set forth in EXHIBIT 4.4(a) and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to you), (b) from Baker & Daniels, special local counsel to the Company in connection with such transactions, substantially in the form set forth in EXHIBIT 4.4(b) with respect to the Lafayette Property and covering such other matters incident to such transactions as you may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to you), and (c) from special counsel to the Collateral Agent substantially in the form set forth in EXHIBIT 4.4(c). Section 4.5 Exchange Permitted By Applicable Law, etc. On the date of the Closing your exchange of Notes shall (i) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (ii) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the 3 Federal Reserve System) and (iii) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by you, you shall have received an Officer's Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such exchange is so permitted. Section 4.6 Exchange of Other Notes. Contemporaneously with the Closing the Company shall issue to the Other Purchasers and the Other Purchasers shall surrender the Notes to be exchanged by them at the Closing as specified in SCHEDULE A. Section 4.7 Payment of Special Counsel Fees. Without limiting the provisions of SECTION 15.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of Schiff Hardin & Waite, your special counsel, incurred in connection with the preparation of this Agreement, the Other Agreements and matters incident thereto to the extent reflected in a statement of such counsel rendered to the Company (which statement may contain an estimate for fees, expenses and disbursements anticipated to be made) at least one Business Day prior to the Closing. Section 4.8 Private Placement Number. A new Private Placement number issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for the Notes. Section 4.9 Changes in Corporate Structure. Except as specified in SCHEDULE 4.9, neither the Company nor any of its Subsidiaries shall have changed its respective jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in SCHEDULE 5.5. Section 4.10 Collateral Documents; Related Transactions; Amendment Fee. (a) Subject to the terms and provisions of SECTION 9.14(b), each of the Collateral Documents shall have been duly executed and delivered in the respective forms thereof and shall be in full force and effect and all of the security interests granted thereunder shall be duly perfected to the satisfaction of your special counsel. (b) The Credit Agreement and the Intercreditor Agreement shall have been duly executed and delivered by the parties thereto and all of the transactions contemplated thereby shall have been consummated to your satisfaction. 4 (c) The Series C-H Note Purchase Agreements and the Series I Note Purchase Agreement shall have been duly executed and delivered by the parties thereto and all of the transactions contemplated thereby shall have been consummated to your satisfaction. (d) The Company shall have entered into definitive and binding documentation pertaining to, and closed on, the Permitted Receivables Transfer on terms and conditions satisfactory to you. (e) The Company shall have closed on an amendment to the Fleet Lease Transaction on terms and conditions satisfactory to you. (f) The Company shall have paid in cash an amendment fee to each of you in an amount equal to 0.50% of the aggregate principal amount of the Notes held by you. (g) The Company shall have provided you written copies of any fee letter entered into among the Company and any Secured Party or the Administrative Agent relating to the transactions contemplated by this Agreement, the Credit Agreement and the Intercreditor Agreement other than fees paid to the Administrative Agent or Collateral Agent in their agent capacities. Section 4.11 PIK Notes. (a) The Company shall have issued to each holder of Notes a promissory note substantially in the form of EXHIBIT 2 (each a "Deferral Fee Note" and collectively, the "Deferral Fee Notes") which shall evidence the payment by the Company to each such holder of a deferral fee. The deferral fee evidenced by the Deferral Fee Note issued to each such holder shall accrue in the manner and bear interest at the interest rate set forth in the Deferral Fee Notes. (b) The Company shall have issued to each Holder a promissory grid note in substantially the form of EXHIBIT 3 (each a "Make-Whole Note" and collectively, the "Make-Whole Notes") which shall evidence the payment by the Company to each such Holder of the applicable Make-Whole Amount upon the prepayment of the Notes in accordance with the terms and provisions of SECTION 8.1(b). Interest on the Make-Whole Notes shall accrue monthly, shall be computed at a rate equal to 9.66% per annum and shall be added to the interest-bearing principal amount of the Make-Whole Notes. Section 4.12 Consent of Other Creditors. Any consents or approvals required to be obtained from any holder of any outstanding debt of the Company or any Guarantor and any amendments of agreements pursuant to which any debt may have been incurred by the Company or any Guarantor, which shall be necessary to permit the consummation of the transactions contemplated hereby or by the Restructuring Transaction shall have been obtained and all such consents, approvals or amendments shall be satisfactory in form and substance to you and your special counsel. Section 4.13 Payment of Accrued Interest on all Notes. 5 The Company shall have paid to the Holders all unpaid and accrued interest to the date of Closing on the Notes. Section 4.14 Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to you and your special counsel, and you and your special counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request. SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to you that: Section 5.1 Organization; Power and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of Delaware, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement, the Other Agreements, the Collateral Documents and the Notes and to perform the provisions hereof and thereof. Section 5.2 Authorization, etc. This Agreement, the Other Agreements, the Collateral Documents and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement and each Collateral Document constitutes, and upon execution and delivery thereof each Note will constitute a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Section 5.3 Disclosure. Except as disclosed in SCHEDULE 5.3, this Agreement, the documents, certificates or other writings delivered to you by or on behalf of the Company in connection with the transactions contemplated hereby, including, without limitation, the December 31, 2000 SEC Form 10-K (including all documents incorporated by reference therein), the March 31, 2001 SEC Form 10-Q, the June 30, 2001 SEC Form 10-Q and the September 30, 2001 SEC Form 10-Q of the Company and the financial statements listed 6 in SCHEDULE 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as expressly described in SCHEDULE 5.3, or in one of the documents, certificates or other writings identified therein, or in the March 31, 2001, June 30, 2001 or September 30, 2001 SEC Forms 10-Q or in the financial statements listed in SCHEDULE 5.5, since December 31, 2000, there has been no change in the financial condition, operations, business, properties or prospects of the Company or any of its Subsidiaries except changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the other documents, certificates and other writings delivered to you by or on behalf of the Company specifically for use in connection with the transactions contemplated hereby. Section 5.4 Organization and Ownership of Shares of Subsidiaries. (a) SCHEDULE 5.4 contains (except as noted therein) complete and correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary; (ii) of the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's directors and executive officers. (b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in SCHEDULE 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in SCHEDULE 5.4). (c) Each Subsidiary identified in SCHEDULE 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact. (d) No Subsidiary is a party to, or otherwise subject to any legal restriction or any agreement (other than this Agreement, the agreements listed on SCHEDULE 5.4 and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. Section 5.5 Financial Statements. 7 The Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on SCHEDULE 5.5. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such SCHEDULE and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). Section 5.6 Compliance with Laws, Other Instruments, etc. The execution, delivery and performance by the Company of this Agreement, the Collateral Documents and the Notes will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary. (a) The Notes and all other obligations under this Agreement of the Company are direct and secured obligations of the Company ranking pari passu with all of the other Secured Obligations of the Company (actual or contingent) other than as set forth in the Intercreditor Agreement. Section 5.7 Governmental Authorizations, etc. No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement, the Collateral Documents or the Notes. Section 5.8 Litigation; Observance of Agreements, Statutes and Orders. (a) Except as disclosed in SCHEDULE 5.8, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation 8 of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Section 5.9 Taxes. The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which is not individually or in the aggregate Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate. The federal income tax liabilities of the Company and its Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 1996. Section 5.10 Title to Property; Leases. The Company and its Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material (other than assets subject to Capitalized Leases), including all such properties reflected in the most recent audited balance sheet referred to in SECTION 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement, except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects. Section 5.11 Licenses, Permits, etc. Except as disclosed in SCHEDULE 5.11, (a) the Company and its Subsidiaries own, possess, are licensed or otherwise have the lawful right to use all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect; (b) to the best knowledge of the Company, no product of the Company or any of its Subsidiaries infringes in any material respect any license, permit, franchise, 9 authorization, patent, copyright, service mark, trademark, trade name or other right owned by any other Person; and (c) to the best knowledge of the Company, there is no Material violation by any Person of any right of the Company or any of its Subsidiaries with respect to any patent, copyright, service mark, trademark, trade name or other right owned or used by the Company or any of its Subsidiaries. Section 5.12 Compliance with ERISA. (a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not be individually or in the aggregate have a Material Adverse Effect. (b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan's most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan's most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities. The term "benefit liabilities" has the meaning specified in Section 4001 of ERISA and the terms "current value" and "present value" have the meaning specified in Section 3 of ERISA. (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material. (d) The expected postretirement benefit obligation (determined as of the last day of the Company's most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of the Company and its Subsidiaries is not Material. (e) The execution and delivery of this Agreement and the Collateral Documents and the issuance and exchange of the Notes hereunder will not involve any transaction that is subject to the prohibitions of Section 406 of ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of this SECTION 5.12(e) is made in reliance 10 upon and subject to the accuracy of your representation in SECTION 6.2 as to the sources of the funds used to pay the purchase price of the Notes purchased by you. Section 5.13 Margin Regulations. Margin stock (excluding any shares of Common Stock, par value $0.10 per share, of the Company which have been retired) does not constitute more than 25% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 25% of the value of such assets. As used in this SECTION, the terms "margin stock" and "purpose of buying or carrying" shall have the meanings assigned to them in said Regulation U, but shall not include the shares of Common Stock. Section 5.14 Existing Indebtedness; Existing Liens; Existing Investments. (a) SCHEDULE 5.14 sets forth a complete and correct list of all (i) outstanding Indebtedness of the Company and its Subsidiaries representing an obligation to pay in excess of $50,000 as of December 31, 2001, (ii) Liens on property of the Company and its Subsidiaries as of December 31, 2001 and (iii) Investments of the Company and its Subsidiaries as of December 31, 2001. Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment. (b) Except as disclosed in SCHEDULE 5.14, neither the Company nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by SECTION 10.2(c). Section 5.15 Status under Certain Statutes. Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the Federal Power Act, as amended, except for Continental Transit Corp., a Subsidiary, which is subject to the Interstate Commerce Act, as amended. Section 5.16 Environmental Matters. Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed to you in writing: 11 (a) neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect; (b) neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws, in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and (c) all buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect. Section 5.17 Credit Agreement Representations. The representations and warranties set forth in Article V of the Credit Agreement are hereby incorporated by reference herein as if such representations and warranties were set forth herein in full. Section 5.18 Restructuring Fees. Neither the Company nor any Subsidiary has agreed to or has paid any amendment fee, restructuring fee, default premium or fee or any other fee, premium or charge to any holder of Indebtedness in connection with the Restructuring Transaction other than (a) the fees and charges specifically set forth in the Wabash National Corporation Proposal for Debt Restructure letter dated April 1, 2002, (b) the fees, costs and expenses specifically provided for in the Master Amendment dated as of the Closing to certain of the Fleet Lease Transaction documentation, (c) the extension fee paid to National City Leasing Corporation in connection with the extension of the National City Lease Transaction and (d) fees paid to the Administrative Agent or the Collateral Agent solely in their respective capacities as Administrative Agent or Collateral Agent. The Company and its Subsidiaries have disclosed to the Holders all written fee letters or other agreements regarding the payment of the fees and charges described in this SECTION 5.18 paid to or agreed to in connection with the Restructuring Transaction other than those fees described in clause (d) above. SECTION 6. REPRESENTATIONS OF THE PURCHASER. Section 6.1 Purchase for Investment. You represent that you purchased the Notes for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds managed by you and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all times be within your or 12 their control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes. Section 6.2 Source of Funds. You represent that at least one of the following statements is an accurate representation as to each source of funds (a "Source") which was used by you to pay the purchase price of the Notes purchased by you: (a) if you are an insurance company, the Source does not include assets allocated to any separate account maintained by you in which any employee benefit plan (or its related trust) has any interest; or (b) if you are an insurance company, the source is your "insurance company general account" (as such term is defined under Section V of the United States Department of Labor's Prohibited Transaction Class Exemption ("PTCE") 95-60), and as of the date of the purchase of the Notes you satisfy all of the applicable requirements for relief under Sections I and IV of PTCE 95-60; or (c) the Source is either (i) an insurance company pooled separate account, within the meaning of Prohibited Transaction Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in writing pursuant to this paragraph (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or (d) the Source constitutes assets of an "investment fund" (within the meaning of Part V of the QPAM Exemption) managed by a "qualified professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption), no employee benefit plan's assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this paragraph (d); or (e) the Source is a governmental plan; or 13 (f) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this paragraph (f); or (g) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA. (h) As used in this SECTION 6.2, the terms "employee benefit plan", "governmental plan", "party in interest" and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA. SECTION 7. INFORMATION AS TO COMPANY. Section 7.1 Financial and Business Information. (a) Financial Reporting. The Company shall furnish to each Holder that is an Institutional Investor: (i) Monthly Reports. As soon as practicable and in any event within thirty (30) days after the end of each monthly accounting period of the Company (other than those monthly periods which are the last month in a fiscal quarter or fiscal year which reports for such periods shall be delivered within the time period specified in SECTIONS 7.1(a)(ii) and 7.1(a)(iii), respectively), the consolidated balance sheet of the Company and its Subsidiaries as of the end of such period, and the related consolidated statements of income and cash flows for the period commencing at the end of the previous fiscal year and ending with the end of such period setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the chief financial officer or treasurer of the Company as having been prepared in accordance with GAAP, together with a certificate of the chief financial officer or treasurer of the Company on behalf of the Company stating that no Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement setting forth the details thereof and the action which the Company has taken and proposes to take with respect thereto; (ii) Quarterly Reports. As soon as practicable, and in any event within forty-five (45) days (or such shorter period of time as is required by the Commission for delivery of quarterly financial statements) after the end of each of the first three fiscal quarters in each fiscal year, the consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such period and the related consolidated and consolidating statements of income and cash flows of the Company and its Subsidiaries for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, certified by the chief financial officer or treasurer of the Company on behalf of the Company as fairly presenting in all material respects the consolidated and consolidating financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in accordance with GAAP, subject to normal year end adjustments. Delivery within the time period specified above of copies of the Company's Quarterly Report on 14 Form 10-Q prepared in compliance with the requirements therefor and filed with the Commission shall be deemed to satisfy the requirements of this SECTION 7.1(a)(ii); (iii) Annual Reports. As soon as practicable, and in any event within ninety (90) days (or such shorter period of time as is required by the Commission for delivery of annual financial statements) after the end of each fiscal year (including the fiscal year ended on or about December 31, 2001), (a) the consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such fiscal year and the related consolidated and consolidating statements of income, stockholders' equity and cash flows of the Company and its Subsidiaries for such fiscal year and, in comparative form the corresponding figures for the previous fiscal year and (b) an audit report on the items (other than the consolidating financial statements) listed in CLAUSE (a) hereof of independent certified public accountants of recognized national standing, which audit report shall be unqualified and shall state that such financial statements fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flows for the periods indicated in conformity with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards. Delivery within the time period specified above of the Company's Annual Report on Form 10-K for such fiscal year (together with the Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Securities Exchange Act of 1934) prepared in accordance with the requirements therefor and filed with the Commission shall be deemed to satisfy the foregoing requirements of this SECTION 7.1(a)(iii), provided that the auditors' report contained therein satisfies the requirements specified in CLAUSE (b) above. The deliveries made pursuant to this CLAUSE (iii) shall be accompanied by a certificate of such accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Event of Default, or if, in the opinion of such accountants, any Default or Event of Default shall exist, stating the nature and status thereof; (iv) Officer's Certificate. Together with each delivery of any financial statement pursuant to CLAUSES (i), (ii) and (iii) of this SECTION 7.1(a), (a) an Officer's Certificate of the Company, substantially in the form of EXHIBIT 7.1(a) attached hereto and made a part hereof, stating that no Default or Event of Default exists, or if any Default or Event of Default exists, stating the nature and status thereof and (b) a Compliance Certificate, substantially in the form of EXHIBIT 7.1(b) attached hereto and made a part hereof, signed by the Company's chief financial officer or treasurer, setting forth (1) calculations which demonstrate compliance with the provisions of SECTION 10 and (2) in the case of a Compliance Certificate accompanying the financial statements delivered pursuant to SECTION 7.1(a)(ii), a detailed description and calculation of the Excess Cash Flow for the applicable fiscal quarter then ended; (v) Valuations and Appraisals. By no later than such date as the Collateral Agent may specify, such valuations, appraisals and certificates (all costs and expenses with respect to which shall be for the account of the Company) as the Collateral Agent may require with respect to the value of the Collateral, the financial condition and insurance coverage of the Company and its Subsidiaries and the material Contingent Obligations of the Company and its Subsidiaries in compliance with the terms of SECTION 9.14(b); and 15 (vi) Other Information. Promptly, such other information respecting the business, properties operations or financial condition of the Company or any of its Subsidiaries, or the Collateral, including, without limitation, schedules identifying and describing the Collateral and any dispositions thereof, as any Holder may from time to time reasonably request. (b) Notice of Default. Promptly upon any of the chief executive officer, chief operating officer, chief financial officer, treasurer or controller of the Company obtaining knowledge (i) of any condition or event which constitutes a Default or Event of Default, or becoming aware that any Holder has given any written notice with respect to a claimed Default or Event of Default under this Agreement, or (ii) that any Person has given any written notice to the Company or any Subsidiary of the Company or taken any other action with respect to a claimed default or event or condition of the type referred to in SECTION 11(e), deliver to the Holders an Officer's Certificate specifying (a) the nature and period of existence of any such claimed default, Default, Event of Default, condition or event, (b) the notice given or action taken by such Person in connection therewith, and (c) what action the Company has taken, is taking and proposes to take with respect thereto. (c) Lawsuits. (i) Promptly upon the Company obtaining knowledge of the institution of, or written threat of, any action, suit, proceeding, governmental investigation or arbitration against or affecting the Company or any of its Subsidiaries or any property of the Company or any of its Subsidiaries not previously disclosed pursuant to SECTION 5.8, which action, suit, proceeding, governmental investigation or arbitration exposes, or in the case of multiple actions, suits, proceedings, governmental investigations or arbitrations arising out of the same general allegations or circumstances which expose, in the Company's reasonable judgment, the Company or any of its Subsidiaries to liability in an amount aggregating $1,000,000 or more (exclusive of claims covered by insurance policies of the Company or any of its Subsidiaries unless the insurers of such claims have disclaimed coverage or reserved the right to disclaim coverage on such claims and exclusive of claims covered by the indemnity of a financially responsible indemnitor in favor of the Company or any of its Subsidiaries (unless the indemnitor has disclaimed or reserved the right to disclaim coverage thereof)), give written notice thereof to the Holders and provide such other information as may be reasonably available to enable each Holder and its counsel to evaluate such matters; and (ii) in addition to the requirements set forth in CLAUSE (i) of this SECTION 7.1(c), upon request of the Required Holders, promptly give written notice of the status of any action, suit, proceeding, governmental investigation or arbitration covered by a report delivered pursuant to CLAUSE (i) above and provide such other information as may be reasonably available to it that would not result in loss of any attorney-client privilege by disclosure to the Holders to enable each Holder and its counsel to evaluate such matters. (d) Material Developments. Promptly and in any event within three (3) calendar days after the Company obtaining knowledge of the occurrence of any development in the business or affairs of the Company or any of its Subsidiaries which has resulted in or, which is likely in the reasonable judgment of the Company to result in, a Material Adverse Effect, or affects the value of, or the Collateral Agent's interest in, the Collateral, taken as a whole, in any material respect, deliver to the Holders a statement of the chief financial officer or treasurer of the Company setting forth details of each such development and the action which the Company or such Subsidiary, as the case may be, has taken and proposes to take with respect thereto. 16 (e) ERISA Notices. Deliver or cause to be delivered to the Holders, at the Company's expense, the following information and notices as soon as reasonably possible, and in any event: (i) (x) within ten (10) Business Days after the Company obtains knowledge that a Termination Event has occurred, a written statement of the chief financial officer of the Company describing such Termination Event and the action, if any, which the Company has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto and (y) within ten (10) Business Days after any member of the Controlled Group obtains knowledge that a Termination Event has occurred which could reasonably be expected to subject the Company to liability in excess of $1,000,000, a written statement of the chief financial officer of the Company describing such Termination Event and the action, if any, which the member of the Controlled Group has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto; (ii) within ten (10) Business Days after the Company or any of its Subsidiaries obtains knowledge that a non-exempt prohibited transaction (as defined in ERISA and the Code) has occurred, a statement of the chief financial officer of the Company describing such transaction and the action which the Company or such Subsidiary has taken, is taking or proposes to take with respect thereto; (iii) within ten (10) Business Days after the Company or any of its Subsidiaries receives notice of any unfavorable determination letter from the IRS regarding the qualification of a Plan under Section 401(a) of the Code, copies of each such letter; (iv) within ten (10) Business Days after the filing thereof with the IRS, a copy of each funding waiver request filed with respect to any Benefit Plan and all communications received by the Company or a member of the Controlled Group with respect to such request; (v) within ten (10) Business Days after receipt by the Company or any member of the Controlled Group of the PBGC's intention to terminate a Benefit Plan or to have a trustee appointed to administer a Benefit Plan, copies of each such notice; (vi) within ten (10) Business Days after receipt by the Company or any member of the Controlled Group of a notice from a Multiemployer Plan regarding the imposition of withdrawal liability, copies of each such notice; (vii) within ten (10) Business Days after the Company or any member of the Controlled Group fails to make a required installment or any other required payment under Section 412 of the Internal Revenue Code on or before the due date for such installment or payment, a notification of such failure; and (viii) within ten (10) Business Days after the Company or any member of the Controlled Group knows or has reason to know that (a) a Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a 17 Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan. For purposes of this SECTION 7.1(e), the Company, any of its Subsidiaries and any member of the Controlled Group shall be deemed to know all facts known by the Administrator of any Plan of which the Company or any member of the Controlled Group or such Subsidiary is the plan sponsor. (f) Other Reports. Deliver or cause to be delivered to the Holders copies of all financial statements, reports and notices, if any, sent or made available generally by the Company to owners of ownership, membership or other equity interests in the Company or filed with the Commission by the Company, all press releases made available generally by the Company or any of the Company's Subsidiaries to the public concerning material developments in the business of the Company or any such Subsidiary and all notifications received from the Commission by the Company or its Subsidiaries pursuant to the Securities Exchange Act and the rules promulgated thereunder. (g) Environmental Notices. As soon as possible and in any event within ten (10) days after receipt by the Company or any of its Subsidiaries, a copy of (i) any notice or claim to the effect that the Company or any of its Subsidiaries is or may be liable to any Person as a result of the Release by the Company, any of its Subsidiaries, or any other Person of any Contaminant into the environment, and (ii) any notice alleging any violation of any Environmental, Health or Safety Requirements of Law by the Company or any of its Subsidiaries if, in either case, such notice or claim relates to an event which could reasonably be expected to subject the Company or any of its Subsidiaries to liability in excess of $5,000,000. (h) Other Information. Promptly upon receiving a request therefor from any Holder, prepare and deliver to the Holders such other information with respect to the business, Property, prospects, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries as from time to time may be reasonably requested by any Holder. Section 7.2 Inspection. The Company shall permit the representatives of each holder of Notes that is an Institutional Investor: (a) No Default -- if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company's officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and (b) Default -- if a Default or Event of Default then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make 18 copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested. Section 7.3 Information Required by Rule 144A. The Company covenants that it will upon the request of the holder of any Note, provide such holder, and any qualified institutional buyer designated by such holder, such financial and other information as such holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144A under the Securities Act in connection with the resale of Notes, except at such times as the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. For the purpose of this SECTION 7.5, the term "qualified institutional buyer" shall have the meaning specified in Rule 144A under the Securities Act. SECTION 8. PREPAYMENT OF THE NOTES. Section 8.1 Required Prepayments. (a) On the last day of each month commencing with April 30, 2002 through and including December 31, 2002, the Company will prepay the Notes in an aggregate principal amount equal to the product of the Series A Note Principal Allocation times $1,166,667, together with the Make-Whole Amount payable with respect thereto; provided that no portion of such prepayment shall be applied to any Deferral Fee Note or Make-Whole Note. (b) On the last day of each month commencing with January 31, 2003 through December 31, 2003, the Company will prepay the Notes in an aggregate principal amount equal to the product of the Series A Note Principal Allocation times $4,958,333, together with the Make-Whole Amount payable with respect thereto; provided that no portion of such prepayment shall be applied to any Deferral Fee Note or Make-Whole Note. (c) Within three Business Days after the each of each fiscal quarter of the Company (commencing with the fiscal quarter ending on June 30, 2002), the Company will prepay the Notes in an aggregate principal amount equal to the product of the Series A Note Principal Allocation times the Excess Cash Flow if positive, for such quarter, together with the Make-Whole Amount payable with respect; provided that no portion of such prepayment shall be applied to any Deferral Fee Note or Make-Whole Note. (d) All prepayments made under and pursuant to this SECTION 8.1 shall be applied in accordance with the terms and provisions of SECTION 8.3. All amounts of Make-Whole Amount due and payable with respect to such prepayments shall be added to the outstanding principal amount of the Make-Whole Notes and an appropriate entry on the grid attached thereto shall be made by each holder of such Make-Whole Notes. Section 8.2 Optional Prepayments with Make-Whole Amount. 19 The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes (other than the Deferral Fee Notes and the Make-Whole Notes unless all other Notes are paid in full at such time), at 100% of the principal amount so prepaid, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this SECTION 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date, the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with SECTION 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date. The Company shall, on or before the day on which it gives written notice of prepayment pursuant to this SECTION 8.2, give telephonic notice of the principal amount of the Notes to be prepaid and the prepayment date to each Institutional Investor which shall have designated a recipient of such notices in SCHEDULE A attached hereto or by notice in writing to the Company. Section 8.3 Allocation of Partial Prepayments. In the case of each partial prepayment of the Notes pursuant to SECTION 8.1 or 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes (not counting the Make-Whole Notes and the Deferral Fee Notes) at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment; provided that all such partial prepayments shall be applied against the principal amount of the Notes scheduled to become due in the inverse order of maturity thereof. Section 8.4 Maturity; Surrender, etc. In the case of each prepayment of Notes pursuant to this SECTION 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note. Section 8.5 Purchase of Notes. 20 The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes. Section 8.6 Make-Whole Amount. The term "Make-Whole Amount" means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings: "Called Principal" means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to SECTIONS 8.1 OR 8.2 or has become or is declared to be immediately due and payable pursuant to SECTION 12.1, as the context requires. "Discounted Value" means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. "Reinvestment Yield" means, with respect to the Called Principal of any Note, 50 basis points over the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as "Page PX1" on the Bloomberg Financial Markets Services Screen (or such other display as may replace Page PX1 on the Bloomberg Financial Markets Services Screen) for actively traded U.S. Treasury securities having a maturity closest to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H. 15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the duration closest to and greater than the Remaining 21 Average Life and (2) the actively traded U.S. Treasury security with the duration closest to and less than the Remaining Average Life. "Remaining Average Life" means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. "Remaining Scheduled Payments" means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to SECTION 8.1, 8.2 or 12.1. "Settlement Date" means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to SECTION 8.1 OR 8.2 or has become or is declared to be immediately due and payable pursuant to SECTION 12.1, as the context requires. Notwithstanding anything to the contrary contained herein or in the Notes, for purposes of computing any Make-Whole Amount under this Agreement, (1) the "scheduled due date" of the Called Principal of the Notes shall be deemed to be January 31, 2003 and (2) all Remaining Scheduled Payments on the Notes shall be determined on the assumption that the interest rates borne by the Notes is 6.41% per annum. SECTION 9. AFFIRMATIVE COVENANTS. The Company covenants that from and after the date of the Closing and continuing so long as any of the Notes are outstanding: Section 9.1 Existence, Etc. Except with respect to the inactive Subsidiaries identified on SCHEDULE 9.1 hereto, the Company shall, and shall cause each of its Subsidiaries to, at all times maintain its existence and preserve and keep, or cause to be preserved and kept, in full force and effect its rights and franchises material to its businesses, and except that any Subsidiary of the Company may merge with or liquidate into the Company or any other Subsidiary of the Company, provided that the surviving entity expressly assumes any liabilities, if any, of any of such Subsidiaries with respect to the Obligations pursuant to an assumption agreement reasonably satisfactory to the Required Holders and provided further that the consolidated net worth of the surviving corporation is not less than the 22 consolidated net worth of the Subsidiary with any liability with respect to the Obligations immediately prior to such merger. The Holders acknowledge that the Company intends to, and the Company hereby agrees to, legally dissolve by no later than sixty (60) days after the Closing the inactive Subsidiaries identified on SCHEDULE 9.1 hereto, and the Holders expressly consent to such dissolution. Section 9.2 Powers. The Company shall, and shall cause each of its Subsidiaries to, qualify and remain qualified to do business in each jurisdiction in which the nature of its business requires it to be so qualified and where the failure to be so qualified will have or is reasonably likely to have a Material Adverse Effect. Section 9.3 Compliance with Laws, Etc. The Company shall, and shall cause its Subsidiaries to, (a) comply with all Requirements of Law and all restrictive covenants affecting such Person or the business, properties, assets or operations of such Person, and (b) obtain as needed all permits, licenses and franchises necessary for its operations and maintain such permits in good standing unless failure to comply or obtain could not reasonably be anticipated to have a Material Adverse Effect. Section 9.4 Payment of Taxes and Claims. The Company shall pay, and cause each of its Subsidiaries to pay, (a) all taxes, assessments and other governmental charges imposed upon it or on any of its properties or assets or in respect of any of its franchises, business, income or property before any penalty or interest accrues thereon, and (b) all claims (including, without limitation, claims for labor, services, materials and supplies) for sums which have become due and payable and which by law have or may become a Lien (other than a Lien permitted by SECTION 10.2(c)) upon any of the Company's or such Subsidiary's property or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, however, that no such taxes, assessments and governmental charges referred to in CLAUSE (a) above or claims referred to in CLAUSE (b) above (and interest, penalties or fines relating thereto) need be paid if being contested in good faith by appropriate proceedings diligently instituted and conducted and if such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor; and provided further that no Default or Event of Default shall arise or occur with respect to this SECTION 9.4 unless unpaid taxes, assessments, governmental charges and claims (other than those being contested pursuant to the preceding proviso) exceed $1,000,000 in the aggregate. Section 9.5 Intentionally Omitted. Section 9.6 Inspection of Property; Books and Records; Discussions. In addition to the provisions set forth in SECTION 7.2, the Company shall permit, and cause each of the Company's Subsidiaries to permit, (a) any authorized 23 representative(s) designated by any Holder to visit and inspect any of the properties of the Company or any of its Subsidiaries, to examine, audit, check and make copies of their respective financial and accounting records, books, journals, orders, receipts and any correspondence and other data relating to their respective businesses or the transactions contemplated hereby (including, without limitation, in connection with environmental compliance, hazard or liability), and to discuss their affairs, finances and accounts with their directors, officers, employees and independent certified public accountants, and (ii) permit the Collateral Agent or any of its agents or representatives to conduct a comprehensive field audit of its books, records, properties and assets, including without limitation, the Collateral, all upon reasonable notice, at such reasonable times during normal business hours, as often as may be reasonably requested and at the cost and expense of the Company; provided, however, so long as no Event of Default has occurred and is continuing, the Collateral Agent shall conduct no more than one (1) such comprehensive field audit during any twelve (12) month period and the reimbursable cost associated therewith shall not exceed $15,000. The Company shall keep and maintain, and cause each of the Company's Subsidiaries to keep and maintain, in all material respects, proper books of record and account in which entries in conformity with GAAP shall be made of all dealings and transactions in relation to their respective businesses and activities. If a Default has occurred and is continuing, the Company, upon the request of the Required Holders, shall turn over any such records to the Holders or their representatives. Section 9.7 ERISA Compliance. The Company shall, and shall cause each of the Company's Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Plans to comply in all material respects with the provisions of ERISA, the Code, all other applicable laws, and the regulations and interpretations thereunder and the respective requirements of the governing documents for such Plans. Section 9.8 Maintenance of Properties; Insurance. The Company shall maintain, preserve and protect all Property that is material to the conduct of the business of the Company or any of its Subsidiaries and keep such Property in good repair, working order and condition and from time to time make, or cause to be made all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times in accordance with customary and prudent business practices for similar businesses; and maintain in full force and effect insurance with responsible and reputable insurance companies or associations in such amounts, on such terms and covering such risks, including fire and other risks insured against by extended coverage, as is usually carried by companies engaged in similar businesses and owning similar properties similarly situated and maintain in full force and effect public liability insurance, insurance against claims for personal injury or death or property damage occurring in connection with any of its activities or any properties owned, occupied or controlled by it, in such amounts as it shall reasonably deem necessary, and maintain such other insurance as may be required 24 by law. The Company shall deliver to the Collateral Agent, by no later than thirty (30) days after the Closing, endorsements (y) to all "All Risk" physical damage insurance policies on all of the Company's and its Subsidiaries' tangible personal property and assets and business interruption insurance policies naming the Collateral Agent as loss payee, and (z) to all general liability and other liability policies naming the Collateral Agent and each Holder as an additional insured. In the event the Company or any of its Subsidiaries, at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required herein or to pay any premium in whole or in part relating thereto, then the Collateral Agent, without waiving or releasing any obligations or resulting Default hereunder, may at any time or times thereafter (but shall be under no obligation to do so) obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto which the Collateral Agent deems advisable. Section 9.9 Environmental Compliance. The Company and its Subsidiaries shall comply with all Environmental, Health or Safety Requirements of Law, except where noncompliance will not have or is not reasonably likely to subject the Company and its Subsidiaries to liability, individually or in the aggregate, in excess of $5,000,000 (excluding amounts covered by indemnity claims that are not in dispute). Section 9.10 Foreign Employee Benefit Compliance. The Company shall, and shall cause each of its Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Foreign Employee Benefit Plans to comply in all material respects with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Plans, except for failures to comply which, in the aggregate, would not result in liability in excess of $1,000,000. Section 9.11 Maintenance of Rights. The Company shall obtain and maintain, and shall cause each of its Subsidiaries to obtain and maintain, in full force and effect all licenses, franchises, permits other similar rights necessary for the operation of its business, except where the failure to obtain or maintain such rights does not have and could not reasonably be expected to have a Material Adverse Effect. Section 9.12 Conduct of Business. Subject to SECTIONS 9.1(a) and 10.2(h), the Company will continue, and will cause each Subsidiary to continue, to engage primarily in the material lines of business which the Company and its Subsidiaries operate, respectively, as of the Closing. Section 9.13 Subsidiary Documentation. 25 As soon as practicable and in any event within 30 days after any Person becomes a Domestic Subsidiary of the Company, the Company shall cause each such Person to execute and deliver a Note Guaranty to the Holders and Collateral Documents to the Collateral Agent and to deliver or cause to be delivered to the Holders (in the case of a Note Guaranty) and the Collateral Agent (in the case of any Collateral Documents) all related documentation with respect to the execution and delivery of such Note Guaranty and Collateral Documents by such Person that the Holders or Collateral Agent may reasonably request, including, without limitation, certified resolutions, incumbency certificates, organizational documents and legal opinions. Section 9.14 Collateral Documents; Post-Closing Real Estate Covenants. (a) The Company shall execute or cause to be executed: (1) on or prior to the Closing, (i) the Security Agreement, (ii) one or more Pledge Agreements with respect to all of the Capital Stock owned by the Company and its Domestic Subsidiaries of each of the Domestic Subsidiaries in existence on the Closing, (iii) a Mortgage from the title owner of the Lafayette Property with respect to the Lafayette Property and (iv) such vehicle title applications (other than with respect to vehicles subject to the Fleet Lease Transaction and the National City Lease Transaction) as the Collateral Agent may request, accompanied by the relevant vehicle titles and fees to be filed with the applicable Governmental Authorities to reflect the Collateral Agent as lienholder; (2)(i) within five (5) Business Days after any Subsidiary becoming a Domestic Subsidiary, a Pledge Agreement (or supplement thereto) with respect to all of the Capital Stock of such Subsidiary owned by the Company and its Domestic Subsidiaries and (ii) within thirty (30) days after any Subsidiary becoming a First Tier Foreign Subsidiary, a pledge agreement (or supplement thereto) or share mortgage in favor of the Collateral Agent for the benefit of the Secured Parties with respect to the lesser of (x) 100% (or, in respect of any First Tier Foreign Subsidiary, 65% so long as a 100% pledge would cause such First Tier Foreign Subsidiary's accumulated and undistributed earnings and profits to be deemed to be repatriated to the Company or a Domestic Subsidiary for U.S. federal income tax purposes) of all the outstanding Capital Stock of each First Tier Foreign Subsidiary and (y) all of the outstanding Capital Stock of each First Tier Foreign Subsidiary currently or hereafter owned by the Company and its Domestic Subsidiaries; and provided that no such pledge of the Capital Stock of a First Tier Foreign Subsidiary shall be required hereunder to the extent such pledge is prohibited by applicable law or the Collateral Agent and its counsel reasonably determine that such pledge would not provide material Collateral for the benefit of the Secured Parties pursuant to legally binding, valid and enforceable Pledge Agreements; (3) within five (5) Business Days after any Subsidiary becoming a Guarantor, a supplement to the Security Agreement (in the form attached thereto), and the other documents required by the Collateral Agent in connection therewith; 26 (4) within thirty (30) days after the Company or any Domestic Subsidiary acquires any fee interest in real property, a Mortgage executed by such acquiring Person, accompanied by such title reports, title insurance, surveys, appraisals and environmental reports (collectively, "Real Estate Instruments") as are requested by the Collateral Agent (provided that the foregoing shall not apply to any real property that is (1) or is expected to be the subject of the SunTrust Sale Leaseback or (2) identified on SCHEDULE 10.2(b) hereto); (5) within ten (10) days after any Loan Party acquires an ownership interest in any vehicle and other item of rolling stock subject to a certificate of title law, to the extent so required by the Collateral Agent, an appropriate vehicle title application (other than with respect to vehicles subject to the Fleet Lease Transaction and the National City Lease Transaction) accompanied by the relevant vehicle title and fee to be filed with the applicable Governmental Authority to reflect the Collateral Agent as lienholder with respect to such vehicle or other item of rolling stock; and the Company shall deliver to the Collateral Agent all such Pledge Agreements, Note Guarantees and other Collateral Documents, together with appropriate corporate resolutions and other documentation (including opinions, UCC financing statements, real estate title insurance policies, environmental reports, the stock certificates representing the Capital Stock subject to such pledge, stock powers with respect thereto executed in blank, and such other documents as shall be reasonably requested to perfect the Lien of such pledge) in each case in form and substance reasonably satisfactory to the Collateral Agent; provided that, with respect to the pledge of Capital Stock in First Tier Foreign Subsidiaries in existence on the date hereof and vehicles and real estate owned by the Company or any of its Domestic Subsidiaries on the date hereof, such relevant Pledge Agreements, vehicle title applications and Real Estate Instruments are required to be delivered hereunder at the times and in the manner required in writing by the Holders. (b) In addition to the terms and provisions of SECTION 9.14(a), the Company shall, and shall cause its Subsidiaries to, within the time periods set forth below (to the extent such actions have not occurred on or prior to the Closing), cause the following to occur: (1) with respect to the Layfayette Property: (a) within seven (7) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; (b) within seven (7) days of the Closing, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the Lafayette Property; (c) within sixty (60) days of the Closing, deliver a Phase I Environmental Assessment addressed to and in form and substance reasonably satisfactory to the Holders, and prepared by an environmental engineering firm reasonably acceptable to the Holders; (d) within seven (7) days of the Closing, deliver a legal opinion in the form as set forth in EXHIBIT 4.4(b) hereto from Baker & Daniels regarding such Mortgage; (e) within seventy-five (75) days of the Closing, deliver an ALTA plat of survey prepared by a surveyor licensed in the State of Indiana with respect to the Layfayette Property; and (f) within sixty (60) days of delivery of the survey, cause 27 any necessary adjustments or modifications to the Mortgage or the title insurance policy as may be reasonably required to reflect the survey and the facts set forth therein on the title insurance policy and the Mortgage; (2) with respect to each Material Real Estate Property: (a) within fifteen (15) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; (b) within thirty (30) days of the Closing, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the such property; (c) within sixty (60) days of the Closing, deliver a Phase I Environmental Assessment addressed to and in form and substance reasonably satisfactory to the Holders, and prepared by an environmental engineering firm reasonably acceptable to the Holders; (d) within thirty (30) days of the Closing, deliver a legal opinion in the form as set forth in EXHIBIT 4.4(b) hereto from special local counsel reasonably satisfactory to the Holders regarding such Mortgage; (e) within seventy-five (75) days of the Closing, deliver an ALTA plat of survey prepared by a surveyor licensed in the state where such property is located with respect to such property; and (f) within sixty (60) days of delivery of the survey, cause any necessary adjustments or modifications to the Mortgage or the title insurance policy as may be reasonably required to reflect the survey and the facts set forth therein on the title insurance policy and the Mortgage; (3) with respect to each Significant Real Estate Property: (a) within forty-five (45) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; and (b) within forty-five (45) days of the Closing, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the such property; (4) with respect to all other real property owned by the Company or its Domestic Subsidiaries: (a) within sixty (60) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; and (5) with respect to all properties which are anticipated to be included in the SunTrust Sale Leaseback, the Company agrees that if such SunTrust Sale Leaseback is not consummated on or prior to December 31, 2002, or if any property which was anticipated to be included in such SunTrust Sale Leaseback and is not so included, the Company shall comply or cause its Domestic Subsidiaries to comply with the terms and provisions of this SECTION 9.14(b) with respect to each such property on or prior to December 31, 2002 in the case of all such properties if the SunTrust Sale Leaseback is not consummated and within forty-five (45) days from the date any property is no longer anticipated to be included in the SunTrust Sale Leaseback. Section 9.15 Restructuring Consultant. 28 The Company shall engage and retain, until such time as the Required Secured Parties so require, a restructuring consulting firm acceptable to the Required Secured Parties and the Company shall cause such restructuring consulting firm to deliver such financial reports, statements and analysis to any Holder as such Holder may reasonably request from time to time. Each Holder hereby acknowledges that the Company has engaged and retained PricewaterhouseCoopers as its restructuring consultant and agrees that PricewaterhouseCoopers is acceptable to such Holder. Section 9.16 Chief Restructuring Officer. In the event the Company has not appointed a full-time permanent chief executive officer by September 30, 2002, the Company shall appoint and retain, until a full-time permanent chief executive officer of the Company is appointed, a chief restructuring officer with such qualifications and experience as are acceptable to the Required Secured Parties, which officer shall report directly to the Company's board of directors. The Company shall vest such officer with control over the operations of the Company and its Subsidiaries. Furthermore, until a full-time permanent chief executive officer of the Company is appointed, the Company hereby agrees to furnish to the Holders, promptly and in any event within (a) three (3) calendar days after the Company obtaining knowledge thereof, a statement of the chief financial officer or treasurer of the Company setting forth details of any and all material developments in the Company's search for a full-time permanent chief executive officer and (b) fifteen (15) days after the end of each calendar month, a statement of the chief financial officer or treasurer of the Company setting forth details of any and all steps the Company proposes to take with respect to selecting a full-time permanent chief executive officer. Section 9.17 Approved Refinancing Indebtedness. The Company shall incur an Approved Refinancing Indebtedness on or prior to March 30, 2004 in an aggregate principal amount equal to or in excess of the amount of Indebtedness of the Company which matures on March 30, 2004. SECTION 10. NEGATIVE COVENANTS; FINANCIAL COVENANTS. Section 10.1 Fiscal Year 2004 Covenants. The Company covenants that from and after December 31, 2003 and continuing so long as any of the Notes are outstanding: (a) Consolidated Tangible Net Worth. The Company will at all times keep and maintain Consolidated Tangible Net Worth at an amount not less than the sum of (i) $110,000,000 plus (ii) 75% of Consolidated Net Income computed on a cumulative basis for each of the elapsed fiscal quarters ending after December 31, 2003; provided that notwithstanding that Consolidated Net Income for any such elapsed fiscal quarter may be a deficit figure, no reduction as a result thereof shall be made on the sum to be maintained pursuant hereto. 29 (b) Funded Debt. The Company shall not at any time permit the aggregate amount of all Consolidated Funded Debt to exceed an amount equal to 50% of Consolidated Total Capitalization determined at such time. (c) Priority Debt. The Company shall not at any time permit the aggregate amount of all Consolidated Priority Debt outstanding at any time to exceed an amount equal to 20% of Consolidated Tangible Net Worth. (d) Minimum Interest Coverage Ratio. The Company shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ending on or about March 30, 2004), for the period of four consecutive fiscal quarters then ending, to be less than 4.00 to 1. (e) Maximum Leverage Ratio. The Company shall not permit the ratio of (i) Consolidated Funded Debt to (ii) Consolidated EBITDA as of the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ending on or about March 30, 2004), for the period of four consecutive fiscal quarters then ending, to be greater than 2.85 to 1. Section 10.2 Negative Covenants. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding: (a) Indebtedness. Neither the Company nor any of its Subsidiaries shall directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except: (i) the Obligations; (ii) Permitted Existing Indebtedness; (iii) Indebtedness arising from intercompany loans from the Company or any Subsidiary to any Subsidiary so long as intercompany loans from the Company or any Domestic Subsidiary to a Foreign Subsidiary shall not exceed an aggregate of $5,000,000 during the term of this Agreement; (iv) Indebtedness with respect to surety, appeal and performance bonds obtained by the Company or any of its Subsidiaries in the ordinary course of business; (v) Indebtedness constituting Contingent Obligations permitted by SECTION 10.2(e); (vi) Unsecured Indebtedness and other liabilities incurred in the ordinary course of business and consistent with past practice, but not incurred through the borrowing of money or the obtaining of credit (other than customary trade terms); 30 (vii) Indebtedness evidenced by the Bank Notes and other Indebtedness under the Credit Agreement in an aggregate principal amount not to exceed $125,000,000 plus the PIK Notes (as defined in the Credit Agreement); (viii) Indebtedness incurred in connection with the Receivables Purchase Documents; provided that Receivables Facility Attributed Indebtedness incurred in connection therewith does not exceed $110,000,000 in the aggregate at any time; (ix) other unsecured Indebtedness in an aggregate principal amount not exceeding $3,000,000 at any time outstanding; and (x) the Approved Refinancing Indebtedness. (b) Sales of Assets. Except in connection with the SunTrust Sale Leaseback and the sale of any of the assets and properties or consummation of the transactions identified on SCHEDULE 10.2(b) hereto, neither the Company nor any of its Subsidiaries shall sell, assign, transfer, lease, convey or otherwise dispose of any property, whether now owned or hereafter acquired, or any income or profits therefrom, or enter into any agreement to do so, except: (i) sales of inventory in the ordinary course of business; (ii) the disposition of obsolete equipment in the ordinary course of business; (iii) Permitted Receivables Transfers; (iv) sales by Apex Trailer Leasing & Rentals, L.P. in the ordinary course of business of lease and other finance contract receivables and equipment subject to lease, if such transaction (a) is for not less than fair market value and (b) when combined with all other such sales during the then current fiscal year represents disposition of not greater than 50% of Apex Trailer Leasing & Rentals, L.P.'s Tangible Assets at the end of the immediately preceding fiscal year; and (v) transfers of assets by the Company or any Subsidiary to any Subsidiary so long as (1) in the case of a transferee which is a Domestic Subsidiary, the security interests granted pursuant to the Collateral Documents in the events so transferred shall remain in full force and effect and perfected and (2) transfers of assets by the Company or any Domestic Subsidiary to any Foreign Subsidiary shall not exceed an aggregate of $1,000,000 during the term of this Agreement. (c) Liens. Neither the Company nor any of its Subsidiaries shall directly or indirectly create, incur, assume or permit to exist any Lien on or with respect to any of their respective property or assets except: (i) Permitted Existing Liens; (ii) Customary Permitted Liens; 31 (iii) purchase money Liens (including the interest of a lessor under a Capitalized Lease and Liens to which any property is subject at the time of the acquisition thereof by the Company or one of its Subsidiaries) securing permitted purchase money Indebtedness; provided that such Liens shall not apply to any property of the Company or its Subsidiaries other than that purchased or subject to such Capitalized Lease; (iv) Liens arising in connection with the Permitted Receivables Transfer; (v) Environmental Liens securing liabilities, claims, costs or damages not exceeding $5,000,000 in the aggregate; (vi) Liens created by the Collateral Documents; and (vii) Liens granted by a Foreign Subsidiary on Property located in Canada to the extent securing Indebtedness permitted by SECTION 10.2(a)(iii). In addition, neither the Company nor any or its Subsidiaries shall, after the date hereof, become a party to any agreement, note, indenture or other instrument (other than the Intercreditor Agreement), or take any other action, which would prohibit the creation of a Lien on any of its properties or other assets in favor of the Collateral Agent for the benefit of the Holders and the other Secured Parties as collateral for the Secured Obligations; provided that any agreement, note, indenture or other instrument in connection with permitted purchase money Indebtedness (including Capitalized Lease Obligations) may prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of the Holders and the other Secured Parties on the items of property obtained with the proceeds of such permitted purchase money Indebtedness; and provided further that the Receivables Purchase Documents may prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of the Holders and the other Secured Parties on the assets of WNC and on the "Transferred Assets" (as defined in the Receivables Sale Agreement) of the Originators. (d) Investments. Neither the Company nor any of its Subsidiaries shall directly or indirectly make or own any Investment except: (i) Investments in Cash Equivalents; (ii) Permitted Existing Investments; (iii) Investments received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (iv) Investments consisting of deposit accounts maintained by the Company or any of its Subsidiaries in connection with their cash management systems; (v) Investments with respect to Indebtedness permitted pursuant to SECTION 10.2(a)(iii); 32 (vi) Existing Investments in any Subsidiaries; (vii) Investments consisting of minority interests and joint ventures and loans or advances to such entities, provided that at the time any such Investment is made the amount of all Investments under this CLAUSE (vii) (including such new Investment, and including all Permitted Existing Investments that are of the type covered by this CLAUSE (vii)) does not exceed $5,000,000 at such time; (viii) Investments in WNC required in connection with the Receivables Purchase Documents; and (ix) Investments in connection with Permitted Acquisitions. (e) Contingent Obligations. Neither the Company nor any of its Subsidiaries shall directly or indirectly create or become or be liable with respect to any Contingent Obligation, except: (i) recourse obligations resulting from endorsement of negotiable instruments for collection in the ordinary course of business; (ii) Permitted Existing Contingent Obligations and any extensions, renewals or replacements thereof, provided that any such extension, renewal or replacement is not greater than the Indebtedness under, and shall be on terms no less favorable to the Company or such Subsidiary than the terms of, the Permitted Existing Contingent Obligation being extended, renewed or replaced; (iii) obligations, warranties, and indemnities, not relating to Indebtedness of any Person, which have been or are undertaken or made in the ordinary course of business and not for the benefit of or in favor of an Affiliate of the Company or such Subsidiary; (iv) Contingent Obligations of the Company or any of its Subsidiaries with respect to any Indebtedness permitted by this Agreement; and (v) Contingent Obligations with respect to surety, appeal and performance bonds obtained by the Company or any Subsidiary in the ordinary course of business. (f) Acquisitions. Neither the Company nor any of its Subsidiaries shall make any Acquisition other than a Permitted Acquisition. (g) Transactions with Shareholders or Affiliates. Neither the Company nor any of its Subsidiaries shall directly or indirectly enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder or holders of any Equity Interests of the Company, or with any Affiliate of the Company which is not its Subsidiary, on terms that are less favorable to the Company or its Subsidiaries, as applicable, than those that might be obtained in an arm's length transaction at the time from Persons who are not such a holder or Affiliate. (h) Restriction on Fundamental Changes. Neither the Company nor any of its Subsidiaries shall enter into any merger or consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell, transfer or otherwise dispose of, in one transaction or series of transactions, all or substantially all of the Company's or any such Subsidiary's business or property, whether now or hereafter acquired, except transactions permitted under SECTIONS 10.2(b) and 10.2(f) and except that any Subsidiary of the Company may merge with or liquidate into the Company or any other Subsidiary of the Company, provided that the surviving entity expressly assumes any liabilities, if any, of either of such 33 Subsidiaries with respect to the Obligations pursuant to an assumption agreement reasonably satisfactory to the Required Holders and provided further that the consolidated net worth of the surviving corporation is not less than the consolidated net worth of the Subsidiary with any liability with respect to the Obligations immediately prior to such merger. (i) Margin Regulations. Neither the Company nor any of its Subsidiaries shall use all or any portion of the proceeds of any credit extended under this Agreement to purchase or carry Margin Stock. (j) ERISA. The Company shall not: (i) engage, or permit any of its Subsidiaries to engage, in any prohibited transaction described in Sections 406 of ERISA or 4975 of the Code for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the DOL; (ii) permit to exist any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of the Internal Revenue Code), with respect to any Benefit Plan, whether or not waived; (iii) fail, or permit any Controlled Group member to fail, to pay timely required contributions or annual installments due with respect to any waived funding deficiency to any Benefit Plan; or (iv) terminate, or permit any Controlled Group member to terminate, any Benefit Plan which would result in any liability of the Company or any Controlled Group member under Title IV of ERISA. (k) Fiscal Year. Neither the Company nor any of its consolidated Subsidiaries shall change its fiscal year for accounting or tax purposes from a period consisting of the 12-month period ending on December 31 of each calendar year. (l) Prepayment of Other Indebtedness. Neither the Company nor any of its Subsidiaries shall make any optional prepayment, redemption, repurchase or defeasance of any Indebtedness of the Company or any such Subsidiary which would, in accordance with GAAP, constitute long-term Indebtedness, other than the Obligations, any intercompany indebtedness permitted by SECTION 10.2(a)(iii) and other Indebtedness described on SCHEDULE 5.14 hereto. (m) Limitations on Restrictive Agreements. Neither the Company nor any of its Subsidiaries shall enter into, or suffer to exist, any agreement (other than this Agreement, the Credit Agreement, the Series C-H Note Purchase Agreements and the Series I Note Purchase Agreement) with any Person which, directly or indirectly, prohibits or limits the ability of any Subsidiary to (i) pay dividends or make other distributions to the Company or prepay any Indebtedness owed to Company or (ii) transfer any of its properties or assets to the Company (other than with respect to assets subject to Liens permitted by SECTION 10.2(c)). (n) Leases. Except in connection with the SunTrust Sale Leaseback, the Fleet Lease Transaction and the National City Lease Transaction, the Company shall not create, incur, 34 assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any obligation as lessee for the rental or hire of any real or personal property, except: (i) leases existing on the date of this Agreement and any extensions or renewals thereof, but no increase in the amount payable thereunder; and (ii) leases (other than Capitalized Leases or leases constituting Off-Balance Sheet Liabilities) which do not in the aggregate require the Company and its Subsidiaries on a consolidated basis to make payments (including taxes, insurance, maintenance and similar expenses which the Company or any Subsidiary is required to pay under the terms of any lease) at any time during the term of this Agreement in excess of $3,500,000. (o) [Intentionally Omitted.] (p) Hedging Obligations. Enter into any interest rate, commodity or foreign currency exchange, swap, collar, cap or similar agreements evidencing Hedging Obligations, other than interest rate, foreign currency or commodity exchange, swap, collar, cap or similar agreements entered into by the Company pursuant to which the Company has hedged its actual or forecasted interest rate, foreign currency or commodity exposure. Such permitted hedging agreements entered into by the Company and any Lender or any affiliate of any Lender to hedge floating interest rate risk in an aggregate notional amount not to exceed at any time an amount equal to the outstanding balance of the Term Loans and the principal Indebtedness under the Senior Notes at such time are sometimes referred to herein as "Interest Rate Agreements". (q) Sales and Leasebacks. Neither the Company nor any of its Subsidiaries shall become liable, directly, by assumption or by Contingent Obligation, with respect to any lease, whether an operating lease or a Capitalized Lease, of any Property (whether real or personal or mixed) (i) which it or one of its Subsidiaries sold or transferred or is to sell or transfer to any other Person, or (ii) which it or one of its Subsidiaries intends to use for substantially the same purposes as any other Property which has been or is to be sold or transferred by it or one of its Subsidiaries to any other Person in connection with such lease, unless (a) in either case the sale involved is not prohibited under SECTION 10.2(b) and the lease involved is not prohibited under SECTION 10.2(a) or (b) such sale and leaseback transaction is the SunTrust Sale Leaseback. The parties hereto acknowledge and agree that the foregoing shall not operate to restrict, prohibit or prevent the Fleet Lease Transaction and the National City Lease Transaction. (r) Issuance of Disqualified and Preferred Stock. Neither the Company nor any of its Subsidiaries shall issue any Disqualified Stock. The Company shall not issue any new shares of preferred stock and shall not permit any Subsidiary to issue any shares of preferred stock. (s) Corporate Documents. Neither the Company nor any of its Subsidiaries shall amend, modify or otherwise change any of the terms or provisions in any of their respective constituent documents as in effect on the date hereof in any manner materially adverse to the ability of the Company or any of its Subsidiaries to perform their respective obligations under the Note Documents, without the prior written consent of the Required Holders. The Company shall not amend, modify or otherwise change any of the terms or provisions of the Fruehauf Preferred Stock. 35 (t) Other Indebtedness. The Company shall not amend, modify or supplement, or permit any Subsidiary to amend, modify or supplement (or consent to any amendment, modification or supplement of), any document, agreement or instrument evidencing the Bank Notes, the Senior Notes (other than the Notes), the NatCity Lease Transaction, the Fleet Lease Transaction, the Permitted Receivables Transfer or Subordinated Indebtedness (or any replacements, substitutions or renewals thereof) or pursuant to which any such Indebtedness is issued where such amendment, modification or supplement provides for the following or which has any of the following effects: (i) increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest; (ii) shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions; (iii) shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness; (iv) increases the rate of interest accruing on such Indebtedness; (v) provides for the payment of additional fees or increases existing fees; (vi) amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Company or a Subsidiary of the Company from taking certain actions) in a manner which is more onerous or more restrictive to the Company (or any Subsidiary of the Company) or which is otherwise materially adverse to the Company and/or the Lenders or, in the case of adding covenants, which places additional restrictions on the Company (or a Subsidiary of the Company) or which requires the Company or any such Subsidiary to comply with more restrictive covenants than the covenants set forth herein or which requires the Company to better its financial performance from that set forth in the financial covenants set forth herein; (vii) amends, modifies or adds any covenant in a manner which, when taken as a whole, is materially adverse to the Company and/or the Holders; (viii) amends, modifies or supplements any subordination provisions thereof; (ix) amends or modifies the limitations on transfer provided therein; or (x) reduces the lending commitments under the Credit Agreement or the availability under the Permitted Receivables Transfer facility. (u) No Changes to Standard Warranty. The Company shall not, and shall cause its Subsidiaries to not, make any material changes to the warranty policies of the Company and its Subsidiaries in effect on the date of this Agreement. 36 (v) Prohibition Against Trade-In Value Guaranties. The Company shall not, and shall cause its Subsidiaries to not, make any Guaranty of trade-in values of trailers beyond six months in duration. Section 10.3 Financial Covenants. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding: (a) Minimum Consolidated Tax Adjusted Equity. If the Company shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below:
Minimum Consolidated Tax Fiscal Quarter Ending Adjusted Equity --------------------- ------------------------ March 31, 2003 $99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 $96,504,000
(b) Minimum Consolidated Equity. If the Company shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below:
Fiscal Quarter Ending Minimum Consolidated Equity --------------------- --------------------------- March 31, 2003 $87,882,000 June 30, 2003 $90,461,000 September 30, 2003 $94,751,000 December 31, 2003 $84,077,000
(c) Maximum Leverage Valuation Ratio. The Company shall not permit, as of the last day of each of the fiscal quarters specified below, the Leverage Valuation Ratio to exceed the applicable "Maximum Leverage Valuation Ratio" specified below:
Maximum Leverage Fiscal Quarter Ending Valuation Ratio --------------------- ---------------- June 30, 2002 0.95 to 1 September 30, 2002 0.95 to 1 December 31, 2002 0.95 to 1
37 March 31, 2003 0.85 to 1 June 30, 2003 0.80 to 1 September 30, 2003 0.80 to 1 December 31, 2003 0.75 to 1
(d) Minimum Consolidated EBITDA. (i) The Company shall, as of the last day of each of the fiscal quarters of the Company occurring in calendar year 2002, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such fiscal quarter, at an amount not less than $(20,000,000). (ii) The Company shall, as of the last day of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending:
Minimum Rolling 12 Month Month Ending Consolidated EBITDA ------------ ------------------------- January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000
(e) Minimum Interest Coverage Ratio. The Company shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ending on or about March 31, 2003), for the period of four consecutive fiscal quarters then ending, to be less than 1.25 to 1. (f) Maximum Capital Expenditures. The Company will not, and will not permit any Subsidiary to, expend for Capital Expenditures during any fiscal year of the Company and its Subsidiaries, in excess of $6,000,000 in the aggregate for the Company and its Subsidiaries. 38 (g) Maximum Finance Contracts. The Company will not, and will not permit any Subsidiary to, enter into any new Finance Contract if and to the extent that the sum of such Finance Contract (a) when added to the aggregate amount of all Finance Contracts entered into by the Company or any of its Subsidiaries during the twelve (12) month period that commences on the Closing Date exceeds $5,000,000 or (b) when added to the aggregate amount of all Finance Contracts entered by the Company or any of its Subsidiaries during the twelve (12) month period that commences on the first (1st) anniversary of the date of Closing exceeds $5,000,000. Section 10.4 Additional Negative Covenants. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding: (a) Restricted Payments. The Company will not, and will not permit any Subsidiary to, make any Restricted Payment; provided that the Company may, commencing with the March 15, 2003 scheduled dividend, resume (but may not make any payments that were previously due and not paid) making the regularly scheduled dividends on the Fruehauf Preferred Stock on a quarterly basis in an amount per quarter not to exceed 1.5% of the Stated Value Per Share (as defined in the Fruehauf Preferred Stock) so long as (i) no Default or Event of Default shall have occurred and be continuing hereunder, (ii) no Default or Event of Default would have occurred under the financial covenants set forth in CLAUSES (1), (2), (3) and (4) below if such financial covenants had been in full force and effect from the Closing to the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock and (iii) the Company has appointed a full-time permanent chief executive officer as of the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock. For purposes of this SECTION 10.4(a), on and prior to the date of the declaration of any proposed Restricted Payment on the Fruehauf Preferred Stock pursuant to this SECTION 10.4(a), the Company shall have, and shall have caused each of its Subsidiaries to have, complied with the following financial covenants set forth in CLAUSES (1), (2), (3) and (4) below: (1) (A) If the Company shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below:
Minimum Consolidated Tax Fiscal Quarter Ending Adjusted Equity --------------------- ------------------------ June 30, 2002 $106,376,000 September 30, 2002 $113,535,000 December 31, 2002 $107,267,000 March 31, 2003 $99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000
39 December 31, 2003 $96,504,000
(B) If the Company shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below:
Fiscal Quarter Ending Minimum Consolidated Equity --------------------- --------------------------- June 30, 2002 $101,492,000 September 30, 2002 $110,961,000 December 31, 2002 $100,966,000 March 31, 2003 $87,882,000 June 30, 2003 $90,461,000 September 30, 2003 $94,751,000 December 31, 2003 $84,077,000
(2) (A) The Company shall not permit the Interest Coverage Ratio as of the last day of the calendar months specified below, for the cumulative period commencing April, 2002 and ending on the last day of such calendar month, to be less than the applicable "Minimum Interest Coverage Ratio" specified below:
Minimum Interest Fiscal Quarter Ending Coverage Ratio --------------------- ---------------- June 30, 2002 1.50 to 1 September 30, 2002 1.50 to 1 December 31, 2002 1.25 to 1
(B) The Company shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Company specified below, for the period of four consecutive fiscal quarters then ending, to be less than the applicable "Minimum Interest Coverage Ratio" specified below:
Minimum Interest Fiscal Quarter Ending Coverage Ratio --------------------- ---------------- March 31, 2003 1.25 to 1 June 30, 2003 1.25 to 1 September 30, 2003 1.25 to 1 December 31, 2003 1.25 to 1
(3) The Company shall, as of the last day of each of the calendar months specified below, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such calendar month, at an 40 amount not less than the applicable "Minimum Cumulative Consolidated EBITDA" specified below:
Minimum Cumulative Month Ending Consolidated EBITDA ------------ ------------------- April 30, 2002 $3,841,000 May 31, 2002 $8,389,000 June 30, 2002 $14,722,000 July 31, 2002 $22,084,000 August 31, 2002 $28,732,000 September 30, 2002 $33,110,000 October 31, 2002 $36,753,000 November 30, 2002 $37,818,000 December 31, 2002 $37,856,000
(4) The Company shall, as of the last day of each of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending:
Minimum Rolling 12 Month Month Ending Consolidated EBITDA ------------ ------------------------ January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000
(b) Approved Refinancing Indebtedness. The Company will not, and will not permit any Subsidiary to, incur any Indebtedness other than (x) Indebtedness permitted under SECTION 10.2(a), (y) other Indebtedness with the prior written consent of 100% of the Holders of the Notes and (z) the Approved Refinancing Indebtedness. For purposes of this Agreement, "Approved Refinancing Indebtedness" shall mean Indebtedness of the Company which is either approved under clause (y) above or which satisfies each of the following requirements: 41 (i) the maximum principal amount of such Indebtedness does not exceed the outstanding principal amount of Indebtedness of the Company which matures on March 30, 2004 plus accrued interest thereon and the amount of all reasonable costs and expenses incurred in connection with the incurrence of such Indebtedness; (ii) the maturity date of such Indebtedness is no earlier than March 30, 2007; (iii) immediately prior to and after giving effect to the incurrence of such Indebtedness, no Default or Event of Default shall have occurred or be continuing under this Agreement, including, without limitation, the provisions of SECTION 10 hereof, or the Credit Agreement; (iv) the documentation evidencing such Indebtedness provides for collateralization, covenants and other material terms no less favorable to the Holders than those set forth in this Agreement, the Collateral Documents and the Intercreditor Agreement; and (v) such Indebtedness includes a working capital or revolving facility in an amount reasonably required to support the projected operations of the Company. SECTION 11. EVENTS OF DEFAULT. An "Event of Default" shall exist if any of the following conditions or events shall occur and be continuing: (a) Failure to Make Payments When Due. The Company shall (i) fail to pay when due any of the Obligations consisting of principal with respect to the Notes or (ii) shall fail to pay within three (3) Business Days of the date when due any of the other Obligations under this Agreement or the other Note Documents. (b) Breach of Certain Covenants. The Company shall fail duly and punctually to perform or observe any agreement, covenant or obligation binding on the Company under: (i) SECTIONS 7.1(c), 7.1(d), 7.1(e), 7.1(f), 7.1(g), 9.2, 9.3 or 9.6 and such failure shall continue unremedied for fifteen (15) days; (ii) SECTION 7.1(a) or 7.1(b) or SECTION 9.13 or SECTION 9.14 or SECTION 9.15 or SECTION 9.16 and such failure shall continue unremedied for five (5) Business Days; (iii) SECTION 10; or (iv) SECTION 9.17. (c) Breach of Representation or Warranty. Any representation or warranty made or deemed made by the Company to the Collateral Agent or any Holder herein or by the Company or any of its Subsidiaries in any of the other Note Documents or in any statement or 42 certificate at any time given by any such Person pursuant to any of the Note Documents shall be false or misleading in any material respect on the date as of which made (or deemed made). (d) Other Defaults. The Company shall default in the performance of or compliance with any term contained in this Agreement (other than as covered by PARAGRAPHS (a), (b) or (c) of this SECTION 11), or the Company or any of its Subsidiaries shall default in the performance of or compliance with any term contained in any of the other Note Documents, and such default shall continue for thirty (30) days after the earlier of (i) notice from the Collateral Agent or any Holder or (ii) the date on which the Company knew of such default or should have known of such default exercising reasonable diligence. (e) Default as to Other Indebtedness. Any of the Company or any of its Subsidiaries shall fail to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) with respect to any Indebtedness (other than the Obligations) the outstanding principal amount of which Indebtedness is in excess of $2,000,000; or any breach, default or event of default shall occur, or any other condition shall exist under any instrument, agreement or indenture pertaining to any such Indebtedness, if the effect thereof is to either cause or permit the holder thereof to cause an acceleration, mandatory redemption, a requirement that the Company or any such Subsidiary offer to purchase such Indebtedness or other required repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness to accelerate the maturity of any such Indebtedness or require a redemption or other repurchase of such Indebtedness; or any such Indebtedness shall be otherwise declared to be due and payable (by acceleration or otherwise) or required to be prepaid, redeemed or otherwise repurchased by the Company or any of its Subsidiaries (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof. (f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) An involuntary case shall be commenced against the Company or any of its Subsidiaries and the petition shall not be dismissed, stayed, bonded or discharged within sixty (60) days after commencement of the case; or a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or any of its Subsidiaries in an involuntary case, under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or any other similar relief shall be granted under any applicable federal, state, local or foreign law. (ii) A decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Company or any of its Subsidiaries or over all or a substantial part of the property of the Company or any of its Subsidiaries shall be entered; or an interim receiver, trustee or other custodian of the Company or any of its Subsidiaries or of all or a substantial part of the property of the Company or any of its Subsidiaries shall be appointed or a warrant of attachment, execution or similar process against any substantial part of the property of the Company or any of its Subsidiaries shall be issued and any such event shall not be stayed, dismissed, bonded or discharged within sixty (60) days after entry, appointment or issuance. 43 (g) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Company or any of its Subsidiaries shall (i) commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, (iii) consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property, (iv) make any assignment for the benefit of creditors or (v) take any corporate, partnership or comparable action to authorize any of the foregoing. (h) Judgments and Attachments. Any money judgment(s) (other than a money judgment covered by insurance as to which the insurance company has not disclaimed or reserved the right to disclaim coverage), writ or warrant of attachment, or similar process against any of the Company or any of its Subsidiaries or any of their respective assets involving in any single case or in the aggregate an amount in excess of $1,000,000 is (are) entered and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event later than fifteen (15) days prior to the date of any proposed sale thereunder. (i) Dissolution. Any order, judgment or decree shall be entered against the Company or any of its Subsidiaries decreeing its involuntary dissolution or split up and such order shall remain undischarged and unstayed for a period in excess of sixty (60) days; or the Company or any of its Subsidiaries shall otherwise dissolve or cease to exist except as specifically permitted by this Agreement unless the dissolving entity is a limited liability company which elects to continue its existence. (j) Note Documents; Failure of Security. At any time, for any reason, (i) any Note Document as a whole that materially affects the ability of the Collateral Agent or any of the Holders to enforce the Obligations against the Company or any Guarantor or enforce their rights against the Collateral ceases to be in full force and effect or (ii) any Loan Party seeks to repudiate its obligations under the Note Documents or (iii) after the execution and delivery of the Collateral Documents, except to the extent permitted by the terms thereof, the Collateral Documents shall cease to create a valid and perfected first priority Lien subject only to Permitted Liens in any of the Collateral purported to be covered thereby or (iv) any title insurance coverage in respect of any Material portion of the Collateral is disavowed or becomes ineffective. (k) Termination Event. Any Termination Event occurs which the Required Holders believe is reasonably likely to subject the Company or any of its Subsidiaries to liability in excess of $1,000,000. (l) Waiver of Minimum Funding Standard. If the plan administrator of any Plan applies under Section 412(d) of the Code for a waiver of the minimum funding standards of Section 412(a) of the Code and any Lender believes the substantial business hardship upon which the application for the waiver is based could reasonably be expected to subject either the Company or any Controlled Group member to liability in excess of $1,000,000. (m) Change of Control. A Change of Control shall occur. 44 (n) Environmental Matters. The Company or any of its Subsidiaries shall be the subject of any proceeding or investigation pertaining to (i) the Release by the Company or any of its Subsidiaries of any Contaminant into the environment, (ii) the liability of any of the Company or any of its Subsidiaries arising from the Release by any other Person of any Contaminant into the environment, or (iii) any violation of any Environmental, Health or Safety Requirements of Law by the Company or any of its Subsidiaries, which, in any case, has or is reasonably likely to subject the Company or any of its Subsidiaries to liability individually or in the aggregate in excess of $5,000,000 (exclusive of liabilities with respect to which the Company is maintaining reserves as of the date hereof in accordance with GAAP). (o) Collateral Documents. The Company or any Subsidiary shall fail to comply with any of the terms or provisions of any Collateral Document for five (5) Business Days, subject to any applicable cure periods contained therein, after notice of such non-compliance from the Collateral Agent. (p) Interest Rate Agreements. Nonpayment by the Company or any Subsidiary of any obligation under any Interest Rate Agreement or the breach by the Company or any Subsidiary of any term, provision or condition contained in any such Interest Rate Agreement. (q) Material Adverse Effect. A Material Adverse Effect shall occur. (r) Intercreditor Agreement. The intercreditor provisions of the Intercreditor Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, any Person (including any Secured Party) shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations hereunder shall for any reason be subordinated or shall not have the priority contemplated by this Agreement and the Intercreditor Agreement. SECTION 12. REMEDIES ON DEFAULT, ETC. Section 12.1 Acceleration. (a) If an Event of Default with respect to the Company described in paragraph (b)(iv), (f) or (g) of SECTION 11 has occurred, all the Notes then outstanding shall automatically become immediately due and payable. (b) If any other Event of Default has occurred and is continuing, any holder or holders of more than 50% in principal amount of the Notes (other than the Deferral Fee Notes and the Make-Whole Notes) at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable. (c) If any Event of Default described in paragraph (a) of SECTION 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable. 45 Upon any Notes becoming due and payable under this SECTION 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances. Section 12.2 Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under SECTION 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. Section 12.3 Rescission. At any time after any Notes have been declared due and payable pursuant to clause (b) or (c) of SECTION 12.1, the holders of not less than 50% in principal amount of the Notes then outstanding (other than the Deferral Fee Notes and the Make-Whole Notes), by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to SECTION 17, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this SECTION 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon. Section 12.4 No Waivers or Election of Remedies, Expenses, etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder's rights, powers or remedies. No right, power or remedy conferred 46 by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under SECTION 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this SECTION 12, including, without limitation, reasonable attorneys' fees, expenses and disbursements. SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. Section 13.1 Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes. Section 13.2 Transfer and Exchange of Notes. Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver, at the Company's expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of EXHIBIT 1, 2 OR 3, as the case may be. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in SECTION 6.2. Section 13.3 Replacement of Notes. 47 Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000, such Person's own unsecured agreement of indemnity shall be deemed to be satisfactory), or (b) in the case of mutilation, upon surrender and cancellation thereof, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon. SECTION 14. PAYMENTS ON NOTES. Section 14.1 Place of Payment. Subject to SECTION 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in Chicago, Illinois at the principal office at a bank or trust company in such jurisdiction which the Company agrees to designate at any time when there is any holder of any Note not entitled to the benefits of SECTION 14.2 hereof. Section 14.2 Home Office Payment. So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in SECTION 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below your name in SCHEDULE A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to SECTION 14.1. Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to SECTION 13.2. The Company will afford the benefits of this SECTION 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by you under this Agreement and that has made the same agreement relating to such Note as you have made in this SECTION 14.2. 48 SECTION 15. EXPENSES, ETC. Section 15.1 Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable costs and expenses (including reasonable attorneys' fees of a special counsel and local or other counsel) incurred by you and each Other Purchaser or holder of a Note in connection with such transactions (including the execution and delivery of the Collateral Documents and the perfection of Liens thereunder) and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Collateral Documents or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Collateral Documents or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Collateral Documents or the Notes, or by reason of being a holder of any Note, and (b) the costs and expenses, including financial advisors' fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes, including without limitation, the reasonable professional fees and expenses of Ernst & Young, LLP incurred in connection with its engagement to assist the Holders in their evaluation of the projections, business assumptions and other financial information presented by the Company in connection with the transactions contemplated herein. All such reasonable fees, costs and expenses incurred after the Closing shall be paid by the Company on a monthly basis. The Company will pay, and will save you and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses if any, of brokers and finders (other than those retained by you). Section 15.2 Survival. The obligations of the Company under this SECTION 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement. SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of you or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof. 49 SECTION 17. AMENDMENT AND WAIVER. Section 17.1 Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of SECTION 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to you unless consented to by you in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of SECTION 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, (iii) amend any of SECTIONS 8, 11(a), 12, 17 or 20, (iv) release all or substantially all of the Collateral other than pursuant to the transactions permitted hereunder or under another Note Document or (v) release any Guarantor from its obligations under the Note Guaranty or the Collateral Documents other than pursuant to the transactions permitted hereunder or under another Note Document. Section 17.2 Solicitation of Holders of Notes. (a) Solicitation. The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this SECTION 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes. (b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes or any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment. Section 17.3 Binding Effect, etc. Any amendment or waiver consented to as provided in this SECTION 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will 50 extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented. Section 17.4 Notes Held by Company, etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding. SECTION 18. NOTICES. All notices and communications provided for hereunder shall be in writing and sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent: (i) if to you or your nominee, to you or it at the address specified for such communications in SCHEDULE A, or at such other address as you or it shall have specified to the Company in writing, (ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or (iii) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of the Chief Financial Officer or at such other address as the Company shall have specified to the holder of each Note in writing. Notices under this SECTION 18 will be deemed given only when actually received. SECTION 19. REPRODUCTION OF DOCUMENTS. This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and you may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original 51 itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This SECTION 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction. SECTION 20. CONFIDENTIAL INFORMATION. For the purposes of this SECTION 20, "Confidential Information" means information delivered to you by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by you as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by you or any Person acting on your behalf, (c) otherwise becomes known to you other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to you under SECTION 7.1 that are otherwise publicly available. You will use your best efforts to maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you, provided that you may deliver or disclose Confidential Information to (i) your directors, officers, employees, agents, attorneys and affiliates, (to the extent such disclosure reasonably relates to the administration of the investment represented by your Notes), (ii) your financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this SECTION 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this SECTION 20), (v) any Person from which you offer to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this SECTION 20), (vi) any federal or state regulatory authority having jurisdiction over you, (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about your investment portfolio or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to you, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which you are a party or (z) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this SECTION 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery 52 to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this SECTION 20. SECTION 21. SUBSTITUTION OF PURCHASER. You shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate's agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in SECTION 6. Upon receipt of such notice, wherever the word "you" is used in this Agreement (other than in this SECTION 21), such word shall be deemed to refer to such Affiliate in lieu of you. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word "you" is used in this Agreement (other than in this SECTION 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of an original holder of the Notes under this Agreement. SECTION 22. MISCELLANEOUS. Section 22.1 Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not. Section 22.2 Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such next succeeding Business Day. Section 22.3 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction. Section 22.4 Construction. 53 Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. Section 22.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. Section 22.6 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. Section 22.7 WAIVER OF JURY TRIAL. THE COMPANY AND EACH HOLDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY NOTE DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER. Section 22.8 Amendment and Restatement of Original Note Purchase Agreement. The Company and the Purchasers agree that, upon (a) the execution and delivery of this Agreement by the Company and the Purchasers and (b) satisfaction (or waiver by the Purchasers in their sole discretion) of the conditions precedent set forth in SECTION 4, the terms and provisions of the Original Note Purchase Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement. This Agreement is not intended to and shall not constitute a novation of the Original Note Purchase Agreement or the indebtedness created thereunder, including, without limitation, the Original Notes issued thereunder. Section 22.9 Section 22.9. Release. The Company hereby acknowledges and confirms that (a) it does not have any grounds, and hereby agrees not to challenge (or to allege or to pursue any matter, cause or claim arising under or with respect to), in any case based upon acts or omissions of the Purchasers occurring prior to the date hereof or facts otherwise known to it as of 54 the date hereof, the effectiveness, genuineness, validity, collectibility or enforceability of this Agreement or any of the other Note Documents, the Obligations, the Liens securing such Obligations, or any of the terms or conditions of any Note Document (it being understood that such acknowledgment and confirmation does not preclude the Company from challenging any Purchaser's interpretation of any term or provision of this Agreement or of any other Note Document) and (b) it does not possess (and hereby forever waives, remises, releases, discharges and holds harmless the Purchasers and their respective affiliates, stockholders, directors, officers, employees, attorneys, agents and representatives and each of their respective heirs, executors, administrators, successors and assigns (collectively, the "Released Parties") from and against, and agrees not to allege or pursue) any action, cause of action, suit, debt, claim, counterclaim, cross-claim, demand, defense, offset, opposition, demand and every other right of action whatsoever, whether in law, equity or otherwise (which it, all those claiming by, through or under it, or its successors or assigns, have or may have) against the Released Parties, or any of them, by reason of, any matter, cause or thing whatsoever, with respect to events or omissions occurring or arising on or prior to the date hereof and relating to this Agreement or any of the other Note Documents (including, without limitation, with respect to the payment, performance, validity or enforceability of the Obligations, the Liens securing the Obligations or any or all of the terms or conditions of any Note Document) or any transaction relating thereto; provided, however, that the Company does not release or hold harmless any Released Party for actions or omissions by any such Released Party constituting, or losses or expenses directly resulting from, the gross negligence or willful misconduct of such Released Party as determined by a final judgment of a court of competent jurisdiction. * * * * * [Signature pages to follow] 55 If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company. Very truly yours, WABASH NATIONAL CORPORATION By______________________________________ Name: Christopher A. Black Title: Vice President & Treasurer 56 The foregoing is hereby agreed to as of the date thereof. [VARIATION] By ____________________________________ [Title] 57 SCHEDULE A INFORMATION RELATING TO PURCHASERS Principal Amount of Name and Address of Purchaser Notes Held - ----------------------------- ------------------- THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $25,000,000 (1) All payments by wire transfer of immediately available funds to: ACCOUNT NO. 890-0304-391 The Bank of New York New York, New York (ABA No: 021-000-018) Each such wire transfer shall set forth the name of the Company, a reference to "9.66% Series A Senior Secured Notes due March 30, 2004, Security No. !INV5315!, and the application (as among principal, interest and Make-Whole Amount) of the payment being made. (2) All notices of payments and written confirmations of such wire transfers: The Prudential Insurance Company of America c/o Prudential Capital Group Gateway Center Three 100 Mulberry Street Newark, New Jersey 07102 Attention: Manager, Investment Operation Group Telephone: (973) 802-5260 Telecopy: (973) 802-8055 (3) All communications: The Prudential Insurance Company of America 1 c/o Prudential Capital Group Four Gateway Center, 7th Floor 100 Mulberry Street Newark, New Jersey 07102 Attention: Managing Director Telephone: (973) 802-9819 Telecopy: (4) Recipient of telephonic prepayment notices: Attention: Manager, Investment Structuring and Pricing Telephone: (973) 802-6660 Telecopy: (973) 802-9425 (5) Tax Identification No. 22-1211670 NATIONWIDE LIFE INSURANCE COMPANY $11,500,000 (1) All payments by wire transfer of immediately available funds to: F/A/O Nationwide Life Insurance Company Custody Account No. 71615 Morgan Guaranty Trust Company of New York 23 Wall Street New York, New York 10015 (ABA No. 021-000-238) Journal No. 999-99-024 Attn: Custody Service Dept. PPN No.: __________ Each such wire transfer shall set forth the name of the Company, a reference to "9.66% Series A Senior Secured Notes due March 30, 2004, and the application (as among principal, interest and Make-Whole Amount) of the payment being made. (2) All notices of payments and written confirmations of such wire transfers: 2 Nationwide Life Insurance Company One Nationwide Plaza (1-32-09) Columbus, Ohio 43215-2220 Attention: Corporate Money Management (3) All other communications: Nationwide Life Insurance Company One Nationwide Plaza (1-33-07) Columbus, Ohio 43216-2220 Attention: Corporate Fixed Income Securities (4) Tax Identification No. 31-4156830 WEST COAST LIFE INSURANCE COMPANY $2,500,000 (1) All payments by wire transfer of immediately available funds to: F/A/O West Coast Life Custody Account No. 73290 Morgan Guaranty Trust Company of New York 23 Wall Street New York, New York 10015 (ABA No. 021-000-238) Journal No. 999-99-024 Attn: Custody Service Dept. PPN No.: ___________ Each such wire transfer shall set forth the name of the Company, a reference to "9.66% Series A Senior Secured Notes due March 30, 2004, and the application (as among principal, interest and Make-Whole Amount) of the payment being made. (2) All notices of payments and written confirmations of such wire transfers: West Coast Life Insurance Company 343 Sansone Street 3 San Francisco, California 94104 Attention: Karl Snover (3) All other communications: West Coast Life Insurance Company One Nationwide Plaza (1-33-07) Columbus, Ohio 43215-2220 Attention: Corporate Fixed Income Securities (4) Tax Identification No. 94-0971150 NATIONWIDE LIFE AND ANNUITY INSURANCE $1,000,000 COMPANY (1) All payments by wire transfer of immediately available funds to: F/A/O Nationwide Life and Annuity Insurance Company Custody Account No. 71620 Morgan Guaranty Trust Company of New York 23 Wall Street New York, New York 10015 (ABA No. 021-000-238) Journal No. 999-99-024 Attn: Custody Service Dept. PPN No.: ___________ Each such wire transfer shall set forth the name of the Company, a reference to "9.66% Series A Senior Secured Notes due March 30, 2004, and the application (as among principal, interest and Make-Whole Amount) of the payment being made. (2) All notices of payments and written confirmations of such wire transfers: Nationwide Life and Annuity Insurance Company 4 One Nationwide Plaza (1-32-09) Columbus, Ohio 43215-2220 Attention: Corporate Money Management (3) All other communications: Nationwide Life and Annuity Insurance Company One Nationwide Plaza (1-33-07) Columbus, Ohio 43216-2220 Attention: Corporate Fixed Income Securities (4) Tax Identification No. 31-1000740 GREAT-WEST LIFE & ANNUITY INSURANCE $10,000,000 COMPANY (1) All payments by wire transfer of immediately available funds to: Bank of New York ABA No.: 021-000-018 Bkof NYC/CTR/BBK=IOC565 Instit. Custody Department - GWL #640935 Each such wire transfer shall set forth the name of the Company, a reference to "9.66% Series A Senior Secured Notes due March 30, 2004, PPN No. ____________" and the application (as among principal, interest and Make-Whole Amount) of the payment being made and confirmation of principal balance. (2) All notices of payments and written confirmations of such wire transfers: The Bank of New York Institutional Custody Department, 14th Floor One Wall Street New York, New York 10286 Telecopier: 212/635-8844 (3) All other communications: 5 Great-West Life & Annuity Insurance Company 8515 East Orchard Road, 3T2 Greenwood, Colorado 80111 Attention: Corporate Finance Investments Telecopier: (303) 737-6193 (4) Tax Identification No. 84-0467907 6 SCHEDULE B DEFINED TERMS As used herein, the following terms have the respective meanings set forth below or set forth in the SECTION hereof following such term: "Acquisition" means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Company or any of its Subsidiaries (a) acquires any going business or all or substantially all of the assets of any firm, corporation or division thereof which constitutes a going business, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage of voting power) of the outstanding partnership interests of a partnership or a majority (by percentage or voting power) of the outstanding ownership interests of a limited liability company. "Administrative Agent" means Bank One in its capacity as contractual representative for itself and the Lenders pursuant to the Credit Agreement and any successor Administrative Agent appointed pursuant thereto. "Advance" is defined in the Credit Agreement. "Affiliate" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person is the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of greater than ten percent (10%) or more of any class of voting securities (or other voting interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Capital Stock, by contract or otherwise. In addition, each director of the Company or any Subsidiary of the Company shall be deemed to be an Affiliate of the Company. "Aggregate Revolving Loan Commitment" means the aggregate of the Revolving Loan Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is $18,000,000.00, of which $10,444,995.69 is outstanding as of the Closing. "Agreement" means this Amended and Restated Note Purchase Agreement, as it may be amended, restated or otherwise modified and in effect from time to time. "Approved Refinancing Indebtedness" is defined in SECTION 10.4(b). "Authorized Officer" means any of the chief executive officer, chief financial officer, controller and treasurer of the Company, acting singly. 1 "Available Liquidity" means, for any period, the sum of the average monthly balances during such period of (i) the amount by which (A) the Aggregate Revolving Loan Commitment in effect during such period exceeds (B) the aggregate outstanding amount of the Revolving Advances (as defined in the Credit Agreement) and Revolver L/C Obligations (as defined in the Credit Agreement) during such period and (ii) "Availability" (as defined in the Receivables Purchase Agreement) during such period. "Bank One" means Bank One, Indiana, N.A. in its individual capacity, together with its successors. "Bank Notes" means the Revolving Notes, the Term Notes and the PIK Notes (as defined in the Credit Agreement). "Benefit Plan" means a defined benefit plan as defined in Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which the Company or any other member of the Controlled Group is, or within the immediately preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA. "Business Day" means (a) for the purposes of SECTION 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, Indiana or Illinois are required or authorized to be closed. "Capital Expenditures" means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including Capitalized Leases and purchase money Indebtedness to the extent permitted hereunder) by the Company and its Subsidiaries during that period that, in conformity with GAAP, are required to be included in or reflected by the property, plant, equipment or similar fixed asset accounts reflected in the consolidated balance sheet of the Company and its Subsidiaries. "Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership, partnership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Capitalized Lease" of a Person means any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP. "Capitalized Lease Obligations" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP. "Cash Equivalents" means (a) marketable direct obligations issued or unconditionally guaranteed by the government of the United States; (b) domestic and 2 Eurodollar certificates of deposit and time deposits, bankers' acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, or its branches or agencies and having capital and surplus in an aggregate amount not less than $500,000,000 (fully protected against currency fluctuations for any such deposits with a term of more than ten (10) days); (c) shares of money market, mutual or similar funds having net assets in excess of $500,000,000 maturing or being due or payable in full not more than one hundred eighty (180) days after the Company's acquisition thereof and the investments of which are limited to investment grade securities (i.e., securities rated at least Baa by Moody's Investors Service, Inc. or at least BBB by Standard & Poor's Ratings Group) and (d) commercial paper of United States banks and bank holding companies and their subsidiaries and United States finance, commercial, industrial or utility companies which, at the time of acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better) by Moody's Investors Service, Inc.; provided that the maturities of such Cash Equivalents shall not exceed 365 days. "Change of Control" means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock of the Company. "Closing" is defined in SECTION 3. "Code" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. "Collateral" means all real and personal property and interests in real and personal property now owned or hereafter acquired by the Company or any of the Company's Domestic Subsidiaries in or upon which a security interest or lien is granted to the Collateral Agent, for the benefit of the Secured Parties, whether under the Security Agreement, under any of the other Collateral Documents or under any of the other Note Documents. "Collateral Agent" means Bank One, NA, a national banking association, in its capacity as contractual representative for itself and the Secured Parties pursuant to the terms of the Intercreditor Agreement and any successor Collateral Agent appointed pursuant to the terms thereof. "Collateral Documents" means the Security Agreement, the Pledge Agreements, the Mortgages and all other security agreements, pledges, powers of attorney, assignments, financing statements, vehicle titles and all other instruments and documents delivered to the Collateral Agent pursuant to SECTION 9.14 hereof, together with all agreements, instruments and documents referred to therein or contemplated thereby. "Commission" means the Securities and Exchange Commission and any Person succeeding to the functions thereof. 3 "Company" means Wabash National Corporation, a Delaware corporation, and its successors and assigns. "Compliance Certificate" means a certificate substantially in the form of EXHIBIT 7.1(b) delivered to the Holders by the Company pursuant to the provisions of this Agreement and covering, among other things, its compliance with the financial covenants contained in SECTION 10 and certain other provisions of this Agreement. "Confidential Information" is defined in SECTION 20. "Consolidated EBITDA" means, for any period, on a consolidated basis for the Company and its consolidated Subsidiaries, the sum of the amounts for such period, without duplication, of (i) Consolidated Operating Income, plus (ii) charges against income for foreign taxes and U.S. income taxes to the extent deducted in computing Consolidated Operating Income, plus (iii) Interest Expense to the extent deducted in computing Consolidated Operating Income, plus (iv) depreciation expense to the extent deducted in computing Consolidated Operating Income, plus (v) amortization expense, including, without limitation, amortization of goodwill and other intangible assets to the extent deducted in computing Consolidated Operating Income, plus (vi) other non-cash charges (in an aggregate amount not in excess of $15,000,000 during any fiscal year of the Company) in accordance with GAAP to the extent deducted in computing Consolidated Operating Income, minus (x) the total interest income of the Company and its Subsidiaries to the extent included in computing Consolidated Operating Income minus (y) the total tax benefit reported by the Company and its Subsidiaries to the extent included in computing Consolidated Operating Income. "Consolidated Equity" means as of the date of any determination thereof, the total stockholders' equity of the Company and its Subsidiaries on a consolidated basis, all as determined in accordance with GAAP. "Consolidated Funded Debt" means Funded Debt of the Company and its Subsidiaries, determined on a consolidated basis eliminating intercompany items. "Consolidated Net Income" means, with reference to any period, the net income (or loss) of the Company and its Subsidiaries for such period (taken as a cumulative whole), as determined in accordance with GAAP, after eliminating all offsetting debits and credits between the Company and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP. "Consolidated Operating Income" means, with reference to any period, the net operating income (or loss) of the Company and its Subsidiaries for such period (taken as a cumulative whole on a consolidated basis) including, without limitation, all restructuring expenses for such period (exclusive of "other income/expenses" as reflected in the Company's consolidated statement of income of the Company and its Subsidiaries for such period and related to non-operating and non-recurring income and expenses), as determined in accordance with GAAP, after eliminating all offsetting debits and credits 4 between the Company and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP. "Consolidated Priority Debt" means Priority Debt of the Company and its Subsidiaries, determined on a consolidated basis eliminating intercompany items. "Consolidated Tangible Net Worth" means as of the date of any determination thereof, the arithmetic sum of: (a) the amount of the capital stock accounts (net of treasury stock, at cost) plus (or minus in the case of deficit) the surplus and retained earnings of the Company and its Subsidiaries, PLUS (b) minority interests and deferred taxes of the Company and its Subsidiaries, MINUS (c) the net book value, after deducting any reserves applicable thereto, of all items of the following character which are included in the assets of the Company and its Subsidiaries, to wit: (i) the incremental increase in an asset resulting from any reappraisal, revaluation or write-up of assets (other than any revaluation or write-up of assets in accordance with GAAP); and (ii) goodwill, patents, patent applications, permits, trademarks, trade names, copyrights, licenses, franchises, experimental expense, organizational expense, unamortized debt discount and expense, the excess of cost of shares acquired over book value of related assets and such other assets as are properly classified as "intangible assets" acquired by the Company or any Subsidiary after December 1, 1996 to the extent and in the amount by which the fair market value thereof is in excess of 10% of Consolidated Total Assets as of any date of determination of Consolidated Total Assets; all determined in accordance with GAAP. "Consolidated Tax Adjusted Equity" means as of the date of any determination thereof, Consolidated Equity plus the cumulative federal, state and local income tax benefit reported by the Company in accordance with GAAP. "Consolidated Total Assets" means as of the date of any determination thereof, total assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP. 5 "Consolidated Total Capitalization" means as of the date of any determination thereof, the sum of (a) Consolidated Funded Debt plus (b) Consolidated Tangible Net Worth. "Contaminant" means any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any constituent of any such substance or waste, and includes but is not limited to these terms as defined in Environmental, Health or Safety Requirements of Law. "Contingent Obligation", as applied to any Person, means any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or (d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof. In any computation of the Indebtedness or other liabilities of the obligor under any Contingent Obligation, the Indebtedness or other obligations that are the subject of such Contingent Obligation shall be assumed to be direct obligations of such obligor. "Contractual Obligation", as applied to any Person, means any provision of any equity or debt securities issued by that Person or any indenture, mortgage, deed of trust, security agreement, pledge agreement, guaranty, contract, undertaking, agreement or instrument, in any case in writing, to which that Person is a party or by which it or any of its properties is bound, or to which it or any of its properties is subject. "Controlled Group" means the group consisting of (a) any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Company; (b) a partnership or other trade or business (whether or not incorporated) which is under common control (within the meaning of Section 414(c) of the Code) with the Company; and (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Company, any 6 corporation described in clause (a) above or any partnership or trade or business described in clause (b) above. "Credit Agreement" means the Amended and Restated Credit Agreement dated as of April 11, 2002, among the Company, the financial institutions from time to time party thereto as lenders and Bank One, Indiana, N.A. as Administrative Agent, as amended from time to time in accordance with SECTION 10.2(t) hereof. "Customary Permitted Liens" means: (a) Liens (other than Environmental Liens and Liens in favor of the IRS or the PBGC) with respect to the payment of taxes, assessments or governmental charges in all cases which are not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP; (b) statutory Liens of landlords and Liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other similar Liens imposed by law created in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP; (c) Liens (other than Environmental Liens and Liens in favor of the IRS or the PBGC) incurred or deposits made in the ordinary course of business in connection with worker's compensation, unemployment insurance or other types of social security benefits or to secure the performance of bids, tenders, sales, contracts (other than for the repayment of borrowed money), surety, appeal and performance bonds; provided that (A) all such Liens do not in the aggregate materially detract from the value of assets or property of the Company and its Subsidiaries taken as a whole or materially impair the use thereof in the operation of their businesses taken as a whole, and (B) all Liens securing bonds to stay judgments or in connection with appeals that do not secure at any time an aggregate amount exceeding $5,000,000; (d) Liens arising with respect to zoning restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other similar charges or encumbrances on the use of real property which do not interfere in any material respect with the ordinary conduct of the business of the Company or any Subsidiary of the Company; (e) Liens of attachment or judgment with respect to judgments, writs or warrants of attachment, or similar process against the Company or any Subsidiary of the Company which do not constitute a Default under SECTION 11; (f) Liens arising from leases, subleases or licenses granted to others which do not interfere in any material respect with the business of the Company or any Subsidiary of the Company; and 7 (g) any interest or title of the lessor in the property subject to any operating lease entered into by the Company or any Subsidiary of the Company in the ordinary course of business. "Default" means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default. "Default Rate" means that rate of interest that is the greater of (a) 11.66% per annum or (b) 2% over the rate of interest publicly announced by Morgan Guaranty Bank of New York in New York City, New York as its "base" or "prime" rate. "Deferral Fee Notes" is defined in SECTION 4.11(a). "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after March 30, 2004. "DOL" means the United States Department of Labor and any Person succeeding to the functions thereof. "Dollar" and "$" means dollars in the lawful currency of the United States of America. "Domestic Subsidiary" means a Subsidiary organized under the laws of a jurisdiction located in the United States of America, including, without limitation, those Subsidiaries identified as "Domestic Subsidiaries" on SCHEDULE 5.4 hereto. "Environmental, Health or Safety Requirements of Law" means all Requirements of Law derived from or relating to federal, state and local laws or regulations relating to or addressing pollution or protection of the environment, or protection of worker health or safety, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq., and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., in each case including any amendments thereto, any successor statutes, and any regulations or guidance promulgated thereunder, and any state or local equivalent thereof. "Environmental Laws" means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to hazardous substances or wastes, air emissions and discharges to waste or public systems. "Environmental Lien" means a lien in favor of any Governmental Authority for (a) any liability under Environmental, Health or Safety Requirements of Law, or (b) 8 damages arising from, or costs incurred by such Governmental Authority in response to, a Release or threatened Release of a Contaminant into the environment. "Environmental Property Transfer Act" means any applicable requirement of law that conditions, restricts, prohibits or requires any notification or disclosure triggered by the closure of any property or the transfer, sale or lease of any property or deed or title for any property for environmental reasons, including, but not limited to, any so-called "Industrial Site Recovery Act" or "Responsible Property Transfer Act." "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (including any debt security that is convertible into, or exchangeable for, Capital Stock). "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time including (unless the context otherwise requires) any rules or regulations promulgated thereunder. "ERISA Affiliate" means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code. "Event of Default" is defined in SECTION 11. "Excess Cash Flow" means, without duplication, for any fiscal quarter of the Company, an amount equal to: (a) the sum of cash and Cash Equivalents of the Company and its Subsidiaries on the last day of such fiscal quarter; (plus) (b) Available Liquidity on the last day of such fiscal quarter; minus (c) the Projected Liquidity Amount on the last day of such fiscal quarter; minus (d) $5,000,000. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Existing Letters of Credit" is defined in the Credit Agreement. "Finance Contracts" means any chattel paper originated by the Company or any of its Subsidiaries pursuant to a bona fide sale transaction in the ordinary course of business with a customer or any Subsidiary. "First Tier Foreign Subsidiary" means each Foreign Subsidiary with respect to which any one or more of the Company or its Domestic Subsidiaries directly owns or controls more than 50% of such Foreign Subsidiary's Capital Stock. 9 "Fleet Lease Transaction" means (i) the lease transaction among Wabash Statutory Trust - 2000 as lessor and Apex Trailer Leasing & Rentals, L.P. as lessee under that certain Amended and Restated Equipment Lease dated as of March 30, 2001, as amended, restated, supplemented or otherwise modified from time to time and all other instruments and documents related thereto and (ii) the lease transaction among Fleet Capital Corporation (as successor to BancBoston Leasing, Inc.) as lessor and Apex Trailer Leasing & Rentals, L.P. as lessee under that certain Master Lease Agreement dated as of September 5, 1997, as amended, restated, supplemented or otherwise modified from time to time and all other instruments and documents related thereto. "Foreign Employee Benefit Plan" means any employee benefit plan as defined in Section 3(3) of ERISA which is maintained or contributed to for the benefit of the employees of the Company, any of its Subsidiaries or any members of its Controlled Group and is not covered by ERISA pursuant to ERISA Section 4(b)(4). "Foreign Pension Plan" means any employee benefit plan as described in Section 3(3) of ERISA which (a) is maintained or contributed to for the benefit of employees of the Company, any of its Subsidiaries or any of its ERISA Affiliates, (b) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA, and (c) under applicable local law, is required to be funded through a trust or other funding vehicle. "Foreign Subsidiary" means a Subsidiary of the Company which is not a Domestic Subsidiary. "Fruehauf Preferred Stock" means the Series A 6% Cumulative Convertible Exchangeable Preferred Stock of the Company. "Funded Debt" of any Person means all Indebtedness of such Person which would, in accordance with GAAP, constitute long-term Indebtedness, including, without limitation (a) all Indebtedness of such Person for borrowed money or which has been incurred in connection with the acquisition of assets in each case having a final maturity of more than one year from the date of origin thereof (or which is renewable or extendible at the option of the obligor for a period or periods more than one year from the date of origin), including in any event all payments in respect thereof that are required to be made within one year from the date of any determination of Funded Debt, whether or not the obligation to make such payments shall constitute a current liability of the obligor under GAAP, and all Indebtedness of such Person outstanding under any revolving credit, line of credit, commercial extension of credit or similar agreement between such Person and an Institutional Investor which is classified as long-term in accordance with GAAP, (b) all Capitalized Rentals of such Person, (c) all Guaranties by such Person of Funded Debt of others, and (d) all Indebtedness of such Person outstanding under any revolving credit, line of credit, commercial extension of credit or similar agreement between such Person and an Institutional Investor, whether or not classified as long-term or short-term Indebtedness, if, during the 365-day period immediately preceding the date of any determination of Funded Debt of such Person, there shall not have been a period of at least 30 consecutive days during which Indebtedness of such Person outstanding under such revolving credit, line of credit, commercial extension of credit or similar 10 agreement is equal to zero, in which event there shall be included in such determination of Funded Debt an amount equal to the highest aggregate amount of all such Indebtedness outstanding during any period of 30 consecutive days selected by such Person during such preceding 365-day period. "GAAP" means generally accepted accounting principles as in effect from time to time in the United States, applied in a manner consistent with those used in preparing the financial statements referred to in SECTION 7.1 hereof. "Governmental Acts" is defined in the Credit Agreement. "Governmental Authority" means any nation or government, any foreign, federal, state, local or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Guarantor" means each Initial Guarantor and each other Domestic Subsidiary that executes and delivers a Note Guaranty, and in each case their respective successors and assigns. "Guaranty" means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or (d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof. In any computation of the Indebtedness or other liabilities of the obligor under any Guaranty, the Indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. "Hazardous Material" means any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which 11 may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls). "Hedging Obligations" of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, commodity prices, exchange rates or forward rates applicable to such party's assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any of the foregoing. "holder" or "Holder" means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to SECTION 13.1. "Indebtedness" means, with respect to any Person, without duplication, (a) its liabilities for borrowed money, including reimbursement obligations (contingent or otherwise) with respect to letters of credit; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) its Capitalized Lease Obligations; (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) its Off-Balance Sheet Liabilities; (f) its Receivables Facility Attributed Indebtedness; and (g) any Contingent Obligation of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof. Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be 12 extinguished under GAAP. In no event shall Indebtedness include Unfunded Liabilities of any Plan of the Company and its Subsidiaries, which amount, as of December 31, 2001, was zero. "Initial Guarantors" means each Domestic Subsidiary (other than WNC, WNC Receivables Management Corp., WNC Funding LLC and WNC Funding Manager Corp.) in existence on the Closing. "Institutional Investor" means (a) any original purchaser of a Note, (b) any holder of a Note holding more than 5% of the aggregate principal amount of the Notes then outstanding, and (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form. "Intercreditor Agreement" means the Intercreditor and Collateral Agency Agreement dated as of April 11, 2002, among the Collateral Agent, the Administrative Agent and the Secured Parties, as such agreement may be amended, restated, supplemented (including by way of joinder of additional parties thereto in accordance with its terms) or otherwise modified from time to time. "Interest Coverage Ratio" means, as of any date the same is to be determined, the ratio of (a) Consolidated EBITDA as of such date for (i) in the case of calculating Consolidated EBITDA for each relevant month in the Company's fiscal year ending on or about December 31, 2002, the cumulative period of months ending on and after April 30, 2002 and (ii) in the case of calculating Consolidated EBITDA for each month thereafter, the period of four consecutive fiscal quarters then ending to (b) Interest Expense during the same applicable periods. "Interest Expense" means, for any period, the total interest expense of the Company and its consolidated Subsidiaries, whether paid or accrued (including the total interest expense under the Permitted Receivables Transfer), including interest expense not payable in cash (including amortization or write-off of debt discount and debt issuance costs and commissions and discounts and other fees and charges associated with Indebtedness (including the Obligations)), all as determined in conformity with GAAP. "Interest Rate Agreements" is defined in Section 10.2(p) hereof. "Investment" means, with respect to any Person, (a) any purchase or other acquisition by that Person any Indebtedness, Equity Interests or other securities, or of a beneficial interest in any Indebtedness, Equity Interests or other securities, issued by any other Person, (b) any purchase by that Person of all or substantially all of the assets of a business conducted by another Person, and (c) any loan, advance (other than deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts receivable, advances to employees and similar items made or incurred in the ordinary course of business) or capital contribution by that Person to any other Person, 13 including all Indebtedness to such Person arising from a sale of property by such Person other than in the ordinary course of its business. "IRS" means the Internal Revenue Service and any Person succeeding to the functions thereof. "Lafayette Property" means all of the real property owned by Wabash National, L.P. in Lafayette, Indiana which includes the central offices and manufacturing facilities of the Company. "L/C Obligations" is defined in the Credit Agreement. "Lenders" means the lending institutions listed on the signature pages of the Credit Agreement, including the Issuing Lender (as defined in the Credit Agreement) and their respective successors and assigns. "Letter(s) of Credit" is defined in the Credit Agreement. "Leverage Valuation Ratio" means, as of any date the same is to be determined, the ratio of (a) the sum of the aggregate outstanding principal amount of the Obligations, the Series C-H Obligations, the Series I Obligations and the Indebtedness (excluding L/C Obligations) under the Credit Agreement to (b) Consolidated Total Assets only to the extent consisting of cash and Cash Equivalents, net inventory, net prepaid and other expenses and net property, plant and equipment as of such date, in all cases as determined in accordance with GAAP. "Lien" means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement). "Loan(s)" is defined in the Credit Agreement. "Loan Parties" means the Company and each of the Guarantors. "Make-Whole Amount" is defined in SECTION 8.6. "Make-Whole Notes" is defined in SECTION 4.11(b). "Margin Stock" shall have the meaning ascribed to such term in Regulation U. "Material" means material in relation to the business, operations, affairs, financial condition, assets, properties or prospects of the Company and its Subsidiaries taken as a whole. "Material Adverse Effect" means a material adverse effect upon (a) the business, condition (financial or otherwise), operations, performance, Properties or prospects of the 14 Company and its Subsidiaries taken as a whole, (b) the ability of the Company and its Subsidiaries to perform their respective obligations under the Note Documents, or (c) the ability of the Holders to enforce the Obligations in any material respect. "Material Real Estate Property" shall mean each individual parcel of property owned by the Company or its Domestic Subsidiaries that has a net book value in excess of $3,000,000, excluding therefrom any parcels that are anticipated to be included in the SunTrust Sale Leaseback. "Mortgages" means the mortgages and deeds of trust from time to time executed by one or more of the Loan Parties in favor of the Collateral Agent for the benefit of the Holders and the other Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. "Multiemployer Plan" means a "Multiemployer Plan" as defined in Section 4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years was, contributed to by either the Company or any member of the Controlled Group. "National City Lease Transaction" means the lease transaction among National City Leasing Corporation as lessor and Apex Trailer Leasing & Rentals, L.P. (as successor to Wabash National Finance Corporation) as lessee under that certain Master Equipment Lease Agreement No. 07008 dated as of December 30, 1996, as amended, restated, supplemented or otherwise modified from time to time. "Note Documents" means this Agreement, the Notes, the Note Guaranty, the Collateral Documents and all other documents, instruments and agreements executed in connection therewith or contemplated thereby, including the letter agreement regarding fees among the Administrative Agent, the Collateral Agent and the Company, in each case as the same may be amended, restated or otherwise modified and in effect from time to time. "Note Guaranty" is defined in SECTION 1.2. "Notes" is defined in SECTION 1. "Obligations" means all Notes, advances, debts, liabilities, obligations, covenants and duties owing by the Company to any Holder, any Affiliate of any of the foregoing or any indemnitee, of any kind or nature, present or future, arising under this Agreement, the Notes or any other Note Document, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term includes, without limitation, all interest, charges, expenses, fees, attorneys' fees and disbursements, paralegals' fees (in each case whether or not allowed), and any other sum chargeable to the Company under this Agreement or any other Note Document. 15 "Off-Balance Sheet Liabilities" of a Person means (a) any repurchase obligation or liability of such Person or any of its Subsidiaries with respect to accounts or notes receivable sold by such Person or any of its Subsidiaries, (b) any liability of such Person or any of its Subsidiaries under any sale and leaseback transactions which do not create a liability on the consolidated balance sheet of such Person, (c) any liability of such person or any of its Subsidiaries under any so-called "synthetic" lease transaction, or (d) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheets of such Person and its Subsidiaries. "Officer's Certificate" means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate. "Original Credit Agreement" means the Credit Agreement dated as of September 30, 1997 among the Company, the financial institutions parties thereto and the Administrative Agent, as amended by Amendment No. 1 dated as of January 30, 1998, Amendment No. 2 dated as of September 30, 1999 and Amendment No. 3 dated as of November 30, 2000. "Original Note Guaranty" is defined in SECTION 1.2. "Original Note Purchase Agreement" is defined in SECTION 1.1. "Original Notes" is defined in SECTION 1.1. "Originators" means Wabash National, L.P. and NOAMTC, Inc., in their capacities as parties to the Receivables Sale Agreement. "Other Agreements" is defined in SECTION 2. "Other Purchasers" is defined in SECTION 2. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto. "Permitted Acquisition" means any Acquisition made by the Company or any of its Subsidiaries provided that: (a) as of the date of such Acquisition, no Default or Event of Default shall have occurred and be continuing or would result from such Acquisition or from the incurrence of any Indebtedness in connection with such Acquisition; (b) prior to the date of such Acquisition, such Acquisition shall have been approved by the board of directors and, if applicable, the shareholders of the Person whose stock or assets are being acquired in connection with such Acquisition and no claim or challenge has been asserted or threatened by any shareholder or director of such Person which could reasonably be expected to have a material adverse effect on such Acquisition or a Material Adverse Effect; (c) as of the date of any such Acquisition, all approvals required in connection with such Acquisition shall have been obtained and (d) the Purchase Price 16 paid or payable to the Company and its Subsidiaries for all Permitted Acquisitions during any fiscal year of the Company shall not exceed $2,500,000. "Permitted Existing Contingent Obligations" means the Contingent Obligations of the Company and its Subsidiaries identified as such on SCHEDULE 5.14 to this Agreement. "Permitted Existing Indebtedness" means the Indebtedness of the Company and its Subsidiaries identified as such on SCHEDULE 5.14 to this Agreement. "Permitted Existing Investments" means the Investments of the Company and its Subsidiaries identified as such on SCHEDULE 5.14 to this Agreement. "Permitted Existing Liens" means the Liens on assets of the Company or its Subsidiaries identified as such on SCHEDULE 5.14 to this Agreement. "Permitted Receivables Transfer" means (i) a sale or other transfer by any Originator to WNC of "Receivables," and "Collections" under, and as such terms are defined in, the Receivables Sale Agreement, in accordance with the terms of the Receivables Sale Agreement, and/or (ii) a sale by WNC to purchasers of "Purchaser Interests" under, and as such term is defined in, the Receivables Purchase Agreement, in accordance with the terms of the Receivables Purchase Agreement. "Person" means any individual, corporation, firm, enterprise, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company or other entity of any kind, or any government or political subdivision or any agency, department or instrumentality thereof. "PIK Notes" means the Deferral Fee Notes and the Make-Whole Notes, collectively. "Plan" means an employee benefit plan defined in Section 3(3) of ERISA in respect of which the Company or any member of the Controlled Group is, or within the immediately preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA. "Pledge Agreements" means the pledge agreements from time to time executed pursuant to the terms of CLAUSE (a) and CLAUSE (b) of SECTION 9.14 in favor of the Collateral Agent for the benefit of the Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. "Priority Debt" means (i) all Indebtedness of the Company or any Subsidiary secured by a Lien on any property of the Company or any Subsidiary, excluding Indebtedness secured by Liens permitted by CLAUSES (i), (ii), (iii), (iv), (vi) and (vii) of SECTION 10.2(c), but including Indebtedness secured by Liens permitted by CLAUSE (v) of SECTION 10.2(c), and (ii) all Indebtedness of Subsidiaries other than Indebtedness of a Subsidiary to the Company. 17 "Projected Liquidity Amount" means, for any period, the applicable amount so designated for such period in the Company's "Covenant Case Projection" as set forth in SCHEDULE B19 to this Agreement. "Property" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. "Purchase Price" means the total consideration and other amounts payable in connection with any Acquisition, including, without limitation, any portion of the consideration payable in cash, the value of any Capital Stock or other equity interests of the Company or any Subsidiary issued as consideration for such Acquisition, all Indebtedness and other monetary liabilities incurred or assumed in connection with such Acquisition and all transaction costs and expenses incurred in connection with such Acquisition. "QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued by the United States Department of Labor. "Real Estate Instruments" is defined in SECTION 9.14(d). "Receivables Facility Attributed Indebtedness" means the amount of obligations outstanding under a receivables purchase facility on any date of determination that would be characterized as principal if such facility were structured as a secured lending transaction rather than as a purchase. "Receivables Purchase Agreement" means that certain Receivables Purchase and Servicing Agreement dated as of April 11, 2002 among WNC, as seller, Wabash Financing LLC, as servicer, WNC Receivables Management Corporation, as independent member, General Electric Capital Corporation, as sole initial purchaser and as agent, and the other purchasers from time to time party thereto, as such agreement may be amended, restated or otherwise modified from time to time, or any replacement or substitution therefor. "Receivables Purchase Documents" means the Receivables Sale Agreement and the Receivables Purchase Agreement. "Receivables Sale Agreement" means that certain Receivables Sale and Contribution Agreement, dated as of April 11, 2002, by and among the Company, Wabash National, L.P., NOAMTC, Inc., and WNC, as such agreement may be amended, restated or otherwise modified from time to time, or any replacement or substitution therefor. "Regulation T" means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by 18 and to brokers and dealers of securities for the purpose of purchasing or carrying margin stock (as defined therein). "Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks and nonbank, nonbroker lenders for the purpose of purchasing or carrying Margin Stock. "Regulation X" means Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by foreign lenders for the purpose of purchasing or carrying margin stock (as defined therein). "Release" means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including the movement of Contaminants through or in the air, soil, surface water or groundwater. "Released Parties" shall have the meaning assigned thereto in SECTION 22.9. "Reportable Event" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days after such event occurs, provided, however, that a failure to meet the minimum funding standards of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code. "Required Holders" means, at any time, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates and exclusive of Deferral Fee Notes and Make-Whole Notes). "Required Secured Parties" shall have the meaning assigned thereto in the Intercreditor Agreement. "Requirements of Law" means, as to any Person, the charter and by-laws or other organizational or governing documents of such Person, and any law, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject including, without limitation, the Securities Act of 1933, the Securities Exchange Act 1934, Regulations T, U and X promulgated by the Board of Governors of the Federal Reserve System, ERISA, the Fair Labor Standards Act, the Worker Adjustment and Retraining Notification Act, Americans with Disabilities Act of 19 1990, and any certificate of occupancy, zoning ordinance, building, environmental or land use requirement or permit or environmental, labor, employment, occupational safety or health law, rule or regulation, including Environmental, Health or Safety Requirements of Law. "Responsible Officer" means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this agreement. "Restricted Payment" means (i) any dividend or other distribution, direct or indirect, on account of any Equity Interests of the Company now or hereafter outstanding, except a dividend payable solely in the Company's Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock, (ii) any redemption, retirement, purchase or other acquisition for value, direct or indirect, of any Equity Interests of the Company or any of its Subsidiaries now or hereafter outstanding, other than in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company) of other Equity Interests of the Company (other than Disqualified Stock), (iii) any redemption, purchase, retirement, defeasance, prepayment or other acquisition for value, direct or indirect, of any Indebtedness prior to the stated maturity thereof, other than the Obligations and (iv) any payment of a claim for the rescission of the purchase or sale of, or for material damages arising from the purchase or sale of, any Indebtedness (other than the Obligations) or any Equity Interests of the Company or any of the Company's Subsidiaries, or of a claim for reimbursement, indemnification or contribution arising out of or related to any such claim for damages or rescission. "Restructuring Transaction" means the transactions contemplated by this Agreement and the Credit Agreement which include the extension of the maturities of the Original Series C Notes, the execution and delivery of the Collateral Documents, the execution and delivery of the Permitted Receivables Transfer, the amendments and/or waivers to the Fleet Lease Transaction and all transactions relating thereto. "Revolving Lender" means any Lender with a Revolving Loan Commitment. "Revolving Loan" means a loan by a Lender to the Company as part of a Revolving Advance. "Revolving Loan Commitment" is defined in the Credit Agreement. "Revolving Note" is defined in the Credit Agreement. "Secured Obligations" has the meaning ascribed to such term in the Intercreditor Agreement. "Secured Parties" has the meaning ascribed to such term in the Intercreditor Agreement. "Securities Act" means the Securities Act of 1933, as amended from time to time. 20 "Security Agreement" means that certain Security Agreement dated as of April 11, 2002, executed by the Company and the Initial Guarantors in favor of the Collateral Agent for the benefit of the Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. "Senior Financial Officer" means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company. "Senior Funded Debt" of any Person means Funded Debt of such Person which is not expressed to be subordinate or junior in rank to any other Funded Debt of such Person. "Senior Notes" means $192,000,000 aggregate principal amount of the Company's Senior Notes, Series A and Series C through I, due 2004-2008. "Series A Note Principal Allocation" shall mean, at any time, the percentage determined by dividing (a) the outstanding principal amount of the Notes (other than the Deferral Fee Notes and the Make-Whole Notes) as of such time, by (b) the sum of (i) the outstanding principal amount of the Senior Secured Notes (other than the Deferral Fee Notes and the Make-Whole Notes)(as each such term is defined in the Intercreditor Agreement), and (ii) the sum of (1) the outstanding principal amount of all of the Term Loans (other than the PIK Notes) plus (2) the amount then available for drawing under all Term Letters of Credit plus (3) the amount of unpaid reimbursement obligations with respect to drawings under all Term Letters of Credit (as each such term is defined in the Credit Agreement as in effect at the Closing). "Series C-H Note Purchase Agreements" means the separate and several Amended and Restated Note Purchase Agreements relating to the Series C-H Notes of the Company dated as of the date hereof among the Company and the institutional investors named therein, as amended from time to time in accordance with SECTION 10.2(t) hereof. "Series C-H Obligations" means "Obligations" as defined in the Series C-H Note Purchase Agreements. "Series I Note Purchase Agreement" means that certain Amended and Restated Note Purchase Agreement relating to the Series I Notes of the Company dated as of the date hereof among the Company and the institutional investors named therein, as amended from time to time in accordance with SECTION 10.2(t) hereof. "Series I Obligations" means "Obligations" as defined in the Series I Note Purchase Agreement. "Significant Real Estate Property" shall mean each individual parcel of property owned by the Company or its Domestic Subsidiaries that has a net book value in excess of $1,000,000 and less than $3,000,000, excluding therefrom any parcels that are anticipated to be included in the SunTrust Sale Leaseback. 21 "Single Employer Plan" means a Plan maintained by the Company or any member of the Controlled Group for employees of the Company or any member of the Controlled Group. "Subordinated Debt" means, for any period, on a consolidated basis for the Company and its Subsidiaries, the sum of Indebtedness of such Persons the payment of which is subordinated to the payment of the Secured Obligations to the written satisfaction of the Required Holders. "Subsidiary" of a Person means (a) 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 (b) any company, partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "Subsidiary" shall mean a direct or indirect Subsidiary of the Company. "SunTrust Sale Leaseback" means that certain sale and leaseback of certain real property owned by the Company and/or certain of its Domestic Subsidiaries to be effected pursuant to that certain engagement letter agreement between the Company and SunTrust Robinson Humphrey dated February 1, 2002. "Tangible Assets" means as of the date of any determination thereof, with respect to any Person, total assets of such Person in accordance with GAAP, but excluding therefrom goodwill, patents, patent applications, permits, trademarks, trade names, copyrights, licenses, franchises, experimental expense, organizational expense, unamortized debt discount and expense, the excess of cost of shares acquired over book value of related assets and such other assets as are properly classified as "intangible assets" in accordance with GAAP. "Term Letter(s) of Credit" is defined in the Credit Agreement. "Term Loans" is defined in the Credit Agreement. "Term Loan Lender" is defined in the Credit Agreement. "Term Note" is defined in the Credit Agreement. "Termination Event" means (i) a Reportable Event with respect to any Benefit Plan; (ii) the withdrawal of the Company or any member of the Controlled Group from a Benefit Plan during a plan year in which the Company or such Controlled Group member was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the cessation of operations which results in the termination of employment of twenty percent (20%) of Benefit Plan participants who are employees of the Company or any member of the Controlled Group; (iii) the imposition of an obligation on the Company or any member of the Controlled Group under Section 4041 of ERISA to provide affected parties written notice of intent to terminate a Benefit Plan in a distress termination described in Section 22 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Benefit Plan; (v) any event or condition which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Benefit Plan; or (vi) the partial or complete withdrawal of the Company or any member of the Controlled Group from a Multiemployer Plan. "Transfer" means, with respect to any property, the sale, exchange, conveyance, lease, transfer or other disposition of such property. "Unfunded Liabilities" means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations. "Value" means, with respect to any property on any date, the greater of the book value of such property on such date or the fair market value of such property on such date. "Wholly-Owned Subsidiary" means, at any time, any Subsidiary one hundred percent (100%) of all of the equity interests (except directors' qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company's other Wholly-Owned Subsidiaries at such time. "WNC" means WNC Receivables LLC, a Delaware limited liability company and a wholly-owned Subsidiary of the Company. 23 SCHEDULE 4.9 CHANGES IN CORPORATE STRUCTURE (none to be reported) 1 SCHEDULE 5.3 DISCLOSURE MATERIALS (none to be reported) 1 SCHEDULE 5.4 Subsidiaries of the Company and Ownership of Subsidiary Stock
- ------------------------------------------------------------------------------------- JURISDICTION OF % OF SHARES OWNED NAME OF SUBSIDIARY ORGANIZATION BY COMPANY - ------------------------------------------------------------------------------------- Domestic Subsidiaries - ------------------------------------------------------------------------------------- Apex Trailer Leasing & Rentals, L.P. Delaware 100% - ------------------------------------------------------------------------------------- Cloud Oak Flooring Company, Inc. Arkansas 100% - ------------------------------------------------------------------------------------- Continental Transit Corporation Indiana 100% - ------------------------------------------------------------------------------------- FTSI Distribution Company, L.P. Delaware 100% - ------------------------------------------------------------------------------------- National Trailer Funding, L.L.C. Delaware 100% - ------------------------------------------------------------------------------------- NOAMTC, Inc. Delaware 100% - ------------------------------------------------------------------------------------- WNC Cloud Merger Sub, Inc. Arkansas 100% - ------------------------------------------------------------------------------------- WNC Funding Manager Corp. Delaware 100% - ------------------------------------------------------------------------------------- WNC Funding LLC Delaware 100% - ------------------------------------------------------------------------------------- WNC Receivables, LLC Delaware 100% - ------------------------------------------------------------------------------------- WNC Receivables Management Corp. Delaware 100% - ------------------------------------------------------------------------------------- WTSI Technology Corp. Delaware 100% - ------------------------------------------------------------------------------------- Wabash Financing LLC Delaware 100% - ------------------------------------------------------------------------------------- Wabash National Services, L.P. Delaware 100% - ------------------------------------------------------------------------------------- Wabash National, L.P. Delaware 100% - ------------------------------------------------------------------------------------- Wabash Technology Corp. Delaware 100% - ------------------------------------------------------------------------------------- Foreign Subsidiaries - ------------------------------------------------------------------------------------- FTSI Canada, Ltd. New Brunswick (unavailable) - ------------------------------------------------------------------------------------- Roadrailer Bimodal, Ltd. U.K. 100% - ------------------------------------------------------------------------------------- Roadrailer Mercosul, Ltda. Brazil 50% - ------------------------------------------------------------------------------------- Roadrailer Technology Development Co., Ltd. PRC 81% - ------------------------------------------------------------------------------------- Wabash do Brasil Brazil 100% - ------------------------------------------------------------------------------------- Wabash International, Inc. U.S. Virgin 100% Islands - ------------------------------------------------------------------------------------- Wabash National, GmbH Germany 100% - -------------------------------------------------------------------------------------
1 SCHEDULE 5.4 (CONTINUED) AFFILIATES None. DIRECTORS John T. Hackett Chairman of the Board Richard E. Dessimoz Mark R. Holden E. Hunter Harrison Ludvik F. Koci Donald J. Ehrlich Dr. Martin C. Jischke Dave Burdakin EXECUTIVE OFFICERS Richard E. Dessimoz Acting CEO and President Mark R. Holden Senior Vice President, CFO, Member Office of the CEO Derek L. Nagle Senior Vice President, Member Office of the CEO Arthur R. Brown Senior Vice President, COO Charles R. Ehrlich Vice President - Manufacturing Rodney P. Ehrlich Senior Vice President - Engineering Lawrence J. Gross Senior Vice President - Marketing Wilfred E. Lewallen Vice President - Industrial Engineering Stanley E. Sutton Vice President - Purchasing Richard H. Snodgress Vice President - Quality Assurance Christopher A. Black Vice President - Treasurer Angela Knowlton Vice President - Controller Nick C. Fletcher Vice President - Human Resources Gary L. Bateman Vice President - Management Information Systems Bryan K. Langford Vice President - Aftermarket Parts & Accessories Cynthia J. Kretz Secretary Donald J. Hurtt Assistant Secretary 2 SCHEDULE 5.5 FINANCIAL STATEMENTS The following financial data has been provided to each Purchaser: 1 SCHEDULE 5.8 Certain Pending or Threatened Litigation
- ------------------------------------------------------------------------------------------------ NAME/PARTIES DESCRIPTION OR CURRENT STATUS RELIEF SOUGHT NATURE OF PROCEEDINGS - ------------------------------------------------------------------------------------------------ JAN C. AMOS V. Wrongful death; piece of metal Discovery phase Damages in excess WNC, ET AL. came off semi-trailer and of $1,000,000. through windshield of plaintiff's vehicle, decapitating plaintiff's wife. Co-defendant, owner-operator, determined responsible by highway patrol report. Outcome unknown. - ------------------------------------------------------------------------------------------------ MORALES, ET AL. Wrongful death; WNC trailer Several very Money damages; WNC V. ORTIZ V. stopped with warning flashers on important has self-insured BUNNER, ET AL. due to accident ahead; driver of motions pending. retention policy of van smuggling 16 illegal aliens $250,000. Any fell asleep, hit rear of stopped damages over that trailer, killing 13 and injuring amount up to $51 4. million insured. - ------------------------------------------------------------------------------------------------ LISA MOTOR LINES, Strict liability, negligence, Pending. Damages in excess INC., CONWELL misrepresentation, breach of Second amended of $1,000,000. CORP., AND FFE warranty/contract. Plaintiffs petition. TRANSPORTATION V. allege axle and wheel failures; Outcome unknown. WABASH NATIONAL Defendants include several CORPORATION manufacturers of trailers, parts and lubricants. - ------------------------------------------------------------------------------------------------ WABASH NATIONAL Wabash complained against PPG Pending. Value of goods and CORP., PPG for negligent misrepresentation Wabash pro-rata share of INDUSTRIES, INC. and breach of warranty/contract vigorously PPG's initial for selling Wabash a painting defending investment in system. PPG counter-claimed for counter-claim. painting system, alleged consigned goods provided interest, and costs. Wabash. - ------------------------------------------------------------------------------------------------ TENNESSEE Environmental dispute. Grand Threatened. Unknown. DEPARTMENT OF jury subpoena in 2nd quarter Investigation ENVIRONMENTAL 2000 requested documents for ongoing. CONSERVATION; discharge of wastewater at Unable to WABASH NATIONAL Huntsville, TN facility. predict outcome CORPORATION Company appealed assessment of appeal. order of 10/10/00 and fine for violations. - ------------------------------------------------------------------------------------------------ BERNARD KRONE DO Joint venture between BK and Pending before BK asserts damages BRASEL V. WABASH Wabash dissolved; BK sued Wabash Brazil in amount of $8.4 NATIONAL over non-compete agreement and bankruptcy million (US) CORPORATION technology disclosures. court. (BRAZIL) - ------------------------------------------------------------------------------------------------ ESTATE OF Product liability. NOAMTC Pending. CM&S Money damages. EBERHARDT V. leased trailer to CM & S insurer will NOAMTC has NOAMTC, INC., ET Enterprises. Eberhardt's defend NOAMTC, self-insured AL. vehicle collided with trailer, which also retention policy of stopped without lights, and seeks $100,000. Any died. Claim NOAMTC negligently indemnification. damages over that manufactured trailer. $1 million amount up to $51 policy limit. million insured. - ------------------------------------------------------------------------------------------------
1 SCHEDULE 5.11 Patents, Etc. Knowledge of potential claim: Wabash National Corporation received a letter dated August 13, 2001 from North American Trailer Sales, Ltd., a Minnesota corporation, requesting that NOAMTC, Inc. cease using the d/b/a "North American Trailer Centers" in Minnesota. The letter does not allege infringement of intellectual property. The matter was referred to Trexler, Bushnell, Giangiorgi, Blackstone & Marr, Ltd., intellectual property counselors to Wabash National Corporation. As of the date hereof, Wabash National Corporation has not responded to the letter. 1 SCHEDULE 5.14 Existing Indebtedness CONSOLIDATED DEBT SCHEDULE FOR YEAR ENDING DECEMBER 31, 2001
CURRENT DESCRIPTION LENDER RATE MATURITY BALANCE 12/31/2001 - ------------------------------------------------------------------------------------------------ ON BALANCE SHEET PRIVATE PLACEMENT DEBT: SERIES A - interest due 1/31 & 7/31 6.41% 30-Mar-04 50,000,000 SERIES C - 3/13 & 9/13 7.16% 30-Mar-04 22,000,000 SERIES D - 6/17 & 12/17 7.31% 17-Dec-04 9,000,000 SERIES E - 3/13 & 9/13 7.36% 13-Mar-05 3,000,000 SERIES F - 6/17 & 12/17 7.47% 17-Dec-06 13,000,000 SERIES G - 6/30 & 12/30 7.53% 31-Dec-06 6,667,000 SERIES G - 6/30 & 12/30 7.53% 31-Dec-07 6,667,000 SERIES G - 6/30 & 12/30 7.53% 31-Dec-08 6,666,000 SERIES H - 6/17 & 12/17 7.55% 17-Dec-07 12,500,000 SERIES H - 6/17 & 12/17 8.04% 17-Dec-08 12,500,000 SERIES I - 3/29 & 9/29 8.04% 29-Sep-05 25,000,000 SERIES I - 3/29 & 9/29 8.04% 29-Sep-07 25,000,000 ------------------- 192,000,000 CREDIT FACILITY DEBT: REVOLVING CREDIT - WNC Bank One - Agent 2.44% 30-Mar-04 75,000,000 REVOLVING CREDIT - CANADA(1) Toronto Dominion 3.40% 30-Mar-04 14,641,976 RENTAL FLEET FACILITY Fleet Boston 30-Jun-05 65,233,521 AR SECURITIZATION National City 4.75% 30-Mar-04 17,700,000 ------------------- 172,575,497 OTHER DEBT: CAPITAL LEASE - AIRPLANE First Security 7.50% 30-Nov-02 12,080,750 SWIFT HIGH CUBE National City 0.00% 30-Jun-02 13,825,000 INSTALLMENT BREADNER Seller Note 7.25% 15-Jan-06 8,500,000 TERM LOAN NORTHERN Northern Trust 8.16% 30-Sep-08 10,965,356 INSTALLMENT APEX National City 7.55% 15-Sep-02 453,300 MORTGAGE CLOUD Public Bonds 4.75% VARIES 1,331,585 BILL REINDERS - CANADA Seller Note 8.00% 30-Jun-02 285,965 ------------------- 47,441,956 ------------------- TOTAL ON BALANCE SHEET DEBT 412,017,453 =================== OFF BALANCE SHEET
- -------- (1) The Canadian revolving credit facility includes any and all renewals, extensions, continuations and refinancings of any of the foregoing, to the extent that the maximum principal amount thereof is not increased. 1 MANUFACTURING EQUIPMENT: DURAPLATE PLANT National City 23-Dec-04 9,638,234 PLASMA FABRICATOR National City 27-Oct-04 469,576 PRODUCTION LINE EQUIP Key Bank 30-Sep-06 3,853,401 DRY KILNS Key Bank 22-Dec-06 1,240,642 DURAPLATE PLANT II GE Capital 20-Nov-08 9,327,575 ---------------- 24,529,428 (continued next page) NEW AND USED TRAILERS: SALES LEASEBACK National City 31-Dec-01 - SALES LEASEBACK Bank Boston 5-Sep-04 3,878,124 SALES LEASEBACK Bank Boston 5-Aug-05 5,155,290 SALES LEASEBACK Pitney Bowes 30-Aug-04 8,959,759 SALES LEASEBACK Bank Boston 31-Mar-05 5,877,740 ---------------- 23,870,914 ---------------- TOTAL OFF BALANCE SHEET DEBT 48,400,342 ================ ---------------- TOTAL CONSOLIDATED DEBT 460,417,795 ================
S-5.14-2 Permitted Existing Investments Wabash National Corporation Investment Accounts as of April 8, 2002
=============================================================================================== BANK ONE, NA NORTHERN TRUST BANK =============================================================================================== Address 111 Monument Circle 50 S. LaSalle Indianapolis, IN 46204 Chicago, IL 60675 - ----------------------------------------------------------------------------------------------- Relationship Officer Linda Taylor Greta Satek - ----------------------------------------------------------------------------------------------- Bank Account Title Wabash National Corp. Wabash National Corp. Finance - ----------------------------------------------------------------------------------------------- Balance $45,900,000 $47,000 - ----------------------------------------------------------------------------------------------- Description of Account WNC Fidelity Accounts WNC Northern Trust Bank - ----------------------------------------------------------------------------------------------- Account Number B6681120 5677211 - -----------------------------------------------------------------------------------------------
S-5.14-3 SCHEDULE 5.14(b) Existing Liens
===================================================================-================================== DEBTOR/JURISDICTION SECURED PARTY COLLATERAL ====================================================================================================== APEX RENTALS, INC. - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Associates Commercial Corporation Specific vehicles, accessions, chattel paper, etc. - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Associates Commercial Corporation Specific vehicles, accessions, chattel paper, etc. - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Apex Trailer & Truck Equip. Sales, Specific equipment, replacement, Inc. proceeds, etc. - ------------------------------------------------------------------------------------------------------ APEX TRAILER LEASING & RENTALS, L.P. - ------------------------------------------------------------------------------------------------------ Delaware Secretary of Fleet Capital Corp., as Collateral Specific equipment/inventory, State Agent and Assignee of Wabash A/R, rents, proceeds related Statutory Trust-2000 thereto. (Vehicles sold to Fleet Boston) - ------------------------------------------------------------------------------------------------------ Delaware Secretary of Fleet Capital Corp., as Collateral Specific vehicles, accessions, State Agent and Assignee of Wabash chattel paper, general Statutory Trust-2000 intangibles, proceeds, etc. - ------------------------------------------------------------------------------------------------------ Indiana Secretary of Fleet Capital Corporation, as Specific equipment/inventory, State Collateral Agent and Assignee of A/R, rents, proceeds related Wabash Statutory Trust-2000 thereto. (Vehicles sold to Fleet Boston) - ------------------------------------------------------------------------------------------------------ Missouri Secretary of Fleet Capital Corp., as Collateral Specific equipment/inventory, State Agent and Assignee of Wabash A/R, rents, proceeds related Statutory Trust-2000 thereto. (Vehicles sold to Fleet Boston) - ------------------------------------------------------------------------------------------------------ CLOUD OAK FLOORING COMPANY, INC. - ------------------------------------------------------------------------------------------------------ Arkansas Secretary of Boatmen's Trust Company of Arkansas All tangible personal property State purchased with $2,350,000 Arkansas Development Finance Authority Economic Development Revenue Bonds (1996 Series D) (Plant) - ------------------------------------------------------------------------------------------------------ FRUEHAUF TRAILER SERVICES, INC. - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Caterpillar Financial Services 3 trucks (substitutions, Corporation additions, proceeds) - ------------------------------------------------------------------------------------------------------ Iowa Secretary of State Norwest Bank Iowa, NA 1 Digital On Hold download, w/ productions - ------------------------------------------------------------------------------------------------------ Missouri Secretary of US Fleet Leasing, as Agent Receivables and Related Security State and Collection Accounts. - ------------------------------------------------------------------------------------------------------ Missouri Secretary of US Fleet Leasing Specific equipment (trucks and State proceeds) - ------------------------------------------------------------------------------------------------------ Recorder of Deeds; US Fleet Leasing, as Agent Receivables and Related Security St. Louis County, Missouri and Collection Accounts. - ------------------------------------------------------------------------------------------------------ Ohio Secretary of State Caterpillar Financial Services 3 trucks (substitutions, Corporation additions, proceeds) - ------------------------------------------------------------------------------------------------------ Ohio Secretary of State Raymond Leasing Corporation, as Specific leased equipment (order Assignee (from Storage Concepts, Inc.) pickers, batteries and chargers) - ------------------------------------------------------------------------------------------------------ Franklin County Ohio Raymond Leasing Corporation, as Specific leased equipment (order Assignee (from Storage Concepts, Inc.) pickers, batteries and chargers) - ------------------------------------------------------------------------------------------------------ City of Richmond, Virginia Raymond Leasing Corporation, as Specific leased equipment (order Assignee (from Storage Concepts, Inc.) pickers, batteries and chargers) - ------------------------------------------------------------------------------------------------------ Scranton, Pennsylvania City of Scranton sewer authority $431.26 sewer treatment charges Court of Common Pleas (Lackawanna County) filed 1/11/98 - ------------------------------------------------------------------------------------------------------ Greenville County, Williamson Thermo King Dealerships, Specific equipment (Thermo King South Carolina Inc. unit) - ------------------------------------------------------------------------------------------------------
S-5.14-4 - ------------------------------------------------------------------------------------------------------ Texas Secretary of State US Fleet Leasing Specific equipment (trucks and proceeds) - ------------------------------------------------------------------------------------------------------ NOAMTC, INC. - ------------------------------------------------------------------------------------------------------ Delaware Secretary of Bankers/Softech Divisions of EAB Specific equipment (combination State Leasing Corp. system, liner bags, filter pads and extended warranty) - ------------------------------------------------------------------------------------------------------ WABASH NATIONAL, L.P. - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State General Electric Capital Corporation Equipment and Production line (sale lease-back) - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State National City Leasing Corporation Leased equipment (Whitney Plasma Fabricator) - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State First Bank Richmond, assigned Leased equipment (fax copier) from Mid Continent Financial Corp. - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Copelco Capital, Inc. Leased equipment - ------------------------------------------------------------------------------------------------------ WABASH NATIONAL CORPORATION - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Bank One, Indiana, N.A. (f/k./a NBD Specific equipment (accessions, Bank, N.A., successor by merger to proceeds) INB National Bank; f/k/a Lafayette National Bank, original Secured Party) - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Caterpillar Financial Services truck (substitutions, additions, proceeds) - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Caterpillar Financial Services 2 trucks (substitutions, additions, proceeds) - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State IBM Credit Corporation Leased computer equipment and proceeds - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State National City Leasing Corp. Specific leased equipment (Duraplate) - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Marlin Leasing Corporation Specific leased equipment - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State Computer Technologies Leasing, Inc. [Description Unavailable] - ------------------------------------------------------------------------------------------------------ Greenville County, S.C. Williamson Thermo King Dealerships, Specific equipment (Thermo King Inc. unit) - ------------------------------------------------------------------------------------------------------ WABASH NATIONAL FINANCE CORP. - ------------------------------------------------------------------------------------------------------ Indiana Secretary of State First Union National Bank, as Specific chattel paper (leases) successor by merger to CoreStates and inventory of leased personal Bank, N.A. property, accessions and rights. - ------------------------------------------------------------------------------------------------------ WNC CLOUD MERGER SUB, INC. - ------------------------------------------------------------------------------------------------------ Arkansas Secretary of KeyCorp Leasing Specific equipment, accessions, State proceeds - ------------------------------------------------------------------------------------------------------ Arkansas Secretary of KeyCorp Leasing Specific equipment, accessions, State proceeds - ------------------------------------------------------------------------------------------------------ Boone County, Arkansas KeyCorp Leasing Specific equipment, accessions, Circuit Clerk proceeds - ------------------------------------------------------------------------------------------------------
The Liens in favor of Fleet Capital Corporation noted on certificates of title for vehicles titled in the name of Apex Trailer Leasing & Rentals, L.P. or Wabash Statutory Trust - 2000. S-5.14-5 SCHEDULE 9.1 INACTIVE SUBSIDIARIES 1. Wabash International, Inc. 2. WNC Funding LLC 3. WNC Funding Manager Corp. 1 SCHEDULE 10.2(b) Sales of Assets 1. THE FOLLOWING PROPERTIES HELD FOR SALE:
- ---------------------------------------------------------------------------------------------------------------------------------- FACILITY STREET ADDRESS CITY STATE ZIP NET BOOK TYPE ENTITY LOCATION CODE VALUE - ---------------------------------------------------------------------------------------------------------------------------------- Fort Madison 2597 Highway 61 Ft Madison IA 52627 1,751,461 manufacturing (closed) Wabash National, L.P. - ---------------------------------------------------------------------------------------------------------------------------------- Scott County 470 Fruehauf Road Huntsville TN 37756 4,950,000 manufacturing (closed) Wabash National, L.P. - ---------------------------------------------------------------------------------------------------------------------------------- Sheridan 606 East Center Street Sheridan AK 72150 1,055,682 trailer sales/rental Cloud Oak Flooring Company, Inc. - ---------------------------------------------------------------------------------------------------------------------------------- Sheridan 606 East Center Street Sheridan AK 72150 (1) trailer floor mfg Cloud Oak Flooring Company, Inc. (closed) - ---------------------------------------------------------------------------------------------------------------------------------- Fresno 2727 South East Avenue Fresno CA 93725 502,650 branch manufacturing NOAMTC, Inc. (closed) - ---------------------------------------------------------------------------------------------------------------------------------- Greenville 1875 Hwy 101 South Greer SC 29651 956,318 NOAMTC, Inc. - ---------------------------------------------------------------------------------------------------------------------------------- Louisville 4700 Astor Road Louisville KY 40218 903,785 full service location FTSI Distribution Co., L.P. - ---------------------------------------------------------------------------------------------------------------------------------- Phoenix 902 South 7th Street Phoenix AZ 85034 485,609 full service location NOAMTC, Inc. - ---------------------------------------------------------------------------------------------------------------------------------- Seattle 9426 8th Avenue Seattle WA 98108 1,235,574 full service location NOAMTC, Inc. - ---------------------------------------------------------------------------------------------------------------------------------- Spokane East 5316 Broadway Spokane WA 99212 490,696 full service location NOAMTC, Inc. - ---------------------------------------------------------------------------------------------------------------------------------- Tampa 5801 East Broadway Tampa FL 33619 955,156 full service location NOAMTC, Inc. - ----------------------------------------------------------------------------------------------------------------------------------
2. It is anticipated that Wabash National Corporation will sell that certain 1990 Dassault-Breguet Falcon 50 aircraft (serial number-212). 1 [FORM OF NOTE] WABASH NATIONAL CORPORATION 9.66% SERIES A SENIOR SECURED NOTE DUE MARCH 30, 2004 No. [_____] [Date] $[_______] PPN[______________] FOR VALUE RECEIVED, the undersigned, WABASH NATIONAL CORPORATION (herein called the "Company"), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [___________________________], or registered assigns, the principal sum of [___________________________] DOLLARS on March 30, 2004, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 9.66% per annum from the date hereof, payable monthly, on the last day of each calendar month in each year, commencing with the last day of the calendar month next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreements referred to below), payable monthly as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 11.66% or (ii) 2% over the rate of interest publicly announced by Morgan Guaranty Trust Company of New York from time to time in New York, New York as its "base" or "prime" rate. Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Chicago, Illinois or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreements referred to below. This Note is one of a series of Series A Senior Secured Notes (herein called the "Notes") issued pursuant to separate Amended and Restated Note Purchase Agreements, each dated as of April 12, 2002 (as from time to time amended, the "Note Purchase Agreements"), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to have made the representation set forth in Section 6.2 of the Note Purchase Agreements. This Note is a registered Note and, as provided in the Note Purchase Agreements, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary. EXHIBIT 1 (to Note Purchase Agreement) This Note is subject to mandatory and optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreements, but not otherwise. If an Event of Default, as defined in the Note Purchase Agreements, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreements. This Note is equally and ratably secured by the Collateral Documents (as defined in the Note Purchase Agreements). Reference is hereby made to the Collateral Documents for a description of the collateral thereby mortgaged, warranted, bargained, sold, released, conveyed, assigned, transferred, pledged and hypothecated, the nature and extent of the security for the Notes, the rights of the holders of the Notes, the Collateral Agent (as defined in the Note Purchase Agreements) in respect of such security and otherwise. The payment of the principal amount of, premium, if any, and interest on this Note has been unconditionally guaranteed by the Guarantors (as defined in the Note Purchase Agreements) pursuant to the Note Guaranty (as defined in the Note Purchase Agreements). Reference is hereby made thereto for a statement of the rights and benefits accorded thereby. This Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Illinois excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State. WABASH NATIONAL CORPORATION By:_____________________________________ Title:_______________________________ E-1-2 [FORM OF DEFERRAL FEE NOTE] WABASH NATIONAL CORPORATION 9.66% SENIOR SECURED PIK NOTE DUE MARCH 30, 2004 No. _________ [Date] $____________ Original Principal Amount PPN _______________ FOR VALUE RECEIVED, the undersigned, WABASH NATIONAL CORPORATION (herein called the "Company"), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to ________________, or registered assigns, the R-__ Note Accreted Principal Amount on March 31, 2004. The outstanding principal amount of this Senior Secured PIK Note shall accrete at the rate of 9.66% per annum on a monthly basis on the last day of each calendar month in each year commencing with the last day of the calendar month next succeeding the date hereof (computed on the basis of a year of 360 days and twelve 30-day months) from January 31, 2003, and shall cease to accrete on the date on which this Senior Secured PIK Note shall have been paid in full; provided that in the case of any prepayment or other payment of this Senior Secured PIK Note on any date other than the last day of any calendar month, the outstanding principal amount of this Senior Secured PIK Note shall accrete at the rate of 9.66% per annum on a daily basis from the date of the last day of such calendar month to the date of such prepayment; provided further that upon the occurrence of an Event of Default (as defined in the Note Purchase Agreements referred to below and until such Event of Default has been cured or waived in writing (such period constituting a "Default Interest Period"), the outstanding principal amount of this Senior Secured PIK Note shall accrete, to the extent permitted by law, at a rate per annum from time to time equal to the greater of (i) 11.66% or (ii) 2% over the rate of interest publicly announced by Morgan Guaranty Bank of New York from time to time in New York, New York as its "base" or "prime" rate. It is understood and agreed that any reference in this Senior Secured PIK Note to the "principal amount" of this Senior Secured PIK Note shall include a reference to the R-___ Note Accreted Principal Amount thereof whether or not specifically set forth. "R-__ Note Accreted Principal Amount" shall mean with reference to this Senior Secured PIK Note, as of any date of determination, the sum of (a) [$___________] and (b) the outstanding principal amount of this Senior Secured PIK Note which shall have been accreted thereon from the date of issuance through such date, such amount shall accrete at the rate of 9.66% per annum on a monthly basis on the last day of each calendar month in each year commencing with the last day of the calendar month next succeeding the date hereof (computed on the basis of a year of 360 days and twelve 30-day months) and shall cease to accrete on the date on which this Senior Secured PIK Note shall have been paid in full; provided that in the case of any prepayment or other payment of this Senior Secured PIK Note on any date other than the last day of any calendar month, the outstanding principal amount of this Senior Secured PIK Note shall accrete at the rate of 9.66% per annum on a daily basis from the date of the last day of such calendar month to the date of such prepayment. EXHIBIT 2 (to Note Purchase Agreement) Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Chicago, Illinois or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreements referred to below. This Note is one of the 9.66% Senior Secured PIK Notes, due March 31, 2004 (the "Deferral Fee Notes") of the Company in the aggregate principal amount of $_______ which, together with the Company's Notes and Make-Whole Notes (as each is defined in the Note Purchase Agreements described below) are hereinafter referred to collectively as the "Notes", are issued and outstanding pursuant to separate Amended and Restated Note Purchase Agreements, each dated as of April 12, 2002 (as from time to time amended, the "Note Purchase Agreements"), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in SECTION 20 of the Note Purchase Agreements and (ii) to have made the representation set forth in SECTION 6.2 of the Note Purchase Agreements. This Note is a registered Note and, as provided in the Note Purchase Agreements, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary. The Company will make a required prepayment of principal on the date and in the amount specified in the Note Purchase Agreements. This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreements, but not otherwise. If an Event of Default, as defined in the Note Purchase Agreements, occurs and is continuing, the R-__ Note Accreted Principal Amount of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreements. This Note is equally and ratably secured by the Collateral Documents (as defined in the Note Purchase Agreements). Reference is hereby made to the Collateral Documents for a description of the collateral thereby mortgaged, warranted, bargained, sold, released, conveyed, assigned, transferred, pledged and hypothecated, the nature and extent of the security for the Notes, the rights of the holders of the Notes, the Collateral Agent (as defined in the Note Purchase Agreements) in respect of such security and otherwise. The payment of all R-__ Note Accreted Principal Amount of, premium, if any, and interest on this Note has been unconditionally guaranteed by the Guarantors (as defined in the Note Purchase Agreements) pursuant to the Note Guaranty (as defined in the Note Purchase E-2-2 Agreements). Reference is hereby made thereto for a statement of the rights and benefits accorded thereby. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS AND PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. WABASH NATIONAL CORPORATION By _____________________________________ Title __________________________________ E-2-3 [FORM OF MAKE-WHOLE NOTE] WABASH NATIONAL CORPORATION SENIOR SECURED PIK GRID NOTE DUE MARCH 30, 2004 No. _________ [Date] $____________ PPN _______________ FOR VALUE RECEIVED, the undersigned, WABASH NATIONAL CORPORATION (herein called the "Company"), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to ________________, or registered assigns, the R-__ Note Accreted Principal Amount on March 31, 2004. The outstanding principal amount of this Senior Secured PIK Grid Note shall accrete at the rate of 9.66% per annum on a monthly basis on the last day of each calendar month in each year commencing with the last day of the calendar month next succeeding the date hereof (computed on the basis of a year of 360 days and twelve 30-day months) from the date of issuance hereof and shall cease to accrete on the date on which this Senior Secured PIK Grid Note shall have been paid in full; provided that in the case of any prepayment or other payment of this Senior Secured PIK Grid Note on any date other than the last day of any calendar month, the outstanding principal amount of this Senior Secured PIK Grid Note shall accrete at the rate of 9.66% per annum on a daily basis from the date of the last day of such calendar month to the date of such prepayment; provided further that upon the occurrence of an Event of Default (as defined in the Note Purchase Agreements referred to below and until such Event of Default has been cured or waived in writing (such period constituting a "Default Interest Period"), the outstanding principal amount of this Senior Secured PIK Grid Note shall accrete, to the extent permitted by law, at a rate per annum from time to time equal to the greater of (i) 11.66% or (ii) 2% over the rate of interest publicly announced by Morgan Guaranty Bank of New York from time to time in New York, New York as its "base" or "prime" rate. It is understood and agreed that any reference in this Senior Secured PIK Grid Note to the "principal amount" of this Senior Secured PIK Grid Note shall include a reference to the R-___ Note Accreted Principal Amount thereof whether or not specifically set forth. "R-__ Note Accreted Principal Amount" shall mean with reference to this Senior Secured PIK Grid Note, as of any date of determination, the sum of (a) the Make-Whole Amounts which shall become payable to the holder of this Note with respect to such holder's Series A Notes, from time to time upon payment by the Company of portions of the principal amount of such Notes pursuant to SECTION 8.1(b) of the Note Purchase Agreements and (b) the outstanding principal amount of this Senior Secured PIK Grid Note which shall have been accreted thereon from the date of issuance through such date, such amount shall accrete at the rate of 9.66% per annum on a monthly basis on the last day of each calendar month in each year commencing with the last day of the calendar month next succeeding the date hereof (computed on the basis of a year of 360 days and twelve 30-day months) and shall cease to accrete on the date on which this Senior Secured PIK Grid Note shall have been paid in full; provided that in the case of any prepayment or other payment of this Senior Secured PIK Grid Note on any date other than the last day of any calendar month, the outstanding principal amount of this Senior Secured PIK EXHIBIT 3 (to Note Purchase Agreement) Grid Note shall accrete at the rate of 9.66% per annum on a daily basis from the date of the last day of such calendar month to the date of such prepayment. The amounts of the Make-Whole Amounts payable from time to time may for the convenience of the parties be recorded by the holder hereof on the attached Grid however the books and records of the holder shall, in the absence of manifest error, be conclusive as to the determination of the Make-Whole Amounts evidenced by this Note. Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Chicago, Illinois or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreements referred to below. This Note is one of the Senior Secured PIK Grid Notes due March 30, 2004 (the "Make-Whole Notes") of the Company which, together with the Company's Notes and Deferral Fee Notes (as each is defined in the Note Purchase Agreements described below) are hereinafter referred to collectively as the "Notes", are issued and outstanding pursuant to separate Amended and Restated Note Purchase Agreements, each dated as of April 12, 2002 (as from time to time amended, the "Note Purchase Agreements"), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in SECTION 20 of the Note Purchase Agreements and (ii) to have made the representation set forth in SECTION 6.2 of the Note Purchase Agreements. This Note is a registered Note and, as provided in the Note Purchase Agreements, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary. The Company will make a required prepayment of principal on the date and in the amount specified in the Note Purchase Agreements. This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreements, but not otherwise. If an Event of Default, as defined in the Note Purchase Agreements, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreements. This Note is equally and ratably secured by the Collateral Documents (as defined in the Note Purchase Agreements). Reference is hereby made to the Collateral Documents for a description of the collateral thereby mortgaged, warranted, bargained, sold, released, conveyed, assigned, transferred, pledged and hypothecated, the nature and extent of the security for the E-3-2 Notes, the rights of the holders of the Notes, the Collateral Agent (as defined in the Note Purchase Agreements) in respect of such security and otherwise. The payment of all R-__ Note Accreted Principal Amount of, premium, if any, and interest on this Note has been unconditionally guaranteed by the Guarantors (as defined in the Note Purchase Agreements) pursuant to the Note Guaranty (as defined in the Note Purchase Agreements). Reference is hereby made thereto for a statement of the rights and benefits accorded thereby. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS AND PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. WABASH NATIONAL CORPORATION By ___________________________________ Title ________________________________ E-3-3 WABASH NATIONAL CORPORATION SCHEDULE OF MAKE-WHOLE AMOUNTS DUE UNDER THE SENIOR SECURED PIK GRID NOTE DUE MARCH 30, 2004
- -------------------------------------------------------------------------------- Date Make-Whole Accreted Applicable Accreted Total Amount Principal Interest Interest Accreted Amount Rate Payable Principal and Interest Payable - -------------------------------------------------------------------------------- 4/30/02 - -------------------------------------------------------------------------------- 5/31/02 - -------------------------------------------------------------------------------- 6/30/02 - -------------------------------------------------------------------------------- 7/31/02 - -------------------------------------------------------------------------------- 8/31/02 - -------------------------------------------------------------------------------- 9/30/02 - -------------------------------------------------------------------------------- 10/31/02 - -------------------------------------------------------------------------------- 11/30/02 - -------------------------------------------------------------------------------- 12/31/02 - -------------------------------------------------------------------------------- 1/31/03 - -------------------------------------------------------------------------------- 2/28/03 - -------------------------------------------------------------------------------- 3/31/03 - -------------------------------------------------------------------------------- 4/30/03 - -------------------------------------------------------------------------------- 5/31/03 - -------------------------------------------------------------------------------- 6/30/03 - -------------------------------------------------------------------------------- 7/31/03 - -------------------------------------------------------------------------------- 8/31/03 - -------------------------------------------------------------------------------- 9/30/03 - -------------------------------------------------------------------------------- 10/31/03 - -------------------------------------------------------------------------------- 11/30/03 - -------------------------------------------------------------------------------- 12/31/03 - -------------------------------------------------------------------------------- 1/31/04 - -------------------------------------------------------------------------------- 2/28/04 - -------------------------------------------------------------------------------- 3/31/04 - --------------------------------------------------------------------------------
E-3-4 DESCRIPTION OF CLOSING OPINION OF COUNSEL TO THE COMPANY The closing opinion of Baker & Daniels, counsel for the Company, which is called for by SECTION 4.4(a) of the Note Agreements, shall be dated the Closing Date and addressed to the Purchasers, shall be satisfactory in scope and form to the Purchasers and shall be to the effect that: 1. The Company is a corporation, duly incorporated, validly existing and in good standing under the laws of the State of Delaware, has the corporate power and the corporate authority to execute and perform the Note Documents to which it is a party and to issue the Notes and has the full corporate power and the corporate authority to conduct the activities in which it is now engaged and is duly licensed or qualified and is in good standing as a foreign corporation in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business transacted by it makes such licensing or qualification necessary. 2. Each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and is duly licensed or qualified and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business transacted by it makes such licensing or qualification necessary and all of the issued and outstanding shares of capital stock of each such Subsidiary have been duly issued, are fully paid and non-assessable and are owned by the Company, by one or more Subsidiaries, or by the Company and one or more Subsidiaries. 3. Each Guarantor has the corporate power and the corporate authority to execute and perform the Note Documents to which it is a party. 4. Each Note Document has been duly authorized by all necessary corporate action on the part of the Company and the Guarantors, has been duly executed and delivered by the Company and the Guarantors and constitutes the legal, valid and binding contract of the Company or the Guarantors, as the case may be enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors' rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law). 5. The Notes have been duly authorized by all necessary corporate action on the part of the Company, have been duly executed and delivered by the Company and constitute the legal, valid and binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors' rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law). 6. No approval, consent or withholding of objection on the part of, or filing, registration or qualification with, any governmental body, Federal, state or local, is necessary in connection with the execution, delivery and performance of the Note Documents or the Notes. 7. The issuance and exchange of the Notes and the execution, delivery and performance by the Company and the Guarantors of the Note Documents do not conflict EXHIBIT 4.4(a) (to Note Purchase Agreement) with or result in any breach of any of the provisions of or constitute a default under or result in the creation or imposition of any Lien upon any of the property of the Company or the Guarantors pursuant to the provisions of the Certificate of Incorporation or By-laws of the Company and the Guarantors or any agreement or other instrument known to such counsel to which the Company or the Guarantors is a party or by which the Company or the Guarantors may be bound. 8. The issuance, exchange and delivery of the Notes under the circumstances contemplated by the Note Agreements does not, under existing law, require the registration of the Notes under the Securities Act of 1933, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended. 9. There is no litigation pending or, to the best knowledge of such counsel, threatened which in such counsel's opinion could reasonably be expected to have a materially adverse effect on the Company's and the Guarantors' business or assets or which would impair the ability of the Company to issue and exchange the Notes or the ability of the Company and the Guarantors to comply with the provisions of the Note Documents. The opinion of Baker & Daniels shall cover such other matters relating to the sale of the Notes as the Purchasers may reasonably request. With respect to matters of fact on which such opinion is based, such counsel shall be entitled to rely on appropriate certificates of public officials and officers of the Company and of the Guarantors. E-4.4(a)-2 DESCRIPTION OF CLOSING OPINION OF SPECIAL LOCAL COUNSEL TO THE COMPANY The closing opinion of _________, special local counsel to the Purchasers, which is called for by SECTION 4.4(b) of the Note Agreements, shall be dated the date of Closing and addressed to the Purchasers, shall be satisfactory in scope and form to the Purchasers and shall be to the effect that: 1. Assuming the Mortgages to which the Company/Guarantor is a party have been duly authorized by proper corporate action on the part of the Company/Guarantor, have been duly executed and delivered by authorized officers of the Company/Guarantor, the Mortgage to which the Company/Guarantor is a party constitute legal, valid and binding contracts and agreements of the Company/Guarantor enforceable in accordance with their respective terms, except as enforcement of such terms may be limited by (i) bankruptcy, insolvency or similar laws effecting the enforcement of creditors' rights generally, (ii) equitable principles of general applicability (regardless of whether such enforceability is considered in a preceding in equity or at law), and (iii) except that certain remedies provided for in the Mortgage may be limited by applicable law, but none of such limitations as to remedies will, however, in their opinion, materially interfere with the practical realization of the security provided by the Mortgage. 2. No approval, consent or withholding of objection on the part of, or filing, registration or qualification with, any [INSERT STATE] governmental body, state or local, is necessary in connection with the execution, delivery and performance by the Company/Guarantor of the Notes or the Mortgage. 3. Each Mortgage and financing statements or similar notices thereof have been recorded and filed for record in all public offices wherein such filing or recordation is necessary to perfect the lien thereof against creditors of and purchasers from the Company/Guarantor. 4. When each Mortgage has been recorded in the real estate records in the County in which the property is located and when UCC-1 financing statements in a form provided by the applicable state law have been filed with the office of the Secretary of State of [INSERT STATE] and in the real estate records in the county in which the property is located, such Mortgage (or financing statements with respect thereto) shall have been recorded or filed in all public offices wherein such filing or recordation is necessary to perfect the lien or security interest thereof as against creditors of and purchasers from the Company/Guarantor. Except for the necessity of filing continuation statements with respect to such financing statements prior to five years from the date of filing thereof and prior to each fifth year thereafter, no further filings or recordings are necessary to create or perfect the liens and security interests granted under such documents. The opinion of is limited to the laws of the State of [INSERT STATE] and the Federal laws of the United States. With respect to matters of fact upon which such opinion is based, _______________ may rely on appropriate certificates of public officials and officers of the Company/Guarantor. EXHIBIT 4.4(b) (to Note Purchase Agreement) DESCRIPTION OF CLOSING OPINION FOR COUNSEL FOR THE COLLATERAL AGENT The closing opinion of the counsel of the Collateral Agent called for by SECTION 4.4(c) of the Note Agreements, shall be dated the date of Closing and addressed to the Purchasers, shall be satisfactory in form and substance to the Purchasers and shall be to the effect that: 1. The Collateral Agent is a cooperation banking association validly existing under the laws of the United States and is duly qualified to act as Collateral Agent under the Intercreditor Agreement. 2. The Collateral Agent has the requisite power and authority to execute, deliver and perform its respective obligations under the Intercreditor Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of each of the said agreements or instruments. 3. The Intercreditor Agreement has been duly authorized, executed and delivered by the Collateral Agent and constitutes the legal, valid and binding contract of the Collateral Agent enforceable against the Collateral Agent in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors' rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law). 4. No authorization, consent, approval, license, exemption of or filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality by the Collateral Agent or any affiliate thereof is necessary to the valid execution, delivery or performance of the Intercreditor Agreement. The opinion of the counsel of the Collateral Agent shall cover such other matters relating to the transactions contemplated by the Note Agreements as the Purchasers may reasonably request. With respect to matters of fact on which such opinion is based, such counsel shall be entitled to rely on appropriate certificates of public officials and other officers of the parties involved in the transaction. EXHIBIT 4.4(c) (to Note Purchase Agreement) EX-10.25 9 c68906a1ex10-25.txt AMENDED AND RESTATED SECURED NOTES PURCHASE AGMT Exhibit 10.25 MW&E DRAFT 4/12/02 ================================================================================ WABASH NATIONAL CORPORATION Re: $22,000,000 10.41% Senior Secured Notes, Series C, due March 30, 2004, $9,000,000 10.56% Senior Secured Notes, Series D, due December 17, 2004, $3,000,000 10.61% Senior Secured Notes, Series E, due March 13, 2005, $13,000,000 10.72% Senior Secured Notes, Series F, due December 17, 2006, $20,000,000 10.78% Senior Secured Notes, Series G, due December 30, 2008 and $25,000,000 10.80% Senior Secured Notes, Series H, due December 17, 2008 -------------- AMENDED AND RESTATED NOTE PURCHASE AGREEMENT ------------- Dated as of April 12, 2002 ================================================================================ TABLE OF CONTENTS (Not a part of the Agreement)
SECTION HEADING PAGE Section 1. Amendment and Restatement; Guaranties; Security................................................7 Section 1.1. Amendment and Restatement of Note Purchase Agreements and Notes.......................7 Section 1.2. Guaranty..............................................................................8 Section 1.3. Security for the Notes and Note Guaranty..............................................9 Section 1.4. Intercreditor Agreement...............................................................9 Section 2. Issuance and Exchange of Notes.................................................................9 Section 3. Closing........................................................................................9 Section 4. Conditions to Closing..........................................................................9 Section 4.1. Representations and Warranties........................................................9 Section 4.2. Performance; No Default...............................................................9 Section 4.3. Compliance Certificates..............................................................10 Section 4.4. Opinions of Counsel..................................................................10 Section 4.5. Purchase Permitted By Applicable Law, etc............................................10 Section 4.6. Exchange of Other Notes..............................................................10 Section 4.7. Payment of Special Counsel Fees......................................................10 Section 4.8. Private Placement Number.............................................................11 Section 4.9. Changes in Corporate Structure.......................................................11 Section 4.10. Collateral Documents; Related Transactions; Amendment Fee............................11 Section 4.11. PIK Notes............................................................................12 Section 4.12. Consent of Other Creditors...........................................................12 Section 4.13. Payment of Accrued Interest on all Notes and Extension Fee on the Series C Notes................................................................................12 Section 4.14. Proceedings and Documents............................................................12 Section 5. Representations and Warranties of the Company.................................................12 Section 5.1. Organization; Power and Authority....................................................12 Section 5.2. Authorization, etc...................................................................13 Section 5.3. Disclosure...........................................................................13 Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.....................13
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SECTION HEADING PAGE Section 5.5. Financial Statements.................................................................14 Section 5.6. Compliance with Laws, Other Instruments, etc.........................................14 Section 5.7. Governmental Authorizations, etc.....................................................15 Section 5.8. Litigation; Observance of Agreements, Statutes and Orders............................15 Section 5.9. Taxes................................................................................15 Section 5.10. Title to Property; Leases............................................................15 Section 5.11. Licenses, Permits, etc...............................................................16 Section 5.12. Compliance with ERISA................................................................16 Section 5.13. Margin Regulations...................................................................17 Section 5.14. Existing Indebtedness; Future Liens..................................................17 Section 5.15. Status under Certain Statutes........................................................17 Section 5.16. Environmental Matters................................................................18 Section 5.17. Credit Agreement Representations.....................................................18 Section 5.18. Restructuring Fees...................................................................18 Section 6. Representations of the Purchaser..............................................................18 Section 6.1. Purchase for Investment..............................................................18 Section 6.2. Source of Funds......................................................................19 Section 7. Information as to Company.....................................................................20 Section 7.1. Financial and Business Information...................................................20 Section 7.2. Inspection...........................................................................25 Section 7.3. Information Required by Rule 144A....................................................25 Section 8. Prepayment of the Notes.......................................................................25 Section 8.1. Required Prepayments.................................................................25 Section 8.2. Optional Prepayments with Make-Whole Amount..........................................27 Section 8.3. Allocation of Partial Prepayments....................................................27 Section 8.4. Maturity; Surrender, etc.............................................................27 Section 8.5. Purchase of Notes....................................................................27 Section 8.6. Make-Whole Amount....................................................................28 Section 9. Affirmative Covenants.........................................................................29 Section 9.1. Existence, Etc.......................................................................29 Section 9.2. Powers...............................................................................30 Section 9.3. Compliance with Laws, Etc............................................................30
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SECTION HEADING PAGE Section 9.4. Payment of Taxes and Claims..........................................................30 Section 9.5. Intentionally Omitted................................................................30 Section 9.6. Inspection of Property; Books and Records; Discussions...............................30 Section 9.7. ERISA Compliance.....................................................................31 Section 9.8. Maintenance of Properties; Insurance.................................................31 Section 9.9. Environmental Compliance.............................................................31 Section 9.10. Foreign Employee Benefit Compliance..................................................32 Section 9.11. Maintenance of Rights................................................................32 Section 9.12. Conduct of Business..................................................................32 Section 9.13. Subsidiary Documentation.............................................................32 Section 9.14. Collateral Documents; Post-Closing Real Estate Covenants.............................32 Section 9.15. Restructuring Consultant.............................................................35 Section 9.16. Chief Restructuring Officer..........................................................35 Section 9.17. Approved Refinancing Indebtedness........................................................35 Section 10. Negative Covenants; Financial Covenants.......................................................35 Section 10.1. Fiscal Year 2004 Covenants...........................................................35 Section 10.2. Negative Covenants...................................................................36 Section 10.3. Financial Covenants..................................................................43 Section 10.4. Additional Negative Covenants........................................................45 Section 11. Events of Default.............................................................................48 Section 12. Remedies on Default, etc......................................................................51 Section 12.1. Acceleration.........................................................................51 Section 12.2. Other Remedies.......................................................................52 Section 12.3. Rescission...........................................................................52 Section 12.4. No Waivers or Election of Remedies, Expenses, etc....................................52 Section 13. Registration; Exchange; Substitution of Notes.................................................52 Section 13.1. Registration of Notes................................................................52 Section 13.2. Transfer and Exchange of Notes.......................................................53 Section 13.3. Replacement of Notes.................................................................53 Section 14. Payments on Notes.............................................................................54 Section 14.1. Place of Payment.....................................................................54 Section 14.2. Home Office Payment..................................................................54
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SECTION HEADING PAGE Section 15. Expenses, Etc.................................................................................54 Section 15.1. Transaction Expenses.................................................................54 Section 15.2. Survival.............................................................................55 Section 16. Survival of Representations and Warranties; Entire Agreement..................................55 Section 17. Amendment and Waiver..........................................................................55 Section 17.1. Requirements.........................................................................55 Section 17.2. Solicitation of Holders of Notes.....................................................56 Section 17.3. Binding Effect, etc..................................................................56 Section 17.4. Notes Held by Company, etc...........................................................56 Section 18. Notices.......................................................................................56 Section 19. Reproduction of Documents.....................................................................57 Section 20. Confidential Information......................................................................57 Section 21. Substitution of Purchaser.....................................................................58 Section 22. Miscellaneous.................................................................................58 Section 22.1. Successors and Assigns...............................................................58 Section 22.2. Payments Due on Non-Business Days....................................................59 Section 22.3. Severability.........................................................................59 Section 22.4. Construction.........................................................................59 Section 22.5. Counterparts.........................................................................59 Section 22.6. Governing Law........................................................................59 Section 22.7. WAIVER OF JURY TRIAL.................................................................59 Section 22.8. Amendment and Restatement of Original Note Purchase Agreement........................59 Section 22.9. Release..............................................................................60
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SCHEDULE A -- INFORMATION RELATING TO PURCHASERS SCHEDULE B -- DEFINED TERMS SCHEDULE 4.9 -- Changes in Corporate Structure SCHEDULE 5.3 -- Disclosure Materials SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock SCHEDULE 5.5 -- Financial Statements SCHEDULE 5.8 -- Certain Litigation SCHEDULE 5.11 -- Patents, etc. SCHEDULE 5.14 -- Existing Indebtedness; Existing Liens; Existing Investments SCHEDULE 9.14(A) -- Schedule of Excluded Real Estate SCHEDULE 10.2(B) -- Sales of Assets SCHEDULE 10.2(L) -- Excluded Prepayment Restricted Indebtedness SCHEDULE B-19 -- Covenant Case Projections (Financials) EXHIBIT 1 -- Form of 10.41% Senior Secured Note, Series C, due March 30, 2004 EXHIBIT 2 -- Form of 10.56% Senior Secured Note, Series D, due December 17, 2004 EXHIBIT 3 -- Form of 10.61% Senior Secured Note, Series E, due March 13, 2005 EXHIBIT 4 -- Form of 10.72% Senior Secured Note, Series F, due December 17, 2006 EXHIBIT 5 -- Form of 10.78% Senior Secured Note, Series G, due December 30, 2008 EXHIBIT 6 -- Form of 10.80% Senior Secured Note, Series H, due December 17, 2008 EXHIBIT 7 -- Form of Deferral Fee Note EXHIBIT 8 -- Form of Make-Whole Note
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EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Company EXHIBIT 4.4(b) -- Form of Opinion of Special Indiana Counsel for the Company EXHIBIT 4.4(c) Form of Opinion for the Collateral Agent EXHIBIT 7.1(a) -- Form of Officer's Certificate EXHIBIT 7.1(b) -- Form of Compliance Certificate
-vi- WABASH NATIONAL CORPORATION 1000 SAGAMORE PARKWAY SOUTH LAFAYETTE, INDIANA 47905 Re: $22,000,000 10.41% Senior Secured Notes, Series C, due March 30, 2004, $9,000,000 10.56% Senior Secured Notes, Series D, due December 17, 2004, $3,000,000 10.61% Senior Secured Notes, Series E, due March 13, 2005, $13,000,000 10.72% Senior Secured Notes, Series F, due December 17, 2006, $20,000,000 10.78% Senior Secured Notes, Series G, due December 30, 2008 and $25,000,000 10.80% Senior Secured Notes, Series H, due December 17, 2008 Dated as of April 12, 2002 TO EACH OF THE PURCHASERS LISTED IN THE ATTACHED SCHEDULE A: Ladies and Gentlemen: WABASH NATIONAL CORPORATION, a Delaware corporation (the "Company"), agrees with you as follows: SECTION 1. AMENDMENT AND RESTATEMENT; GUARANTIES; SECURITY. Section 1.1. Amendment and Restatement of Note Purchase Agreements and Notes. The Purchasers and the Company are parties to those certain separate and several Note Purchase Agreements each dated as of December 1, 1996, as amended by the First Amendment dated as of March 1, 1998, the Second Amendment dated as of September 30, 1999, and the Third Amendment dated as of November 30, 2000 (as so amended, collectively, the "Original Note Purchase Agreement"), pursuant to which the Company authorized the issue and sale of, and the Purchasers purchased from the Company (a) $8,000,000 aggregate principal amount of its 6.99% Senior Notes, Series B, due December 17, 2001 (the "Original Series B Notes"), (b) $22,000,000 aggregate principal amount of its Designated Rate Senior Notes, Series C, due March 13, 2002 (the "Original Series C Notes"), (c) $9,000,000 aggregate principal amount of its 7.31% Senior Notes, Series D, due December 17, 2004 (the "Original Series D Notes"), (d) $3,000,000 aggregate principal amount of its Designated Rate Senior Notes, Series E, due March 13, 2005 (the "Original Series E Notes"), (e) $13,000,000 aggregate principal amount of its 7.47% Senior Notes, Series F, due December 17, 2006 (the "Original Series F Notes"), (f) $20,000,000 aggregate principal amount of its 7.53% Senior Notes, Series G, due December 30, 2008 (the "Original Series G Notes"), and (g) $25,000,000 aggregate principal amount of its 7.55% Senior Notes, Series H, due December 17, 2008 (the "Original Series H Notes"; the Original Series B Notes, the Original Series C Notes, the Original Series D Notes, the Original Series E Notes, the Original Series F Notes, the Original Series G Notes and the Original Series H Notes being hereinafter collectively referred to as the "Original Notes". The Original Series B Notes have been paid in full and are no longer outstanding under the Original Note Purchase Agreement. On the Closing (as defined below) the Company will amend and restate the Original Notes (other than the Original Series B Notes) in the forms of EXHIBITS 1-6. Reference in this Agreement to the "Series C Notes" shall be a reference to the Original Series C Notes as amended and restated in the form of EXHIBIT 1 together with the applicable PIK Notes related thereto described below. Reference in this Agreement to the "Series D Notes" shall be a reference to the Original Series D Notes as amended and restated in the form of EXHIBIT 2 together with the applicable PIK Notes related thereto described below. Reference in this Agreement to the "Series E Notes" shall be a reference to the Original Series E Notes as amended and restated in the form of EXHIBIT 3 together with the applicable PIK Notes related thereto described below. Reference in this Agreement to the "Series F Notes" shall be a reference to the Original Series F Notes as amended and restated in the form of EXHIBIT 4 together with the applicable PIK Notes related thereto described below. Reference in this Agreement to the "Series G Notes" shall be a reference to the Original Series G Notes as amended and restated in the form of EXHIBIT 5 together with the applicable PIK Notes related thereto described below. Reference in this Agreement to the "Series H Notes" shall be a reference to the Original Series H Notes as amended and restated in the form of EXHIBIT 6 together with the applicable PIK Notes related thereto described below. On the Closing the Company will issue the PIK Notes in the form of EXHIBITS 7 and 8 to you in accordance with the terms and provisions of SECTION 4.11. Reference in this Agreement to the "Notes" shall be a reference to the Original Notes as so amended and restated in said EXHIBITS 1-6 together with the related PIK Notes with such changes therefrom, if any, as may be approved by you and the Company. The Notes shall be substantially in the form set out in EXHIBITS 1-8, respectively, with such changes therefrom, if any, as may be approved by you and the Company. Certain capitalized terms used in this Agreement are defined in SCHEDULE B; references to a "SCHEDULE" or an "EXHIBIT" are, unless otherwise specified, to a SCHEDULE or an EXHIBIT attached to this Agreement. The Company and the Purchasers now desire to amend and restate the Original Note Purchase Agreement and the Original Notes to, among other things, (a) amend certain covenants and related definitions, (b) provide for collateral to secure the obligations represented by the Notes and the Note Guaranty, and (c) make certain other changes to the Original Note Purchase Agreement. Section 1.2. Guaranty. The payment and performance obligations of the Company under and pursuant to the Original Note Purchase Agreement and the Original Notes are fully and unconditionally guaranteed by each of the Guarantors pursuant to the Note Guaranty dated as of September 30, 1999 (the "Original Note Guaranty"). The Purchasers have required as a condition to the execution and delivery of this Agreement that the Guarantors execute and deliver an Amended and Restated Note Guaranty dated the date hereof (the "Note Guaranty") to the Purchasers under and pursuant to which the Guarantors shall fully and unconditionally guaranty the payment and performance obligations of the Company under this Agreement and the Notes. -2- Section 1.3. Security for the Notes and Note Guaranty. The Notes and the obligations of the Guarantors under the Note Guaranty shall be secured, equally and ratably with the other Secured Obligations, by the Collateral Documents. Section 1.4. Intercreditor Agreement. The Collateral described in the Collateral Documents shall be held by Bank One, N.A., as Collateral Agent for the benefit of the Purchasers and the other Secured Parties pursuant to the Intercreditor Agreement. SECTION 2. ISSUANCE AND EXCHANGE OF NOTES. Subject to the terms and conditions of this Agreement, the Company will issue the amended and restated Notes to each Purchaser upon surrender by it of the Original Notes (other than the Original Series B Notes) for cancellation by the Company. Contemporaneously with entering into this Agreement, the Company is entering into separate Amended and Restated Note Purchase Agreements (the "Other Agreements") identical with this Agreement with each of the other purchasers named in SCHEDULE A (the "Other Purchasers"), providing for the issue and exchange, as the case may be, to each of the Other Purchasers of Notes in the principal amount and of the series specified opposite its name in SCHEDULE A. Your obligation hereunder, and the obligations of the Other Purchasers under the Other Agreements, are several and not joint obligations, and you shall have no obligation under any Other Agreement and no liability to any Person for the performance or nonperformance by any Other Purchaser thereunder. SECTION 3. CLOSING. The issue and exchange of the Notes to be purchased by you and the Other Purchasers shall occur at the offices of McDermott, Will & Emery, 227 West Monroe Street, Chicago, Illinois 60606-5096, at 10:00 A.M. Chicago time, at a closing (the "Closing") on April 12, 2002 or on such other Business Day thereafter on or prior to April 15, 2002 as may be agreed upon by the Company and you and the Other Purchasers. If at the Closing the Company shall fail to tender such Notes to you as provided above in this SECTION 3, or any of the conditions specified in SECTION 4 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment. SECTION 4. CONDITIONS TO CLOSING. Your obligation to exchange the Original Notes for the Notes to be issued to you at the Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions: Section 4.1. Representations and Warranties. The representations and warranties of the Company in this Agreement shall be correct when made and at the time of the Closing. Section 4.2. Performance; No Default. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be -3- performed or complied with by it prior to or at the Closing, and after giving effect to the issue and exchange of the Notes, no Default or Event of Default shall have occurred and be continuing. Section 4.3. Compliance Certificates. (a) Officer's Certificate. The Company shall have delivered to you an Officer's Certificate, dated the date of the Closing, certifying that the conditions specified in SECTIONS 4.1, 4.2 and 4.9 have been fulfilled. (b) Secretary's Certificate. The Company shall have delivered to you a certificate certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and the Agreements. Section 4.4. Opinions of Counsel. You shall have received opinions in form and substance satisfactory to you, dated the date of the Closing (a) from Baker & Daniels, independent counsel for the Company, covering the matters set forth in EXHIBIT 4.4(a) and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to you), (b) from Baker & Daniels, special local counsel to the Company, covering the matters set forth in EXHIBIT 4.4(b) with respect to the Lafayette Property and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to you), and (c) from counsel to the Collateral Agent covering the matters set forth in EXHIBIT 4.4(c). Section 4.5. Purchase Permitted By Applicable Law, etc. On the date of the Closing your exchange of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by you, you shall have received an Officer's Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such exchange is so permitted. Section 4.6. Exchange of Other Notes. Contemporaneously with the Closing, the Company shall issue to the Other Purchasers scheduled to exchange the Original Notes on the date of the Closing, and such Other Purchasers shall surrender, the Original Notes to be exchanged by them at the Closing as specified in SCHEDULE A. Section 4.7. Payment of Special Counsel Fees. Without limiting the provisions of SECTION 15.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of McDermott, Will & Emery, special counsel to certain Purchasers, and Mayer, -4- Brown, Rowe & Maw, counsel to a certain Purchaser, incurred in connection with the preparation of this Agreement, the Other Agreements and matters incident thereto to the extent reflected in a statement of such counsel rendered to the Company (which statement may contain an estimate for fees, expenses and disbursements anticipated to be made) at least one Business Day prior to such Closing. Section 4.8. Private Placement Number. On or prior to the date of the Closing, a new Private Placement number issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for each series of the Notes. Section 4.9. Changes in Corporate Structure. Except as specified in SCHEDULE 4.9, the Company shall on the date of the Closing not have changed its jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in SCHEDULE 5.5. Section 4.10. Collateral Documents; Related Transactions; Amendment Fee. (a) Subject to the terms and provisions of SECTION 9.14(b), each of the Collateral Documents shall have been duly executed and delivered in the respective forms thereof and shall be in full force and effect and all of the security interests granted thereunder shall be duly perfected to the satisfaction of your special counsel. (b) The Credit Agreement and the Intercreditor Agreement shall have been duly executed and delivered by the parties thereto and all of the transactions contemplated thereby shall have been consummated to your satisfaction. (c) The Company shall have entered into definitive and binding documentation pertaining to, and closed on, the Permitted Receivables Transfer on terms and conditions satisfactory to you. (d) The Series A Note Purchase Agreements and the Series I Note Purchase Agreement shall have been duly executed and delivered by the parties thereto and all of the transactions contemplated thereby shall have been consummated to your satisfaction. (e) The Company shall have closed on an amendment to the Fleet Lease Transaction on terms and conditions satisfactory to you. (f) The Company shall have paid in cash an amendment fee to each of you in an amount equal to 0.50% of the aggregate principal amount of the Notes held by you. (g) The Company shall have provided you written copies of any fee letter entered into among the Company and any Secured Party or the Administrative Agent relating to the transactions contemplated by this Agreement, the Credit Agreement and the Intercreditor Agreement other than fees paid to the Administrative Agent or Collateral Agent in their agent capacities. -5- Section 4.11. PIK Notes. (a) The Company shall have issued to each Series C Holder a promissory note substantially in the form of EXHIBIT 7 (each a "Deferral Fee Note" and collectively, the "Deferral Fee Notes") which shall evidence the payment by the Company to each Series C Holder of a deferral fee. The deferral fee evidenced by the Deferral Fee Note issued to each Series C Holder shall accrue at the interest rate and in the manner set forth in the Deferral Fee Notes. (b) The Company shall have issued to each Holder (other than to the Series C Holders) a promissory grid note in substantially the form of EXHIBIT 8 (each a "Make-Whole Note" and collectively, the "Make-Whole Notes") which shall evidence the payment by the Company to each such Holder of the applicable Make-Whole Amount upon the prepayment of the Notes (other than the Series C Notes) in accordance with the terms and provisions of SECTION 8.1(b). Interest on the Make-Whole Notes shall accrue monthly, shall be computed at a rate equal to (i) in the case of the Make-Whole Notes held by the Series D Holders, 10.56% per annum, (ii) in the case of the Make-Whole Notes held by the Series E Holders, 10.61% per annum, (iii) in the case of the Make-Whole Notes held by the Series F Holders, 10.72% per annum, (iv) in the case of the Make-Whole Notes held by the Series G Holders, 10.78% per annum, and (v) in the case of the Make-Whole Notes held by the Series H Holders, 10.80% per annum, and shall be added to the interest-bearing principal amount of the Make-Whole Notes. Section 4.12. Consent of Other Creditors. Any consents or approvals required to be obtained from any holder of any outstanding debt of the Company or any Guarantor and any amendments of agreements pursuant to which any debt may have been incurred by the Company or any Guarantor, which shall be necessary to permit the consummation of the transactions contemplated hereby or by the Restructuring Transaction shall have been obtained and all such consents, approvals or amendments shall be satisfactory in form and substance to you and your special counsel. Section 4.13. Payment of Accrued Interest on all Notes and Extension Fee on the Series C Notes. The Company shall have paid to the Holders all unpaid and accrued interest to the date of Closing on the Notes and shall have paid the extension fee to the Series C Holders as set forth in the Extension Agreement dated as of March 31, 2002 among the Company and the Series C Holders. Section 4.14. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement on the date of the Closing and all documents and instruments incident to such transactions shall be satisfactory to you and your special counsel, and you and your special counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request. SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to you that: Section 5.1. Organization; Power and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of -6- incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement, the Other Agreements, the Collateral Documents and the Notes and to perform the provisions hereof and thereof. Section 5.2. Authorization, etc. This Agreement, the Other Agreements, the Collateral Documents and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement and each Collateral Document constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Section 5.3. Disclosure. Except as disclosed in SCHEDULE 5.3, this Agreement, the documents, certificates or other writings delivered to you by or on behalf of the Company in connection with the transactions contemplated hereby, including, without limitation, the December 31, 2000 SEC Form 10-K (including all documents incorporated by reference therein), the March 31, 2001 SEC Form 10-Q, the June 30, 2001 SEC Form 10-Q and the September 30, 2001 SEC Form 10-Q of the Company, and the financial statements listed in SCHEDULE 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as expressly described in SCHEDULE 5.3, or in one of the documents, certificates or other writings identified therein, or in the March 31, 2001, June 30, 2001 or September 30, 2001 SEC Forms 10-Q or in the financial statements listed in SCHEDULE 5.5, since December 31, 2000, there has been no change in the financial condition, operations, business, properties or prospects of the Company or any Subsidiary except changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the other documents, certificates and other writings delivered to you by or on behalf of the Company specifically for use in connection with the transactions contemplated hereby. Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates. (a) SCHEDULE 5.4 contains (except as noted therein) complete and correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii) of the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's directors and executive officers. -7- (b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in SCHEDULE 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in SCHEDULE 5.4). (c) Each Subsidiary identified in SCHEDULE 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact. (d) No Subsidiary is a party to, or otherwise subject to any legal restriction or any agreement (other than this Agreement, the agreements listed on SCHEDULE 5.4 and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. Section 5.5. Financial Statements. The Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on SCHEDULE 5.5. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such SCHEDULE and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). Section 5.6. Compliance with Laws, Other Instruments, etc. (a) The execution, delivery and performance by the Company of this Agreement, the Collateral Documents and the Notes will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary. (b) The Notes and all other obligations under this Agreement of the Company are direct and secured obligations of the Company ranking pari passu with all of the other -8- Secured Obligations of the Company (actual or contingent) other than as set forth in the Intercreditor Agreement. Section 5.7. Governmental Authorizations, etc. No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement, the Collateral Documents or the Notes. Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a) Except as disclosed in SCHEDULE 5.8, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not individually or in the aggregate Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate. The Federal income tax liabilities of the Company and its Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 1996. Section 5.10. Title to Property; Leases. The Company and its Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material (other than assets subject to Capitalized Leases), including all such properties reflected in the most recent audited balance sheet referred to in SECTION 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement, except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects. -9- Section 5.11. Licenses, Permits, etc. Except as disclosed in SCHEDULE 5.11, (a) the Company and its Subsidiaries own, possess or have the lawful right to use all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect; (b) to the best knowledge of the Company, no product of the Company or any of its Subsidiaries infringes in any material respect any license, permit, franchise, authorization, patent, copyright, service mark, trademark, trade name or other right owned by any other Person; and (c) to the best knowledge of the Company, there is no Material violation by any Person of any right of the Company or any of its Subsidiaries with respect to any patent, copyright, service mark, trademark, trade name or other right owned or used by the Company or any of its Subsidiaries. Section 5.12. Compliance with ERISA. (a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not be individually or in the aggregate have a Material Adverse Effect. (b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan's most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan's most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities. The terms "benefit liabilities" has the meaning specified in section 4001 of ERISA and the terms "current value" and "present value" have the meaning specified in section 3 of ERISA. (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material. (d) The expected post-retirement benefit obligation (determined as of the last day of the Company's most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation -10- coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material. (e) The execution and delivery of this Agreement, the Collateral Documents and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406(a)(1) of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of this SECTION 5.12(e) is made in reliance upon and subject to (i) the accuracy of your representation in SECTION 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by you and (ii) the assumption, made solely for the purpose of making such representation, that Department of Labor Interpretive Bulletin 75-2 with respect to prohibited transactions remains valid in the circumstances of the transactions contemplated herein. Section 5.13. Margin Regulations. Margin stock (excluding shares of Common Stock, par value $0.01 per share, of the Company which have been retired) does not constitute more than 5% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 5% of the value of such assets. As used in this SECTION 5.13, the terms "margin stock" and "purpose of buying or carrying" shall have the meanings assigned to them in said Regulation U, but shall not include the aforesaid shares of Common Stock. Section 5.14. Existing Indebtedness; Future Liens. (a) SCHEDULE 5.14 sets forth a complete and correct list of all (i) outstanding Indebtedness of the Company and its Subsidiaries aggregating in excess of $50,000 as of December 31, 2001, since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries, (ii) Liens on property of the Company and its Subsidiaries as of December 31, 2001 and (iii) Investments of the Company and its Subsidiaries as of December 31, 2001. Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment. (b) Except as disclosed in SCHEDULE 5.14, neither the Company nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by SECTION 10.2(c). Section 5.15. Status under Certain Statutes. Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as amended (the "ICA"), or the Federal Power Act, as amended, except that Continental Transit Corp. is subject to regulation under the ICA. -11- Section 5.16. Environmental Matters. Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed to you in writing: (a) neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect; (b) neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws, in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and (c) all buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect. Section 5.17. Credit Agreement Representations. The representations and warranties set forth in Article V of the Credit Agreement are hereby incorporated by reference herein as if such representations and warranties were set forth herein in full. Section 5.18. Restructuring Fees. Neither the Company nor any Subsidiary has agreed to or has paid any amendment fee, restructuring fee, default premium or fee or any other fee, premium or charge to any holder of Indebtedness in connection with the Restructuring Transaction other than (a) the fees and charges specifically set forth in the Wabash National Corporation Proposal for Debt Restructure letter dated April 1, 2002, (b) the fees, costs and expenses specifically provided for in the Master Amendment dated as of the Closing to certain of the Fleet Lease Transaction documentation, (c) the extension fee paid to National City Leasing Corporation in connection with the extension of the National City Lease Transaction, and (d) fees paid to the Administrative Agent or the Collateral Agent solely in their respective capacities as Administrative Agent or Collateral Agent. The Company and its Subsidiaries have disclosed to the Holders all written fee letters or other agreements regarding the payment of the fees and charges described in this SECTION 5.18 paid to or agreed to in connection with the Restructuring Transaction other than those fees described in clause (d) above. -12- SECTION 6. REPRESENTATIONS OF THE PURCHASER. Section 6.1. Purchase for Investment. You represent that you purchased the Notes for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds managed by you and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all times be within your or their control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes. Section 6.2. Source of Funds. You represent that at least one of the following statements is an accurate representation as to each source of funds (a "Source") which was used by you to pay the purchase price of the Notes purchased by you: (a) if you are an insurance company, the Source is an "insurance company general account" within the meaning of Department of Labor Prohibited Transaction Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee benefit plan, treating as a single plan all plans maintained by the same employer or employee organization, with respect to which the amount of the general account reserves and liabilities for all contracts held by or on behalf of such plan exceeds ten percent (10%) of the total reserves and liabilities of such general account (exclusive of separate account liabilities) plus surplus, as set forth in the NAIC Annual Statement filed with your state of domicile; or (b) if you are an insurance company, the Source does not include assets allocated to any separate account maintained by you in which any employee benefit plan (or its related trust) has any interest, other than a separate account that is maintained solely in connection with your fixed contractual obligations under which the amounts payable, or credited, to such plan and to any participant or beneficiary of such plan (including any annuitant) are not affected in any manner by the investment performance of the separate account; or (c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in writing pursuant to this paragraph (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or (d) the Source constitutes assets of an "investment fund" (within the meaning of Part V of the QPAM Exemption) managed by a "qualified professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption), no employee benefit plan's assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same -13- employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part l(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this paragraph (d); or (e) the Source is a governmental plan; or (f) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this paragraph (f); or (g) the Source does not include assets of any employee benefit plan that is subject to ERISA. If you or any subsequent transferee of the Notes indicates that you or such transferee are relying on any representation contained in paragraph (c), (d) or (f) above, the Company shall deliver on the date of Closing on which you are scheduled to purchase Notes and on the date of any applicable transfer a certificate, which shall either state that (i) it is neither a party in interest nor a "disqualified person" (as defined in Section 4975(e)(2) of the Code), with respect to any plan identified pursuant to paragraphs (c) or (f) above, or (ii) with respect to any plan, identified pursuant to paragraph (d) above, neither it nor any "affiliate" (as defined in Section V(c) of the QPAM Exemption) has at such time, and during the immediately preceding one year, exercised the authority to appoint or terminate said QPAM as manager of any plan identified in writing pursuant to paragraph (d) above or to negotiate the terms of said QPAM's management agreement on behalf of any such identified plan. As used in this SECTION 6.2, the terms "employee benefit plan", "governmental plan", "party in interest" and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA. SECTION 7. INFORMATION AS TO COMPANY. Section 7.1. Financial and Business Information. (a) Financial Reporting. Furnish to each Holder that is an Institutional Investor: (i) Monthly Reports. As soon as practicable and in any event within thirty (30) days after the end of each monthly accounting period of the Company (other than those monthly periods which are the last month in a fiscal quarter or fiscal year which reports for such periods shall be delivered within the time period specified in SECTIONS 7.1(a)(ii) and 7.1(a)(iii), respectively), the consolidated balance sheet of the Company and its Subsidiaries as of the end of such period, and the related consolidated statements of income and cash flows for the period commencing at the end of the previous fiscal year and ending with the end of such period setting forth in each case in comparative -14- form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the chief financial officer or treasurer of the Company as having been prepared in accordance with GAAP, together with a certificate of the chief financial officer or treasurer of the Company on behalf of the Company stating that no Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement setting forth the details thereof and the action which the Company has taken and proposes to take with respect thereto; (ii) Quarterly Reports. As soon as practicable, and in any event within forty-five (45) days (or such shorter period of time as is required by the Commission for delivery of quarterly financial statements) after the end of each of the first three fiscal quarters in each fiscal year, the consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such period and the related consolidated and consolidating statements of income and cash flows of the Company and its Subsidiaries for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, certified by the chief financial officer or treasurer of the Company on behalf of the Company as fairly presenting in all material respects the consolidated and consolidating financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in accordance with GAAP, subject to normal year end adjustments. Delivery within the time period specified above of copies of the Company's Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Commission shall be deemed to satisfy the requirements of this SECTION 7.1(a)(ii); (iii) Annual Reports. As soon as practicable, and in any event within ninety (90) days (or such shorter period of time as is required by the Commission for delivery of annual financial statements) after the end of each fiscal year (including the fiscal year ended on or about December 31, 2001), (a) the consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such fiscal year and the related consolidated and consolidating statements of income, stockholders' equity and cash flows of the Company and its Subsidiaries for such fiscal year and, in comparative form the corresponding figures for the previous fiscal year and (b) an audit report on the items (other than the consolidating financial statements) listed in CLAUSE (a) hereof of independent certified public accountants of recognized national standing, which audit report shall be unqualified and shall state that such financial statements fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flows for the periods indicated in conformity with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards. Delivery within the time period specified above of the Company's Annual Report on Form 10-K for such fiscal year (together with the Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Securities Exchange Act of 1934) prepared in accordance with the requirements therefor and filed with the Commission shall be deemed to satisfy the -15- foregoing requirements of this SECTION 7.1(a)(iii), provided that the auditors' report contained therein satisfies the requirements specified in CLAUSE (b) above. The deliveries made pursuant to this CLAUSE (iii) shall be accompanied by a certificate of such accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Event of Default, or if, in the opinion of such accountants, any Default or Event of Default shall exist, stating the nature and status thereof; (iv) Officer's Certificate. Together with each delivery of any financial statement pursuant to CLAUSES (i), (ii) and (iii) of this SECTION 7.1(a), (a) an Officer's Certificate of the Company, substantially in the form of EXHIBIT 7.1(a) attached hereto and made a part hereof, stating that no Default or Event of Default exists, or if any Default or Event of Default exists, stating the nature and status thereof and (b) a Compliance Certificate, substantially in the form of EXHIBIT 7.1(b) attached hereto and made a part hereof, signed by the Company's chief financial officer or treasurer, setting forth (1) calculations which demonstrate compliance with the provisions of SECTION 10 and (2) in the case of a Compliance Certificate accompanying the financial statements delivered pursuant to Section 7.1(a)(ii), a detailed description and calculation of the Excess Cash Flow for the applicable fiscal quarter then-ended; (v) Valuations and Appraisals. By no later than such date as the Collateral Agent may specify, such valuations, appraisals and certificates (all costs and expenses with respect to which shall be for the account of the Company) as the Collateral Agent may require with respect to the value of the Collateral, the financial condition and insurance coverage of the Company and its Subsidiaries and the material Contingent Obligations of the Company and its Subsidiaries in compliance with terms of SECTION 9.14(b); and (vi) Other Information. Promptly, such other information respecting the business, properties operations or financial condition of the Company or any of its Subsidiaries, or the Collateral, including, without limitation, schedules identifying and describing the Collateral and any dispositions thereof, as any Holder may from time to time reasonably request. (b) Notice of Default. Promptly upon any of the chief executive officer, chief operating officer, chief financial officer, treasurer or controller of the Company obtaining knowledge (i) of any condition or event which constitutes a Default or Event of Default, or becoming aware that any Holder has given any written notice with respect to a claimed Default or Event of Default under this Agreement, or (ii) that any Person has given any written notice to the Company or any Subsidiary of the Company or taken any other action with respect to a claimed default or event or condition of the type referred to in SECTION 11(e), deliver to the Holders an Officer's Certificate specifying (a) the nature and period of existence of any such claimed default, Default, Event of Default, condition or event, (b) the notice given or action taken by such Person in connection therewith, and (c) what action the Company has taken, is taking and proposes to take with respect thereto. -16- (c) Lawsuits. (i) Promptly upon the Company obtaining knowledge of the institution of, or written threat of, any action, suit, proceeding, governmental investigation or arbitration against or affecting the Company or any of its Subsidiaries or any property of the Company or any of its Subsidiaries not previously disclosed pursuant to SECTION 5.8, which action, suit, proceeding, governmental investigation or arbitration exposes, or in the case of multiple actions, suits, proceedings, governmental investigations or arbitrations arising out of the same general allegations or circumstances which expose, in the Company's reasonable judgment, the Company or any of its Subsidiaries to liability in an amount aggregating $1,000,000 or more (exclusive of claims covered by insurance policies of the Company or any of its Subsidiaries unless the insurers of such claims have disclaimed coverage or reserved the right to disclaim coverage on such claims and exclusive of claims covered by the indemnity of a financially responsible indemnitor in favor of the Company or any of its Subsidiaries (unless the indemnitor has disclaimed or reserved the right to disclaim coverage thereof)), give written notice thereof to the Holders and provide such other information as may be reasonably available to enable each Holder and its counsel to evaluate such matters; and (ii) in addition to the requirements set forth in CLAUSE (i) of this SECTION 7.1(c), upon request of the Required Holders, promptly give written notice of the status of any action, suit, proceeding, governmental investigation or arbitration covered by a report delivered pursuant to CLAUSE (i) above and provide such other information as may be reasonably available to it that would not result in loss of any attorney-client privilege by disclosure to the Holders to enable each Holder and its counsel to evaluate such matters. (d) Material Developments. Promptly and in any event within three (3) calendar days after the Company obtaining knowledge of the occurrence of any development in the business or affairs of the Company or any of its Subsidiaries which has resulted in or, which is likely in the reasonable judgment of the Company to result in, a Material Adverse Effect, or affects the value of, or the Collateral Agent's interest in, the Collateral, taken as a whole, in any material respect, deliver to the Holders a statement of the chief financial officer or treasurer of the Company setting forth details of each such development and the action which the Company or such Subsidiary, as the case may be, has taken and proposes to take with respect thereto. (e) ERISA Notices. Deliver or cause to be delivered to the Holders, at the Company's expense, the following information and notices as soon as reasonably possible, and in any event: (i) (x) within ten (10) Business Days after the Company obtains knowledge that a Termination Event has occurred, a written statement of the chief financial officer of the Company describing such Termination Event and the action, if any, which the Company has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto and (y) within ten (10) Business Days after any member of the Controlled Group obtains knowledge that a Termination Event has occurred which could reasonably be expected to subject the Company to liability in excess of $1,000,000, a written statement of the chief financial officer of the Company describing such Termination Event and the action, if any, which the member of the Controlled Group has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto; -17- (ii) within ten (10) Business Days after the Company or any of its Subsidiaries obtains knowledge that a non-exempt prohibited transaction (as defined in ERISA and the Code) has occurred, a statement of the chief financial officer of the Company describing such transaction and the action which the Company or such Subsidiary has taken, is taking or proposes to take with respect thereto; (iii) within ten (10) Business Days after the Company or any of its Subsidiaries receives notice of any unfavorable determination letter from the IRS regarding the qualification of a Plan under Section 401(a) of the Code, copies of each such letter; (iv) within ten (10) Business Days after the filing thereof with the IRS, a copy of each funding waiver request filed with respect to any Benefit Plan and all communications received by the Company or a member of the Controlled Group with respect to such request; (v) within ten (10) Business Days after receipt by the Company or any member of the Controlled Group of the PBGC's intention to terminate a Benefit Plan or to have a trustee appointed to administer a Benefit Plan, copies of each such notice; (vi) within ten (10) Business Days after receipt by the Company or any member of the Controlled Group of a notice from a Multiemployer Plan regarding the imposition of withdrawal liability, copies of each such notice; (vii) within ten (10) Business Days after the Company or any member of the Controlled Group fails to make a required installment or any other required payment under Section 412 of the Internal Revenue Code on or before the due date for such installment or payment, a notification of such failure; and (viii) within ten (10) Business Days after the Company or any member of the Controlled Group knows or has reason to know that (a) a Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan. For purposes of this SECTION 7.1(e), the Company, any of its Subsidiaries and any member of the Controlled Group shall be deemed to know all facts known by the Administrator of any Plan of which the Company or any member of the Controlled Group or such Subsidiary is the plan sponsor. (f) Other Reports. Deliver or cause to be delivered to the Holders copies of all financial statements, reports and notices, if any, sent or made available generally by the Company to owners of ownership, membership or other equity interests in the Company or filed with the Commission by the Company, all press releases made available generally by the Company or any of the Company's Subsidiaries to the public concerning material developments in the business of the Company or any such Subsidiary and all notifications received from the -18- Commission by the Company or its Subsidiaries pursuant to the Securities Exchange Act and the rules promulgated thereunder. (g) Environmental Notices. As soon as possible and in any event within ten (10) days after receipt by the Company or any of its Subsidiaries, a copy of (i) any notice or claim to the effect that the Company or any of its Subsidiaries is or may be liable to any Person as a result of the Release by the Company, any of its Subsidiaries, or any other Person of any Contaminant into the environment, and (ii) any notice alleging any violation of any Environmental, Health or Safety Requirements of Law by the Company or any of its Subsidiaries if, in either case, such notice or claim relates to an event which could reasonably be expected to subject the Company or any of its Subsidiaries to liability in excess of $5,000,000. (h) Other Information. Promptly upon receiving a request therefor from any Holder, prepare and deliver to the Holders such other information with respect to the business, Property, prospects, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries as from time to time may be reasonably requested by any Holder. Section 7.2. Inspection. The Company shall permit the representatives of each holder of Notes that is an Institutional Investor: (a) No Default - if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company's officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and (b) Default - if a Default or Event of Default then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested. Section 7.3. Information Required by Rule 144A. The Company covenants that it will upon the request of the holder of any Note, provide such holder, and any qualified institutional buyer designated by such holder, such financial and other information as such holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144A under the Securities Act in connection with the resale of Notes, except at such times as the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. For the purpose of this SECTION 7.4, the term "qualified institutional buyer" shall have the meaning specified in Rule 144A under the Securities Act. -19- SECTION 8. PREPAYMENT OF THE NOTES. Section 8.1. Required Prepayments. (a) Without Make-Whole Premium. (i) On December 30, 2006 and December 30, 2007 the Company will prepay $6,666,667 principal amount (or such lesser principal amount as shall then be outstanding) of the Series G Notes at par and without payment of the Make-Whole Amount or any premium, provided that upon any partial prepayment of the Series G Notes pursuant to SECTION 8.2 or purchase of the Series G Notes permitted by SECTION 8.5 the principal amount of each required prepayment of the Series G Notes becoming due under this SECTION 8.1 on and after the date of such prepayment or purchase shall be reduced in the same proportion as the aggregate unpaid principal amount of the Series G Notes is reduced as a result of such prepayment or purchase. (ii) On December 17, 2007 the Company will prepay $12,500,000 principal amount (or such lesser principal amount as shall then be outstanding) of the Series H Notes at par and without payment of the Make-Whole Amount or any premium, provided that upon any partial prepayment of the Series H Notes pursuant to SECTION 8.2 or purchase of the Series H Notes permitted by SECTION 8.5 the principal amount of each required prepayment of the Series H Notes becoming due under this SECTION 8.1 on and after the date of such prepayment or purchase shall be reduced in the same proportion as the aggregate unpaid principal amount of the Series H Notes is reduced as a result of such prepayment or purchase. (b) With Make-Whole Premium. (i) On the last day of each month commencing with April 30, 2002 through and including December 31, 2002, the Company will prepay the Notes in an aggregate principal amount equal to the product of the Series C-H Note Principal Allocation times $1,166,667, together with the Make-Whole Amount payable with respect thereto; provided that no portion of such prepayment shall be applied to any Deferral Fee Note or Make-Whole Note. (ii) On the last day of each month commencing with January 31, 2003 through December 31, 2003, the Company will prepay the Notes in an aggregate principal amount equal to the product of the Series C-H Note Principal Allocation times $4,958,333, together with the Make-Whole Amount payable with respect thereto; provided that no portion of such prepayment shall be applied to any Deferral Fee Note or Make-Whole Note. (iii) Within three Business Days after the each of each fiscal quarter of the Company (commencing with the fiscal quarter ending on June 30, 2002), the Company will prepay the Notes in an aggregate principal amount equal to the product of the Series C-H Note Principal Allocation times the Excess Cash Flow if positive, for such quarter, together with the Make-Whole Amount payable with respect thereto; provided that no portion of such prepayment shall be applied to any Deferral Fee Note or Make-Whole Note. (iv) All prepayments made under and pursuant to this SECTION 8.1(b) shall be applied in accordance with the terms and provisions of SECTION 8.3. All amounts of Make-Whole Amount due and payable with respect to such prepayments shall be added to the outstanding -20- principal amount of the Make-Whole Notes and an appropriate entry on the grid attached thereto shall be made by each holder of such Make-Whole Notes. Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes (other than the Deferral Fee Notes and the Make-Whole Notes unless all Notes are paid in full at such time), in an amount not less than 10% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment (but if in the case of a partial prepayment, then against each series of Notes in proportion to the aggregate principal amount outstanding on each series), at 100% of the principal amount so prepaid, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this SECTION 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify (a) such date, (b) the aggregate principal amount of the Notes to be prepaid on such date, (c) the principal amount of each series of Notes to be prepaid and the principal amount of each Note held by such holder to be prepaid (in each case determined in accordance with SECTION 8.3), and (d) the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date. Section 8.3. Allocation of Partial Prepayments. In the case of each partial prepayment of the Notes and any prepayment made under SECTION 8.1(b), the principal amount of the Notes to be prepaid shall be: (a) allocated among each series of Notes in proportion to the aggregate unpaid principal amount of each such series of Notes (not counting Make-Whole Notes and Deferred Fee Notes for this purpose), and (b) allocated pro rata among all of the holders of each series of Notes at the time outstanding in accordance with the unpaid principal amount thereof; provided that, within each series, all such partial prepayments shall be applied against the principal amount of the Notes of such series scheduled to become due in the inverse order of maturity thereof. Section 8.4. Maturity; Surrender, etc. In the case of each prepayment of Notes pursuant to this SECTION 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note. -21- Section 8.5. Purchase of Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any series of the outstanding Notes or any part or portion of any thereof, except upon the payment or prepayment of each series of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes. Section 8.6. Make-Whole Amount. The term "Make-Whole Amount" means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings: "Called Principal" means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to SECTIONS 8.1(b) OR 8.2 or has become or is declared to be immediately due and payable pursuant to SECTION 12.1, as the context requires. "Discounted Value" means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. "Reinvestment Yield" means, with respect to the Called Principal of any Note, .50% over the yield to maturity implied by (a) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as "Page PX1" on the Bloomberg Financial Markets Services Screen (or such other display as may replace Page PX1 on the Bloomberg Financial Markets Services Screen) for actively traded U.S. Treasury securities having a maturity closest to the Remaining Average Life of such Called Principal as of such Settlement Date, or (b) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H. 15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (i) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (ii) interpolating linearly between (1) the actively traded U.S. Treasury security with the duration closest to and greater than the Remaining Average Life of such Called Principal and (2) the actively traded U.S. Treasury security with the duration closest to and less than the Remaining Average Life. -22- "Remaining Average Life" means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (a) such Called Principal into (b) the sum of the products obtained by multiplying (i) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (ii) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. "Remaining Scheduled Payments" means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to SECTIONS 8.1(b), 8.2 or 12.1. "Settlement Date" means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to SECTIONS 8.1(b) OR 8.2 or has become or is declared to be immediately due and payable pursuant to SECTION 12.1, as the context requires. Notwithstanding anything to the contrary contained herein or in the Notes, for purposes of computing any Make-Whole Amount under this Agreement, (1) the "scheduled due date" of the Called Principal of the Series C Notes shall be deemed to be March 13, 2002 and (2) all Remaining Scheduled Payments on the Notes shall be determined on the assumption that the interest rates borne by the Notes are as follows: (A) with respect to the Series C Notes, 7.16% per annum, (B) with respect to the Series D Notes, 7.31% per annum, (C) with respect to the Series E Notes, 7.36% per annum, (D) with respect to the Series F Notes, 7.47% per annum, (E) with respect to the Series G Notes, 7.53% per annum and (F) with respect to the Series H Notes, 7.55% per annum. SECTION 9. AFFIRMATIVE COVENANTS. The Company covenants that from and after the date of the Closing and continuing so long as any of the Notes are outstanding: Section 9.1. Existence, Etc. Except with respect to the inactive Subsidiaries identified on SCHEDULE 5.4 hereof, the Company shall, and shall cause each of its Subsidiaries to, at all times maintain its existence and preserve and keep, or cause to be preserved and kept, in full force and effect its rights and franchises material to its businesses, and except that any Subsidiary of the Company may merge with or liquidate into the Company or any other Subsidiary of the Company, provided that the surviving entity expressly assumes any liabilities, if any, of any of such Subsidiaries with respect to the Obligations pursuant to an assumption agreement reasonably satisfactory to the Required Holders and provided further that the consolidated net worth of the surviving corporation is not less than the consolidated net worth of -23- the Subsidiary with any liability with respect to the Obligations immediately prior to such merger. The Holders acknowledge that the Company intends to, and the Company hereby agrees to, legally dissolve by no later than sixty (60) days after the Closing the inactive Subsidiaries identified on SCHEDULE 5.4 hereof, and the Holders expressly consent to such dissolution. Section 9.2. Powers. The Company shall, and shall cause each of its Subsidiaries to, qualify and remain qualified to do business in each jurisdiction in which the nature of its business requires it to be so qualified and where the failure to be so qualified will have or is reasonably likely to have a Material Adverse Effect. Section 9.3. Compliance with Laws, Etc. The Company shall, and shall cause its Subsidiaries to, (a) comply with all Requirements of Law and all restrictive covenants affecting such Person or the business, properties, assets or operations of such Person, and (b) obtain as needed all permits, licenses and franchises necessary for its operations and maintain such permits in good standing unless failure to comply or obtain could not reasonably be anticipated to have a Material Adverse Effect. Section 9.4. Payment of Taxes and Claims. The Company shall pay, and cause each of its Subsidiaries to pay, (a) all taxes, assessments and other governmental charges imposed upon it or on any of its properties or assets or in respect of any of its franchises, business, income or property before any penalty or interest accrues thereon, and (b) all claims (including, without limitation, claims for labor, services, materials and supplies) for sums which have become due and payable and which by law have or may become a Lien (other than a Lien permitted by SECTION 10.2(c)) upon any of the Company's or such Subsidiary's property or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, however, that no such taxes, assessments and governmental charges referred to in CLAUSE (a) above or claims referred to in CLAUSE (b) above (and interest, penalties or fines relating thereto) need be paid if being contested in good faith by appropriate proceedings diligently instituted and conducted and if such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor; and provided further that no Default or Event of Default shall arise or occur with respect to this SECTION 9.4 unless unpaid taxes, assessments, governmental charges and claims (other than those being contested pursuant to the preceding proviso) exceed $1,000,000 in the aggregate. Section 9.5. Intentionally Omitted. Section 9.6. Inspection of Property; Books and Records; Discussions. In addition to the provisions set forth in SECTION 7.2, the Company shall permit, and cause each of the Company's Subsidiaries to permit, (a) any authorized representative(s) designated by any Holder to visit and inspect any of the properties of the Company or any of its Subsidiaries, to examine, audit, check and make copies of their respective financial and accounting records, books, journals, orders, receipts and any correspondence and other data relating to their respective businesses or the transactions contemplated hereby (including, without limitation, in connection with environmental compliance, hazard or liability), and to discuss their affairs, finances and accounts with their directors, officers, employees and independent certified public accountants, -24- and (ii) permit the Collateral Agent or any of its agents or representatives to conduct a comprehensive field audit of its books, records, properties and assets, including without limitation, the Collateral, all upon reasonable notice, at such reasonable times during normal business hours, as often as may be reasonably requested and at the cost and expense of the Company; provided, however, so long as no Event of Default has occurred and is continuing, the Collateral Agent shall not conduct more than one (1) such comprehensive field audit during any twelve (12) month period and the reimbursable cost associated therewith shall not exceed $15,000. The Company shall keep and maintain, and cause each of the Company's Subsidiaries to keep and maintain, in all material respects, proper books of record and account in which entries in conformity with GAAP shall be made of all dealings and transactions in relation to their respective businesses and activities. If a Default has occurred and is continuing, the Company, upon the request of the Required Holders, shall turn over any such records to the Holders or their representatives. Section 9.7. ERISA Compliance. The Company shall, and shall cause each of the Company's Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Plans to comply in all material respects with the provisions of ERISA, the Code, all other applicable laws, and the regulations and interpretations thereunder and the respective requirements of the governing documents for such Plans. Section 9.8. Maintenance of Properties; Insurance. The Company shall maintain, preserve and protect all Property that is material to the conduct of the business of the Company or any of its Subsidiaries and keep such Property in good repair, working order and condition and from time to time make, or cause to be made all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times in accordance with customary and prudent business practices for similar businesses; and maintain in full force and effect insurance with responsible and reputable insurance companies or associations in such amounts, on such terms and covering such risks, including fire and other risks insured against by extended coverage, as is usually carried by companies engaged in similar businesses and owning similar properties similarly situated and maintain in full force and effect public liability insurance, insurance against claims for personal injury or death or property damage occurring in connection with any of its activities or any properties owned, occupied or controlled by it, in such amounts as it shall reasonably deem necessary, and maintain such other insurance as may be required by law. The Company shall deliver to the Collateral Agent, by no later than thirty (30) days after the Closing, endorsements (y) to all "All Risk" physical damage insurance policies on all of the Company's and its Subsidiaries' tangible personal property and assets and business interruption insurance policies naming the Collateral Agent as loss payee, and (z) to all general liability and other liability policies naming the Collateral Agent and each Holder as an additional insured. In the event the Company or any of its Subsidiaries, at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required herein or to pay any premium in whole or in part relating thereto, then the Collateral Agent, without waiving or releasing any obligations or resulting Default hereunder, may at any time or times thereafter (but shall be under no obligation to do so) obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto which the Collateral Agent deems advisable. -25- Section 9.9. Environmental Compliance. The Company and its Subsidiaries shall comply with all Environmental, Health or Safety Requirements of Law, except where noncompliance will not have or is not reasonably likely to subject the Company and its Subsidiaries to liability, individually or in the aggregate, in excess of $5,000,000 (excluding amounts covered by indemnity claims that are not in dispute). Section 9.10. Foreign Employee Benefit Compliance. The Company shall, and shall cause each of its Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Foreign Employee Benefit Plans to comply in all material respects with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Plans, except for failures to comply which, in the aggregate, would not result in liability in excess of $1,000,000. Section 9.11. Maintenance of Rights. The Company shall obtain and maintain, and shall cause each of its Subsidiaries to obtain and maintain, in full force and effect all licenses, franchises, permits other similar rights necessary for the operation of its business, except where the failure to obtain or maintain such rights does not have and could not reasonably be expected to have a Material Adverse Effect. Section 9.12. Conduct of Business. Subject to SECTIONS 9.1(a) and 10.2(h), the Company will continue, and will cause each Subsidiary to continue, to engage primarily in the material lines of business which the Company and its Subsidiaries operate, respectively, as of the Closing. Section 9.13. Subsidiary Documentation. As soon as practicable and in any event within 30 days after any Person becomes a Domestic Subsidiary of the Company, the Company shall cause each such Person to execute and deliver a Note Guaranty to the Holders and Collateral Documents to the Collateral Agent and to deliver or cause to be delivered to the Holders (in the case of a Note Guaranty) and the Collateral Agent (in the case of any Collateral Documents) all related documentation with respect to the execution and delivery of such Note Guaranty and Collateral Documents by such Person that the Holders or Collateral Agent may reasonably request, including, without limitation, certified resolutions, incumbency certificates, organizational documents and legal opinions. Section 9.14. Collateral Documents; Post-Closing Real Estate Covenants. (a) The Company shall execute or cause to be executed: (1) on or prior to the Closing, (i) the Security Agreement, (ii) one or more Pledge Agreements with respect to all of the Capital Stock owned by the Company and its Domestic Subsidiaries of each of the Domestic Subsidiaries in existence on the Closing, (iii) a Mortgage from the title owner of the Lafayette Property with respect to the Lafayette Property, and (iv) such vehicle title applications (other than with respect to vehicles subject to the Fleet Lease Transaction or the National City Lease Transaction) as the Collateral Agent may request, accompanied by the relevant vehicle titles and fees to be filed with the applicable Governmental Authorities to reflect the Collateral Agent as lienholder; -26- (2) (i) within five (5) Business Days after any Subsidiary becoming a Domestic Subsidiary, a Pledge Agreement (or supplement thereto) with respect to all of the Capital Stock of such Subsidiary owned by the Company and its Domestic Subsidiaries and (ii) within thirty (30) days after any Subsidiary becoming a First Tier Foreign Subsidiary, a pledge agreement (or supplement thereto) or share mortgage in favor of the Collateral Agent for the benefit of the Secured Parties with respect to the lesser of (x) 100% (or, in respect of any First Tier Foreign Subsidiary, 65% so long as a 100% pledge would cause such First Tier Foreign Subsidiary's accumulated and undistributed earnings and profits to be deemed to be repatriated to the Company or a Domestic Subsidiary for U.S. federal income tax purposes) of all the outstanding Capital Stock of each First Tier Foreign Subsidiary and (y) all of the outstanding Capital Stock of each First Tier Foreign Subsidiary currently or hereafter owned by the Company and its Domestic Subsidiaries; and provided that no such pledge of the Capital Stock of a First Tier Foreign Subsidiary shall be required hereunder to the extent such pledge is prohibited by applicable law or the Collateral Agent and its counsel reasonably determine that such pledge would not provide material Collateral for the benefit of the Secured Parties pursuant to legally binding, valid and enforceable Pledge Agreements; (3) within five (5) Business Days after any Subsidiary becoming a Guarantor, a supplement to the Security Agreement (in the form attached thereto), and the other documents required by the Collateral Agent in connection therewith; (4) within thirty (30) days after the Company or any Domestic Subsidiary acquires any fee interest in real property, a Mortgage executed by such acquiring Person, accompanied by such title reports, title insurance, surveys, appraisals and environmental reports (collectively, "Real Estate Instruments") as are requested by the Collateral Agent (provided that the foregoing shall not apply to any real property that is (1) or is expected to be the subject of the SunTrust Sale Leaseback or (2) identified on SCHEDULE 9.14(a) hereof; (5) within ten (10) days after any Loan Party acquires an ownership interest in any vehicle and other item of rolling stock subject to a certificate of title law, to the extent so required by the Collateral Agent, an appropriate vehicle title application (other than with respect to vehicles subject to the Fleet Lease Transaction or the National City Lease Transaction) accompanied by the relevant vehicle title and fee to be filed with the applicable Governmental Authority to reflect the Collateral Agent as lienholder with respect to such vehicle or other item of rolling stock; and the Company shall deliver to the Collateral Agent all such Pledge Agreements, Note Guarantees and other Collateral Documents, together with appropriate corporate resolutions and other documentation (including opinions, UCC financing statements, real estate title insurance policies, environmental reports, the stock certificates representing the Capital Stock subject to such pledge, stock powers with respect thereto executed in blank, and such other documents as shall be reasonably requested to perfect the Lien of such pledge) in each case in form and substance reasonably satisfactory to the Collateral Agent; provided that, with respect to the pledge of Capital Stock in First Tier Foreign Subsidiaries in existence on the date hereof and vehicles and real estate owned by the Company or any of its Domestic Subsidiaries on the date hereof, such relevant Pledge Agreements, vehicle title applications and Real Estate Instruments -27- are required to be delivered hereunder at the times and in the manner required in writing by the Holders. (b) In addition to the terms and provisions of SECTION 9.14(a), the Company shall, and shall cause its Subsidiaries to, within the time periods set forth below (to the extent such actions have not occurred on or prior to the Closing), cause the following to occur: (1) with respect to the Layfayette Property: (a) within seven (7) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; (b) within seven (7) days of the Closing, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the Lafayette Property; (c) within sixty (60) days of the Closing, deliver a Phase I Environmental Assessment addressed to and in form and substance reasonably satisfactory to the Holders, and prepared by an environmental engineering firm reasonably acceptable to the Holders; (d) within seven (7) days of the Closing, deliver a legal opinion in the form as set forth in EXHIBIT 4.4(c) hereto from Baker & Daniels regarding such Mortgage; (e) within seventy-five (75) days of the Closing, deliver an ALTA plat of survey prepared by a surveyor licensed in the State of Indiana with respect to the Layfayette Property; and (f) within sixty (60) days of delivery of the survey, cause any necessary adjustments or modifications to the Mortgage or the title insurance policy as may be reasonably required to reflect the survey and the facts set forth therein on the title insurance policy and the Mortgage; (2) with respect to each Material Real Estate Property: (a) within fifteen (15) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; (b) within thirty (30) days of the Closing, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the such property; (c) within sixty (60) days of the Closing, deliver a Phase I Environmental Assessment addressed to and in form and substance reasonably satisfactory to the Holders, and prepared by an environmental engineering firm reasonably acceptable to the Holders; (d) within thirty (30) days of the Closing, deliver a legal opinion in the form as set forth in EXHIBIT 4.4(c) hereto from special local counsel reasonably satisfactory to the Holders regarding such Mortgage; (e) within seventy-five (75) days of the Closing, deliver an ALTA plat of survey prepared by a surveyor licensed in the state where such property is located with respect to such property; and (f) within sixty (60) days of delivery of the survey, cause any necessary adjustments or modifications to the Mortgage or the title insurance policy as may be reasonably required to reflect the survey and the facts set forth therein on the title insurance policy and the Mortgage; (3) with respect to each Significant Real Estate Property: (a) within forty-five (45) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; and (b) within forty-five (45) days of the Closing, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the such property; -28- (4) with respect to all other real property owned by the Company or its Domestic Subsidiaries: (a) within sixty (60) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; and (5) with respect to all properties which are anticipated to be included in the SunTrust Sale Leaseback, the Company agrees that if such SunTrust Sale Leaseback is not consummated on or prior to December 31, 2002, or if any property which was anticipated to be included in such SunTrust Sale Leaseback and is not so included, the Company shall comply or cause its Domestic Subsidiaries to comply with the terms and provisions of this SECTION 9.14(b) with respect to each such property on or prior to December 31, 2002 in the case of all such properties if the SunTrust Sale Leaseback is not consummated and within forty-five (45) days from the date any property is no longer anticipated to be included in the SunTrust Sale Leaseback. Section 9.15. Restructuring Consultant. The Company shall engage and retain, until such time as the Required Secured Parties so require, a restructuring consulting firm acceptable to the Required Secured Parties and the Company shall cause such restructuring consulting firm to deliver such financial reports, statements and analysis to any Holders as such Holder may reasonably request from time to time. Each Holder hereby acknowledges that the Company has engaged and retained PricewaterhouseCoopers as its restructuring consultant and agrees that PricewaterhouseCoopers is acceptable to each Holder. Section 9.16. Chief Restructuring Officer. In the event the Company has not appointed a full-time permanent chief executive officer by September 30, 2002, the Company shall appoint and retain, until a full-time permanent chief executive officer of the Company is appointed, a chief restructuring officer with such qualifications and experience as are acceptable to the Required Secured Parties, which officer shall report directly to the Company's board of directors. The Company shall vest such officer with control over the operations of the Company and its Subsidiaries. Furthermore, until a full-time permanent chief executive officer of the Company is appointed, the Company hereby agrees to furnish to the Holders, promptly and in any event within (a) three (3) calendar days after the Company obtaining knowledge thereof, a statement of the chief financial officer or treasurer of the Company setting forth details of any and all material developments in the Company's search for a full-time permanent chief executive officer and (b) 15 days after the end of each calendar month, a statement of the chief financial officer or treasurer of the Company setting forth details of any and all steps the Company proposes to take with respect to selecting a full-time permanent chief executive officer. Section 9.17. Approved Refinancing Indebtedness. The Company shall incur Approved Refinancing Indebtedness on or prior to March 30, 2004 in an aggregate principal amount equal to or in excess of the amount of Indebtedness of the Company which matures on March 30, 2004. SECTION 10. NEGATIVE COVENANTS; FINANCIAL COVENANTS. Section 10.1. Fiscal Year 2004 Covenants. The Company covenants that from and after December 31, 2003 and continuing so long as any of the Notes are outstanding: -29- (a) Consolidated Tangible Net Worth. The Company will at all times keep and maintain Consolidated Tangible Net Worth at an amount not less than the sum of (i) $110,000,000 plus (ii) 75% of Consolidated Net Income computed on a cumulative basis for each of the elapsed fiscal quarters ending after December 31, 2003; provided that notwithstanding that Consolidated Net Income for any such elapsed fiscal quarter may be a deficit figure, no reduction as a result thereof shall be made on the sum to be maintained pursuant hereto. (b) Funded Debt. The aggregate amount of all Consolidated Funded Debt shall not at any time exceed 50% of Consolidated Total Capitalization. (c) Priority Debt. The aggregate amount of all Consolidated Priority Debt outstanding at any time shall not exceed 20% of Consolidated Tangible Net Worth. (d) Minimum Interest Coverage Ratio. The Company shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ending on or about March 30, 2004), for the period of four consecutive fiscal quarters then ending, to be less than 4.00 to 1. (e) Maximum Leverage Ratio. The Company shall not permit the ratio of (i) Consolidated Funded Debt to (ii) Consolidated EBITDA as of the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ending on or about March 30, 2004), for the period of four consecutive fiscal quarters then ending, to be greater than 2.85 to 1. Section 10.2. Negative Covenants. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding: (a) Indebtedness. Neither the Company nor any of its Subsidiaries shall directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except: (i) the Obligations; (ii) Permitted Existing Indebtedness; (iii) Indebtedness arising from intercompany loans from the Company or any Subsidiary to any Subsidiary so long as intercompany loans from the Company or any Domestic Subsidiary to a Foreign Subsidiary shall not exceed an aggregate of $5,000,000 during the term of this Agreement; (iv) Indebtedness with respect to surety, appeal and performance bonds obtained by the Company or any of its Subsidiaries in the ordinary course of business; (v) Indebtedness constituting Contingent Obligations permitted by SECTION 10.2(e); -30- (vi) unsecured Indebtedness and other liabilities incurred in the ordinary course of business and consistent with past practice, but not incurred through the borrowing of money or the obtaining of credit (other than customary trade terms); (vii) Indebtedness evidenced by the Bank Notes and other Indebtedness under the Credit Agreement in an aggregate principal amount not to exceed $125,000,000 plus the PIK Notes (as defined in the Credit Agreement); (viii) Indebtedness incurred in connection with the Receivables Purchase Documents; provided that Receivables Facility Attributed Indebtedness incurred in connection therewith does not exceed $110,000,000 in the aggregate at any time; (ix) other unsecured Indebtedness in an aggregate principal amount not exceeding $3,000,000 at any time outstanding; and (x) the Approved Refinancing Indebtedness. (b) Sales of Assets. Except in connection with the SunTrust Sale Leaseback and the sale of any of the assets and properties or consummation of the transactions identified on SCHEDULE 10.2(b) hereto, neither the Company nor any of its Subsidiaries shall sell, assign, transfer, lease, convey or otherwise dispose of any property, whether now owned or hereafter acquired, or any income or profits therefrom, or enter into any agreement to do so, except: (i) sales of inventory in the ordinary course of business; (ii) the disposition of obsolete equipment in the ordinary course of business; (iii) Permitted Receivables Transfer; (iv) sales by Apex Trailer Leasing & Rentals, L.P. in the ordinary course of business of lease and other finance contract receivables and equipment subject to lease, if such transaction (a) is for not less than fair market value and (b) when combined with all other such sales during the then current fiscal year represents disposition of not greater than 50% of Apex Trailer Leasing & Rentals, L.P.'s Tangible Assets at the end of the immediately preceding fiscal year; (v) transfers of assets by the Company or any Subsidiary to any Subsidiary so long as (1) in the case of a transferee which is a Domestic Subsidiary, the security interests granted pursuant to the Collateral Documents in the events so transferred shall remain in full force and effect and perfected and (2) transfers of assets by the Company or any Domestic Subsidiary to any Foreign Subsidiary shall not exceed an aggregate of $1,000,000 during the term of this Agreement. (c) Liens. Neither the Company nor any of its Subsidiaries shall directly or indirectly create, incur, assume or permit to exist any Lien on or with respect to any of their respective property or assets except: -31- (i) Permitted Existing Liens; (ii) Customary Permitted Liens; (iii) purchase money Liens (including the interest of a lessor under a Capitalized Lease and Liens to which any property is subject at the time of the acquisition thereof by the Company or one of its Subsidiaries) securing permitted purchase money Indebtedness; provided that such Liens shall not apply to any property of the Company or its Subsidiaries other than that purchased or subject to such Capitalized Lease; (iv) Liens arising in connection with the Permitted Receivables Transfer; (v) Environmental Liens securing liabilities, claims, costs or damages not exceeding $5,000,000 in the aggregate; (vi) Liens created by the Collateral Documents; and (vii) Liens granted by a Foreign Subsidiary on Property located in Canada to the extent securing Indebtedness permitted by SECTION 10.2(a)(iii). In addition, neither the Company nor any or its Subsidiaries shall, after the date hereof, become a party to any agreement, note, indenture or other instrument (other than the Intercreditor Agreement), or take any other action, which would prohibit the creation of a Lien on any of its properties or other assets in favor of the Collateral Agent for the benefit of itself and the Secured Parties as collateral for the Secured Obligations; provided that any agreement, note, indenture or other instrument in connection with permitted purchase money Indebtedness (including Capitalized Lease Obligations) may prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of itself and the Secured Parties on the items of property obtained with the proceeds of such permitted purchase money Indebtedness; and provided further that the Receivables Purchase Documents may prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of itself and the other Secured Parties on the assets of WNC and on the "Transferred Assets" (as defined in the Receivables Sale Agreement) of the Originators. (d) Investments. Neither the Company nor any of its Subsidiaries shall directly or indirectly make or own any Investment except: (i) Investments in Cash Equivalents; (ii) Permitted Existing Investments; (iii) Investments received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; -32- (iv) Investments consisting of deposit accounts maintained by the Company or any of its Subsidiaries in connection with their cash management systems; (v) Investments with respect to Indebtedness permitted pursuant to SECTION 10.2(a)(iii); (vi) Existing Investments in any Subsidiaries; (vii) Investments consisting of minority interests and joint ventures and loans or advances to such entities, provided that at the time any such Investment is made the amount of all Investments under this CLAUSE (vii) (including such new Investment, and including all Permitted Existing Investments that are of the type covered by this CLAUSE (vii)) does not exceed $5,000,000 at such time; (viii) Investments in WNC required in connection with the Receivables Purchase Documents; and (ix) Investments in connection with Permitted Acquisitions. (e) Contingent Obligations. Neither the Company nor any of its Subsidiaries shall directly or indirectly create or become or be liable with respect to any Contingent Obligation, except: (i) recourse obligations resulting from endorsement of negotiable instruments for collection in the ordinary course of business; (ii) Permitted Existing Contingent Obligations and any extensions, renewals or replacements thereof, provided that any such extension, renewal or replacement is not greater than the Indebtedness under, and shall be on terms no less favorable to the Company or such Subsidiary than the terms of, the Permitted Existing Contingent Obligation being extended, renewed or replaced; (iii) obligations, warranties, and indemnities, not relating to Indebtedness of any Person, which have been or are undertaken or made in the ordinary course of business and not for the benefit of or in favor of an Affiliate of the Company or such Subsidiary; (iv) Contingent Obligations of the Company or any of its Subsidiaries with respect to any Indebtedness permitted by this Agreement; and (v) Contingent Obligations with respect to surety, appeal and performance bonds obtained by the Company or any Subsidiary in the ordinary course of business. (f) Acquisitions. Neither the Company nor any of its Subsidiaries shall make any Acquisition other than a Permitted Acquisition. (g) Transactions with Shareholders or Affiliates. Neither the Company nor any of its Subsidiaries shall directly or indirectly enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder or holders of any Equity Interests of the Company, or with any Affiliate of the Company which is not its Subsidiary, on terms that are less favorable to the Company or its Subsidiaries, as applicable, than those that might be obtained in an arm's length transaction at the time from Persons who are not such a holder or Affiliate. -33- (h) Restriction on Fundamental Changes. Neither the Company nor any of its Subsidiaries shall enter into any merger or consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell, transfer or otherwise dispose of, in one transaction or series of transactions, all or substantially all of the Company's or any such Subsidiary's business or property, whether now or hereafter acquired, except transactions permitted under SECTIONS 10.2(b) AND 10.2(f) and except that any Subsidiary of the Company may merge with or liquidate into the Company or any other Subsidiary of the Company, provided that the surviving entity expressly assumes any liabilities, if any, of either of such Subsidiaries with respect to the Obligations pursuant to an assumption agreement reasonably satisfactory to the Required Holders and provided further that the consolidated net worth of the surviving corporation is not less than the consolidated net worth of the Subsidiary with any liability with respect to the Obligations immediately prior to such merger. (i) Margin Regulations. Neither the Company nor any of its Subsidiaries shall use all or any portion of the proceeds of any credit extended under this Agreement to purchase or carry Margin Stock. (j) ERISA. The Company shall not: (i) engage, or permit any of its Subsidiaries to engage, in any prohibited transaction described in Sections 406 of ERISA or 4975 of the Code for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the DOL; (ii) permit to exist any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of the Internal Revenue Code), with respect to any Benefit Plan, whether or not waived; (iii) fail, or permit any Controlled Group member to fail, to pay timely required contributions or annual installments due with respect to any waived funding deficiency to any Benefit Plan; or (iv) terminate, or permit any Controlled Group member to terminate, any Benefit Plan which would result in any liability of the Company or any Controlled Group member under Title IV of ERISA. (k) Fiscal Year. Neither the Company nor any of its consolidated Subsidiaries shall change its fiscal year for accounting or tax purposes from a period consisting of the 12-month period ending on December 31 of each calendar year. (l) Prepayment of Other Indebtedness. Neither the Company nor any of its Subsidiaries shall make any optional prepayment, redemption, repurchase or defeasance of any Indebtedness of the Company or any such Subsidiary which would, in accordance with GAAP, constitute long-term Indebtedness, other than the Obligations, any intercompany indebtedness permitted by SECTION 10.2(a)(iii) and other Indebtedness described on SCHEDULE 10.2(l) hereto. -34- (m) Limitations on Restrictive Agreements. Neither the Company nor any of its Subsidiaries shall enter into, or suffer to exist, any agreement (other than the Credit Agreement, the Series A Note Purchase Agreements and the Series I Note Purchase Agreement with any Person which, directly or indirectly, prohibits or limits the ability of any Subsidiary to (i) pay dividends or make other distributions to the Company or prepay any Indebtedness owed to Company or (ii) transfer any of its properties or assets to the Company (other than with respect to assets subject to Liens permitted by SECTION 10.2(c)). (n) Leases. Except in connection with the SunTrust Sale Leaseback, the Fleet Lease Transaction and the National City Lease Transaction, the Company shall not create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any obligation as lessee for the rental or hire of any real or personal property, except: (i) leases existing on the date of this Agreement and any extensions or renewals thereof, but no increase in the amount payable thereunder; and (ii) leases (other than Capitalized Leases or leases constituting Off-Balance Sheet Liabilities) which do not in the aggregate require the Company and its Subsidiaries on a consolidated basis to make payments (including taxes, insurance, maintenance and similar expenses which the Company or any Subsidiary is required to pay under the terms of any lease) at any time during the term of this Agreement in excess of $3,500,000. (o) [Intentionally Omitted.] (p) Hedging Obligations. Enter into any interest rate, commodity or foreign currency exchange, swap, collar, cap or similar agreements evidencing Hedging Obligations, other than interest rate, foreign currency or commodity exchange, swap, collar, cap or similar agreements entered into by the Company pursuant to which the Company has hedged its actual or forecasted interest rate, foreign currency or commodity exposure. Such permitted hedging agreements entered into by the Company and any Lender or any affiliate of any Lender to hedge floating interest rate risk in an aggregate notional amount not to exceed at any time an amount equal to the outstanding balance of the Term Loans and the principal Indebtedness under the Senior Notes at such time are sometimes referred to herein as "Interest Rate Agreements". (q) Sales and Leasebacks. Neither the Company nor any of its Subsidiaries shall become liable, directly, by assumption or by Contingent Obligation, with respect to any lease, whether an operating lease or a Capitalized Lease, of any Property (whether real or personal or mixed) (i) which it or one of its Subsidiaries sold or transferred or is to sell or transfer to any other Person, or (ii) which it or one of its Subsidiaries intends to use for substantially the same purposes as any other Property which has been or is to be sold or transferred by it or one of its Subsidiaries to any other Person in connection with such lease, unless (a) in either case the sale involved is not prohibited under SECTION 10.2(b) and the lease involved is not prohibited under SECTION 10.2(a) or (b) such sale and leaseback transaction is the SunTrust Sale and Leaseback. The parties hereto acknowledge and agree that the foregoing shall not operate to restrict, prohibit or prevent the Fleet Lease Transaction and the National City Lease Transaction. -35- (r) Issuance of Disqualified and Preferred Stock. Neither the Company nor any of its Subsidiaries shall issue any Disqualified Stock. The Company shall not issue any new shares of preferred stock and shall not permit any Subsidiary to issue any shares of preferred stock. (s) Corporate Documents. Neither the Company nor any of its Subsidiaries shall amend, modify or otherwise change any of the terms or provisions in any of their respective constituent documents as in effect on the date hereof in any manner materially adverse to the ability of the Company or any of its Subsidiaries to perform their respective obligations under the Note Documents, without the prior written consent of the Required Holders. The Company shall not amend, modify or otherwise change any of the terms or provisions of the Fruehauf Preferred Stock. (t) Other Indebtedness. The Company shall not amend, modify or supplement, or permit any Subsidiary to amend, modify or supplement (or consent to any amendment, modification or supplement of), any document, agreement or instrument evidencing the Bank Notes, the Senior Notes (other than the Notes), the NatCity Lease Transaction, the Fleet Lease Transaction, the Permitted Receivables Transfer or Subordinated Indebtedness (or any replacements, substitutions or renewals thereof) or pursuant to which any such Indebtedness is issued where such amendment, modification or supplement provides for the following or which has any of the following effects: (i) increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest; (ii) shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions; (iii) shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness; (iv) increases the rate of interest accruing on such Indebtedness; (v) provides for the payment of additional fees or increases existing fees; (vi) amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Company or a Subsidiary of the Company from taking certain actions) in a manner which is more onerous or more restrictive to the Company (or any Subsidiary of the Company) or which is otherwise materially adverse to the Company and/or the Lenders or, in the case of adding covenants, which places additional restrictions on the Company (or a Subsidiary of the Company) or which requires the Company or any such Subsidiary to comply with more restrictive covenants than the covenants set forth herein or which requires the Company to better its financial performance from that set forth in the financial covenants set forth herein; -36- (vii) amends, modifies or adds any covenant in a manner which, when taken as a whole, is materially adverse to the Company and/or the Holders; (viii) amends, modifies or supplements any subordination provisions thereof; (ix) amends or modifies the limitations on transfer provided therein; or (x) reduces the lending commitments under the Credit Agreement or the availability under the Permitted Receivables Transfer facility. (w) No Changes to Standard Warranty. The Company shall not, and shall cause its Subsidiaries to not, make any material changes to the warranty policies of the Company and its Subsidiaries in effect on the date of this Agreement. (x) Prohibition Against Trade-In-Value Guaranties. The Company shall not, and shall cause its Subsidiaries to not, make any guarantee of trade-in values of trailers beyond six months in duration. Section 10.3. Financial Covenants. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding: (a) Minimum Consolidated Tax Adjusted Equity. If the Company shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below:
Minimum Consolidated Tax Fiscal Quarter Ending Adjusted Equity - --------------------- ------------------------ March 31, 2003 $ 99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 $ 96,504,000
(b) Minimum Consolidated Equity. If the Company shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below:
Minimum Consolidated Fiscal Quarter Ending Equity - --------------------- -------------------- March 31, 2003 $87,882,000 June 30, 2003 $90,461,000 September 30, 2003 $94,751,000 December 31, 2003 $84,077,000
-37- (c) Maximum Leverage Valuation Ratio. The Company shall not permit, as of the last day of each of the fiscal quarters specified below, the Leverage Valuation Ratio to exceed the applicable "Maximum Leverage Valuation Ratio" specified below:
Maximum Leverage Fiscal Quarter Ending Valuation Ratio - --------------------- ---------------- June 30, 2002 0.95 to 1 September 30, 2002 0.95 to 1 December 31, 2002 0.95 to 1 March 31, 2003 0.85 to 1 June 30, 2003 0.80 to 1 September 30, 2003 0.80 to 1 December 31, 2003 0.75 to 1
(d) Minimum Consolidated EBITDA. (i) The Company shall, as of the last day of each of the fiscal quarters of the Company occurring in calendar year 2002, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such fiscal quarter, at an amount not less than $(20,000,000). (ii) The Company shall, as of the last day of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending:
Minimum Rolling 12 Month Consolidated Month Ending EBITDA - ------------ ------------------ January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000
(e) Minimum Interest Coverage Ratio. The Company shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ending on or about March 31, 2003), for the period of four consecutive fiscal quarters then ending, to be less than 1.25 to 1. -38- (f) Maximum Capital Expenditures. The Company will not, and will not permit any Subsidiary to, expend for Capital Expenditures during any fiscal year of the Company and its Subsidiaries, in excess of $6,000,000 in the aggregate for the Company and its Subsidiaries. (g) Maximum Finance Contracts. The Company will not, and will not permit any Subsidiary to, enter into any new Finance Contract if and to the extent that the sum of such Finance Contract (a) when added to the aggregate amount of all Finance Contracts entered by the Company or any of its Subsidiaries during the twelve (12) month period that commences on the Closing Date exceeds $5,000,000 or (b) when added to the aggregate amount of all Finance Contracts entered by the Company or any of its Subsidiaries during the twelve (12) month period that commences on the first (1st) anniversary of the Closing date exceeds $5,000,000. Section 10.4. Additional Negative Covenants. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding: (a) Restricted Payments. The Company will not, and will not permit any Subsidiary to, make any Restricted Payment; provided that the Company may, commencing with the March 15, 2003 scheduled dividend, resume (but may not make any payments that were previously due and not paid) making the regularly scheduled dividends on the Fruehauf Preferred Stock on a quarterly basis in an amount per quarter not to exceed 1.5% of the Stated Value Per Share (as defined in the Fruehauf Preferred Stock) so long as (i) no Default or Event of Default shall have occurred and be continuing hereunder, (ii) no Default or Event of Default would have occurred under the financial covenants set forth in CLAUSES (1), (2), (3) and (4) below if such financial covenants had been in full force and effect from the Closing to the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock and (iii) the Company has appointed a full-time permanent chief executive officer as of the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock. For purposes of this SECTION 10.4(a), on and prior to the date of the declaration of any proposed Restricted Payment on the Fruehauf Preferred Stock pursuant to this SECTION 10.4(a), the Company shall have, and shall have caused each of its Subsidiaries to have, complied with the following financial covenants set forth in CLAUSES (1), (2), (3) and (4) below: (1) (A) If the Company shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below:
Minimum Consolidated Fiscal Quarter Ending Tax Adjusted Equity --------------------- -------------------- June 30, 2002 $106,376,000 September 30, 2002 $113,535,000 December 31, 2002 $107,267,000 March 31, 2003 $ 99,064,000
-39- June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 $ 96,504,000
(B) If the Company shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below:
Minimum Consolidated Fiscal Quarter Ending Equity --------------------- -------------------- June 30, 2002 $101,492,000 September 30, 2002 $110,961,000 December 31, 2002 $100,966,000 March 31, 2003 $ 87,882,000 June 30, 2003 $ 90,461,000 September 30, 2003 $ 94,751,000 December 31, 2003 $ 84,077,000
(2) (A) The Company shall not permit the Interest Coverage Ratio as of the last day of the calendar months specified below, for the cumulative period commencing April, 2002 and ending on the last day of such calendar month, to be less than the applicable "Minimum Interest Coverage Ratio" specified below:
Minimum Interest Fiscal Quarter Ending Coverage Ratio --------------------- ---------------- June 30, 2002 1.50 to 1 September 30, 2002 1.50 to 1 December 31, 2002 1.25 to 1
(B) The Company shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Company specified below, for the period of four consecutive fiscal quarters then ending, to be less than the applicable "Minimum Interest Coverage Ratio" specified below:
Minimum Interest Fiscal Quarter Ending Coverage Ratio --------------------- ---------------- March 31, 2003 1.25 to 1 June 30, 2003 1.25 to 1 September 30, 2003 1.25 to 1 December 31, 2003 1.25 to 1
(3) The Company shall, as of the last day of each of the calendar months specified below, maintain Consolidated EBITDA for the cumulative -40- period commencing on April 1, 2002 and ending on the last day of such calendar month, at an amount not less than the applicable "Minimum Cumulative Consolidated EBITDA" specified below:
Minimum Cumulative Month Ending Consolidated EBITDA April 30, 2002 $ 3,841,000 May 31, 2002 $ 8,389,000 June 30, 2002 $14,722,000 July 31, 2002 $22,084,000 August 31, 2002 $28,732,000 September 30, 2002 $33,110,000 October 31, 2002 $36,753,000 November 30, 2002 $37,818,000 December 31, 2002 $37,856,000
(4) The Company shall, as of the last day of each of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending:
Month Ending Minimum Rolling 12 Month Consolidated EBITDA January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000
(b) Approved Refinancing Indebtedness. The Company will not, and will not permit any Subsidiary to, incur any Indebtedness other than (x) Indebtedness permitted under SECTION 10.2(a), (y) other Indebtedness with the written consent of 100% of the Holders of the Notes and (z) the Approved Refinancing Indebtedness. For purposes of this Agreement, "Approved Refinancing Indebtedness" shall mean Indebtedness of the Company which is either approved under clause (y) above or which satisfies each of the following requirements: -41- (i) the maximum principal amount of such Indebtedness does not exceed the outstanding principal amount of Indebtedness of the Company which matures on March 30, 2004 plus accrued interest thereon and the amount of all reasonable costs and expenses incurred in connection with the incurrence of such Indebtedness; (ii) the maturity date of such Indebtedness is no earlier than March 30, 2007; (iii) immediately prior to and after giving effect to the incurrence of such Indebtedness, no Default or Event of Default shall have occurred or be continuing under this Agreement or the Credit Agreement, including, without limitation the provisions of SECTION 10; (iv) the documentation evidencing such Indebtedness provides for collateralization, covenants and other material terms no less favorable to the Holders than those set forth in this Agreement, the Collateral Documents and the Intercreditor Agreement; and (v) such Indebtedness includes a working capital or revolving facility in an amount reasonably required to support the projected operations of the Company. SECTION 11. EVENTS OF DEFAULT. An "Event of Default" shall exist if any of the following conditions or events shall occur and be continuing: (a) Failure to Make Payments When Due. The Company shall (i) fail to pay when due any of the Obligations consisting of principal with respect to the Notes or (ii) shall fail to pay within three (3) Business Days of the date when due any of the other Obligations under this Agreement or the other Note Documents. (b) Breach of Certain Covenants. The Company shall fail duly and punctually to perform or observe any agreement, covenant or obligation binding on the Company under: (i) SECTIONS 7.1(c), 7.1(d), 7.1(e), 7.1(f), 7.1(g), 9.2, 9.3 or 9.6 and such failure shall continue unremedied for fifteen (15) days; (ii) SECTION 7.1(a) or 7.1(b) or SECTION 9.13 or SECTION 9.14 or SECTION 9.15 or SECTION 9.16 and such failure shall continue unremedied for five (5) Business Days; (iii) SECTION 10; or (iv) SECTION 9.17. (c) Breach of Representation or Warranty. Any representation or warranty made or deemed made by the Company to the Collateral Agent or any Holder herein or by the -42- Company or any of its Subsidiaries in any of the other Note Documents or in any statement or certificate at any time given by any such Person pursuant to any of the Note Documents shall be false or misleading in any material respect on the date as of which made (or deemed made). (d) Other Defaults. The Company shall default in the performance of or compliance with any term contained in this Agreement (other than as covered by PARAGRAPHS (a), (b) or (c) of this SECTION 11), or the Company or any of its Subsidiaries shall default in the performance of or compliance with any term contained in any of the other Note Documents, and such default shall continue for thirty (30) days after the earlier of (i) notice from the Collateral Agent or any Holder or (ii) the date on which the Company knew of such default or should have known of such default exercising reasonable diligence. (e) Default as to Other Indebtedness. Any of the Company or any of its Subsidiaries shall fail to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) with respect to any Indebtedness (other than the Obligations) the outstanding principal amount of which Indebtedness is in excess of $2,000,000; or any breach, default or event of default shall occur, or any other condition shall exist under any instrument, agreement or indenture pertaining to any such Indebtedness, if the effect thereof is to either cause or permit the holder thereof to cause an acceleration, mandatory redemption, a requirement that the Company or any such Subsidiary offer to purchase such Indebtedness or other required repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness to accelerate the maturity of any such Indebtedness or require a redemption or other repurchase of such Indebtedness; or any such Indebtedness shall be otherwise declared to be due and payable (by acceleration or otherwise) or required to be prepaid, redeemed or otherwise repurchased by the Company or any of its Subsidiaries (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof. (f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) An involuntary case shall be commenced against the Company or any of its Subsidiaries and the petition shall not be dismissed, stayed, bonded or discharged within sixty (60) days after commencement of the case; or a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or any of its Subsidiaries in an involuntary case, under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or any other similar relief shall be granted under any applicable federal, state, local or foreign law. (ii) A decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Company or any of its Subsidiaries or over all or a substantial part of the property of the Company or any of its Subsidiaries shall be entered; or an interim receiver, trustee or other custodian of the Company or any of its Subsidiaries or of all or a substantial part of the property of the Company or any of its Subsidiaries shall be appointed or a warrant of attachment, execution or similar process against any substantial part of the property of the Company or any of its Subsidiaries -43- shall be issued and any such event shall not be stayed, dismissed, bonded or discharged within sixty (60) days after entry, appointment or issuance. (g) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Company or any of its Subsidiaries shall (i) commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, (iii) consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property, (iv) make any assignment for the benefit of creditors or (v) take any corporate, partnership or comparable action to authorize any of the foregoing. (h) Judgments and Attachments. Any money judgment(s) (other than a money judgment covered by insurance as to which the insurance company has not disclaimed or reserved the right to disclaim coverage), writ or warrant of attachment, or similar process against any of the Company or any of its Subsidiaries or any of their respective assets involving in any single case or in the aggregate an amount in excess of $1,000,000 is (are) entered and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event later than fifteen (15) days prior to the date of any proposed sale thereunder. (i) Dissolution. Any order, judgment or decree shall be entered against the Company or any of its Subsidiaries decreeing its involuntary dissolution or split up and such order shall remain undischarged and unstayed for a period in excess of sixty (60) days; or the Company or any of its Subsidiaries shall otherwise dissolve or cease to exist except as specifically permitted by this Agreement unless the dissolving entity is a limited liability company which elects to continue its existence. (j) Note Documents; Failure of Security. At any time, for any reason, (i) any Note Document as a whole that materially affects the ability of the Collateral Agent or any of the Holders to enforce the Obligations against the Company or any Guarantor or enforce their rights against the Collateral ceases to be in full force and effect or (ii) any Loan Party seeks to repudiate its obligations under the Note Documents or (iii) after the execution and delivery of the Collateral Documents, except to the extent permitted by the terms thereof, the Collateral Documents shall cease to create a valid and perfected first priority Lien subject only to Permitted Liens in any of the Collateral purported to be covered thereby or (iv) any title insurance coverage in respect of any Material portion of the Collateral is disavowed or becomes ineffective. (k) Termination Event. Any Termination Event occurs which the Required Holders believe is reasonably likely to subject the Company or any of its Subsidiaries to liability in excess of $1,000,000. (l) Waiver of Minimum Funding Standard. If the plan administrator of any Plan applies under Section 412(d) of the Code for a waiver of the minimum funding standards of Section 412(a) of the Code and any Lender believes the substantial business hardship upon -44- which the application for the waiver is based could reasonably be expected to subject either the Company or any Controlled Group member to liability in excess of $1,000,000. (m) Change of Control. A Change of Control shall occur. (n) Environmental Matters. The Company or any of its Subsidiaries shall be the subject of any proceeding or investigation pertaining to (i) the Release by the Company or any of its Subsidiaries of any Contaminant into the environment, (ii) the liability of any of the Company or any of its Subsidiaries arising from the Release by any other Person of any Contaminant into the environment, or (iii) any violation of any Environmental, Health or Safety Requirements of Law by the Company or any of its Subsidiaries, which, in any case, has or is reasonably likely to subject the Company or any of its Subsidiaries to liability individually or in the aggregate in excess of $5,000,000 (exclusive of liabilities with respect to which the Company is maintaining reserves as of the date hereof in accordance with GAAP). (o) Collateral Documents. The Company or any Subsidiary shall fail to comply with any of the terms or provisions of any Collateral Document for five (5) Business Days, subject to any applicable cure periods contained therein, after notice of such non-compliance from the Collateral Agent. (p) Interest Rate Agreements. Nonpayment by the Company or any Subsidiary of any obligation under any Interest Rate Agreement or the breach by the Company or any Subsidiary of any term, provision or condition contained in any such Interest Rate Agreement. (q) Material Adverse Effect. A Material Adverse Effect shall occur. (r) Intercreditor Agreement. The intercreditor provisions of the Intercreditor Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, any Person (including any Secured Party) shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations hereunder shall for any reason be subordinated or shall not have the priority contemplated by this Agreement and the Intercreditor Agreement. SECTION 12. REMEDIES ON DEFAULT, ETC. Section 12.1. Acceleration. (a) If an Event of Default with respect to the Company described SECTION 11(b)(iv) or in SECTIONS 11(f) or 11(g) has occurred, all the Notes then outstanding shall automatically become immediately due and payable. (b) If any other Event of Default has occurred and is continuing, any holder or holders of more than 35% in principal amount of the Notes (other than the Deferral Fee Notes and the Make-Whole Notes) at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable. -45- (c) If any Event of Default described in PARAGRAPH (a) of SECTION 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable. Upon any Notes becoming due and payable under this SECTION 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for), and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances. Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under SECTION 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. Section 12.3. Rescission. At any time after any Notes have been declared due and payable pursuant to CLAUSE (b) OR (c) of SECTION 12.1, the holders of not less than 66-2/3% in principal amount of the Notes then outstanding (other than Make-Whole Notes and Deferral Fee Notes), by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to SECTION 17, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this SECTION 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon. Section 12.4. No Waivers or Election of Remedies, Expenses, etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder's rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of -46- the Company under SECTION 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this SECTION 12, including, without limitation, reasonable attorneys' fees, expenses and disbursements. SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. Section 13.1. Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes. Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or its attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver, at the Company's expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, of the same series and in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of EXHIBIT 1, 2, 3, 4, 5, 6, 7 or 8, as the case may be. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in SECTION 6.2. Section 13.3. Replacement of Notes. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, (i) an Institutional Investor or (ii) another holder of a Note which has a minimum net worth of at least -47- $50,000,000, such Person's own unsecured agreement of indemnity shall be deemed to be satisfactory), or (b) in the case of mutilation, upon surrender and cancellation thereof, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon. SECTION 14. PAYMENTS ON NOTES. Section 14.1. Place of Payment. Subject to SECTION 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in Chicago, Illinois at the principal office of a bank or trust company in such jurisdiction which the Company agrees to designate at any time when there is any holder of any Note not entitled to the benefits of SECTION 14.2. The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction. Section 14.2. Home Office Payment. So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in SECTION 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below your name in SCHEDULE A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to SECTION 14.1. Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to SECTION 13.2. The Company will afford the benefits of this SECTION 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by you under this Agreement and that has made the same agreement relating to such Note as you have made in this SECTION 14.2. SECTION 15. EXPENSES, ETC. Section 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable costs and expenses (including reasonable attorneys' fees of special counsel and local or other counsel) incurred by you and -48- each Other Purchaser or holder of a Note in connection with such transactions (including the execution and delivery of the Collateral Documents and the perfection of Liens thereunder) and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Collateral Documents or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Collateral Documents or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Collateral Documents or the Notes, or by reason of being a holder of any Note, and (b) the costs and expenses, including financial advisors' fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes, including without limitation, the reasonable professional fees and expenses of Ernst & Young, LLP incurred in connection with its engagement to assist the Holders in their evaluation of the projections, business assumptions and other financial information presented by the Company in connection with the transactions contemplated herein. All such reasonable fees, costs and expenses incurred after the Closing shall be paid by the Company on a monthly basis. The Company will pay, and will save you and each other holder of a Note harmless from, all claims in respect of any reasonable fees, costs or expenses, if any, of brokers and finders (other than those retained by you). Section 15.2. Survival. The obligations of the Company under this SECTION 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement. SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of you or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof. SECTION 17. AMENDMENT AND WAIVER. Section 17.1. Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, provided that (a) no amendment or waiver of any of the provisions of SECTION 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to you unless -49- consented to by you in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of SECTION 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, (iii) amend any of SECTIONS 8, 11(a), 12, 17 or 20, (iv) release all or substantially all of the Collateral other than pursuant to the transactions permitted hereunder or under another Note Document or (v) release any Guarantor from its obligations under the Note Guaranty or the Collateral Documents other than pursuant to the transactions permitted hereunder or under another Note Document. Section 17.2. Solicitation of Holders of Notes. (a) Solicitation. The Company will provide each holder of the Notes (irrespective of the amount or series of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this SECTION 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes. (b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of any series of the Notes as consideration for or as an inducement to the entering into by such holder of Notes or any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of each series of Notes then outstanding even if such holder did not consent to such waiver or amendment. Section 17.3. Binding Effect, etc. Any amendment or waiver consented to as provided in this SECTION 17 applies equally to all holders of each series of Notes and is binding upon them and upon each future holder of any Note of any series and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note of any series nor any delay in exercising any rights hereunder or under any Note of any series shall operate as a waiver of any rights of any holder of such Note. As used herein, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented. Section 17.4. Notes Held by Company, etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the -50- Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes of any series directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding. SECTION 18. NOTICES. All notices and communications provided for hereunder shall be in writing and sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent: (i) if to you or your nominee, to you or it at the address specified for such communications in SCHEDULE A, or at such other address as you or it shall have specified to the Company in writing, (ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or (iii) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of the Chief Financial Officer, or at such other address as the Company shall have specified to the holder of each Note in writing. Notices under this SECTION 18 will be deemed given only when actually received. SECTION 19. REPRODUCTION OF DOCUMENTS. This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and you may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This SECTION 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction. -51- SECTION 20. CONFIDENTIAL INFORMATION. For the purposes of this SECTION 20, "Confidential Information" means information delivered to you by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified in writing when received by you as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by you or any Person acting on your behalf, (c) otherwise becomes known to you other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to you under SECTION 7.1 that are otherwise publicly available. You will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you, provided that you may deliver or disclose Confidential Information to (i) your directors, trustees, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by your Notes), (ii) your financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this SECTION 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this SECTION 20), (v) any Person from which you offer to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this SECTION 20), (vi) any federal or state regulatory authority having jurisdiction over you, (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about your investment portfolio or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to you, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which you are a party or (z) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this SECTION 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this SECTION 20. SECTION 21. SUBSTITUTION OF PURCHASER. You shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate's agreement to -52- be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in SECTION 6. Upon receipt of such notice, wherever the word "you" is used in this Agreement (other than in this SECTION 21), such word shall be deemed to refer to such Affiliate in lieu of you. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word "you" is used in this Agreement (other than in this SECTION 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of an original holder of the Notes under this Agreement. SECTION 22. MISCELLANEOUS. Section 22.1. Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not. Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day. Section 22.3. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction. Section 22.4. Construction. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. Section 22.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. Section 22.6. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. -53- Section 22.7. WAIVER OF JURY TRIAL. THE COMPANY AND EACH HOLDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY NOTE DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER. Section 22.8. Amendment and Restatement of Original Note Purchase Agreement. The Company and the Purchasers agree that, upon (a) the execution and delivery of this Agreement by the Company and the Purchasers and (ii) satisfaction (or waiver by the Purchasers in their sole discretion) of the conditions precedent set forth in SECTION 4, the terms and provisions of the Original Note Purchase Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement. This Agreement is not intended to and shall not constitute a novation of the Original Note Purchase Agreement or the indebtedness created thereunder, including, without limitation, the Original Notes issued thereunder. Section 22.9. Release. The Company hereby acknowledges and confirms that (a) it does not have any grounds, and hereby agrees not to challenge (or to allege or to pursue any matter, cause or claim arising under or with respect to), in any case based upon acts or omissions of the Purchasers occurring prior to the date hereof or facts otherwise known to it as of the date hereof, the effectiveness, genuineness, validity, collectibility or enforceability of this Agreement or any of the other Note Documents, the Obligations, the Liens securing such Obligations, or any of the terms or conditions of any Note Document (it being understood that such acknowledgment and confirmation do not preclude the Company from challenging any Purchaser's interpretation of any term or provision of this Agreement or of any other Note Document) and (b) it does not possess (and hereby forever waives, remises, releases, discharges and holds harmless the Purchasers and their respective affiliates, stockholders, directors, officers, employees, attorneys, agents and representatives and each of their respective heirs, executors, administrators, successors and assigns (collectively, the "Released Parties") from and against, and agrees not to allege or pursue) any action, cause of action, suit, debt, claim, counterclaim, cross-claim, demand, defense, offset, opposition, demand and every other right of action whatsoever, whether in law, equity or otherwise (which it, all those claiming by, through or under it, or its successors or assigns, have or may have) against the Released Parties, or any of them, by reason of, any matter, cause or thing whatsoever, with respect to events or omissions occurring or arising on or prior to the date hereof and relating to this Agreement or any of the other Note Documents (including, without limitation, with respect to the payment, performance, validity or enforceability of the Obligations, the Liens securing the Obligations or any or all of the terms or conditions of any Note Document) or any transaction relating thereto; provided, however, that the Company does not release or hold harmless any Released Party for actions or omissions by any such Released Party constituting, or losses or expenses directly resulting from, the gross negligence or willful misconduct of such Released Party as determined by a final judgment of a court of competent jurisdiction. * * * * * -54- If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company. Very truly yours, WABASH NATIONAL CORPORATION By -------------------------------- Its: --------------------------- AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
NAMES AND ADDRESS OF Series of Notes Principal Amount of PURCHASER Notes Held THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY H $25,000,000 720 East Wisconsin Avenue Milwaukee, Wisconsin 53202 Attention: Securities Department Telecopier Number: (414) 665-7124
Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as Wabash National Corporation, 10.80% Senior Secured Notes, Series H, due December 17, 2008, PPN 929566 E# 0, principal, interest or premium") to: Bankers Trust Company (ABA #021-001-033) 16 Wall Street Insurance Unit, 4th Floor New York, New York 10005 for credit to: The Northwestern Mutual Life Insurance Company Account Number 00-000-027 Notices All notices and communications to be addressed as first provided above, except notices with respect to payments and written confirmation of each such payment to be addressed, Attention: Securities Operations. Name of Nominee in which Notes are to be issued: None Taxpayer I.D. Number: 39-0509570 SCHEDULE A (to Note Purchase Agreement)
NAMES AND ADDRESS OF Series of Notes Principal Amount of PURCHASER Notes Held PRINCIPAL LIFE INSURANCE COMPANY D $4,000,000 711 High Street C $12,000,000 Des Moines, Iowa 50392-0800 Attention: Principal Capital Management - Securities Division Telefacsimile: (515) 248-2490 Confirmation: (515) 248-3495
Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as Wabash National Corporation, (i) 10.41% Senior Secured Notes, Series C, due March 31, 2004, PPN 929566 D* 5; or (ii) 10.56% Senior Secured Notes, Series D, due December 17, 2004, PPN 929566 D@ 3, as the case may be, principal, interest or premium") to: ABA #073 000 228 Wells Fargo Bank Iowa Des Moines, Iowa Series C Notes OBI PFGSE(S)B60887() Series D Notes OBI PFGSE(S)B60885() Account Number 0000014752 for Principal Life Insurance Company Notices All notices concerning payment on or in respect of the Notes, to: Principal Life Insurance Company 711 High Street Des Moines, Iowa 50392-0960 Attention: Principal Capital Management (Investment Accounting and Treasury - Securities) Facsimile: (515) 248-2643 Confirmation: (515) 235-9610 All notices and communications other than those in respect to payments to be addressed as provided above. Name of Nominee in which Notes are to be issued: None A-2 Taxpayer I.D. Number: 42-0127290 A-3
NAMES AND ADDRESS OF Series of Notes Principal Amount of PURCHASER Notes Held GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY C $5,000,000 3rd Floor, Tower 2 E $3,000,000 8515 East Orchard Road, Greenwood Village, Colorado 80111
Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as Wabash National Corporation, 10.41% Senior Secured Notes, Series C, due March 31, 2004, PPN 929566 D* 5, or 10.61% Senior Secured Notes, Series E, due March 13, 2005, PPN 929566 D# 1, as the case may be, principal, interest or premium and confirmation of principal balance") to: ABA #021-000-018 BKofNYC/CTR/BBK=IOC565 Instit. Custody Department - GWL #640935 Special Instructions: 1) security description (PPN #), 2) allocation of payment between principal and interest, and 3) confirmation of principal balance. Notices All notices of payments, on or in respect of the Notes and written confirmation of each such payment to: The Bank of New York Institutional Custody Department, 14th Floor One Wall Street New York, New York 10286 Telecopier: 212 635-8844 All notices and communications other than those in respect to payments to be addressed to: Great-West Life & Annuity Insurance Company 8515 East Orchard Road, 3T2 Greenwood Village, Colorado 80111 Attention: Corporate Finance Investments Telecopier: 303-737-6193 Name of Nominee in which Notes are to be issued: None Taxpayer I.D. Number: 84-0467907 A-4
NAMES AND ADDRESS OF Series of Notes Principal Amount of PURCHASER Notes Held THE GREAT-WEST LIFE ASSURANCE COMPANY C $5,000,000 100 Osborne Street North Winnipeg, Manitoba Canada R3C 3A5 Facsimile: (204) 946-8395
Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as Wabash National Corporation, 10.41% Senior Secured Notes, Series C, due March 31, 2004, PPN 929566 D* 5, principal, interest or premium and confirmation of principal balance") to: Boston Safe Deposit ABA 011001234 Credit DDA a/c 125261 Attention: MBS Income Unit cc 1253 for credit to The Great-West Life Assurance Company Account GAWF00050002 C/M GWL US Bond Special Instructions: 1) security description (PPN #), 2) allocation of payment between principal and interest, and 3) confirmation of principal balance Notices All notices of payments, on or in respect of the Notes and written confirmation of each such payment to: Mellon Bank P. O. Box 3195 Pittsburgh, Pennsylvania 15230-3195 Attention: MBS Income Unit All notices and communications other than those in respect to payments to be addressed to the attention of Securities Administration 2C at the address as first provided above with a copy to: A-5 Great-West Life & Annuity Insurance Company Investments Division 8515 E. Orchard Road, 3T2 Greenwood Village, Colorado 80111 Name of Nominee in which Notes are to be issued: MAC & CO Taxpayer I.D. Number: not applicable A-6
NAMES AND ADDRESS OF Series of Notes Principal Amount of PURCHASER Notes Held AMERICAN FAMILY LIFE INSURANCE COMPANY F $6,000,000 6000 American Parkway Madison, Wisconsin 53783-0001 Attention: Investment Division- Private Placements Telecopier Number: (608) 243-4923
Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as Wabash National Corporation, 10.72% Senior Secured Notes, Series F, due December 17, 2006, PPN 929566 E* 4, principal, interest or premium") to: Firstar Bank Milwaukee, N.A. Account of Firstar Trust Company (ABA #075-000-022) for credit to Account Number 112 950 027 Trust Account Number 000018012500 for AFLIC-Traditional Portfolio Attention: Donna Glidden (414) 765-6709 Credit for CUSIP #929566 E* 4 Notices All notices .and communications, including notices with respect to payments and written confirmation of each such payment as well as quarterly and annual financial statements, to be addressed as first provided above. Name of Nominee in which Notes are to be issued: BAND & Co. Taxpayer I.D. Number: 39-6040365 A-7
NAMES AND ADDRESS OF Series of Notes Principal Amount of PURCHASER Notes Held MODERN WOODMEN OF AMERICA F $5,000,000 1701 1st Avenue Rock Island, Illinois 61201 Attention: Investment Department Telecopier Number: (309) 786-1701
Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as Wabash National Corporation, 10.72% Senior Secured Notes, Series F, due December 17, 2006, PPN 929566 E* 4, principal, interest or premium") to: The Northern Trust Company 50 South LaSalle Street Chicago, Illinois 60690 ABA No. 071-000-152 Account Name: Modern Woodmen of America Account Number 84352 Notices All notices and communications, including notices with respect to payments and written confirmation of each such payment, to be addressed as first provided above. Name of Nominee in which Notes are to be issued: None Taxpayer I.D. Number: 36-1493430 A-8 NAMES AND ADDRESS OF Principal Amount of PURCHASER Series of Notes Notes Held STATE FARM LIFE INSURANCE COMPANY D $5,000,000 One State Farm Plaza Bloomington, Illinois 61710 Attn: Investment Department E10 Telecopier Number: (309) 766-1914 Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as Wabash National Corporation, 10.56% Senior Secured Notes, Series D, due December 17, 2004, PPN 929566 D@ 3, principal, interest or premium") to: The Chase Manhattan Bank ABA No. 021000021 SSG Private Income Processing A/C #900-9-000200 For Credit To Account Number G 06893 Ref. PPN # 929566 D@ 3 Rate: Wabash 10.56% Series D Notes Maturity Date: 2004 Notices All notices concerning payment on or in respect of the Notes, to the address as first provided above, Attention: Investment Accounting Department D-3. All other notices and communications to be addressed as first provided above. Name of Nominee in which Notes are to be issued: None Taxpayer I.D. Number: 37-0533090 A-9 NAMES AND ADDRESS OF Principal Amount of PURCHASER Series of Notes Notes Held STATE FARM LIFE INSURANCE COMPANY F $2,000,000 STANDARD INSURANCE COMPANY c/o Protective Life Insurance Co. Investment Department P.O. Box 2606 Birmingham, AL 35202 Attn: Diane Griswold Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as Wabash National Corporation, 10.72% Senior Secured Notes, Series F, due December 17, 2006, PPN 929566 E* 4, principal, interest or premium") to: BK of NYC ABA #021000018 GLA 111-565 TRUST A/C #: 294512 A/C Name: PROTECTIVE/STANDARD CLOSED BLOCK ASSETS Notices All notices and communications, including notices with respect to payments and written confirmation of each such payment, to be addressed as follows: Protective Life Insurance Co. with a copy to: Hare & Co. c/o Investment Department c/o The Bank of New York P.O. Box 2606 PO Box 11203 Birmingham, AL 35202 New York, NY 10286 Attn: Diane Griswold
Name of Nominee in which Notes are to be issued: HARE & Co. Taxpayer I.D. Number: 13-6062916 A-10 NAMES AND ADDRESS OF Principal Amount of PURCHASER Series of Notes Notes Held THE LINCOLN NATIONAL LIFE G $5,350,000 INSURANCE COMPANY c/o Lincoln National Corporation 200 East Berry Street Renaissance Square Fort Wayne, Indiana 46802 Attention: K. ESTEP -- Investment Accounting Fax: (260) 455-2622 Payments All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as "Wabash National Corporation, 10.78% Senior Secured Notes, Series G, due December 30, 2008, PPN 929566 E@ 2, principal, premium or interest") to: The Bank of New York New York, New York ABA #021000018 BNF Acct#: IOC566 Attn: Private Placement P&I Dept. For Further Credit: The Lincoln National Life Insurance Company -- Segment 66 Custody Account No.: 215733 Notices All notices and communications, including notices with respect to payments and written confirmation of each such payment, to be addressed as first provided above with duplicate notices with to: Delaware Lincoln Investment Advisers 2005 Market Street, 40th Floor Philadelphia, PA 19103 Attn: Fixed Income/Private Placements Fax: (215) 255-1296 A separate notice of payment shall be sent to: The Bank of New York P.O. Box 19266 Newark, New Jersey A-11 Attn: Priv Placement P&I Department Ref: Account Name and PPN Name of Nominee in which Notes are to be issued: None Taxpayer I.D. Number: 35-0472300 A-12 EX-10.26 10 c68906a1ex10-26.txt AMENDED AND RESTATED SECURED NOTES PURCHASE AGMT Exhibit 10.26 SHW Draft 4/12/02 ================================================================================ WABASH NATIONAL CORPORATION $50,000,000 11.29% Senior Secured Notes, Series I, due September 29, 2007 -------------- AMENDED AND RESTATED NOTE PURCHASE AGREEMENT ------------- Dated as of April 12, 2002 ================================================================================ TABLE OF CONTENTS
PAGE ---- 1. AMENDMENT AND RESTATEMENT; GUARANTIES; SECURITY.......................................1 1A. Amendment and Restatement of Note Purchase Agreement and Notes............1 1B. Guaranty..................................................................2 1C. Security for the Notes and Note Guaranty..................................2 1D. Intercreditor Agreement...................................................2 2. ISSUANCE AND EXCHANGE.................................................................2 2A. Issuance and Exchange of Notes............................................2 3. CONDITIONS OF CLOSING.................................................................2 3A. Certain Documents.........................................................2 3B. Opinion of Special Counsel to the Collateral Agent........................3 3C. Representations and Warranties; No Default................................4 3D. Exchange Permitted by Applicable Laws.....................................4 3E. Subsidiary Guaranty.......................................................4 3F. Collateral Documents; Related Transactions; Amendment Fee.................4 3G. Yield-Maintenance Notes...................................................5 3H. Consent of Other Creditors................................................5 3I. Payment of Accrued Interest on all Notes..................................5 4. PREPAYMENTS...........................................................................5 4A. Required Prepayments Without Yield-Maintenance Amount.....................5 4B. Required Prepayments With Yield-Maintenance Amount........................5 4C. Optional Prepayment With Yield-Maintenance Amount.........................6 4D. Notice of Optional Prepayment.............................................6 4E. Application of Prepayments................................................6 4F. No Acquisition of Notes...................................................6 5. AFFIRMATIVE COVENANTS.................................................................7 5A. Financial Statements; Notice of Defaults..................................7 5B. Information Required by Rule 144A........................................11 5C. Inspection of Property...................................................11 5D. Existence, Etc...........................................................12 5E. Powers...................................................................12 5F. Compliance with Laws, Etc................................................12 5G. Payment of Taxes and Claims..............................................12
-i- TABLE OF CONTENTS (continued)
PAGE ---- 5H. Inspection of Property; Books and Records; Discussions...................13 5I. ERISA Compliance.........................................................13 5J. Maintenance of Properties; Insurance.....................................13 5K. Environmental Compliance.................................................14 5L. Foreign Employee Benefit Compliance......................................14 5M. Maintenance of Rights....................................................14 5N. Conduct of Business......................................................14 5O. Subsidiary Documentation.................................................14 5P. Collateral Documents.....................................................14 5Q. Restructuring Consultant.................................................16 5R. Chief Restructuring Officer..............................................16 5S. Approved Refinancing Indebtedness........................................16 6. NEGATIVE COVENANTS...................................................................16 6A. Fiscal Year 2004 Covenants...............................................16 6B. Negative Covenants. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding:....17 6C. Financial Covenants......................................................23 6D. Additional Negative Covenants............................................25 6E. Restricted Payments......................................................26 7. EVENTS OF DEFAULT....................................................................28 7A. Acceleration.............................................................28 7B. Rescission of Acceleration...............................................32 7C. Notice of Acceleration or Rescission.....................................32 7D. Other Remedies...........................................................32 8. REPRESENTATIONS, COVENANTS AND WARRANTIES............................................33 8A. Organization; Subsidiary Preferred Stock.................................33 8B. Financial Statements.....................................................33 8C. Actions Pending..........................................................33 8D. Outstanding Indebtedness.................................................33 8E. Title to Properties......................................................34 8F. Taxes....................................................................34 8G. Conflicting Agreements and Other Matters.................................34 8H. Margin Regulations.......................................................34 8I. ERISA....................................................................35 8J. Governmental Consent.....................................................35 8K. Environmental Compliance.................................................35 8L. Regulatory Status........................................................36 8M. Section 144A.............................................................36
-ii- TABLE OF CONTENTS (continued)
PAGE ---- 8N. Absence of Financing Statements, etc.....................................36 8O. Disclosure...............................................................36 8P. Credit Agreement Representations.........................................36 8Q. Restructuring Fees.......................................................36 9. REPRESENTATIONS OF THE PURCHASERS....................................................37 9A. Nature of Purchase.......................................................37 9B. Source of Funds..........................................................37 10. DEFINITIONS; ACCOUNTING MATTERS......................................................37 10A. Yield-Maintenance Terms..................................................37 10B. Other Terms..............................................................38 10C. Accounting Principles, Terms and Determinations..........................61 11. MISCELLANEOUS........................................................................61 11A. Note Payments............................................................61 11B. Expenses.................................................................61 11C. Consent to Amendments....................................................62 11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes...........62 11E. Persons Deemed Owners; Participations....................................63 11F. Survival of Representations and Warranties; Entire Agreement.............63 11G. Successors and Assigns...................................................63 11H. Independence of Covenants................................................63 11I. Notices..................................................................64 11J. Payments Due on Non-Business Days........................................64 11K. Severability.............................................................64 11L. Descriptive Headings.....................................................64 11M. Satisfaction Requirement.................................................64 11N. Governing Law............................................................64 11O. Severalty of Obligations.................................................64 11P. Counterparts.............................................................65 11Q. Disclosure to Other Persons..............................................65 11R. WAIVER OF JURY TRIAL.....................................................65 11S. Amendment and Restatement of Original Note Purchase Agreement............65 11T. Release..................................................................65 11U. Binding Agreement........................................................66
-iii- WABASH NATIONAL CORPORATION 1000 SAGAMORE PARKWAY SOUTH LAFAYETTE, INDIANA 47905 As of April 12, 2002 The Prudential Insurance Company of America ("PRUDENTIAL") Pruco Life Insurance Company ("PRUCO") Each Prudential Affiliate (as hereinafter defined) which becomes bound by certain provisions of this Agreement as hereinafter provided (together with Prudential and Pruco, the "PURCHASERS") c/o Prudential Capital Group Two Prudential Plaza, Suite 5600 Chicago, Illinois 60601 Ladies and Gentlemen: The undersigned, Wabash National Corporation, a Delaware corporation (herein called the "COMPANY"), hereby agrees with the Purchasers as set forth below. Reference is made to paragraph 10 hereof for definitions of capitalized terms used herein and not otherwise defined herein. 1. AMENDMENT AND RESTATEMENT; GUARANTIES; SECURITY. 1A. AMENDMENT AND RESTATEMENT OF NOTE PURCHASE AGREEMENT AND NOTES. The Purchasers and the Company are parties to that certain Note Purchase Agreement dated as of September 29, 2000 (as amended, the "Original Note Purchase Agreement"), pursuant to which the Company authorized the issue and sale of, and the Purchasers purchased from the Company $50,000,000 aggregate principal amount of its 8.04% Senior Notes, Series I, due September 29, 2007 (the "Original Notes"). On the Closing (as defined below) the Company will amend and restate the Original Notes in the form of EXHIBIT 1. Reference in this Agreement to the "Notes" shall be a reference to the Original Notes as amended and restated in the form of EXHIBIT 1 together with the applicable Yield-Maintenance Notes related thereto described below. On the Closing the Company will issue the Yield-Maintenance Notes in the form of EXHIBIT 2 to each Purchaser in accordance with the terms and provisions of paragraph 3G. The Notes shall be substantially in the form set out in EXHIBITS 1 and 2, respectively, with such changes therefrom, if any, as may be approved by each Purchaser and the Company. The Company and the Purchasers now desire to amend and restate the Original Note Purchase Agreement and the Original Notes to, among other things, (a) amend certain covenants and related definitions, (b) provide for collateral to secure the obligations represented by the Notes and the Note Guaranty and (c) make certain other changes to the Original Note Purchase Agreement. 1B. GUARANTY. The payment and performance obligations of the Company under and pursuant to the Original Note Purchase Agreement and the Original Notes are fully and unconditionally guaranteed by each of the Guarantors pursuant to the Note Guaranty dated as of September 29, 2000 (the "Original Note Guaranty"). The Purchasers have required as a condition to the execution and delivery of this Agreement that the Guarantors execute and deliver an Amended and Restated Note Guaranty dated the date hereof (the "Note Guaranty") to the Purchasers under and pursuant to which the Guarantors shall fully and unconditionally guaranty the payment and performance obligations of the Company under this Agreement and the Notes. 1C. SECURITY FOR THE NOTES AND NOTE GUARANTY. The Notes and the obligations of the Guarantors under the Note Guaranty shall be secured, equally and ratably with the other Secured Obligations, by the Collateral Documents. 1D. INTERCREDITOR AGREEMENT. The Collateral described in the Collateral Documents shall be held by Bank One, N.A., as Collateral Agent for the benefit of the Purchasers and the other secured parties pursuant to the Intercreditor Agreement. 2. ISSUANCE AND EXCHANGE. 2A. ISSUANCE AND EXCHANGE OF NOTES. Subject to the terms and conditions of this Agreement, the Company will issue the amended and restated Notes to each Purchaser upon surrender by it of the Original Notes for cancellation by the Company. Each Purchaser's obligations hereunder are several and not joint obligations, and each Purchaser shall have no obligation hereunder and no liability to any person for the performance or nonperformance by any other Purchaser hereunder. The issue and exchange of Notes contemplated hereby shall occur at the offices of Schiff Hardin & Waite, 6600 Sears Tower, Chicago, Illinois 60606, at 10:00 a.m. Chicago time, at a closing (the "Closing") on April 12, 2002 or on such other Business Day thereafter on or prior to April 15, 2002 as may be agreed upon by the Company and each Purchaser. 3. CONDITIONS OF CLOSING. The obligation of any Purchaser to exchange the Original Notes for the Notes to be issued to such Purchaser is subject to the satisfaction, on or before the date of the Closing of the following conditions: 3A. CERTAIN DOCUMENTS. Such Purchaser shall have received the following, each dated the date of the Closing: (i) This Agreement; (ii) The Note(s) to be issued to such Purchaser; (iii) A favorable opinion of (a) Baker & Daniels, independent counsel to the Company satisfactory to such Purchaser and substantially in the form of Exhibit D-1 -2- attached hereto and as to such other matters as such Purchaser may reasonably request and (b) Baker & Daniels, special local counsel to the Company, satisfactory to such Purchaser and substantially in the form of Exhibit D-2 attached hereto with respect to the Lafayette Property and as to such other matters as such Purchaser may reasonably request. The Company hereby directs each such counsel to deliver such opinion, agrees that the issuance and exchange of any Notes will constitute a reconfirmation of such direction, and understands and agrees that each Purchaser receiving such an opinion will and is hereby authorized to rely on such opinion; (iv) a Secretary's Certificate signed by the Secretary or an Assistant Secretary and one other officer of the Company certifying, among other things, (A) as to the names, titles and true signatures of the officers of the Company authorized to sign this Agreement, the Notes, the Collateral Documents and the other documents to be delivered in connection with this Agreement, (B) that attached as Exhibit A thereto is a true, accurate and complete copy of the Certificate of Incorporation of the Company, certified by the Secretary of State of Delaware as of a date not more than ten (10) Business Days from the date of Closing, (C) that attached as Exhibit B thereto is a true, accurate and complete copy of the Company's Bylaws which were duly adopted and are presently in effect and have been in effect immediately prior to and at all times since the adoption of the resolutions referred to in clause (D) below, (D) that attached as Exhibit C thereto is a true, accurate and complete copy of the resolutions of the Company's Board of Directors (authorizing the issuance and exchange of the Notes and the execution, delivery and performance of this Agreement) duly adopted by written action or at a meeting of the Company's Board of Directors, and such resolutions have not been rescinded, amended or modified and (E) that attached as Exhibit D thereto is a good standing certificate for the Company from the Secretary of State of Delaware; and (v) additional documents or certificates with respect to legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by such Purchaser. 3B. OPINION OF SPECIAL COUNSEL TO THE COLLATERAL AGENT. Such Purchaser shall have received from Sidley Austin Brown & Wood LLP, special counsel to the Collateral Agent an opinion substantially in the form set forth in Exhibit D-3. 3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and warranties contained in paragraph 8 shall be true on and as of the date of Closing; there shall exist on date of Closing no Event of Default or Default; and the Company shall have delivered to such Purchaser an Officer's Certificate, dated date of Closing, to both such effects. 3D. EXCHANGE PERMITTED BY APPLICABLE LAWS. The issuance and exchange of the Notes to be exchanged by such Purchaser on the terms and conditions herein provided shall not violate any applicable law or governmental regulation (including, without limitation, Section 5 of the Securities Act or Regulation T, U, or X of the Board of Governors of the Federal Reserve System) and shall not subject such Purchaser to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and such -3- Purchaser shall have received such certificates or other evidence as it may request to establish compliance with this condition. 3E. SUBSIDIARY GUARANTY. Such Purchaser shall have received a Guaranty in the form of Exhibit E hereto (the "NOTE GUARANTY") duly executed by the Guarantors and the Company. 3F. COLLATERAL DOCUMENTS; RELATED TRANSACTIONS; AMENDMENT FEE. (a) Subject to the terms and provisions of paragraph 5P(b), each of the Collateral Documents shall have been duly executed and delivered in the respective forms thereof and shall be in full force and effect and all of the security interests granted thereunder shall be duly perfected to the satisfaction of the Purchasers' special counsel. (b) The Credit Agreement and the Intercreditor Agreement shall have been duly executed and delivered by the parties thereto and all of the transactions contemplated thereby shall have been consummated to each Purchaser's satisfaction. (c) The Company shall have entered into definitive and binding documentation pertaining to, and closed on, the Permitted Receivables Transfer on terms and conditions satisfactory to each Purchaser. (d) The Company shall have closed on an amendment to the Fleet Lease Transaction on terms and conditions satisfactory to each Purchaser. (e) The Company shall have paid in cash an amendment fee to each Purchaser in an amount equal to 0.50% of the aggregate principal amount of the Notes held by such Purchaser. (f) The Company shall have provided each Purchaser written copies of any fee letter entered into among the Company and any Secured Party or the Administrative Agent relating to the transactions contemplated by this Agreement, the Credit Agreement and the Intercreditor Agreement, other than fee letters relating to fees paid to the Administration Agent or the Collateral Agent in their agent capacities. (g) The Series A Note Purchase Agreements and the Series C-H Note Purchase Agreements shall have been duly executed and delivered by the parties thereto and all of the transactions contemplated thereby shall have been consummated to each Purchaser's satisfaction. 3G. YIELD-MAINTENANCE NOTES. The Company shall have issued to each Holder a promissory grid note in substantially the form of Exhibit 2 (each a "Yield-Maintenance Note" and collectively, the "Yield-Maintenance Notes") which shall evidence the payment by the Company to each such Holder of the applicable Yield-Maintenance Amount upon the prepayment of the Notes in accordance with the terms and provisions of paragraph 4B. Interest on the Yield-Maintenance Notes shall accrue monthly, shall be computed at a rate equal to 11.29% per annum and shall be added to the interest-bearing principal amount of the Yield-Maintenance Notes. -4- 3H. CONSENT OF OTHER CREDITORS. Any consents or approvals required to be obtained from any holder of any outstanding debt of the Company or any Guarantor and any amendments of agreements pursuant to which any debt may have been incurred by the Company or any Guarantor, which shall be necessary to permit the consummation of the transactions contemplated hereby or by the Restructuring Transaction shall have been obtained and all such consents, approvals or amendments shall be satisfactory in form and substance to each Purchaser and the Purchasers' special counsel. 3I. PAYMENT OF ACCRUED INTEREST ON ALL NOTES. The Company shall have paid to the Holders all unpaid and accrued interest to the date of Closing on the Notes. 4. PREPAYMENTS. The Notes shall be subject to required prepayment as and to the extent provided in paragraphs 4A and 4B, respectively. The Notes shall also be subject to prepayment under the circumstances set forth in paragraph 4C. Any prepayment made by the Company pursuant to any other provision of this paragraph 4 shall not reduce or otherwise affect its obligation to make any required prepayment as specified in paragraph 4A or 4B. 4A. REQUIRED PREPAYMENTS WITHOUT YIELD-MAINTENANCE AMOUNT. Until the Notes shall be paid in full, the Company shall apply to the prepayment of the Notes, without Yield-Maintenance Amount, the sum of $25,000,000 on September 29, 2005 and such principal amount of the Notes, together with interest thereon to the payment date, shall become due on such payment date. The remaining unpaid principal amount of the Notes, together with any accrued and unpaid interest, shall become due on the maturity date of the Notes. 4B. REQUIRED PREPAYMENTS WITH YIELD-MAINTENANCE AMOUNT. (a) On the last day of each month commencing with April 30, 2002 through and including December 31, 2002, the Company will prepay the Notes in an aggregate principal amount equal to the product of the Series I Note Principal Allocation times $1,166,667, together with the Make-Whole Amount payable with respect thereto; provided that no portion of such prepayment shall be applied to any Yield-Maintenance Note. (b) On the last day of each month commencing with January 31, 2003 through December 31, 2003, the Company will prepay the Notes in an aggregate principal amount equal to the product of the Series I Note Principal Allocation times $4,958,333, together with the Make-Whole Amount payable with respect thereto; provided that no portion of such prepayment shall be applied to any Yield-Maintenance Note. (c) Within three Business Days after the each of each fiscal quarter of the Company (commencing with the fiscal quarter ending on June 30, 2002), the Company will prepay the Notes in an aggregate principal amount equal to the product of the Series I Note Principal Allocation times the Excess Cash Flow if positive, for such quarter, together with the Make-Whole Amount payable with respect thereto; provided that no portion of such prepayment shall be applied to any Yield-Maintenance Note. -5- (d) All prepayments made under and pursuant to this paragraph 4B shall be applied in accordance with the terms and provisions of paragraph 4E. All amounts of Yield-Maintenance Amount due and payable with respect to such prepayments shall be added to the outstanding principal amount of the Yield-Maintenance Notes and an appropriate entry on the grid attached thereto shall be made by each holder of such Yield-Maintenance Notes. 4C. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes (other than the Yield-Maintenance Notes unless all other Notes are paid in full at such time) shall be subject to prepayment, in whole at any time or from time to time in part, at the option of the Company, at 100% of the principal amount so prepaid plus interest thereon to the prepayment date and the Yield-Maintenance Amount, if any, with respect to each such Note. Any partial prepayment of Notes pursuant to this paragraph 4C shall be applied in satisfaction of required payments of principal in inverse order of their scheduled due dates. 4D. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder of each Note to be prepaid pursuant to paragraph 4C irrevocable written notice of such prepayment not less than ten (10) Business Days prior to the prepayment date, specifying such prepayment date, the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of the Notes held by such holder to be prepaid on that date and that such prepayment is to be made pursuant to paragraph 4C. Notice of prepayment having been given as aforesaid, the principal amount of the Notes specified in such notice, together with interest thereon to the prepayment date and together with the Yield-Maintenance Amount, if any, herein provided, shall become due and payable on such prepayment date. The Company shall, on or before the day on which it gives written notice of any prepayment pursuant to paragraph 4C, give telephonic notice of the principal amount of the Notes to be prepaid and the prepayment date to each Holder which shall have designated a recipient for such notices in the Purchaser Schedule attached hereto or by notice in writing to the Company. 4E. APPLICATION OF PREPAYMENTS. In the case of each prepayment of less than the entire unpaid principal amount of all outstanding Notes pursuant to paragraphs 4A, 4B or 4C, the amount to be prepaid shall be applied pro rata to all outstanding Notes (not counting the Yield-Maintenance Notes) according to the respective unpaid principal amounts thereof; provided that all such partial prepayments shall be applied against the principal amount of the Notes scheduled to become due in the inverse order of maturity thereof. 4F. NO ACQUISITION OF NOTES. The Company shall not, and shall not permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part prior to their stated final maturity (other than by prepayment pursuant to paragraphs 4A, 4B or 4C, or upon acceleration of such final maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly or indirectly, Notes held by any holder. Any Notes so prepaid or otherwise retired or purchased or otherwise acquired by the Company or any of its Subsidiaries or Affiliates shall not be deemed to be outstanding for any purpose under this Agreement. -6- 5. AFFIRMATIVE COVENANTS. From and after the date of Closing and so long thereafter as any Note is outstanding and unpaid, the Company covenants as follows: 5A. FINANCIAL STATEMENTS; NOTICE OF DEFAULTS. The Company covenants that it will deliver to each Holder in triplicate: 5A(a) FINANCIAL REPORTING. (i) Monthly Reports. As soon as practicable and in any event within thirty (30) days after the end of each monthly accounting period of the Company (other than those monthly periods which are the last month in a fiscal quarter or fiscal year which reports for such periods shall be delivered within the time period specified in paragraphs 5A(a)(ii) and 5A(a)(iii), respectively), the consolidated balance sheet of the Company and its Subsidiaries as of the end of such period, and the related consolidated statements of income and cash flows for the period commencing at the end of the previous fiscal year and ending with the end of such period setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the chief financial officer or treasurer of the Company as having been prepared in accordance with GAAP, together with a certificate of the chief financial officer or treasurer of the Company on behalf of the Company stating that no Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement setting forth the details thereof and the action which the Company has taken and proposes to take with respect thereto; (ii) Quarterly Reports. As soon as practicable, and in any event within forty-five (45) days (or such shorter period of time as is required by the Commission for delivery of quarterly financial statements) after the end of each of the first three fiscal quarters in each fiscal year, the consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such period and the related consolidated and consolidating statements of income and cash flows of the Company and its Subsidiaries for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, certified by the chief financial officer or treasurer of the Company on behalf of the Company as fairly presenting in all material respects the consolidated and consolidating financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in accordance with GAAP, subject to normal year end adjustments. Delivery within the time period specified above of copies of the Company's Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Commission shall be deemed to satisfy the requirements of this paragraph 5A(a)(ii); (iii) Annual Reports. As soon as practicable, and in any event within ninety (90) days (or such shorter period of time as is required by the Commission for delivery of annual financial statements) after the end of each fiscal year (including the fiscal year ended on or about December 31, 2001), (a) the consolidated and consolidating balance sheet of the Company and its Subsidiaries as at the end of such fiscal year and the related -7- consolidated and consolidating statements of income, stockholders' equity and cash flows of the Company and its Subsidiaries for such fiscal year and, in comparative form the corresponding figures for the previous fiscal year and (b) an audit report on the items (other than the consolidating financial statements) listed in clause (a) hereof of independent certified public accountants of recognized national standing, which audit report shall be unqualified and shall state that such financial statements fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flows for the periods indicated in conformity with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards. Delivery within the time period specified above of the Company's Annual Report on Form 10-K for such fiscal year (together with the Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Securities Exchange Act of 1934) prepared in accordance with the requirements therefor and filed with the Commission shall be deemed to satisfy the foregoing requirements of this paragraph 5A(a)(iii), provided that the auditors' report contained therein satisfies the requirements specified in clause (b) above. The deliveries made pursuant to this clause (iii) shall be accompanied by a certificate of such accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Event of Default, or if, in the opinion of such accountants, any Default or Event of Default shall exist, stating the nature and status thereof; (iv) Officer's Certificate. Together with each delivery of any financial statement pursuant to clauses (i), (ii) and (iii) of this paragraph 5A(a), (a) an Officer's Certificate of the Company, substantially in the form of Exhibit 5A-1 attached hereto and made a part hereof, stating that no Default or Event of Default exists, or if any Default or Event of Default exists, stating the nature and status thereof and (b) a Compliance Certificate, substantially in the form of Exhibit 5A-2 attached hereto and made a part hereof, signed by the Company's chief financial officer or treasurer, setting forth (1) calculations which demonstrate compliance with the provisions of paragraph 6 and (2) in the case of a Compliance Certificate accompanying the financial statements delivered pursuant to paragraph 5A(a)(ii), a detailed description and calculation of the Excess Cash Flow for the applicable fiscal quarter then-ended; (v) Valuations and Appraisals. By no later than such date as the Collateral Agent may specify, such valuations, appraisals and certificates (all costs and expenses with respect to which shall be for the account of the Company) as the Collateral Agent may require with respect to the value of the Collateral, the financial condition and insurance coverage of the Company and its Subsidiaries and the material Contingent Obligations of the Company and its Subsidiaries in compliance with the terms of paragraph 5P(b); and (vi) Other Information. Promptly, such other information respecting the business, properties, operations, prospects or financial condition of the Company or any of its Subsidiaries, or the Collateral, including, without limitation, schedules identifying -8- and describing the Collateral and any dispositions thereof, as any Holder may from time to time reasonably request. 5A(b) NOTICE OF DEFAULT. Promptly upon any of the chief executive officer, chief operating officer, chief financial officer, treasurer or controller of the Company obtaining knowledge (i) of any condition or event which constitutes a Default or Event of Default, or becoming aware that any Holder has given any written notice with respect to a claimed Default or Event of Default under this Agreement, or (ii) that any Person has given any written notice to the Company or any Subsidiary of the Company or taken any other action with respect to a claimed default or event or condition of the type referred to in paragraph 7A(e), deliver to the Holders an Officer's Certificate specifying (a) the nature and period of existence of any such claimed default, Default, Event of Default, condition or event, (b) the notice given or action taken by such Person in connection therewith, and (c) what action the Company has taken, is taking and proposes to take with respect thereto. 5A(c) LAWSUITS. (i) Promptly upon the Company obtaining knowledge of the institution of, or written threat of, any action, suit, proceeding, governmental investigation or arbitration against or affecting the Company or any of its Subsidiaries or any property of the Company or any of its Subsidiaries not previously disclosed pursuant to paragraph 8C, which action, suit, proceeding, governmental investigation or arbitration exposes, or in the case of multiple actions, suits, proceedings, governmental investigations or arbitrations arising out of the same general allegations or circumstances which expose, in the Company's reasonable judgment, the Company or any of its Subsidiaries to liability in an amount aggregating $1,000,000 or more (exclusive of claims covered by insurance policies of the Company or any of its Subsidiaries unless the insurers of such claims have disclaimed coverage or reserved the right to disclaim coverage on such claims and exclusive of claims covered by the indemnity of a financially responsible indemnitor in favor of the Company or any of its Subsidiaries (unless the indemnitor has disclaimed or reserved the right to disclaim coverage thereof)), give written notice thereof to the Holders and provide such other information as may be reasonably available to enable each Holder and its counsel to evaluate such matters; and (ii) in addition to the requirements set forth in clause (i) of this paragraph 5A(c), upon the request of the Required Holder(s), promptly give written notice of the status of any action, suit, proceeding, governmental investigation or arbitration covered by a report delivered pursuant to clause (i) above and provide such other information as may be reasonably available to it that would not result in loss of any attorney-client privilege by disclosure to the Holders to enable each Holder and its counsel to evaluate such matters. 5A(d) MATERIAL DEVELOPMENTS. Promptly (i) and in any event within three (3) calendar days after the Company obtaining knowledge of the occurrence of any development in the business or affairs of the Company or any of its Subsidiaries which has resulted in or, which is likely in the reasonable judgment of the Company to result in, a Material Adverse Effect, or affects the value of, or the Collateral Agent's interest in, the Collateral, taken as a whole, in any material respect, deliver to the Holders a statement of the chief financial officer or treasurer of the Company setting forth details of each such development and the action which the Company or such Subsidiary, as the case may be, has taken and proposes to take with respect thereto. -9- 5A(e) ERISA NOTICES. Deliver or cause to be delivered to the Holders, at the Company's expense, the following information and notices as soon as reasonably possible, and in any event: (i) (x) within ten (10) Business Days after the Company obtains knowledge that a Termination Event has occurred, a written statement of the chief financial officer of the Company describing such Termination Event and the action, if any, which the Company has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto and (y) within ten (10) Business Days after any member of the Controlled Group obtains knowledge that a Termination Event has occurred which could reasonably be expected to subject the Company to liability in excess of $1,000,000, a written statement of the chief financial officer of the Company describing such Termination Event and the action, if any, which the member of the Controlled Group has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto; (ii) within ten (10) Business Days after the Company or any of its Subsidiaries obtains knowledge that a non-exempt prohibited transaction (as defined in ERISA and the Code) has occurred, a statement of the chief financial officer of the Company describing such transaction and the action which the Company or such Subsidiary has taken, is taking or proposes to take with respect thereto; (iii) within ten (10) Business Days after the Company or any of its Subsidiaries receives notice of any unfavorable determination letter from the IRS regarding the qualification of a Plan under Section 401(a) of the Code, copies of each such letter; (iv) within ten (10) Business Days after the filing thereof with the IRS, a copy of each funding waiver request filed with respect to any Benefit Plan and all communications received by the Company or a member of the Controlled Group with respect to such request; (v) within ten (10) Business Days after receipt by the Company or any member of the Controlled Group of the PBGC's intention to terminate a Benefit Plan or to have a trustee appointed to administer a Benefit Plan, copies of each such notice; (vi) within ten (10) Business Days after receipt by the Company or any member of the Controlled Group of a notice from a Multiemployer Plan regarding the imposition of withdrawal liability, copies of each such notice; (vii) within ten (10) Business Days after the Company or any member of the Controlled Group fails to make a required installment or any other required payment under Section 412 of the Internal Revenue Code on or before the due date for such installment or payment, a notification of such failure; and (viii) within ten (10) Business Days after the Company or any member of the Controlled Group knows or has reason to know that (a) a Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to -10- terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan. For purposes of this paragraph 5A(e), the Company, any of its Subsidiaries and any member of the Controlled Group shall be deemed to know all facts known by the Administrator of any Plan of which the Company or any member of the Controlled Group or such Subsidiary is the plan sponsor. 5A(f) OTHER REPORTS. Deliver or cause to be delivered to the Holders copies of all financial statements, reports and notices, if any, sent or made available generally by the Company to owners of ownership, membership or other equity interests in the Company or filed with the Commission by the Company, all press releases made available generally by the Company or any of the Company's Subsidiaries to the public concerning material developments in the business of the Company or any such Subsidiary and all notifications received from the Commission by the Company or its Subsidiaries pursuant to the Securities Exchange Act and the rules promulgated thereunder. 5A(g) ENVIRONMENTAL NOTICES. As soon as possible and in any event within ten (10) days after receipt by the Company or any of its Subsidiaries, a copy of (i) any notice or claim to the effect that the Company or any of its Subsidiaries is or may be liable to any Person as a result of the Release by the Company, any of its Subsidiaries, or any other Person of any Contaminant into the environment, and (ii) any notice alleging any violation of any Environmental, Health or Safety Requirements of Law by the Company or any of its Subsidiaries if, in either case, such notice or claim relates to an event which could reasonably be expected to subject the Company or any of its Subsidiaries to liability in excess of $5,000,000. 5A(h) OTHER INFORMATION. Promptly upon receiving a request therefor from any Holder, prepare and deliver to the Holders such other information with respect to the business, Property, prospects, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries as from time to time may be reasonably requested by any Holder. 5B. INFORMATION REQUIRED BY RULE 144A. The Company covenants that it will, upon the request of the holder of any Note, provide such holder, and any qualified institutional buyer designated by such holder, such financial and other information as such holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144A under the Securities Act in connection with the resale of Notes, except at such times as the Company is subject to and in compliance with the reporting requirements of Section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph 5B, the term "QUALIFIED INSTITUTIONAL BUYER" shall have the meaning specified in Rule 144A under the Securities Act. 5C. INSPECTION OF PROPERTY. The Company covenants that it will permit any Person designated by any Holder in writing, at such Holder's expense (if no Default or Event of Default exists), to visit and inspect any of the properties of the Company and its Subsidiaries, to examine the corporate books and financial records of the Company and its Subsidiaries and make copies thereof or extracts therefrom and to discuss the affairs, finances and accounts of any of such corporations with the principal officers of the Company and its independent public accountants, -11- all at such reasonable times and as often as such Holder may reasonably request. If an Event of Default or Default then exists, any visit and/or inspection pursuant to this paragraph 5C shall be at the expense of the Company. 5D. EXISTENCE, ETC. Except with respect to the inactive Subsidiaries identified on Schedule 5D hereto, the Company shall, and shall cause each of its Subsidiaries to, at all times maintain its existence and preserve and keep, or cause to be preserved and kept, in full force and effect its rights and franchises material to its businesses, and except that any Subsidiary of the Company may merge with or liquidate into the Company or any other Subsidiary of the Company, provided that the surviving entity expressly assumes any liabilities, if any, of either of such Subsidiaries with respect to the Obligations pursuant to an assumption agreement reasonably satisfactory to the Required Holder(s) and provided further that the consolidated net worth of the surviving corporation is not less than the consolidated net worth of the Subsidiary with any liability with respect to the Obligations immediately prior to such merger. The Holders acknowledge that the Company intends to, and the Company hereby agrees to, legally dissolve by no later than sixty (60) days after the Closing the inactive Subsidiaries identified on Schedule 5D hereto, and the Holders expressly consent to such dissolution. 5E. POWERS. The Company shall, and shall cause each of its Subsidiaries to, qualify and remain qualified to do business in each jurisdiction in which the nature of its business requires it to be so qualified and where the failure to be so qualified will have or is reasonably likely to have a Material Adverse Effect. 5F. COMPLIANCE WITH LAWS, ETC. The Company shall, and shall cause its Subsidiaries to, (a) comply with all Requirements of Law and all restrictive covenants affecting such Person or the business, properties, assets or operations of such Person, and (b) obtain as needed all permits, licenses and franchises necessary for its operations and maintain such permits in good standing unless failure to comply or obtain could not reasonably be anticipated to have a Material Adverse Effect. 5G. PAYMENT OF TAXES AND CLAIMS. The Company shall pay, and cause each of its Subsidiaries to pay, (a) all taxes, assessments and other governmental charges imposed upon it or on any of its properties or assets or in respect of any of its franchises, business, income or property before any penalty or interest accrues thereon, and (b) all claims (including, without limitation, claims for labor, services, materials and supplies) for sums which have become due and payable and which by law have or may become a Lien (other than a Lien permitted by paragraph 6B(c) upon any of the Company's or such Subsidiary's property or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, however, that no such taxes, assessments and governmental charges referred to in clause (a) above or claims referred to in clause (b) above (and interest, penalties or fines relating thereto) need be paid if being contested in good faith by appropriate proceedings diligently instituted and conducted and if such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor; and provided further that no Default or Event of Default shall arise or occur with respect to this paragraph 5G unless unpaid taxes, assessments, governmental charges and claims (other than those being contested pursuant to the preceding proviso) exceed $1,000,000 in the aggregate. -12- 5H. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. In addition to the provisions set forth in paragraph 5C, the Company shall permit, and cause each of the Company's Subsidiaries to permit, (a) any authorized representative(s) designated by any Holder to visit and inspect any of the properties of the Company or any of its Subsidiaries, to examine, audit, check and make copies of their respective financial and accounting records, books, journals, orders, receipts and any correspondence and other data relating to their respective businesses or the transactions contemplated hereby (including, without limitation, in connection with environmental compliance, hazard or liability), and to discuss their affairs, finances and accounts with their directors, officers, employees and independent certified public accountants, and (b) permit the Collateral Agent or any of its agents or representatives to conduct a comprehensive field audit of its books, records, properties and assets, including without limitation, the Collateral, all upon reasonable notice, at such reasonable times during normal business hours, as often as may be reasonably requested and at the cost and expense of the Company; provided, however, so long as no Event of Default has occurred and is continuing, the Collateral Agent shall conduct no more than one (1) such comprehensive field audit during any twelve (12) month period and the reimbursable cost associated therewith shall not exceed $15,000. The Company shall keep and maintain, and cause each of the Company's Subsidiaries to keep and maintain, in all material respects, proper books of record and account in which entries in conformity with GAAP shall be made of all dealings and transactions in relation to their respective businesses and activities. If a Default has occurred and is continuing, the Company, upon the request of the Required Holder(s), shall turn over any such records to the Holders or their representatives. 5I. ERISA COMPLIANCE. The Company shall, and shall cause each of the Company's Domestic Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Plans to comply in all material respects with the provisions of ERISA, the Code, all other applicable laws, and the regulations and interpretations thereunder and the respective requirements of the governing documents for such Plans. 5J. MAINTENANCE OF PROPERTIES; INSURANCE. The Company shall maintain, preserve and protect all Property that is material to the conduct of the business of the Company or any of its Subsidiaries and keep such Property in good repair, working order and condition and from time to time make, or cause to be made all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times in accordance with customary and prudent business practices for similar businesses; and maintain in full force and effect insurance with responsible and reputable insurance companies or associations in such amounts, on such terms and covering such risks, including fire and other risks insured against by extended coverage, as is usually carried by companies engaged in similar businesses and owning similar properties similarly situated and maintain in full force and effect public liability insurance, insurance against claims for personal injury or death or property damage occurring in connection with any of its activities or any properties owned, occupied or controlled by it, in such amounts as it shall reasonably deem necessary, and maintain such other insurance as may be required by law. The Company shall deliver to the Collateral Agent, by no later than thirty (30) days after the Closing, endorsements (y) to all "All Risk" physical damage insurance policies on all of the Company's and its Subsidiaries' tangible personal property and assets and business interruption insurance policies naming the Collateral Agent as loss payee, and (z) to all general liability and -13- other liability policies naming the Collateral Agent and each Holder as an additional insured. In the event the Company or any of its Subsidiaries, at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required herein or to pay any premium in whole or in part relating thereto, then the Collateral Agent, without waiving or releasing any obligations or resulting Default hereunder, may at any time or times thereafter (but shall be under no obligation to do so) obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto which the Collateral Agent deems advisable. 5K. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries shall comply with all Environmental, Health or Safety Requirements of Law, except where noncompliance will not have or is not reasonably likely to subject the Company and its Subsidiaries to liability, individually or in the aggregate, in excess of $5,000,000 (excluding amounts covered by indemnity claims that are not in dispute). 5L. FOREIGN EMPLOYEE BENEFIT COMPLIANCE. The Company shall, and shall cause each of its Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Foreign Employee Benefit Plans to comply in all material respects with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Plans, except for failures to comply which, in the aggregate, would not result in liability in excess of $1,000,000. 5M. MAINTENANCE OF RIGHTS. The Company shall obtain and maintain, and shall cause each of its Subsidiaries to obtain and maintain, in full force and effect all licenses, franchises, permits other similar rights necessary for the operation of its business, except where the failure to obtain or maintain such rights does not have and could not reasonably be expected to have a Material Adverse Effect. 5N. CONDUCT OF BUSINESS. Subject to paragraphs 5D and 6B(h), the Company will continue, and will cause each Subsidiary to continue, to engage primarily in the material lines of business which the Company and its Subsidiaries operate, respectively, as of the Closing. 5O. SUBSIDIARY DOCUMENTATION. As soon as practicable and in any event within thirty (30) days after any Person becomes a Domestic Subsidiary of the Company, the Company shall cause each such Person to execute and deliver a Note Guaranty to the Holders and Collateral Documents to the Collateral Agent and to deliver or cause to be delivered to the Holders (in the case of a Note Guaranty) and the Collateral Agent (in the case of any Collateral Documents) all related documentation with respect to the execution and delivery of such Note Guaranty and Collateral Documents by such Person that the Holders or Collateral Agent may reasonably request, including, without limitation, certified resolutions, incumbency certificates, organizational documents and legal opinions. 5P. COLLATERAL DOCUMENTS; POST-CLOSING REAL ESTATE COVENANTS. (a) The Company shall execute or cause to be executed: (1) on or prior to the Closing, (i) the Security Agreement, (ii) one or more Pledge Agreements with respect to all of the Capital Stock owned by the Company and its Domestic Subsidiaries of each of the Domestic Subsidiaries in existence on the Closing, (iii) a Mortgage from the title owner of the Lafayette Property with respect to the Lafayette Property -14- and (iv) such vehicle title applications (other than with respect to vehicles subject to the Fleet Lease Transaction and the National City Lease Transaction) as the Collateral Agent may request, accompanied by the relevant vehicle titles and fees to be filed with the applicable Governmental Authorities to reflect the Collateral Agent as lienholder; (2) (i) within five (5) Business Days after any Subsidiary becoming a Domestic Subsidiary, a Pledge Agreement (or supplement thereto) with respect to all of the Capital Stock of such Subsidiary owned by the Company and its Domestic Subsidiaries and (ii) within thirty (30) days after any Subsidiary becoming a First Tier Foreign Subsidiary, a pledge agreement (or supplement thereto) or share mortgage in favor of the Collateral Agent for the benefit of the Secured Parties with respect to the lesser of (x) 100% (or, in respect of any First Tier Foreign Subsidiary, 65% so long as a 100% pledge would cause such First Tier Foreign Subsidiary's accumulated and undistributed earnings and profits to be deemed to be repatriated to the Company or a Domestic Subsidiary for U.S. federal income tax purposes) of all the outstanding Capital Stock of each First Tier Foreign Subsidiary and (y) all of the outstanding Capital Stock of each First Tier Foreign Subsidiary currently or hereafter owned by the Company and its Domestic Subsidiaries; and provided that no such pledge of the Capital Stock of a First Tier Foreign Subsidiary shall be required hereunder to the extent such pledge is prohibited by applicable law or the Collateral Agent and its counsel reasonably determine that such pledge would not provide material Collateral for the benefit of the Secured Parties pursuant to legally binding, valid and enforceable Pledge Agreements; (3) within five (5) Business Days after any Subsidiary becoming a Guarantor, a supplement to the Security Agreement (in the form attached thereto), and the other documents required by the Collateral Agent in connection therewith; (4) within thirty (30) days after the Company or any Domestic Subsidiary acquires any fee interest in real property, a Mortgage executed by such acquiring Person, accompanied by such title reports, title insurance, surveys, appraisals and environmental reports (collectively, "Real Estate Instruments") as are requested by the Collateral Agent (provided that the foregoing shall not apply to any real property that is (x) or is expected to be the subject of the SunTrust Sale Leaseback or (y) identified on Schedule 6B(b) hereto); (5) within ten (10) days after any Loan Party acquires an ownership interest in any vehicle and other item of rolling stock subject to a certificate of title law, to the extent so required by the Collateral Agent, an appropriate vehicle title application (other than with respect to vehicles subject to the Fleet Lease Transaction and the National City Lease Transaction) accompanied by the relevant vehicle title and fee to be filed with the applicable Governmental Authority to reflect the Collateral Agent as lienholder with respect to such vehicle or other item of rolling stock; and the Company shall deliver to the Collateral Agent all such Pledge Agreements, Note Guarantees and other Collateral Documents, together with appropriate corporate resolutions and other documentation (including opinions, UCC financing statements, real estate title insurance policies, environmental reports, the stock certificates representing the Capital Stock subject to such pledge, stock powers with respect thereto executed in blank, and such other documents as shall be reasonably requested to perfect the Lien of such pledge) in each case in form and -15- substance reasonably satisfactory to the Collateral Agent; provided that, with respect to the pledge of Capital Stock in First Tier Foreign Subsidiaries in existence on the date hereof and vehicles and real estate owned by the Company or any of its Domestic Subsidiaries on the date hereof, such relevant Pledge Agreements, vehicle title applications and Real Estate Instruments are required to be delivered hereunder at the times and in the manner required in writing by the Holders. (b) In addition to the terms and provisions of paragraph 5P(a), the Company shall, and shall cause its Subsidiaries to, within the time periods set forth below (to the extent such actions have not occurred on or prior to the Closing), cause the following to occur: (1) with respect to the Layfayette Property: (a) within seven (7) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; (b) within seven (7) days of the Closing, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the Lafayette Property; (c) within sixty (60) days of the Closing, deliver a Phase I Environmental Assessment addressed to and in form and substance reasonably satisfactory to the Holders, and prepared by an environmental engineering firm reasonably acceptable to the Holders; (d) within seven (7) days of the Closing, deliver a legal opinion in the form as set forth in Exhibit D-2 hereto from Baker & Daniels regarding such Mortgage; (e) within seventy-five (75) days of the Closing, deliver an ALTA plat of survey prepared by a surveyor licensed in the State of Indiana with respect to the Layfayette Property; and (f) within sixty (60) days of delivery of the survey, cause any necessary adjustments or modifications to the Mortgage or the title insurance policy as may be reasonably required to reflect the survey and the facts set forth therein on the title insurance policy and the Mortgage; (2) with respect to each Material Real Estate Property: (a) within fifteen (15) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; (b) within thirty (30) days of the Closing, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the such property; (c) within sixty-five (65) days of the Closing, deliver a Phase I Environmental Assessment addressed to and in form and substance reasonably satisfactory to the Holders, and prepared by an environmental engineering firm reasonably acceptable to the Holders; (d) within thirty (30) days of the Closing, deliver a legal opinion in the form as set forth in Exhibit D-2 hereto from special local counsel reasonably satisfactory to the Holders regarding such Mortgage; (e) within seventy-five (75) days of the Closing, deliver an ALTA plat of survey prepared by a surveyor licensed in the state where such property is located with respect to such property; and (f) within sixty (60) days of delivery of the survey, cause any necessary adjustments or modifications to the Mortgage or the title insurance policy as may be reasonably required to reflect the survey and the facts set forth therein on the title insurance policy and the Mortgage; (3) with respect to each Significant Real Estate Property: (a) within forty-five (45) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; and (b) within forty-five (45) days of the -16- Closing, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the such property; (4) with respect to all other real property owned by the Company or its Domestic Subsidiaries: (a) within sixty (60) days of the Closing, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; and (5) with respect to all properties which are anticipated to be included in the SunTrust Sale Leaseback, the Company agrees that if such SunTrust Sale Leaseback is not consummated on or prior to December 31, 2002, or if any property which was anticipated to be included in such SunTrust Sale Leaseback and is not so included, the Company shall comply or cause its Domestic Subsidiaries to comply with the terms and provisions of this paragraph 5P(b) with respect to each such property on or prior to December 31, 2002 in the case of all such properties if the SunTrust Sale Leaseback is not consummated and within forty-five (45) days from the date any property is no longer anticipated to be included in the SunTrust Sale Leaseback. 5Q. RESTRUCTURING CONSULTANT. The Company shall engage and retain, until such time as the Required Secured Parties so require, a restructuring consulting firm acceptable to the Required Secured Parties and the Company shall cause such restructuring consulting firm to deliver such financial reports, statements and analysis to any Holder as such Holder may reasonably request from time to time. Each Holder hereby acknowledges that the Company has engaged and retained PricewaterhouseCoopers as its restructuring consultant and agrees that PricewaterhouseCoopers is acceptable to such Holder. 5R. CHIEF RESTRUCTURING OFFICER. In the event the Company has not appointed a full-time permanent chief executive officer by September 30, 2002, the Company shall appoint and retain, until a full-time permanent chief executive officer of the Company is appointed, a chief restructuring officer with such qualifications and experience as are acceptable to the Required Secured Parties, which officer shall report directly to the Company's board of directors. The Company shall vest such officer with control over the operations of the Company and its Subsidiaries. Furthermore, until a full-time permanent chief executive officer of the Company is appointed, the Company hereby agrees to furnish to the Holders, promptly and in any event within (a) three (3) calendar days after the Company obtaining knowledge thereof, a statement of the chief financial officer or treasurer of the Company setting forth details of any and all material developments in the Company's search for a full-time permanent chief executive officer and (b) fifteen (15) days after the end of each calendar month, a statement of the chief financial officer or treasurer of the Company setting forth details of any and all steps the Company proposes to take with respect to selecting a full-time permanent chief executive officer. 5S. APPROVED REFINANCING INDEBTEDNESS. The Company shall incur an Approved Refinancing Indebtedness on or prior to March 30, 2004 in an aggregate principal amount equal to or in excess of the amount of Indebtedness of the Company which matures on March 30, 2004. -17- 6. NEGATIVE COVENANTS. 6A. FISCAL YEAR 2004 COVENANTS. The Company covenants that from and after December 31, 2003 and continuing so long as any of the Notes are outstanding: 6A(a) CONSOLIDATED TANGIBLE NET WORTH. The Company will at all times keep and maintain Consolidated Tangible Net Worth at an amount not less than the sum of (i) $110,000,000 plus (ii) 75% of Consolidated Net Income computed on a cumulative basis for each of the elapsed fiscal quarters ending after December 31, 2003; provided that notwithstanding that Consolidated Net Income for any such elapsed fiscal quarter may be a deficit figure, no reduction as a result thereof shall be made on the sum to be maintained pursuant hereto. 6A(b) FUNDED DEBT. The Company shall not at any time permit the aggregate amount of all Consolidated Funded Debt to exceed an amount equal to 50% of Consolidated Total Capitalization determined at such time. 6A(c) PRIORITY DEBT. The Company shall not at any time permit the aggregate amount of all Consolidated Priority Debt outstanding at any time to exceed an amount equal to 20% of Consolidated Tangible Net Worth. 6A(d) MINIMUM INTEREST COVERAGE RATIO. The Company shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ending on or about March 30, 2004), for the period of four consecutive fiscal quarters then ending, to be less than 4.00 to 1. 6A(e) MAXIMUM LEVERAGE RATIO. The Company shall not permit the ratio of (i) Consolidated Funded Debt to (ii) Consolidated EBITDA as of the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ending on or about March 30, 2004), for the period of four consecutive fiscal quarters then ending, to be greater than 2.85 to 1. 6B. NEGATIVE COVENANTS. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding: 6B(a) INDEBTEDNESS. Neither the Company nor any of its Subsidiaries shall directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except: (i) the Obligations; (ii) Permitted Existing Indebtedness; (iii) Indebtedness arising from intercompany loans from the Company or any Subsidiary so long as intercompany loans from the Company or any Domestic Subsidiary to a Foreign Subsidiary shall not exceed an aggregate of $5,000,000 during the term of this Agreement; -18- (iv) Indebtedness with respect to surety, appeal and performance bonds obtained by the Company or any of its Subsidiaries in the ordinary course of business; (v) Indebtedness constituting Contingent Obligations permitted by paragraph 6B(e); (vi) unsecured Indebtedness and other liabilities incurred in the ordinary course of business and consistent with past practice, but not incurred through the borrowing of money or the obtaining of credit (other than customary trade terms); (vii) Indebtedness evidenced by the Bank Notes and other Indebtedness under the Credit Agreement in an aggregate principal amount not to exceed $125,000,000 plus the PIK Notes (as defined in the Credit Agreement); (viii) Indebtedness incurred in connection with the Receivables Purchase Documents; provided that Receivables Facility Attributed Indebtedness incurred in connection therewith does not exceed $110,000,000 in the aggregate at any time; (ix) other unsecured Indebtedness in an aggregate principal amount not exceeding $3,000,000 at any time outstanding; and (x) the Approved Refinancing Indebtedness. 6B(b) SALES OF ASSETS. Except in connection with the SunTrust Sale Leaseback and the sale of any of the assets and properties or consummation of the transactions identified on Schedule 6B(b) hereto, neither the Company nor any of its Subsidiaries shall sell, assign, transfer, lease, convey or otherwise dispose of any property, whether now owned or hereafter acquired, or any income or profits therefrom, or enter into any agreement to do so, except: (i) sales of inventory in the ordinary course of business; (ii) the disposition of obsolete equipment in the ordinary course of business; (iii) Permitted Receivables Transfer; (iv) sales by Apex Trailer Leasing & Rentals, L.P. in the ordinary course of business of lease and other finance contract receivables and equipment subject to lease, if such transaction (a) is for not less than fair market value and (b) when combined with all other such sales during the then current fiscal year represents disposition of not greater than 50% of Apex Trailer Leasing & Rentals, L.P.'s Tangible Assets at the end of the immediately preceding fiscal year; and (v) transfers of assets by the Company or any Subsidiary to any Subsidiary so long as (1) in the case of a transferee which is a Domestic Subsidiary, the security interests granted pursuant to the Collateral Documents in the events so transferred shall remain in full force and effect and perfected and (2) transfers of assets by the Company or any Domestic Subsidiary to any Foreign Subsidiary shall not exceed an aggregate of $1,000,000 during the term of this Agreement. -19- 6B(c) LIENS. Neither the Company nor any of its Subsidiaries shall directly or indirectly create, incur, assume or permit to exist any Lien on or with respect to any of their respective property or assets except: (i) Permitted Existing Liens; (ii) Customary Permitted Liens; (iii) purchase money Liens (including the interest of a lessor under a Capitalized Lease and Liens to which any property is subject at the time of the acquisition thereof by the Company or one of its Subsidiaries) securing permitted purchase money Indebtedness; provided that such Liens shall not apply to any property of the Company or its Subsidiaries other than that purchased or subject to such Capitalized Lease; (iv) Liens arising in connection with the Permitted Receivables Transfer; (v) Environmental Liens securing liabilities, claims, costs or damages not exceeding $5,000,000 in the aggregate; (vi) Liens created by the Collateral Documents; and (vii) Liens granted by a Foreign Subsidiary on Property located in Canada to the extent securing Indebtedness permitted by paragraph 6B(a)(iii). In addition, neither the Company nor any or its Subsidiaries shall, after the date hereof, become a party to any agreement, note, indenture or other instrument (other than the Intercreditor Agreement), or take any other action, which would prohibit the creation of a Lien on any of its properties or other assets in favor of the Collateral Agent for the benefit of the Holders and the other Secured Parties as collateral for the Secured Obligations; provided that any agreement, note, indenture or other instrument in connection with permitted purchase money Indebtedness (including Capitalized Lease Obligations) may prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of the Holders and the other Secured Parties on the items of property obtained with the proceeds of such permitted purchase money Indebtedness; and provided further that the Receivables Purchase Documents may prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of the Holders and the other Secured Parties on the assets of WNC and on the "Transferred Assets" (as defined in the Receivables Sale Agreement) of the Originators. 6B(d) INVESTMENTS. Neither the Company nor any of its Subsidiaries shall directly or indirectly make or own any Investment except: (i) Investments in Cash Equivalents; (ii) Permitted Existing Investments; -20- (iii) Investments received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (iv) Investments consisting of deposit accounts maintained by the Company or any of its Subsidiaries in connection with their cash management systems; (v) Investments with respect to Indebtedness permitted pursuant to paragraph 6B(a)(iii); (vi) Existing Investments in any Subsidiaries; (vii) Investments consisting of minority interests and joint ventures and loans or advances to such entities, provided that at the time any such Investment is made the amount of all Investments under this clause (vii) (including such new Investment, and including all Permitted Existing Investments that are of the type covered by this clause (vii)) does not exceed $5,000,000 at such time; (viii) Investments in WNC required in connection with the Receivables Purchase Documents; and (ix) Investments in connection with Permitted Acquisitions. 6B(e) CONTINGENT OBLIGATIONS. Neither the Company nor any of its Subsidiaries shall directly or indirectly create or become or be liable with respect to any Contingent Obligation, except: (i) recourse obligations resulting from endorsement of negotiable instruments for collection in the ordinary course of business; (ii) Permitted Existing Contingent Obligations and any extensions, renewals or replacements thereof, provided that any such extension, renewal or replacement is not greater than the Indebtedness under, and shall be on terms no less favorable to the Company or such Subsidiary than the terms of, the Permitted Existing Contingent Obligation being extended, renewed or replaced; (iii) obligations, warranties, and indemnities, not relating to Indebtedness of any Person, which have been or are undertaken or made in the ordinary course of business and not for the benefit of or in favor of an Affiliate of the Company or such Subsidiary; (iv) Contingent Obligations of the Company or any of its Subsidiaries with respect to any Indebtedness permitted by this Agreement; and (v) Contingent Obligations with respect to surety, appeal and performance bonds obtained by the Company or any Subsidiary in the ordinary course of business. 6B(f) ACQUISITIONS. Neither the Company nor any of its Subsidiaries shall make any Acquisition other than a Permitted Acquisition. 6B(g) TRANSACTIONS WITH SHAREHOLDERS OR AFFILIATES. Neither the Company nor any of its Subsidiaries shall directly or indirectly enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder or holders of any Equity Interests of the Company, or with any Affiliate of the Company which is not its Subsidiary, on terms that are less favorable to the Company or its Subsidiaries, as applicable, than those that might be obtained in an arm's length transaction at the time from Persons who are not such a holder or Affiliate. -21- 6B(h) RESTRICTION ON FUNDAMENTAL CHANGES. Neither the Company nor any of its Subsidiaries shall enter into any merger or consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell, transfer or otherwise dispose of, in one transaction or series of transactions, all or substantially all of the Company's or any such Subsidiary's business or property, whether now owned or hereafter acquired, except transactions permitted under paragraphs 6B(b) and 6B(f) and except that any Subsidiary of the Company may merge with or liquidate into the Company or any other Subsidiary of the Company, provided that the surviving entity expressly assumes any liabilities, if any, of either of such Subsidiaries with respect to the Obligations pursuant to an assumption agreement reasonably satisfactory to the Required Holder(s) and provided further that the consolidated net worth of the surviving corporation is not less than the consolidated net worth of the Subsidiary with any liability with respect to the Obligations immediately prior to such merger. 6B(i) MARGIN REGULATIONS. Neither the Company nor any of its Subsidiaries shall use all or any portion of the proceeds of any credit extended under this Agreement to purchase or carry Margin Stock. 6B(j) ERISA. The Company shall not: (i) engage, or permit any of its Subsidiaries to engage, in any prohibited transaction described in Sections 406 of ERISA or 4975 of the Code for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the DOL; (ii) permit to exist any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of the Internal Revenue Code), with respect to any Benefit Plan, whether or not waived; (iii) fail, or permit any Controlled Group member to fail, to pay timely required contributions or annual installments due with respect to any waived funding deficiency to any Benefit Plan; or (iv) terminate, or permit any Controlled Group member to terminate, any Benefit Plan which would result in any liability of the Company or any Controlled Group member under Title IV of ERISA. 6B(k) FISCAL YEAR. Neither the Company nor any of its consolidated Subsidiaries shall change its fiscal year for accounting or tax purposes from a period consisting of the 12-month period ending on December 31 of each calendar year. 6B(l) PREPAYMENT OF OTHER INDEBTEDNESS. Neither the Company nor any of its Subsidiaries shall make any optional prepayment, redemption, repurchase or defeasance of any Indebtedness of the Company or any such Subsidiary which would, in accordance with GAAP, constitute long-term Indebtedness, other than the Obligations, any intercompany Indebtedness permitted by paragraph 6B(a)(iii) and other Indebtedness described on SCHEDULE 8D hereto. 6B(m) LIMITATIONS ON RESTRICTIVE AGREEMENTS. Neither the Company nor any of its Subsidiaries shall enter into, or suffer to exist, any agreement (other than this Agreement, the -22- Series A Note Purchase Agreements, the Series C-H Note Purchase Agreements, the Credit Agreement) with any Person which, directly or indirectly, prohibits or limits the ability of any Subsidiary to (i) pay dividends or make other distributions to the Company or prepay any Indebtedness owed to Company or (ii) transfer any of its properties or assets to the Company (other than with respect to assets subject to Liens permitted by paragraph 6B(c)). 6B(n) LEASES. Except in connection with the SunTrust Sale Leaseback, the Fleet Lease Transaction and the National City Lease Transaction, the Company shall not create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any obligation as lessee for the rental or hire of any real or personal property, except: (i) leases existing on the date of this Agreement and any extensions or renewals thereof, but no increase in the amount payable thereunder; and (ii) leases (other than Capitalized Leases or leases constituting Off-Balance Sheet Liabilities) which do not in the aggregate require the Company and its Subsidiaries on a consolidated basis to make payments (including taxes, insurance, maintenance and similar expenses which the Company or any Subsidiary is required to pay under the terms of any lease) at any time during the term of this Agreement in excess of $3,500,000. 6B(o) [Intentionally Omitted.] 6B(p) HEDGING OBLIGATIONS. Enter into any interest rate, commodity or foreign currency exchange, swap, collar, cap or similar agreements evidencing Hedging Obligations, other than interest rate, foreign currency or commodity exchange, swap, collar, cap or similar agreements entered into by the Company pursuant to which the Company has hedged its actual or forecasted interest rate, foreign currency or commodity exposure. Such permitted hedging agreements entered into by the Company and any Lender or any affiliate of any Lender to hedge floating interest rate risk in an aggregate notional amount not to exceed at any time an amount equal to the outstanding balance of the Term Loans and the principal Indebtedness under the Senior Notes at such time are sometimes referred to herein as "Interest Rate Agreements". 6B(q) SALES AND LEASEBACKS. Neither the Company nor any of its Subsidiaries shall become liable, directly, by assumption or by Contingent Obligation, with respect to any lease, whether an operating lease or a Capitalized Lease, of any Property (whether real or personal or mixed) (i) which it or one of its Subsidiaries sold or transferred or is to sell or transfer to any other Person, or (ii) which it or one of its Subsidiaries intends to use for substantially the same purposes as any other Property which has been or is to be sold or transferred by it or one of its Subsidiaries to any other Person in connection with such lease, unless (a) in either case the sale involved is not prohibited under paragraph 6B(b) and the lease involved is not prohibited under paragraph 6B(a) or (b) such sale and leaseback transaction is the SunTrust Sale Leaseback. The parties hereto acknowledge and agree that the foregoing shall not operate to restrict, prohibit or prevent the Fleet Lease Transaction and the National City Lease Transaction. 6B(r) ISSUANCE OF DISQUALIFIED AND PREFERRED STOCK. Neither the Company nor any of its Subsidiaries shall issue any Disqualified Stock. The Company shall not issue any new shares of preferred stock and shall not permit any Subsidiary to issue any shares of preferred stock. -23- 6B(s) CORPORATE DOCUMENTS. Neither the Company nor any of its Subsidiaries shall amend, modify or otherwise change any of the terms or provisions in any of their respective constituent documents as in effect on the date hereof in any manner materially adverse to the ability of the Company or any of its Subsidiaries to perform their respective obligations under the Note Documents, without the prior written consent of the Required Holder(s). The Company shall not amend, modify or otherwise change any of the terms or provisions of the Fruehauf Preferred Stock. 6B(t) OTHER INDEBTEDNESS. The Company shall not amend, modify or supplement, or permit any Subsidiary to amend, modify or supplement (or consent to any amendment, modification or supplement of), any document, agreement or instrument evidencing the Bank Notes, the Series A Notes, the Series C-H Notes, the NatCity Lease Transaction, the Fleet Lease Transaction, the Permitted Receivables Transfer or Subordinated Indebtedness (or any replacements, substitutions or renewals thereof) or pursuant to which any such Indebtedness is issued where such amendment, modification or supplement provides for the following or which has any of the following effects: (i) increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest; (ii) shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions; (iii) shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness; (iv) increases the rate of interest accruing on such Indebtedness; (v) provides for the payment of additional fees or increases existing fees; (vi) amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Company or a Subsidiary of the Company from taking certain actions) in a manner which is more onerous or more restrictive to the Company (or any Subsidiary of the Company) or which is otherwise materially adverse to the Company and/or the Holders or, in the case of adding covenants, which places additional restrictions on the Company (or a Subsidiary of the Company) or which requires the Company or any such Subsidiary to comply with more restrictive covenants than the covenants set forth herein or which requires the Company to better its financial performance from that set forth in the financial covenants set forth herein; (vii) amends, modifies or adds any covenant in a manner which, when taken as a whole, is materially adverse to the Company and/or the Holders; (viii) amends, modifies or supplements any subordination provisions thereof; or (ix) amends or modifies the limitations on transfer provided therein; or -24- (x) reduces the lending commitments under the Credit Agreement or the availability under the Permitted Receivables Transfer facility. 6B(u) NO CHANGES TO STANDARD WARRANTY. The Company shall not, and shall cause its Subsidiaries to not, make any material changes to the warranty policies of the Company and its Subsidiaries in effect on the date of this Agreement. 6B(v) PROHIBITION AGAINST TRADE-IN-VALUE GUARANTIES. The Company shall not, and shall cause its Subsidiaries to not, make any Guaranty of trade-in-values of trailers beyond six months in duration. 6C. FINANCIAL COVENANTS. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding: 6C(a) MINIMUM CONSOLIDATED TAX ADJUSTED EQUITY. If the Company shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below:
Minimum Consolidated Fiscal Quarter Ending Tax Adjusted Equity - --------------------- --------------------- March 31, 2003 $ 99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 $ 96,504,000
6C(b) MINIMUM CONSOLIDATED EQUITY. If the Company shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below:
Minimum Consolidated Fiscal Quarter Ending Equity - --------------------- --------------------- March 31, 2003 $87,882,000 June 30, 2003 $90,461,000 September 30, 2003 $94,751,000 December 31, 2003 $84,077,000
6C(c) MAXIMUM LEVERAGE VALUATION RATIO. The Company shall not permit, as of the last day of each of the fiscal quarters specified below, the Leverage Valuation Ratio to exceed the applicable "Maximum Leverage Valuation Ratio" specified below: -25-
Maximum Leverage Fiscal Quarter Ending Valuation Ratio - --------------------- ---------------- < June 30, 2002 0.95 to 1 September 30, 2002 0.95 to 1 December 31, 2002 0.95 to 1 March 31, 2003 0.85 to 1 June 30, 2003 0.80 to 1 September 30, 2003 0.80 to 1 December 31, 2003 0.75 to 1
6C(d) MINIMUM CONSOLIDATED EBITDA. (i) The Company shall, as of the last day of each of the fiscal quarters of the Company occurring in calendar year 2002, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such fiscal quarter, at an amount not less than $(20,000,000). (ii) The Company shall, as of the last day of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending:
Minimum Rolling 12 Month Consolidated Month Ending EBITDA - ------------ ------------------ January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000
6C(e) MINIMUM INTEREST COVERAGE RATIO. The Company shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Company (commencing with the fiscal quarter ending on or about March 31, 2003), for the period of four consecutive fiscal quarters then ending, to be less than 1.25 to 1. 6C(f) MAXIMUM CAPITAL EXPENDITURES. The Company will not, and will not permit any Subsidiary to, expend for Capital Expenditures during any fiscal year of the Company and its Subsidiaries, in excess of $6,000,000 in the aggregate for the Company and its Subsidiaries. -26- 6C(g) MAXIMUM FINANCE CONTRACTS. The Company will not, and will not permit any Subsidiary to, enter into any new Finance Contract if and to the extent that the sum of such Finance Contract (a) when added to the aggregate amount of all Finance Contracts entered into by the Company or any of its Subsidiaries during the twelve (12) month period that commences on the Closing Date exceeds $5,000,000 or (b) when added to the aggregate amount of all Finance Contracts entered by the Company or any of its Subsidiaries during the twelve (12) month period that commences on the first (1st) anniversary of the date of Closing exceeds $5,000,000. 6D. ADDITIONAL NEGATIVE COVENANTS. The Company covenants that from and after the Closing and continuing so long as any of the Notes are outstanding: 6D(a) RESTRICTED PAYMENTS. The Company will not, and will not permit any Subsidiary to, make any Restricted Payment; provided that the Company may, commencing with the March 15, 2003 scheduled dividend, resume (but may not make any payments that were previously due and not paid) making the regularly scheduled dividends on the Fruehauf Preferred Stock on a quarterly basis in an amount per quarter not to exceed 1.5% of the Stated Value Per Share (as defined in the Fruehauf Preferred Stock) so long as (i) no Default or Event of Default shall have occurred and be continuing hereunder, (ii) no Default or Event of Default would have occurred under the financial covenants set forth in CLAUSES (1), (2), (3) and (4) below if such financial covenants had been in full force and effect from the Closing to the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock and (iii) the Company has appointed a full-time permanent chief executive officer as of the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock. For purposes of this paragraph 6D(a), on and prior to the date of the declaration of any proposed Restricted Payment on the Fruehauf Preferred stock pursuant to this paragraph 6D(a), the Company shall have, and shall have caused each of its Subsidiaries to have, complied with the following financial covenants set forth in CLAUSES (1), (2), (3) and (4) below: (1) (A) If the Company shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below:
Minimum Consolidated Fiscal Quarter Ending Tax Adjusted Equity - --------------------- -------------------- June 30, 2002 $106,376,000 September 30, 2002 $113,535,000 December 31, 2002 $107,267,000 March 31, 2003 $ 99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 $ 96,504,000
(B) If the Company shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Company shall, as of the last day of -27- such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below:
Minimum Consolidated Fiscal Quarter Ending Equity - --------------------- --------------------- June 30, 2002 $101,492,000 September 30, 2002 $110,961,000 December 31, 2002 $100,966,000 March 31, 2003 $ 87,882,000 June 30, 2003 $ 90,461,000 September 30, 2003 $ 94,751,000 December 31, 2003 $ 84,077,000
(2) (A) The Company shall not permit the Interest Coverage Ratio as of the last day of the calendar months specified below, for the cumulative period commencing April, 2002 and ending on the last day of such calendar month, to be less than the applicable "Minimum Interest Coverage Ratio" specified below:
Minimum Interest Fiscal Quarter Ending Coverage Ratio - --------------------- ---------------- June 30, 2002 1.50 to 1 September 30, 2002 1.50 to 1 December 31, 2002 1.25 to 1
(B) The Company shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Company specified below, for the period of four consecutive fiscal quarters then ending, to be less than the applicable "Minimum Interest Coverage Ratio" specified below:
Minimum Interest Fiscal Quarter Ending Coverage Ratio - --------------------- --------------- March 31, 2003 1.25 to 1 June 30, 2003 1.25 to 1 September 30, 2003 1.25 to 1 December 31, 2003 1.25 to 1
(3) The Company shall, as of the last day of each of the calendar months specified below, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such calendar month, at an amount not less than the applicable "Minimum Cumulative Consolidated EBITDA" specified below: -28-
Minimum Cumulative Month Ending Consolidated EBITDA - ------------ ------------------- April 30, 2002 $ 3,841,000 May 31, 2002 $ 8,389,000 June 30, 2002 $14,722,000 July 31, 2002 $22,084,000 August 31, 2002 $28,732,000 September 30, 2002 $33,110,000 October 31, 2002 $36,753,000 November 30, 2002 $37,818,000 December 31, 2002 $37,856,000
(4) The Company shall, as of the last day of each of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending:
Minimum Rolling 12 Month Consolidated Month Ending EBITDA - ------------ ------------------ January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000
6D(b) APPROVED REFINANCING INDEBTEDNESS. The Company will not, and will not permit any Subsidiary to, incur any Indebtedness other than (a) Indebtedness permitted under paragraph 6B(a), (b) other Indebtedness with the prior written consent of 100% of the Holders of the Notes and (c) the Approved Refinancing Indebtedness. For purposes of this Agreement, "Approved Refinancing Indebtedness" shall mean Indebtedness of the Company which is either approved under clause (y) above or which satisfies each of the following requirements: (i) the maximum principal amount of such Indebtedness does not exceed the outstanding principal amount of Indebtedness of the Company which matures on March 30, 2004 plus accrued interest thereon and the amount of all reasonable costs and expenses incurred in connection with the incurrence of such Indebtedness; (ii) the maturity date of such Indebtedness is no earlier than March 30, 2007; -29- (iii) immediately prior to and after giving effect to the incurrence of such Indebtedness, no Default or Event of Default shall have occurred or be continuing under this Agreement, including, without limitation, the provisions of paragraph 6, or the Credit Agreement; (iv) the documentation evidencing such Indebtedness provides for collateralization, covenants and other material terms no less favorable to the Holders than those set forth in this Agreement, the Collateral Documents and the Intercreditor Agreement; and (v) such Indebtedness includes a working capital or revolving facility in an amount reasonably required to support the projected operations of the Company. 7. EVENTS OF DEFAULT. 7A. ACCELERATION. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise): 7A(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Company shall (i) fail to pay when due any of the Obligations consisting of principal with respect to the Notes or (ii) shall fail to pay within three (3) Business Days of the date when due any of the other Obligations under this Agreement or the other Note Documents. 7A(b) BREACH OF CERTAIN COVENANTS. The Company shall fail duly and punctually to perform or observe any agreement, covenant or obligation binding on the Company under: (i) Paragraphs 5A(c), 5A(d), 5A(e), 5A(f), 5A(g), 5E, 5F or 5H and such failure shall continue unremedied for fifteen (15) days; (ii) Paragraphs 5A(a), 5A(b), 5O, 5P, 5Q or 5R and such failure shall continue unremedied for five (5) Business Days; (iii) Paragraph 6; or (iv) Paragraph 5S. 7A(c) BREACH OF REPRESENTATION OR WARRANTY. Any representation or warranty made or deemed made by the Company to the Collateral Agent or any Holder herein or by the Company or any of its Subsidiaries in any of the other Note Documents or in any statement or certificate at any time given by any such Person pursuant to any of the Note Documents shall be false or misleading in any material respect on the date as of which made (or deemed made). 7A(d) OTHER DEFAULTS. The Company shall default in the performance of or compliance with any term contained in this Agreement (other than as covered by paragraphs 7A(a), 7A(b) or 7A(c)), or the Company or any of its Subsidiaries shall default in the performance of or compliance with any term contained in any of the other Note Documents, and -30- such default shall continue for thirty (30) days after the earlier of (i) notice from the Collateral Agent or any Holder or (ii) the date on which the Company knew of such default or should have known of such default exercising reasonable diligence. 7A(e) DEFAULT AS TO OTHER INDEBTEDNESS. Any of the Company or any of its Subsidiaries shall fail to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) with respect to any Indebtedness (other than the Obligations) the outstanding principal amount of which Indebtedness is in excess of $2,000,000; or any breach, default or event of default shall occur, or any other condition shall exist under any instrument, agreement or indenture pertaining to any such Indebtedness, if the effect thereof is to either cause or permit the holder thereof to cause an acceleration, mandatory redemption, a requirement that the Company or any such Subsidiary offer to purchase such Indebtedness or other required repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness to accelerate the maturity of any such Indebtedness or require a redemption or other repurchase of such Indebtedness; or any such Indebtedness shall be otherwise declared to be due and payable (by acceleration or otherwise) or required to be prepaid, redeemed or otherwise repurchased by the Company or any of its Subsidiaries (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof. 7A(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) An involuntary case shall be commenced against the Company or any of its Subsidiaries and the petition shall not be dismissed, stayed, bonded or discharged within sixty (60) days after commencement of the case; or a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or any of its Subsidiaries in an involuntary case, under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or any other similar relief shall be granted under any applicable federal, state, local or foreign law. (ii) A decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Company or any of its Subsidiaries or over all or a substantial part of the property of the Company or any of its Subsidiaries shall be entered; or an interim receiver, trustee or other custodian of the Company or any of its Subsidiaries or of all or a substantial part of the property of the Company or any of its Subsidiaries shall be appointed or a warrant of attachment, execution or similar process against any substantial part of the property of the Company or any of its Subsidiaries shall be issued and any such event shall not be stayed, dismissed, bonded or discharged within sixty (60) days after entry, appointment or issuance. 7A(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Company or any of its Subsidiaries shall (i) commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, (iii) consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property, (iv) make any assignment for the -31- benefit of creditors or (v) take any corporate, partnership or comparable action to authorize any of the foregoing. 7A(h) JUDGMENTS AND ATTACHMENTS. Any money judgment(s) (other than a money judgment covered by insurance as to which the insurance company has not disclaimed or reserved the right to disclaim coverage), writ or warrant of attachment, or similar process against any of the Company or any of its Subsidiaries or any of their respective assets involving in any single case or in the aggregate an amount in excess of $1,000,000 is (are) entered and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event later than fifteen (15) days prior to the date of any proposed sale thereunder. 7A(i) DISSOLUTION. Any order, judgment or decree shall be entered against the Company or any of its Subsidiaries decreeing its involuntary dissolution or split up and such order shall remain undischarged and unstayed for a period in excess of sixty (60) days; or the Company or any of its Subsidiaries shall otherwise dissolve or cease to exist except as specifically permitted by this Agreement unless the dissolving entity is a limited liability company which elects to continue its existence. 7A(j) NOTE DOCUMENTS; FAILURE OF SECURITY. At any time, for any reason, (i) any Note Document as a whole that materially affects the ability of the Collateral Agent or any of the Holders to enforce the Obligations against the Company or any Guarantor or enforce their rights against the Collateral ceases to be in full force and effect or (ii) any Loan Party seeks to repudiate its obligations under the Note Documents or (iii) after the execution and delivery of the Collateral Documents, except to the extent permitted by the terms thereof, the Collateral Documents shall cease to create a valid and perfected first priority Lien subject only to Permitted Liens in any of the Collateral purported to be covered thereby or (iv) any title insurance coverage in respect of any Material portion of the Collateral is disavowed or becomes ineffective. 7A(k) TERMINATION EVENT. Any Termination Event occurs which the Required Holder(s) believe is reasonably likely to subject the Company or any of its Subsidiaries to liability in excess of $1,000,000. 7A(l) WAIVER OF MINIMUM FUNDING STANDARD. If the plan administrator of any Plan applies under Section 412(d) of the Code for a waiver of the minimum funding standards of Section 412(a) of the Code and any Holder believes the substantial business hardship upon which the application for the waiver is based could reasonably be expected to subject either the Company or any Controlled Group member to liability in excess of $1,000,000. 7A(m) CHANGE OF CONTROL. A Change of Control shall occur. 7A(n) ENVIRONMENTAL MATTERS. The Company or any of its Subsidiaries shall be the subject of any proceeding or investigation pertaining to (i) the Release by the Company or any of its Subsidiaries of any Contaminant into the environment, (ii) the liability of any of the Company or any of its Subsidiaries arising from the Release by any other Person of any Contaminant into the environment, or (iii) any violation of any Environmental, Health or Safety Requirements of Law by the Company or any of its Subsidiaries, which, in any case, has or is reasonably likely to subject the Company or any of its Subsidiaries to liability individually or in -32- the aggregate in excess of $5,000,000 (exclusive of liabilities with respect to which the Company is maintaining reserves as of the date hereof in accordance with GAAP). 7A(o) COLLATERAL DOCUMENTS. The Company or any Subsidiary shall fail to comply with any of the terms or provisions of any Collateral Document for five (5) Business Days, subject to any applicable cure periods contained therein, after notice of such non-compliance from the Collateral Agent. 7A(p) INTEREST RATE AGREEMENTS. Nonpayment by the Company or any Subsidiary of any obligation under any Interest Rate Agreement or the breach by the Company or any Subsidiary of any term, provision or condition contained in any such Interest Rate Agreement. 7A(q) MATERIAL ADVERSE EFFECT. A Material Adverse Effect shall occur. 7A(r) INTERCREDITOR AGREEMENT. The intercreditor provisions of the Intercreditor Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, any Person (including any Secured Party) shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations hereunder shall for any reason be subordinated or shall not have the priority contemplated by this Agreement and the Intercreditor Agreement. then (a) if such event is an Event of Default specified in paragraph 7A(a) or 7A(b)(i)-(iii), any holder of any Note may at its option during the continuance of such Event of Default, by notice in writing to the Company, declare all of the Notes held by such holder to be, and all of the Notes held by such holder shall thereupon be and become, immediately due and payable at par together with interest accrued thereon and together with the Yield-Maintenance Amount, if any, with respect to each such Note, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Company, (b) if such event is an Event of Default specified in paragraph 7A(b)(iv), 7A(f) or 7A(g) with respect to the Company, all of the Notes at the time outstanding shall automatically become immediately due and payable together with interest accrued thereon and together with the Yield-Maintenance Amount, if any, with respect to each Note, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Company, and (c) with respect to any event constituting an Event of Default, the Required Holder(s) of the Notes may at its or their option during the continuance of such Event of Default, by notice in writing to the Company, declare all of the Notes to be, and all of the Notes shall thereupon be and become, immediately due and payable together with interest accrued thereon and together with the Yield-Maintenance Amount, if any, with respect to each Note, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Company. 7B. RESCISSION OF ACCELERATION. At any time after any or all of the Notes shall have been declared immediately due and payable pursuant to paragraph 7A, the Required Holder(s) of the Notes may, by notice in writing to the Company, rescind and annul such declaration and its consequences if (i) the Company shall have paid all overdue interest on the Notes, the principal of and Yield-Maintenance Amount, if any, payable with respect to any Notes which have become due otherwise than by reason of such declaration, and interest on such overdue interest -33- and overdue principal and Yield-Maintenance Amount at the rate specified in the Notes, (ii) the Company shall not have paid any amounts which have become due solely by reason of such declaration, (iii) all Events of Default and Defaults, other than non-payment of amounts which have become due solely by reason of such declaration, shall have been cured or waived pursuant to paragraph 11C, and (iv) no judgment or decree shall have been entered for the payment of any amounts due pursuant to the Notes or this Agreement. No such rescission or annulment shall extend to or affect any subsequent Event of Default or Default or impair any right arising therefrom. 7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be declared immediately due and payable pursuant to paragraph 7A or any such declaration shall be rescinded and annulled pursuant to paragraph 7B, the Company shall forthwith give written notice thereof to the holder of each Note at the time outstanding. 7D. OTHER REMEDIES. If any Event of Default or Default shall occur and be continuing, the holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note by exercising such remedies as are available to such holder in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Agreement or in aid of the exercise of any power granted in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise. 8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents, covenants and warrants as follows (all references to "Subsidiary" and "Subsidiaries" in this paragraph 8 shall be deemed omitted if the Company has no Subsidiaries at the time the representations herein are made or repeated): 8A. ORGANIZATION; SUBSIDIARY PREFERRED STOCK. The Company is a corporation duly organized and existing in good standing under the laws of the State of Delaware, each Subsidiary is duly organized and existing in good standing under the laws of the jurisdiction in which it is incorporated, and the Company has and each Subsidiary has the corporate power to own its respective property and to carry on its respective business as now being conducted. No Subsidiary has outstanding any shares of stock of a class which has priority over any other class as to dividends or in liquidation. Schedule 8A is (except as noted therein) a complete and correct list of the Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary. All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 8A as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 8A). 8B. FINANCIAL STATEMENTS. The Company has furnished each Purchaser of any Note with the financial statements listed on Schedule 8B, identified by a principal financial officer of the Company. Such financial statements (including any related schedules and/or notes) are true and -34- correct in all material respects (subject, as to interim statements, to changes resulting from audits and year-end adjustments), have been prepared in accordance with generally accepted accounting principles consistently followed throughout the periods involved and show all liabilities, direct and contingent, of the Company and its Subsidiaries required to be shown in accordance with such principles. The balance sheets fairly present the condition of the Company and its Subsidiaries as at the dates thereof, and the statements of income, stockholders' equity and cash flows fairly present the results of the operations of the Company and its Subsidiaries and their cash flows for the periods indicated. Except as described in the financial statements listed on Schedule 8B, there has been no material adverse change in the business, property or assets, condition (financial or otherwise), operations or prospects of the Company and its Subsidiaries taken as a whole since the end of the most recent fiscal year for which such audited financial statements have been furnished. 8C. ACTIONS PENDING. Except as disclosed on Schedule 8C hereto, there is no action, suit, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, or any properties or rights of the Company or any of its Subsidiaries, by or before any court, arbitrator or administrative or governmental body which could be reasonably expected to result in any material adverse change in the business, property or assets, condition (financial or otherwise), operations or prospects of the Company and its Subsidiaries taken as a whole. 8D. OUTSTANDING INDEBTEDNESS. Neither the Company nor any of its Subsidiaries has outstanding any Indebtedness except as permitted by paragraph 6B(a). There exists no default under the provisions of any instrument evidencing such Indebtedness or of any agreement relating thereto. Schedule 8D hereto sets forth a complete and correct list of all (i) outstanding Indebtedness of the Company and its Subsidiaries representing an obligation to pay in excess of $50,000 as of December 31, 2001, (ii) Liens on property of the Company and its Subsidiaries as of December 31, 2001 and (iii) Investments of the Company and its Subsidiaries as of December 31, 2001. 8E. TITLE TO PROPERTIES. The Company has and each of its Subsidiaries has good and indefeasible title to its respective real properties (other than properties which it leases) and good title to all of its other respective properties and assets, including the properties and assets reflected in the most recent audited balance sheet referred to in paragraph 8B (other than properties and assets disposed of in the ordinary course of business), subject to no Lien of any kind except Liens permitted by paragraph 6B(c). All leases necessary in any material respect for the conduct of the respective businesses of the Company and its Subsidiaries are valid and subsisting and are in full force and effect. 8F. TAXES. The Company has and each of its Subsidiaries has filed all federal, state and other income tax returns which, to the best knowledge of the officers of the Company and its Subsidiaries, are required to be filed, and each has paid all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles. -35- 8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement or subject to any charter or other corporate restriction which materially and adversely affects its business, property or assets, condition (financial or otherwise) or operations. Neither the execution nor delivery of this Agreement, the other Note Documents or the Notes, nor the issuance and exchange of the Notes, nor fulfillment of nor compliance with the terms and provisions hereof and thereof will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the properties or assets of the Company or any of its Subsidiaries pursuant to, the charter or by-laws of the Company or any of its Subsidiaries, any award of any arbitrator or any agreement (including any agreement with stockholders), instrument, order, judgment, decree, statute, law, rule or regulation to which the Company or any of its Subsidiaries is subject. Neither the Company nor any of its Subsidiaries is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other contract or agreement (including its charter) which limits the amount of, or otherwise imposes restrictions on the granting of, Liens on the Property of the Company and its Subsidiaries of the type contemplated by the Collateral Documents except as set forth in the agreements listed in Schedule 8G attached hereto. 8H. MARGIN REGULATIONS. The Company is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying "margin stock" (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and the aggregate market value of all "margin stock" owned by the Company and its Subsidiaries does not exceed 25% of the aggregate value of the assets thereof, as determined by any reasonable method. Neither the Company nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or the Notes to violate Regulation U, Regulation T or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, in each case as in effect now or as the same may hereafter be in effect. 8I. ERISA. No accumulated funding deficiency (as defined in Section 302 of ERISA and Section 412 of the Code), whether or not waived, exists with respect to any Plan (other than a Multiemployer Plan). No liability to the PBGC has been or is expected by the Company or any ERISA Affiliate to be incurred with respect to any Plan (other than a Multiemployer Plan) by the Company, any Subsidiary or any ERISA Affiliate which is or would be materially adverse to the business, property or assets, condition (financial or otherwise) or operations of the Company and its Subsidiaries taken as a whole. Neither the Company, any Subsidiary nor any ERISA Affiliate has incurred or presently expects to incur any withdrawal liability under Title IV of ERISA with respect to any Multiemployer Plan which is or would be materially adverse to the business, property or assets, condition (financial or otherwise) or operations of the Company and its Subsidiaries taken as a whole. The execution and delivery of this Agreement and the issuance and exchange of the Notes will be exempt from or will not involve any transaction which is subject to the prohibitions of Section 406 of ERISA and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code. The representation by the Company in the next preceding sentence is made in reliance upon and subject to the accuracy of the -36- representation of each Purchaser in paragraph 9B as to the source of funds used by it to purchase the Notes. 8J. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any Subsidiary, nor any of their respective businesses or properties, nor any relationship between the Company or any Subsidiary and any other Person, nor any circumstance in connection with the issuance, exchange or delivery of the Notes is such as to require any authorization, consent, approval, exemption or any action by or notice to or filing with any court or administrative or governmental body (other than routine filings after the date of Closing with the Securities and Exchange Commission and/or state Blue Sky authorities) in connection with the execution and delivery of this Agreement or the other Note Documents, the issuance, exchange or delivery of the Notes or fulfillment of or compliance with the terms and provisions hereof or thereof. 8K. ENVIRONMENTAL COMPLIANCE. Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed to you in writing: (a) neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect; (b) neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws, in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and (c) all buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect. 8L. REGULATORY STATUS. Neither the Company nor any Subsidiary is (i) an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary company" or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company", within the meaning of the Public Utility Act of 1935, as amended, or (iii) a "public utility" within the meaning of the Federal Power Act, as amended. -37- 8M. SECTION 144A. The Notes are not of the same class as securities, if any, of the Company listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system. 8N. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to Liens permitted by paragraph 6B(c) hereof, there is no financing statement, security agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any filing records, registry or other public office, that purports to cover, affect or give notice of any present or possible future Lien on, or security interest in, any assets or property of the Company or any of its Subsidiaries or any rights relating thereto. 8O. DISCLOSURE. Neither this Agreement nor any other document, certificate or statement furnished to any Purchaser by or on behalf of the Company in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Company or any of its Subsidiaries which materially adversely affects or in the future may (so far as the Company can now foresee) materially adversely affect the business, property or assets, condition (financial or otherwise), prospects or operations of the Company or any of its Subsidiaries and which has not been set forth in this Agreement. 8P. CREDIT AGREEMENT REPRESENTATIONS. The representations and warranties set forth in Article V of the Credit Agreement are hereby incorporated by reference herein as if such representations and warranties were set forth herein in full. 8Q. RESTRUCTURING FEES. Neither the Company nor any Subsidiary has agreed to or has paid any amendment fee, restructuring fee, default premium or fee or any other fee, premium or charge to any holder of Indebtedness in connection with the Restructuring Transaction other than (a) the fees and charges specifically set forth in the Wabash National Corporation Proposal for Debt Restructure letter dated April 1, 2002, (b) the fees, costs and expenses specifically provided for in the Master Amendment dated as of the Closing to certain of the Fleet Lease Transaction documentation, (c) the extension fee paid to National City Leasing Corporation in connection with the extension of the National City Lease Transaction and (d) fees paid to the Administration Agent or the Collateral Agent solely in their respective capacities as Administrative Agent or Collateral Agent. The Company and its Subsidiaries have disclosed to the Holders all written fee letters or other agreements regarding the payment of the fees and charges described in this paragraph 8Q paid to or agreed to in connection with the Restructuring Transaction other than those fees described in clause (d) above. 9. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser represents as follows: 9A. NATURE OF PURCHASE. Such Purchaser did not acquire the Notes purchased by it under the Original Note Purchase Agreement with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, provided that the disposition of such Purchaser's property shall at all times be and remain within its control. -38- 9B. SOURCE OF FUNDS. The source of the funds used by such Purchaser to pay the purchase price of the Notes purchased by such Purchaser under the Original Note Purchase Agreement constituted assets allocated to: (i) the "insurance company general account" of such Purchaser (as such term is defined under Section V of the United States Department of Labor's Prohibited Transaction Class Exemption ("PTCE") 95-60), and as of the date of the purchase of the Notes such Purchaser satisfies all of the applicable requirements for relief under Sections I and IV of PTCE 95-60, (ii) a separate account maintained by such Purchaser in which no employee benefit plan, other than employee benefit plans identified on a list which has been furnished by such Purchaser to the Company, participates to the extent of 10% or more or (iii) an investment fund, the assets of which do not include any assets of any employee benefit plan. For the purpose of this paragraph 9B, the terms "SEPARATE ACCOUNT" and "EMPLOYEE BENEFIT PLAN" shall have the respective meanings specified in Section 3 of ERISA. 10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this Agreement, the terms defined in paragraphs 10A and 10B (or within the text of any other paragraph) shall have the respective meanings specified therein and all accounting matters shall be subject to determination as provided in paragraph 10C. 10A. YIELD-MAINTENANCE TERMS. "CALLED PRINCIPAL" shall mean, with respect to any Note, the principal of such Note that is to be prepaid pursuant to paragraph 4B or 4C or is declared to be immediately due and payable pursuant to paragraph 7A, as the context requires. "DISCOUNTED VALUE" shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (as converted to reflect the periodic basis on which interest on such Note is payable, if payable other than on a semi-annual basis) equal to the Reinvestment Yield with respect to such Called Principal. "REINVESTMENT YIELD" shall mean, with respect to the Called Principal of any Note, the yield to maturity implied by (i) 0.50% over the yields reported, as of 10:00 A.M. (New York City local time) on the Business Day next preceding the Settlement Date with respect to such Called Principal, on the display designated as "Page PX1" on the Bloomberg Financial Markets Services Screen (or such other display as may replace Page PX1 on the Bloomberg Financial Markets Services Screen) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or if such yields shall not be reported as of such time or the yields reported as of such time shall not be ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for the latest day for which such yields shall have been so reported as of the Business Day next preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield shall be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between yields reported for various maturities. -39- "REMAINING AVERAGE LIFE" shall mean, with respect to the Called Principal of any Note, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) each Remaining Scheduled Payment of such Called Principal (but not of interest thereon) by (b) the number of years (calculated to the nearest one-twelfth year) which will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. "REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due on or after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date. "SETTLEMENT DATE" shall mean, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to paragraph 4B or 4C or is declared to be immediately due and payable pursuant to paragraph 7A, as the context requires. "YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i) such Called Principal plus (ii) interest accrued thereon as of (including interest due on) the Settlement Date with respect to such Called Principal. The Yield-Maintenance Amount shall in no event be less than zero. Notwithstanding anything to the contrary contained herein or in the Notes, for purposes of computing any Yield-Maintenance Amount under this Agreement, all Remaining Scheduled Payments on the Notes shall be determined on the assumption that the interest rates borne by the Notes is 8.04% per annum. 10B. OTHER TERMS. "ACQUISITION" means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Company or any of its Subsidiaries (a) acquires any going business or all or substantially all of the assets of any firm, corporation or division thereof which constitutes a going business, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage of voting power) of the outstanding partnership interests of a partnership or a majority (by percentage or voting power) of the outstanding ownership interests of a limited liability company. "ADMINISTRATIVE AGENT" means Bank One in its capacity as contractual representative for itself and the Lenders pursuant to the Credit Agreement and any successor Administrative Agent appointed pursuant thereto. "AFFILIATE" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person is the "beneficial owner" (as defined in Rule -40- 13d-3 under the Securities Exchange Act of 1934) of greater than ten percent (10%) or more of any class of voting securities (or other voting interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Capital Stock, by contract or otherwise. In addition, each director of the Company or any Subsidiary of the Company shall be deemed to be an Affiliate of the Company. "AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the Revolving Loan Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is $18,000,000.00, of which $10,444,995.69 is issued and outstanding as of the Closing. "AGREEMENT" means this Amended and Restated Note Purchase Agreement, as it may be amended, restated or otherwise modified and in effect from time to time. "APPROVED REFINANCING INDEBTEDNESS" is defined in paragraph 6D(b). "AUTHORIZED OFFICER" means any of the chief executive officer, chief financial officer, controller and treasurer of the Company, acting singly. "AVAILABLE LIQUIDITY" means, for any period, the sum of the average monthly balances during such period of (i) the amount by which (A) the Aggregate Revolving Loan Commitment in effect during such period exceeds (B) the aggregate outstanding amount of the Revolving Advances (as defined in the Credit Agreement) and Revolver L/C Obligations (as defined in the Credit Agreement) during such period and (ii) "Availability" (as defined in the Receivables Purchase Agreement) during such period. "BANK ONE" means Bank One, Indiana, N.A. in its individual capacity, together with its successors. "BANK NOTES" means the Revolving Notes, the Term Notes and the PIK Notes (as defined in the Credit Agreement). "BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which the Company or any other member of the Controlled Group is, or within the immediately preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA. "CAPITAL EXPENDITURES" means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including Capitalized Leases and purchase money Indebtedness to the extent permitted hereunder) by the Company and its Subsidiaries during that period that, in conformity with GAAP, are required to be included in or reflected by the property, plant, equipment or similar fixed asset accounts reflected in the consolidated balance sheet of the Company and its Subsidiaries. "CAPITAL STOCK" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership, -41- partnership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "CAPITALIZED LEASE" of a Person means any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP. "CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP. "CASH EQUIVALENTS" means (a) marketable direct obligations issued or unconditionally guaranteed by the government of the United States; (b) domestic and Eurodollar certificates of deposit and time deposits, bankers' acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, or its branches or agencies and having capital and surplus in an aggregate amount not less than $500,000,000 (fully protected against currency fluctuations for any such deposits with a term of more than ten (10) days); (c) shares of money market, mutual or similar funds having net assets in excess of $500,000,000 maturing or being due or payable in full not more than one hundred eighty (180) days after the Company's acquisition thereof and the investments of which are limited to investment grade securities (i.e., securities rated at least Baa by Moody's Investors Service, Inc. or at least BBB by Standard & Poor's Ratings Group) and (d) commercial paper of United States banks and bank holding companies and their subsidiaries and United States finance, commercial, industrial or utility companies which, at the time of acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better) by Moody's Investors Service, Inc.; provided that the maturities of such Cash Equivalents shall not exceed 365 days. "CHANGE OF CONTROL" means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock of the Company. "CLOSING" is defined in paragraph 2A. "CODE" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. "COLLATERAL" means all real and personal property and interests in real and personal property now owned or hereafter acquired by the Company or any of the Company's Domestic Subsidiaries in or upon which a security interest or lien is granted to the Collateral Agent, for the benefit of the Secured Parties, whether under the Security Agreement, under any of the other Collateral Documents or under any of the other Note Documents. "COLLATERAL AGENT" means Bank One, NA, a national banking association, in its capacity as contractual representative for itself and the Secured Parties pursuant to the terms of -42- the Intercreditor Agreement and any successor Collateral Agent appointed pursuant to the terms thereof. "COLLATERAL DOCUMENTS" means the Security Agreement, the Pledge Agreements, the Mortgages and all other security agreements, pledges, powers of attorney, assignments, financing statements, vehicle titles and all other instruments and documents delivered to the Collateral Agent pursuant to paragraph 5P hereof, together with all agreements, instruments and documents referred to therein or contemplated thereby. "COMMISSION" means the Securities and Exchange Commission and any Person succeeding to the functions thereof. "COMPANY" means Wabash National Corporation, a Delaware corporation, and its successors and assigns. "COMPLIANCE CERTIFICATE" means a certificate substantially in the form of EXHIBIT 5A-2 delivered to the Holders by the Company pursuant to the provisions of this Agreement and covering, among other things, its compliance with the financial covenants contained in paragraph 6 and certain other provisions of this Agreement. "CONFIDENTIAL INFORMATION" shall mean any written information delivered or made available by or on behalf of the Company or any Subsidiary to a Purchaser or a Transferee (as the case may be) in connection with or pursuant to this Agreement which is proprietary in nature and clearly marked or labeled as being confidential information, but in no event shall include information (i) which was publicly known or otherwise known to such Purchaser or Transferee (as the case may be) at the time of disclosure (except pursuant to disclosure in connection with this Agreement), (ii) which subsequently becomes publicly known through no act or omission by such Purchaser or Transferee (as the case may be), or (iii) which otherwise becomes known to such Purchaser or Transferee, other than through disclosure by the Company or any Subsidiary or any Person who was not under an obligation of confidentiality (known or advised to such Purchaser). "CONSOLIDATED EBITDA" means, for any period, on a consolidated basis for the Company and its consolidated Subsidiaries, the sum of the amounts for such period, without duplication, of (i) Consolidated Operating Income, plus (ii) charges against income for foreign taxes and U.S. income taxes to the extent deducted in computing Consolidated Operating Income, plus (iii) Interest Expense to the extent deducted in computing Consolidated Operating Income, plus (iv) depreciation expense to the extent deducted in computing Consolidated Operating Income, plus (v) amortization expense, including, without limitation, amortization of goodwill and other intangible assets to the extent deducted in computing Consolidated Operating Income, plus (vi) other non-cash charges (in an aggregate amount not in excess of $15,000,000 during any fiscal year of the Company) in accordance with GAAP to the extent deducted in computing Consolidated Operating Income, minus (x) the total interest income of the Company and its Subsidiaries to the extent included in computing Consolidated Operating Income minus (y) the total tax benefit reported by the Company and its Subsidiaries to the extent included in computing Consolidated Operating Income. -43- "CONSOLIDATED EQUITY" means as of the date of any determination thereof, the total stockholders' equity of the Company and its Subsidiaries on a consolidated basis, all as determined in accordance with GAAP. "CONSOLIDATED FUNDED DEBT" means Funded Debt of the Company and its Subsidiaries, determined on a consolidated basis eliminating intercompany items. "CONSOLIDATED NET INCOME" means, with reference to any period, the net income (or loss) of the Company and its Subsidiaries for such period (taken as a cumulative whole), as determined in accordance with GAAP, after eliminating all offsetting debits and credits between the Company and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP. "CONSOLIDATED OPERATING INCOME" means, with reference to any period, the net operating income (or loss) of the Company and its Subsidiaries for such period (taken as a cumulative whole on a consolidated basis) including, without limitation, all restructuring expenses for such period (exclusive of "other income/expenses" as reflected in the Company's consolidated statement of income of the Company and its Subsidiaries for such period and related to non-operating and non-recurring income and expenses), as determined in accordance with GAAP, after eliminating all offsetting debits and credits between the Company and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP. "CONSOLIDATED PRIORITY DEBT" means Priority Debt of the Company and its Subsidiaries, determined on a consolidated basis eliminating intercompany items. "CONSOLIDATED TANGIBLE NET WORTH" means as of the date of any determination thereof, the arithmetic sum of: (a) the amount of the capital stock accounts (net of treasury stock, at cost) plus (or minus in the case of deficit) the surplus and retained earnings of the Company and its Subsidiaries, PLUS (b) minority interests and deferred taxes of the Company and its Subsidiaries, MINUS (c) the net book value, after deducting any reserves applicable thereto, of all items of the following character which are included in the assets of the Company and its Subsidiaries, to wit: (i) the incremental increase in an asset resulting from any reappraisal, revaluation or write-up of assets (other than any revaluation or write-up of assets in accordance with GAAP); and -44- (ii) goodwill, patents, patent applications, permits, trademarks, trade names, copyrights, licenses, franchises, experimental expense, organizational expense, unamortized Indebtedness discount and expense, the excess of cost of shares acquired over book value of related assets and such other assets as are properly classified as "intangible assets" acquired by the Company or any Subsidiary after December 1, 1996 to the extent and in the amount by which the fair market value thereof is in excess of 10% of Consolidated Total Assets as of any date of determination of Consolidated Total Assets; all determined in accordance with GAAP. "CONSOLIDATED TAX ADJUSTED EQUITY" means as of the date of any determination thereof, Consolidated Equity plus the cumulative federal, state and local income tax benefit reported by the Company in accordance with GAAP. "CONSOLIDATED TOTAL ASSETS" means as of the date of any determination thereof, total assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP. "CONSOLIDATED TOTAL CAPITALIZATION" means as of the date of any determination thereof, the sum of (a) Consolidated Funded Debt plus (b) Consolidated Tangible Net Worth. "CONTAMINANT" means any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any constituent of any such substance or waste, and includes but is not limited to these terms as defined in Environmental, Health or Safety Requirements of Law. "CONTINGENT OBLIGATION", as applied to any Person, means any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or -45- (d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof. In any computation of the Indebtedness or other liabilities of the obligor under any Contingent Obligation, the Indebtedness or other obligations that are the subject of such Contingent Obligation shall be assumed to be direct obligations of such obligor. "CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of any equity or Indebtedness securities issued by that Person or any indenture, mortgage, deed of trust, security agreement, pledge agreement, guaranty, contract, undertaking, agreement or instrument, in any case in writing, to which that Person is a party or by which it or any of its properties is bound, or to which it or any of its properties is subject. "CONTROLLED GROUP" means the group consisting of (a) any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Company; (b) a partnership or other trade or business (whether or not incorporated) which is under common control (within the meaning of Section 414(c) of the Code) with the Company; and (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Company, any corporation described in clause (a) above or any partnership or trade or business described in clause (b) above. "CREDIT AGREEMENT" means the Amended and Restated Credit Agreement dated as of April 11, 2002, among the Company, the financial institutions from time to time party thereto as lenders and Bank One, Indiana, N.A. as Administrative Agent, as amended from time to time in accordance with paragraph 6B(t) hereof. "CUSTOMARY PERMITTED LIENS" means: (a) Liens (other than Environmental Liens and Liens in favor of the IRS or the PBGC) with respect to the payment of taxes, assessments or governmental charges in all cases which are not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP; (b) statutory Liens of landlords and Liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other similar Liens imposed by law created in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP; (c) Liens (other than Environmental Liens and Liens in favor of the IRS or the PBGC) incurred or deposits made in the ordinary course of business in connection with worker's compensation, unemployment insurance or other types of social security benefits or to secure the performance of bids, tenders, sales, contracts (other than for the repayment of borrowed money), surety, appeal and performance bonds; provided that (A) all such Liens do not in the aggregate materially detract from the value of assets or property of the Company and its Subsidiaries taken as a whole or materially impair the use thereof in the operation of their businesses taken as a -46- whole, and (B) all Liens securing bonds to stay judgments or in connection with appeals that do not secure at any time an aggregate amount exceeding $5,000,000; (d) Liens arising with respect to zoning restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other similar charges or encumbrances on the use of real property which do not interfere in any material respect with the ordinary conduct of the business of the Company or any Subsidiary of the Company; (e) Liens of attachment or judgment with respect to judgments, writs or warrants of attachment, or similar process against the Company or any Subsidiary of the Company which do not constitute a Default under paragraph 7A; (f) Liens arising from leases, subleases or licenses granted to others which do not interfere in any material respect with the business of the Company or any Subsidiary of the Company; and (g) any interest or title of the lessor in the property subject to any operating lease entered into by the Company or any Subsidiary of the Company in the ordinary course of business. "DEFAULT" means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default. "DEFAULT RATE" means that rate of interest that is the greater of (a) 13.29% per annum or (b) 2% over the rate of interest publicly announced by Morgan Guaranty Bank of New York in New York City, New York as its "base" or "prime" rate. "DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after March 30, 2004. "DOL" means the United States Department of Labor and any Person succeeding to the functions thereof. "DOLLAR" and "$" means dollars in the lawful currency of the United States of America. "DOMESTIC SUBSIDIARY" means a Subsidiary organized under the laws of a jurisdiction located in the United States of America, including, without limitation, those Subsidiaries identified as "Domestic Subsidiaries" on Schedule 8A hereto. "ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all Requirements of Law derived from or relating to federal, state and local laws or regulations relating to or addressing pollution or protection of the environment, or protection of worker health or safety, including, but not limited to, the Comprehensive Environmental Response, -47- Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq., and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., in each case including any amendments thereto, any successor statutes, and any regulations or guidance promulgated thereunder, and any state or local equivalent thereof. "ENVIRONMENTAL LAWS" means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to hazardous substances or wastes, air emissions and discharges to waste or public systems. "ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority for (a) any liability under Environmental, Health or Safety Requirements of Law, or (b) damages arising from, or costs incurred by such Governmental Authority in response to, a Release or threatened Release of a Contaminant into the environment. "ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of law that conditions, restricts, prohibits or requires any notification or disclosure triggered by the closure of any property or the transfer, sale or lease of any property or deed or title for any property for environmental reasons, including, but not limited to, any so-called "Industrial Site Recovery Act" or "Responsible Property Transfer Act." "EQUITY INTERESTS" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (including any Indebtedness security that is convertible into, or exchangeable for, Capital Stock). "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time including (unless the context otherwise requires) any rules or regulations promulgated thereunder. "ERISA AFFILIATE" means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under Section 414 of the Code. "EVENT OF DEFAULT" shall mean any of the events specified in paragraph 7A, provided that there has been satisfied any requirement in connection with such event for the giving of notice, or the lapse of time, or the happening of any further condition, event or act, and "DEFAULT" shall mean any of such events, whether or not any such requirement has been satisfied. "EXCESS CASH FLOW" means, without duplication, for any fiscal quarter of the Company, an amount equal to: (a) the sum of cash and Cash Equivalents of the Company and its Subsidiaries on the last day of such fiscal quarter; plus (b) Available Liquidity on the last day of such fiscal quarter; -48- minus (c) the Projected Liquidity Amount on the last day of such fiscal quarter; minus (d) $5,000,000. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXISTING LETTERS OF CREDIT" is defined in the Credit Agreement. "FINANCE CONTRACTS" means any chattel paper originated by the Company or any of its Subsidiaries pursuant to a bona fide sale transaction in the ordinary course of business with a customer or any Subsidiary. "FIRST TIER FOREIGN SUBSIDIARY" means each Foreign Subsidiary with respect to which any one or more of the Company or its Domestic Subsidiaries directly owns or controls more than 50% of such Foreign Subsidiary's Capital Stock. "FLEET LEASE TRANSACTION" means (i) the lease transaction among Wabash Statutory Trust -- 2000 as lessor and Apex Trailer Leasing & Rentals, L.P. as lessee under that certain Amended and Restated Equipment Lease dated as of March 30, 2001, as amended, restated, supplemented or otherwise modified from time to time and (ii) the lease transaction among Fleet Capital Corporation (as successor to BancBoston Leasing, Inc.) as lessor and Apex Trailer Leasing & Rentals, L.P. as lessee under that certain Master Lease Agreement dated as of September 5, 1997, as amended, restated, supplemented or otherwise modified from time to time and all other instruments and documents related thereto. "FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as defined in Section 3(3) of ERISA which is maintained or contributed to for the benefit of the employees of the Company, any of its Subsidiaries or any members of its Controlled Group and is not covered by ERISA pursuant to ERISA Section 4(b)(4). "FOREIGN PENSION PLAN" means any employee benefit plan as described in Section 3(3) of ERISA which (a) is maintained or contributed to for the benefit of employees of the Company, any of its Subsidiaries or any of its ERISA Affiliates, (b) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA, and (c) under applicable local law, is required to be funded through a trust or other funding vehicle. "FOREIGN SUBSIDIARY" means a Subsidiary of the Company which is not a Domestic Subsidiary. "FRUEHAUF PREFERRED STOCK" means the Series A 6% Cumulative Convertible Exchangeable Preferred Stock of the Company. "FUNDED DEBT" of any Person means all Indebtedness of such Person which would, in accordance with GAAP, constitute long-term Indebtedness, including, without limitation (a) all Indebtedness of such Person for borrowed money or which has been incurred in connection with the acquisition of assets in each case having a final maturity of more than one year from the date of origin thereof (or which is renewable or extendible at the option of the obligor for a period or periods more than one year from the date of origin), including in any -49- event all payments in respect thereof that are required to be made within one year from the date of any determination of Funded Debt, whether or not the obligation to make such payments shall constitute a current liability of the obligor under GAAP, and all Indebtedness of such Person outstanding under any revolving credit, line of credit, commercial extension of credit or similar agreement between such Person and an Institutional Investor which is classified as long-term in accordance with GAAP, (b) all Capitalized Rentals of such Person, (c) all Guaranties by such Person of Funded Debt of others, and (d) all Indebtedness of such Person outstanding under any revolving credit, line of credit, commercial extension of credit or similar agreement between such Person and an Institutional Investor, whether or not classified as long-term or short-term Indebtedness, if, during the 365-day period immediately preceding the date of any determination of Funded Debt of such Person, there shall not have been a period of at least 30 consecutive days during which Indebtedness of such Person outstanding under such revolving credit, line of credit, commercial extension of credit or similar agreement is equal to zero, in which event there shall be included in such determination of Funded Debt an amount equal to the highest aggregate amount of all such Indebtedness outstanding during any period of 30 consecutive days selected by such Person during such preceding 365-day period. "GAAP" means generally accepted accounting principles as in effect from time to time in the United States, applied in a manner consistent with those used in preparing the financial statements referred to in paragraph 5A(a) hereof. "GOVERNMENTAL ACTS" is defined in the Credit Agreement. "GOVERNMENTAL AUTHORITY" means any nation or government, any foreign, federal, state, local or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "GUARANTOR" means each Initial Guarantor and each other Domestic Subsidiary that executes and delivers a Note Guaranty, and in each case their respective successors and assigns. "GUARANTY" means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation; -50- (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or (d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof. In any computation of the Indebtedness or other liabilities of the obligor under any Guaranty, the Indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. "HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls). "HEDGING OBLIGATIONS" of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, commodity prices, exchange rates or forward rates applicable to such party's assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any of the foregoing. "HOLDER" or "HOLDER" means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to paragraph 11D. "INCLUDING" shall mean, unless the context clearly requires otherwise, "including without limitation". "INDEBTEDNESS" means, with respect to any Person, without duplication, (a) its liabilities for borrowed money, including reimbursement obligations (contingent or otherwise) with respect to letters of credit; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) its Capitalized Lease Obligations; -51- (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) its Off-Balance Sheet Liabilities; (f) its Receivables Facility Attributed Indebtedness; and (g) any Contingent Obligation of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof. Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP. In no event shall Indebtedness include Unfunded Liabilities of any Plan of the Company and its Subsidiaries, which amount, as of December 31, 2001, was zero. "INITIAL GUARANTORS" means each Domestic Subsidiary (other than WNC, WNC Receivables Management Corp., WNC Funding LLC and WNC Funding Manager Corp.) in existence on the Closing. "INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note, (b) any holder of a Note holding more than 5% of the aggregate principal amount of the Notes then outstanding, and (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form. "INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral Agency Agreement dated as of the Closing among the Collateral Agent, the Administrative Agent and the Secured Parties, as such agreement may be amended, restated, supplemented (including by way of joinder of additional parties thereto in accordance with its terms) or otherwise modified from time to time. "INTEREST COVERAGE RATIO" means, as of any date the same is to be determined, the ratio of (a) Consolidated EBITDA as of such date for (i) in the case of calculating Consolidated EBITDA for each relevant month in the Company's fiscal year ending on or about December 31, 2002, the cumulative period of months ending on and after April 30, 2002 and (ii) in the case of calculating Consolidated EBITDA for each month thereafter, the period of four consecutive fiscal quarters then ending to (b) Interest Expense during the same applicable periods. "INTEREST EXPENSE" means, for any period, the total interest expense of the Company and its consolidated Subsidiaries, whether paid or accrued (including the total interest expense under the Permitted Receivables Transfer), including interest expense not payable in cash (including amortization or write-off of Indebtedness discount and Indebtedness issuance costs and commissions and discounts and other fees and charges associated with Indebtedness (including the Obligations)), all as determined in conformity with GAAP. -52- "INTEREST RATE AGREEMENTS" is defined in paragraph 6B(p) hereof. "INVESTMENT" means, with respect to any Person, (a) any purchase or other acquisition by that Person of any Indebtedness, Equity Interests or other securities, or of a beneficial interest in any Indebtedness, Equity Interests or other securities, issued by any other Person, (b) any purchase by that Person of all or substantially all of the assets of a business conducted by another Person, and (c) any loan, advance (other than deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts receivable, advances to employees and similar items made or incurred in the ordinary course of business) or capital contribution by that Person to any other Person, including all Indebtedness to such Person arising from a sale of property by such Person other than in the ordinary course of its business. "IRS" means the Internal Revenue Service and any Person succeeding to the functions thereof. "LAFAYETTE PROPERTY" means all of the real property owned by Wabash National, L.P. in Lafayette, Indiana which includes the central offices and manufacturing facilities of the Company. "L/C OBLIGATIONS" is defined in the Credit Agreement. "LENDERS" means the lending institutions listed on the signature pages of the Credit Agreement, including the Issuing Lender (as defined in the Credit Agreement) and their respective successors and assigns. "LETTER(S) OF CREDIT" is defined in the Credit Agreement. "LEVERAGE VALUATION RATIO" means, as of any date the same is to be determined, the ratio of (a) the sum of the aggregate outstanding principal amount of the Obligations, the Series A Obligations, the Series C-H Obligations and the Indebtedness (excluding L/C Obligations) under the Credit Agreement to (b) Consolidated Total Assets only to the extent consisting of cash and Cash Equivalents, net inventory, net prepaid and other expenses and net property, plant and equipment as of such date, in all cases as determined in accordance with GAAP. "LIEN" means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement). "LOAN(s)" is defined in the Credit Agreement. "LOAN PARTIES" means the Company and each of the Guarantors. "MARGIN STOCK" shall have the meaning ascribed to such term in Regulation U. -53- "MATERIAL" means material in relation to the business, operations, affairs, financial condition, assets, properties or prospects of the Company and its Subsidiaries taken as a whole. "MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the business, condition (financial or otherwise), operations, performance, Properties or prospects of the Company and its Subsidiaries taken as a whole, (b) the ability of the Company and its Subsidiaries to perform their respective obligations under the Note Documents, or (c) the ability of the Holders to enforce the Obligations in any material respect. "MATERIAL REAL ESTATE PROPERTY" means each individual parcel of property owned by the Company or its Domestic Subsidiaries that has a net book value in excess of $3,000,000, excluding therefrom any parcels that are anticipated to be included in the SunTrust Sale Leaseback. "MORTGAGES" means the mortgages and deeds of trust from time to time executed by one or more of the Loan Parties in favor of the Collateral Agent for the benefit of the Holders and the other Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. "MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section 4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years was, contributed to by either the Company or any member of the Controlled Group. "NATIONAL CITY LEASE TRANSACTION" means the lease transaction among National City Leasing Corporation as lessor and Apex Trailer Leasing & Rentals, L.P. (as successor to Wabash National Finance Corporation) as lessee under that certain Master Equipment Lease Agreement No. 07008 dated as of December 30, 1996, as amended, restated, supplemented or otherwise modified from time to time. "NOTE DOCUMENTS" means this Agreement, the Notes, the Note Guaranty, the Collateral Documents and all other documents, instruments and agreements executed in connection therewith or contemplated thereby, including the letter agreement regarding fees among the Administrative Agent, the Collateral Agent and the Company, in each case as the same may be amended, restated or otherwise modified and in effect from time to time. "NOTE GUARANTY" is defined in paragraph 1B. "NOTES" is defined in paragraph 1A. "OBLIGATIONS" means all Notes, advances, Indebtedness, liabilities, obligations, covenants and duties owing by the Company to any Holder, any Affiliate of any of the foregoing or any Indemnitee, of any kind or nature, present or future, arising under this Agreement, the Notes or any other Note Document, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term includes, without limitation, all -54- interest, charges, expenses, fees, attorneys' fees and disbursements, paralegals' fees (in each case whether or not allowed), and any other sum chargeable to the Company under this Agreement or any other Note Document. "OFF-BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase obligation or liability of such Person or any of its Subsidiaries with respect to accounts or notes receivable sold by such Person or any of its Subsidiaries, (b) any liability of such Person or any of its Subsidiaries under any sale and leaseback transactions which do not create a liability on the consolidated balance sheet of such Person, (c) any liability of such person or any of its Subsidiaries under any so-called "synthetic" lease transaction, or (d) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheets of such Person and its Subsidiaries. "OFFICER'S CERTIFICATE" means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate. "ORIGINAL CREDIT AGREEMENT" means the Credit Agreement dated as of September 30, 1997 among the Company, the financial institutions parties thereto and the Administrative Agent, as amended by Amendment No. 1 dated as of January 30, 1998, Amendment No. 2 dated as of September 30, 1999 and Amendment No. 3 dated as of November 30, 2000. "ORIGINAL NOTE GUARANTY" is defined in paragraph 1B. "ORIGINAL NOTE PURCHASE AGREEMENT" is defined in paragraph 1A. "ORIGINAL NOTES" is defined in paragraph 1A. "ORIGINATORS" means Wabash National, L.P. and NOAMTC, Inc., in their capacities as parties to the Receivables Sale Agreement. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto. "PERMITTED ACQUISITION" means any Acquisition made by the Company or any of its Subsidiaries provided that: (a) as of the date of such Acquisition, no Default or Event of Default shall have occurred and be continuing or would result from such Acquisition or from the incurrence of any Indebtedness in connection with such Acquisition; (b) prior to the date of such Acquisition, such Acquisition shall have been approved by the board of directors and, if applicable, the shareholders of the Person whose stock or assets are being acquired in connection with such Acquisition and no claim or challenge has been asserted or threatened by any shareholder or director of such Person which could reasonably be expected to have a material adverse effect on such Acquisition or a Material Adverse Effect; (c) as of the date of any such Acquisition, all approvals required in connection with such Acquisition shall have been obtained and (d) the Purchase Price paid or payable to the Company and its Subsidiaries for all Permitted Acquisitions during any fiscal year of the Company shall not exceed $2,500,000. -55- "PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent Obligations of the Company and its Subsidiaries identified as such on SCHEDULE 8D to this Agreement. "PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Company and its Subsidiaries identified as such on SCHEDULE 8D to this Agreement. "PERMITTED EXISTING INVESTMENTS" means the Investments of the Company and its Subsidiaries identified as such on SCHEDULE 8D to this Agreement. "PERMITTED EXISTING LIENS" means the Liens on assets of the Company or its Subsidiaries identified as such on SCHEDULE 8D to this Agreement. "PERMITTED RECEIVABLES TRANSFER" means (i) a sale or other transfer by any Originator to WNC of "Receivables," and "Collections" under, and as such terms are defined in, the Receivables Sale Agreement, in accordance with the terms of the Receivables Sale Agreement, and/or (ii) a sale by WNC to purchasers of "Purchaser Interests" under, and as such term is defined in, the Receivables Purchase Agreement, in accordance with the terms of the Receivables Purchase Agreement. "PERSON" means any individual, corporation, firm, enterprise, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company or other entity of any kind, or any government or political subdivision or any agency, department or instrumentality thereof. "PLAN" means an employee benefit plan defined in Section 3(3) of ERISA in respect of which the Company or any member of the Controlled Group is, or within the immediately preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA. "PLEDGE AGREEMENTS" means the pledge agreements from time to time executed pursuant to the terms of clause (a) and clause (b) of paragraph 5P in favor of the Collateral Agent for the benefit of the Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. "PRIORITY DEBT" means (i) all Indebtedness of the Company or any Subsidiary secured by a Lien on any property of the Company or any Subsidiary, excluding Indebtedness secured by Liens permitted by clauses (i), (ii), (iii), (iv), (vi) and (vii) of paragraph 6B(c), but including Indebtedness secured by Liens permitted by clause (v) of paragraph 6B(c), and (ii) all unsecured Indebtedness of Subsidiaries other than Indebtedness of a Subsidiary to the Company. "PROJECTED LIQUIDITY AMOUNT" means, for any period, the applicable amount so designated for such period in the Company's "Covenant Case Projection" as set forth in Schedule B19 to this Agreement. "PROPERTY" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. -56- "PRUCO" shall mean Pruco Life Insurance Company. "PRUDENTIAL" shall mean The Prudential Insurance Company of America. "PRUDENTIAL AFFILIATE" shall mean any Affiliate of Prudential. "PURCHASE PRICE" means the total consideration and other amounts payable in connection with any Acquisition, including, without limitation, any portion of the consideration payable in cash, the value of any Capital Stock or other equity interests of the Company or any Subsidiary issued as consideration for such Acquisition, all Indebtedness and other monetary liabilities incurred or assumed in connection with such Acquisition and all transaction costs and expenses incurred in connection with such Acquisition. "QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14 issued by the United States Department of Labor. "REAL ESTATE INSTRUMENTS" is defined in paragraph 5P(d). "RECEIVABLES FACILITY ATTRIBUTED INDEBTEDNESS" means the amount of obligations outstanding under a receivables purchase facility on any date of determination that would be characterized as principal if such facility were structured as a secured lending transaction rather than as a purchase. "RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables Purchase and Servicing Agreement dated as of April 11, 2002 among WNC, as seller, Wabash Financing LLC, as servicer, WNC Receivables Management Corporation, as independent member, General Electric Capital Corporation, as sole initial purchaser and as agent, and the other purchasers from time to time party thereto, as such agreement may be amended, restated or otherwise modified from time to time, or any replacement or substitution therefor. "RECEIVABLES PURCHASE DOCUMENTS" means the Receivables Sale Agreement and the Receivables Purchase Agreement. "RECEIVABLES SALE AGREEMENT" means that certain Receivables Sale and Contribution Agreement, dated as of April 11, 2002, by and among the Company, Wabash National, L.P., NOAMTC, Inc., and WNC, as such agreement may be amended, restated or otherwise modified from time to time, or any replacement or substitution therefor. "REGULATION T" means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by and to brokers and dealers of securities for the purpose of purchasing or carrying margin stock (as defined therein). "REGULATION U" means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks and nonbank, nonbroker lenders for the purpose of purchasing or carrying Margin Stock. -57- "REGULATION X" means Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by foreign lenders for the purpose of purchasing or carrying margin stock (as defined therein). "RELEASE" means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including the movement of Contaminants through or in the air, soil, surface water or groundwater. "RELEASED PARTIES" shall have the meaning assigned thereto in paragraph 11T. "REPORTABLE EVENT" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days after such event occurs, provided, however, that a failure to meet the minimum funding standards of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code. "REQUIRED HOLDER(s)" means, at any time, the holders of at least 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates and exclusive of the Yield-Maintenance Notes). "REQUIRED SECURED PARTIES" shall have the meaning assigned thereto in the Intercreditor Agreement. "REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or other organizational or governing documents of such Person, and any law, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject including, without limitation, the Securities Act of 1933, the Securities Exchange Act 1934, Regulations T, U and X promulgated by the Board of Governors of the Federal Reserve System, ERISA, the Fair Labor Standards Act, the Worker Adjustment and Retraining Notification Act, Americans with Disabilities Act of 1990, and any certificate of occupancy, zoning ordinance, building, environmental or land use requirement or permit or environmental, labor, employment, occupational safety or health law, rule or regulation, including Environmental, Health or Safety Requirements of Law. "RESPONSIBLE OFFICER" means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this agreement. "RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct or indirect, on account of any Equity Interests of the Company now or hereafter outstanding, except a dividend payable solely in the Company's Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock, (ii) any redemption, retirement, purchase or other acquisition for value, direct or indirect, of any Equity Interests of the Company -58- or any of its Subsidiaries now or hereafter outstanding, other than in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company) of other Equity Interests of the Company (other than Disqualified Stock), (iii) any redemption, purchase, retirement, defeasance, prepayment or other acquisition for value, direct or indirect, of any Indebtedness prior to the stated maturity thereof, other than the Obligations and (iv) any payment of a claim for the rescission of the purchase or sale of, or for material damages arising from the purchase or sale of, any Indebtedness (other than the Obligations) or any Equity Interests of the Company or any of the Company's Subsidiaries, or of a claim for reimbursement, indemnification or contribution arising out of or related to any such claim for damages or rescission. "RESTRUCTURING TRANSACTION" means the transactions contemplated by this Agreement, the Series A Note Purchase Agreements, the Series C-H Note Purchase Agreements and the Credit Agreement which include the extension of the maturities of the Original Notes, the execution and delivery of the Collateral Documents, the execution and delivery of the Permitted Receivables Transfer, the amendments and/or waivers to the Fleet Lease Transaction and all transactions relating thereto. "REVOLVING LENDER" means any Lender with a Revolving Loan Commitment. "REVOLVING LOAN" means a loan by a Lender to the Company as part of a Revolving Advance. "REVOLVING LOAN COMMITMENT" is defined in the Credit Agreement. "REVOLVING NOTE" is defined in the Credit Agreement. "SECURED OBLIGATIONS" has the meaning ascribed to such term in the Intercreditor Agreement. "SECURED PARTIES" has the meaning ascribed to such term in the Intercreditor Agreement. "SECURITIES ACT" means the Securities Act of 1933, as amended from time to time. "SECURITY AGREEMENT" means that certain Security Agreement dated as of the Closing executed by the Company and the Initial Guarantors in favor of the Collateral Agent for the benefit of the Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. "SENIOR FINANCIAL OFFICER" means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company. "SENIOR FUNDED DEBT" of any Person means Funded Debt of such Person which is not expressed to be subordinate or junior in rank to any other Funded Debt of such Person. -59- "SENIOR NOTES" means $192,000,000 aggregate principal amount of the Company's Senior Notes, Series A and Series C through I, due 2004-2008. "SERIES A NOTE PURCHASE AGREEMENTS" means the separate and several Amended and Restated Note Purchase Agreements each dated as of April 12, 2002 among the Company and the institutional investors named therein relating to the Series A Senior Notes of the Company. "SERIES A OBLIGATIONS" means the "Obligations" as defined in the Series A Note Purchase Agreements. "SERIES C-H NOTE PURCHASE AGREEMENTS" means the separate and several Amended and Restated Note Purchase Agreements each dated as of April 12, 2002 among the Company and the institutional investors named therein relating to the Series C-H Senior Notes of the Company. "SERIES C-H OBLIGATIONS" means the "Obligations" as defined in the Series C-H Note Purchase Agreements. "SERIES I NOTE PRINCIPAL ALLOCATION" means, at any time, the percentage determined by dividing (a) the outstanding principal amount of the Notes (other than the Yield-Mantenance Notes) as of such time, by (b) the sum of (i) the outstanding principal amount of the Senior Secured Notes (other than the Deferral Fee Notes and the Make-Whole Notes)(as each such term is defined in the Intercreditor Agreement), and (ii) the sum of (1) the outstanding principal amount of all of the Term Loans (other than the PIK Notes) plus (2) the amount then available for drawing under all Term Letters of Credit plus (3) the amount of unpaid reimbursement obligations with respect to drawings under all Term Letters of Credit (as each such term is defined in the Credit Agreement as in effect at the Closing). "SIGNIFICANT REAL ESTATE PROPERTY" means each individual parcel of property owned by the Company or its Domestic Subsidiaries that has a net book value in excess of $1,000,000 and less than $3,000,000, excluding therefrom any parcels that are anticipated to be included in the SunTrust Sale Leaseback. "SINGLE EMPLOYER PLAN" means a Plan maintained by the Company or any member of the Controlled Group for employees of the Company or any member of the Controlled Group. "SUBORDINATED INDEBTEDNESS" means, for any period, on a consolidated basis for the Company and its Subsidiaries, the sum of Indebtedness of such Persons the payment of which is subordinated to the payment of the Secured Obligations to the written satisfaction of the Required Holder(s). "SUBSIDIARY" of a Person means (a) 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 (b) any company, partnership, limited liability company, association, joint venture or similar business organization more than 50% of the -60- ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "Subsidiary" shall mean a direct or indirect Subsidiary of the Company. "SUNTRUST SALE LEASEBACK" means that certain sale and leaseback of certain real property owned by the Company and/or certain of its Domestic Subsidiaries to be effected pursuant to that certain engagement letter agreement between the Company and SunTrust Robinson Humphrey dated February 1, 2002. "TANGIBLE ASSETS" means as of the date of any determination thereof, with respect to any Person, total assets of such Person in accordance with GAAP, but excluding therefrom goodwill, patents, patent applications, permits, trademarks, trade names, copyrights, licenses, franchises, experimental expense, organizational expense, unamortized Indebtedness discount and expense, the excess of cost of shares acquired over book value of related assets and such other assets as are properly classified as "intangible assets" in accordance with GAAP. "TERM LETTER(S) OF CREDIT" is defined in the Credit Agreement. "TERM LOANS" is defined in the Credit Agreement. "TERM LOAN LENDER" is defined in the Credit Agreement. "TERM NOTE" is defined in the Credit Agreement. "TERMINATION EVENT" means (i) a Reportable Event with respect to any Benefit Plan; (ii) the withdrawal of the Company or any member of the Controlled Group from a Benefit Plan during a plan year in which the Company or such Controlled Group member was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the cessation of operations which results in the termination of employment of twenty percent (20%) of Benefit Plan participants who are employees of the Company or any member of the Controlled Group; (iii) the imposition of an obligation on the Company or any member of the Controlled Group under Section 4041 of ERISA to provide affected parties written notice of intent to terminate a Benefit Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Benefit Plan; (v) any event or condition which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Benefit Plan; or (vi) the partial or complete withdrawal of the Company or any member of the Controlled Group from a Multiemployer Plan. "TRANSFER" means, with respect to any property, the sale, exchange, conveyance, lease, transfer or other disposition of such property. "TRANSFEREE" means any direct or indirect transferee of all or any part of any Note issued to any Purchaser under this Agreement. "UNFUNDED LIABILITIES" means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent -61- valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations. "VALUE" means, with respect to any property on any date, the greater of the book value of such property on such date or the fair market value of such property on such date. "WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary one hundred percent (100%) of all of the equity interests (except directors' qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company's other Wholly-Owned Subsidiaries at such time. "WNC" means WNC Receivables LLC, a Delaware limited liability company and a wholly-owned Subsidiary of the Company. "YIELD-MAINTENANCE NOTES" is defined in paragraph 3G. 10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All references in this Agreement to "generally accepted accounting principles" shall be deemed to refer to generally accepted accounting principles in effect in the United States at the time of application thereof. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all unaudited financial statements and certificates and reports as to financial matters required to be furnished hereunder shall be prepared, in accordance with generally accepted accounting principles applied on a basis consistent with the most recent audited financial statements delivered pursuant to clause (iii) of paragraph 5A(a) or, if no such statements have been so delivered, the most recent audited financial statements referred to in clause (i) of paragraph 8B. Any reference herein to any specific law, statute, rule or regulation shall refer to such law, statute, rule or regulation as the same may be may be modified, amended or replaced from time to time. 11. MISCELLANEOUS. 11A. NOTE PAYMENTS. The Company agrees that, so long as any Purchaser shall hold any Note, it will make payments of principal of, interest on, and any Yield-Maintenance Amount payable with respect to, such Note, which comply with the terms of this Agreement, by wire transfer of immediately available funds for credit (not later than 12:00 noon, New York City local time, on the date due) to the account or accounts of such Purchaser specified in the Purchaser Schedule attached hereto or such other account or accounts in the United States as such Purchaser may from time to time designate in writing, notwithstanding any contrary provision herein or in any Note with respect to the place of payment. Each Purchaser agrees that, before disposing of any Note, it will make a notation thereon (or on a schedule attached thereto) of all principal payments previously made thereon and of the date to which interest thereon has been paid. The Company agrees to afford the benefits of this paragraph 11A to any Transferee which shall have made the same agreement as the Purchasers have made in this paragraph 11A. 11B. EXPENSES. The Company agrees, whether or not the transactions contemplated hereby shall be consummated, to pay, and save Prudential, each Purchaser and any Transferee harmless against liability for the payment of, all reasonable expenses arising in connection with -62- such transactions, including (i) all document production and duplication charges and the fees and expenses of any special counsel engaged by the Purchasers or any Transferee in connection with this Agreement or the Collateral Documents, the transactions contemplated hereby and thereby and any subsequent proposed modification of, or proposed consent under, this Agreement or the Collateral Documents, whether or not such proposed modification shall be effected or proposed consent granted, (ii) the costs and expenses, including attorneys' fees, incurred by any Purchaser or any Transferee in enforcing (or determining whether or how to enforce) any rights under this Agreement, the Notes or the Collateral Documents or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the Collateral Documents or the transactions contemplated hereby and thereby or by reason of any Purchaser's or any Transferee's having acquired any Note, including without limitation costs and expenses (including financial advisors' fees) incurred in any bankruptcy case or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes, including without limitation, the reasonable professional fees and expenses of Ernst & Young, LLP incurred in connection with its engagement to assist the Holders in their evaluation of the projections, business assumptions and other financial information presented by the Company in connection with the transactions contemplated herein. All such reasonable fees, costs and expenses incurred after the Closing shall be paid by the Company on a monthly basis. The obligations of the Company under this paragraph 11B shall survive the transfer of any Note or portion thereof or interest therein by any Purchaser or any Transferee, the payment of any Note, the enforcement, amendment or waiver of any provision of this Agreement, the Notes, or the Collateral Documents and the termination of this Agreement. 11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, if the Company shall obtain the written consent to such amendment, action or omission to act, of the Required Holder(s) of the Notes except that, (i) with the written consent of the holders of all Notes at the time outstanding, the Notes may be amended or the provisions thereof waived to change the maturity thereof, to change or affect the principal thereof, or to change or affect the rate or time of payment of interest on or any Yield-Maintenance Amount payable with respect to the Notes, and (ii) without the written consent of the holder or holders of all Notes at the time outstanding, no amendment to or waiver of the provisions of this Agreement shall (a) change or affect the provisions of paragraph 7A or this paragraph 11C insofar as such provisions relate to proportions of the principal amount of the Notes, or the rights of any individual holder of Notes, required with respect to any declaration of Notes to be due and payable or with respect to any consent, amendment, waiver or declaration, (b) release all or substantially all of the Collateral or (c) release any Guarantor from its obligations under the Note Guaranty or the Collateral Documents. Each holder of any Note at the time or thereafter outstanding shall be bound by any consent authorized by this paragraph 11C, whether or not such Note shall have been marked to indicate such consent, but any Notes issued thereafter may bear a notation referring to any such consent. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein and in the Notes, the term "THIS AGREEMENT" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented. -63- 11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The Notes are issuable as registered notes without coupons in denominations of at least $1,000,000, except as may be necessary to reflect any principal amount not evenly divisible by $1,000,000; provided, however, that no such minimum denomination shall apply to Notes issued upon transfer by any holder of the Notes to Prudential or Prudential Affiliates or to any other entity or group of affiliates with respect to which the Notes so issued or transferred shall be managed by a single entity. The Company shall keep at its principal office a register in which the Company shall provide for the registration of Notes and of transfers of Notes. Upon surrender for registration of transfer of any Note at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of such transferee or transferees. At the option of the holder of any Note, such Note may be exchanged for other Notes of like tenor and of any authorized denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the Company. Whenever any Notes are so surrendered for exchange, the Company shall, at its expense, execute and deliver the Notes which the holder making the exchange is entitled to receive. Each prepayment of principal payable on each prepayment date upon each new Note issued upon any such transfer or exchange shall be in the same proportion to the unpaid principal amount of such new Note as the prepayment of principal payable on such date on the Note surrendered for registration of transfer or exchange bore to the unpaid principal amount of such Note. No reference need be made in any such new Note to any prepayment or prepayments of principal previously due and paid upon the Note surrendered for registration of transfer or exchange. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed, by the holder of such Note or such holder's attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon transfer thereof shall carry the rights to unpaid interest and interest to accrue which were carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall result from any such transfer or exchange. Upon receipt of written notice from the holder of any Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss, theft or destruction, upon receipt of such holder's unsecured indemnity agreement, or in the case of any such mutilation upon surrender and cancellation of such Note, the Company will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. 11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for registration of transfer, the Company may treat the Person in whose name any Note is registered as the owner and holder of such Note for the purpose of receiving payment of principal of and interest on, and any Yield-Maintenance Amount payable with respect to, such Note and for all other purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary. Subject to the preceding sentence, the holder of any Note may from time to time grant participations in all or any part of such Note to any Person on such terms and conditions as may be determined by such holder in its sole and absolute discretion. 11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein or made in writing by or on behalf of the Company in connection herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by any Purchaser of any Note or portion thereof or interest therein and the -64- payment of any Note, and may be relied upon by any Transferee, regardless of any investigation made at any time by or on behalf of any Purchaser or any Transferee. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings relating to such subject matter. 11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this Agreement contained by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not. 11H. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given independent effect so that if a particular action or condition is prohibited by any one of such covenants, the fact that it would be permitted by an exception to, or otherwise be in compliance within the limitations of, another covenant shall not avoid (i) the occurrence of a Default or Event of Default if such action is taken or such condition exists or (ii) in any way prejudice an attempt by the holder of any Note to prohibit through equitable action or otherwise the taking of any action by the Company or any Subsidiary which would result in a Default or Event of Default. 11I. NOTICES. All written communications provided for hereunder shall be sent by first class mail or nationwide overnight delivery service (with charges prepaid) and (i) if to any Purchaser, addressed as specified for such communications in the Purchaser Schedule attached hereto or at such other address as any such Purchaser shall have specified to the Company in writing, (ii) if to any other holder of any Note, addressed to it at such address as it shall have specified in writing to the Company or, if any such holder shall not have so specified an address, then addressed to such holder in care of the last holder of such Note which shall have so specified an address to the Company and (iii) if to the Company, addressed to it at 1000 Sagamore Parkway South, Lafayette, Indiana 47905, Attention: Chief Financial Officer, provided, however, that any such communication to the Company may also, at the option of the Person sending such communication, be delivered by any other means either to the Company at its address specified above or to any Authorized Officer of the Company. 11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on, or Yield-Maintenance Amount payable with respect to, any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for any payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such Business Day. 11K. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. -65- 11L. DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 11M. SATISFACTION REQUIREMENT. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to any Purchaser, to any holder of Notes or to the Required Holder(s), the determination of such satisfaction shall be made by such Purchaser, such holder or the Required Holder(s), as the case may be, in the sole and exclusive judgment (exercised in good faith) of the Person or Persons making such determination. 11N. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF THE STATE OF ILLINOIS. 11O. SEVERALTY OF OBLIGATIONS. The sales of Notes to the Purchasers are to be several sales, and the obligations of Prudential and the Purchasers under this Agreement are several obligations. No failure by Prudential or any Purchaser to perform its obligations under this Agreement shall relieve any other Purchaser or the Company of any of its obligations hereunder, and neither Prudential nor any Purchaser shall be responsible for the obligations of, or any action taken or omitted by, any other such Person hereunder. 11P. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 11Q. DISCLOSURE TO OTHER PERSONS. Each Purchaser (and each Transferee by its acceptance of an interest in any Note) agrees to use its reasonable best efforts to hold in confidence and not disclose any Confidential Information; provided, however, that nothing contained herein shall prevent the holder of any Note from delivering copies of any financial statements and other documents delivered to such holder, and disclosing any other information disclosed to such holder, by the Company or any Subsidiary in connection with or pursuant to this Agreement to (i) such holder's directors, officers, employees, agents and professional consultants, (ii) any other holder of any Note, (iii) any Person to which such holder offers to sell such Note or any part thereof, (iv) any Person to which such holder sells or offers to sell a participation in all or any part of such Note, (v) any federal or state regulatory authority having jurisdiction over such holder, (vi) the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency or (vii) any other Person to which such delivery or disclosure may be reasonably necessary or appropriate (a) in compliance with any law, rule, regulation or order applicable to such holder, (b) in response to any subpoena or other legal process or investigative demand, (c) in connection with any litigation in connection with this Agreement to which such holder is a party or (d) in order to protect such holder's investment and enforce the rights of such holder under this Agreement; and provided further that after notice to the Company the holders of the Notes shall be free to correct any false or misleading information which may become public concerning their relationship to the Company or any of its Subsidiaries. 11R. WAIVER OF JURY TRIAL. THE COMPANY AND EACH HOLDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, -66- DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY NOTE DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER. 11S. AMENDMENT AND RESTATEMENT OF ORIGINAL NOTE PURCHASE AGREEMENT. The Company and the Purchasers agree that, upon (a) the execution and delivery of this Agreement by the Company and the Purchasers and (b) satisfaction (or waiver by the Purchasers in their sole discretion) of the conditions precedent set forth in paragraph 3, the terms and provisions of the Original Note Purchase Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement. This Agreement is not intended to and shall not constitute a novation of the Original Note Purchase Agreement or the indebtedness created thereunder, including, without limitation, the Original Notes issued thereunder. 11T. RELEASE. The Company hereby acknowledges and confirms that (a) it does not have any grounds, and hereby agrees not to challenge (or to allege or to pursue any matter, cause or claim arising under or with respect to), in any case based upon acts or omissions of the Purchasers occurring prior to the date hereof or facts otherwise known to it as of the date hereof, the effectiveness, genuineness, validity, collectibility or enforceability of this Agreement or any of the other Note Documents, the Obligations, the Liens securing such Obligations, or any of the terms or conditions of any Note Document (it being understood that such acknowledgment and confirmation does not preclude the Company from challenging any Purchaser's interpretation of any term or provision of this Agreement or of any other Note Document) and (b) it does not possess (and hereby forever waives, remises, releases, discharges and holds harmless the Purchasers and their respective affiliates, stockholders, directors, officers, employees, attorneys, agents and representatives and each of their respective heirs, executors, administrators, successors and assigns (collectively, the "Released Parties") from and against, and agrees not to allege or pursue) any action, cause of action, suit, debt, claim, counterclaim, cross-claim, demand, defense, offset, opposition, demand and every other right of action whatsoever, whether in law, equity or otherwise (which it, all those claiming by, through or under it, or its successors or assigns, have or may have) against the Released Parties, or any of them, by reason of, any matter, cause or thing whatsoever, with respect to events or omissions occurring or arising on or prior to the date hereof and relating to this Agreement or any of the other Note Documents (including, without limitation, with respect to the payment, performance, validity or enforceability of the Obligations, the Liens securing the Obligations or any or all of the terms or conditions of any Note Document) or any transaction relating thereto; provided, however, that the Company does not release or hold harmless any Released Party for actions or omissions by any such Released Party constituting, or losses or expenses directly resulting from, the gross negligence or willful misconduct of such Released Party as determined by a final judgment of a court of competent jurisdiction. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] -67- 11U. BINDING AGREEMENT. When this Agreement is executed and delivered by the Company and the Purchasers, it shall become a binding agreement between the Company and the Purchasers. This Agreement shall also inure to and each such Purchaser shall be bound by this Agreement to the extent provided in such Confirmation of Acceptance. WABASH NATIONAL CORPORATION By: ---------------------------------- Name: Christopher A. Black Title: Vice President & Treasurer -68- The foregoing Agreement is hereby accepted as of the date first above written. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: ----------------------------------- Vice President PRUCO LIFE INSURANCE COMPANY By: ----------------------------------- Vice President -69- SCHEDULE 5D INACTIVE SUBSIDIARIES 1. Wabash International, Inc. 2. WNC Funding LLC 3. WNC Funding Manager Corp. SCHEDULE 6B(b) Sales of Assets 1. THE FOLLOWING PROPERTIES HELD FOR SALE:
FACILITY LOCATION STREET ADDRESS CITY STATE ZIP CODE NET BOOK VALUE TYPE - ----------------- -------------- ---- ----- ------- -------------- ---- Fort Madison 2597 Highway 61 Ft Madison IA 52627 1,751,461 manufacturing (closed) Scott County 470 Fruehauf Road Huntsville TN 37756 4,950,000 manufacturing (closed) Sheridan 606 East Center Street Sheridan AK 72150 1,055,682 trailer sales/rental Sheridan 606 East Center Street Sheridan AK 72150 (1) trailer floor mfg (closed) Fresno 2727 South East Avenue Fresno CA 93725 502,650 branch manufacturing (closed) Greenville 1875 Hwy 101 South Greer SC 29651 956,318 Louisville 4700 Astor Road Louisville KY 40218 903,785 full service location Phoenix 902 South 7th Street Phoenix AZ 85034 485,609 full service location Seattle 9426 8th Avenue Seattle WA 98108 1,235,574 full service location Spokane East 5316 Broadway Spokane WA 99212 490,696 full service location Tampa 5801 East Broadway Tampa FL 33619 955,156 full service location FACILITY LOCATION ENTITY - ----------------- ------ Fort Madison Wabash National, L.P. Scott County Wabash National, L.P. Sheridan Cloud Oak Flooring Company, Inc. Sheridan Cloud Oak Flooring Company, Inc. Fresno NOAMTC, Inc. Greenville NOAMTC, Inc. Louisville FTSI Distribution Co., L.P. Phoenix NOAMTC, Inc. Seattle NOAMTC, Inc. Spokane NOAMTC, Inc. Tampa NOAMTC, Inc.
2. It is anticipated that Wabash National Corporation will sell that certain 1990 Dassault-Breguet Falcon 50 aircraft (serial number-212). SCHEDULE 8A Subsidiaries of the Company and Ownership of Subsidiary Stock
JURISDICTION OF % OF SHARES OWNED NAME OF SUBSIDIARY ORGANIZATION BY COMPANY ------------------ --------------- ------------------ Domestic Subsidiaries Apex Trailer Leasing & Rentals, L.P. Delaware 100% Cloud Oak Flooring Company, Inc. Arkansas 100% Continental Transit Corporation Indiana 100% FTSI Distribution Company, L.P. Delaware 100% National Trailer Funding, L.L.C. Delaware 100% NOAMTC, Inc. Delaware 100% WNC Cloud Merger Sub, Inc. Arkansas 100% WNC Funding Manager Corp. Delaware 100% WNC Funding LLC Delaware 100% WNC Receivables, LLC Delaware 100% WNC Receivables Management Corp. Delaware 100% WTSI Technology Corp. Delaware 100% Wabash Financing LLC Delaware 100% Wabash National Services, L.P. Delaware 100% Wabash National, L.P. Delaware 100% Wabash Technology Corp. Delaware 100% Foreign Subsidiaries FTSI Canada, Ltd. New Brunswick (unavailable) Roadrailer Bimodal, Ltd. U.K. 100% Roadrailer Mercosul, Ltda. Brazil 50% Roadrailer Technology Development Co., Ltd. PRC 81% Wabash do Brasil Brazil 100% Wabash International, Inc. U.S. Virgin Islands 100% Wabash National, GmbH Germany 100%
1 SCHEDULE 8A (CONTINUED) AFFILIATES None. DIRECTORS John T. Hackett Chairman of the Board Richard E. Dessimoz Mark R. Holden E. Hunter Harrison Ludvik F. Koci Donald J. Ehrlich Dr. Martin C. Jischke Dave Burdakin EXECUTIVE OFFICERS Richard E. Dessimoz Acting CEO and President Mark R. Holden Senior Vice President, CFO, Member Office of the CEO Derek L. Nagle Senior Vice President, Member Office of the CEO Arthur R. Brown Senior Vice President, COO Charles R. Ehrlich Vice President -- Manufacturing Rodney P. Ehrlich Senior Vice President -- Engineering Lawrence J. Gross Senior Vice President -- Marketing Wilfred E. Lewallen Vice President -- Industrial Engineering Stanley E. Sutton Vice President -- Purchasing Richard H. Snodgress Vice President -- Quality Assurance Christopher A. Black Vice President -- Treasurer Angela Knowlton Vice President -- Controller Nick C. Fletcher Vice President -- Human Resources Gary L. Bateman Vice President -- Management Information Systems Bryan K. Langford Vice President -- Aftermarket Parts & Accessories Cynthia J. Kretz Secretary Donald J. Hurtt Assistant Secretary
2 SCHEDULE 8B FINANCIAL STATEMENTS The following financial data has been provided to each Purchaser: 1 SCHEDULE 8C Certain Pending or Threatened Litigation
- ------------------------- ---------------------------------------- --------------------- --------------------------- DESCRIPTION OR NAME/PARTIES NATURE OF PROCEEDINGS CURRENT STATUS RELIEF SOUGHT - ------------------------- ---------------------------------------- --------------------- --------------------------- JAN C. AMOS V. WNC, ET Wrongful death; piece of metal came Discovery phase Damages in excess of AL. off semi-trailer and through $1,000,000. windshield of plaintiff's vehicle, decapitating plaintiff's wife. Co-defendant, owner-operator, determined responsible by highway Outcome unknown. patrol report. - ------------------------- ---------------------------------------- --------------------- --------------------------- MORALES, ET. AL. V. Wrongful death; WNC trailer stopped Several very Money damages; WNC has ORTIZ V. BUNNER, ET. AL. with warning flashers on due to important motions self-insured retention accident ahead; driver of van pending. policy of $250,000. Any smuggling 16 illegal aliens fell damages over that amount asleep, hit rear of stopped trailer, up to $51 million insured. killing 13 and injuring 4. - ------------------------- ---------------------------------------- --------------------- --------------------------- LISA MOTOR LINES, INC., Strict liability, negligence, Pending. Second Damages in excess of CONWELL CORP., AND FFE misrepresentation, breach of amended petition. $1,000,000. TRANSPORTATION V. warranty/contract. Plaintiffs allege WABASH NATIONAL axle and wheel failures; Defendants Outcome unknown. CORPORATION include several manufacturers of trailers, parts and lubricants. - ------------------------- ---------------------------------------- --------------------- --------------------------- WABASH NATIONAL CORP., Wabash complained against PPG for Pending. Wabash Value of goods and PPG INDUSTRIES, INC. negligent misrepresentation and breach vigorously pro-rata share of PPG's of warranty/contract for selling defending initial investment in Wabash a painting system. PPG counter-claim. painting system, counter-claimed for alleged consigned interest, and costs. goods provided Wabash. - ------------------------- ---------------------------------------- --------------------- --------------------------- TENNESSEE DEPARTMENT OF Environmental dispute. Grand jury Threatened. Unknown. ENVIRONMENTAL subpoena in 2nd quarter 2000 requested Investigation CONSERVATION; WABASH documents for discharge of wastewater ongoing. Unable to NATIONAL CORPORATION at Huntsville, TN facility. Company predict outcome of appealed assessment order of 10/10/00 appeal. and fine for violations. - ------------------------- ---------------------------------------- --------------------- --------------------------- BERNARD KRONE DO BRASEL Joint venture between BK and Wabash Pending before BK asserts damages in V. WABASH NATIONAL dissolved; BK sued Wabash over Brazil bankruptcy amount of $8.4 million CORPORATION non-compete agreement and technology court. (US) (BRAZIL) disclosures. - ------------------------- ---------------------------------------- --------------------- --------------------------- ESTATE OF EBERHARDT V. Product liability. NOAMTC leased Pending. CM&S Money damages. NOAMTC NOAMTC, INC., ET AL. trailer to CM & S Enterprises. insurer will defend has self-insured Eberhardt's vehicle collided with NOAMTC, which also retention policy of trailer, stopped without lights, and seeks $100,000. Any damages died. Claim NOAMTC negligently indemnification. over that amount up to manufactured trailer. $1 million policy $51 million insured. limit. - ------------------------- ---------------------------------------- --------------------- ---------------------------
1 SCHEDULE 8D Existing Indebtedness CONSOLIDATED DEBT SCHEDULE FOR YEAR ENDING DECEMBER 31, 2001
DESCRIPTION LENDER CURRENT RATE MATURITY BALANCE 12/31/2001 - --------------------------------------------------------------------------------------------------------------------- ON BALANCE SHEET PRIVATE PLACEMENT DEBT: SERIES A - interest due 1/31 & 7/31 6.41% 30-Mar-04 50,000,000 SERIES C - 3/13 & 9/13 7.16% 30-Mar-04 22,000,000 SERIES D - 6/17 & 12/17 7.31% 17-Dec-04 9,000,000 SERIES E - 3/13 & 9/13 7.36% 13-Mar-05 3,000,000 SERIES F - 6/17 & 12/17 7.47% 17-Dec-06 13,000,000 SERIES G - 6/30 & 12/30 7.53% 31-Dec-06 6,667,000 SERIES G - 6/30 & 12/30 7.53% 31-Dec-07 6,667,000 SERIES G - 6/30 & 12/30 7.53% 31-Dec-08 6,666,000 SERIES H - 6/17 & 12/17 7.55% 17-Dec-07 12,500,000 SERIES H - 6/17 & 12/17 8.04% 17-Dec-08 12,500,000 SERIES I - 3/29 & 9/29 8.04% 29-Sep-05 25,000,000 SERIES I - 3/29 & 9/29 8.04% 29-Sep-07 25,000,000 ------------- 192,000,000 CREDIT FACILITY DEBT: REVOLVING CREDIT - WNC Bank One - Agent 2.44% 30-Mar-04 75,000,000 REVOLVING CREDIT - CANADA(1) Toronto Dominion 3.40% 30-Mar-04 14,641,976 RENTAL FLEET FACILITY Fleet Boston 30-Jun-05 65,233,521 AR SECURITIZATION National City 4.75% 30-Mar-04 17,700,000 ------------- 172,575,497 OTHER DEBT: CAPITAL LEASE - AIRPLANE First Security 7.50% 30-Nov-02 12,080,750 SWIFT HIGH CUBE National City 0.00% 30-Jun-02 13,825,000 INSTALLMENT BREADNER Seller Note 7.25% 15-Jan-06 8,500,000 TERM LOAN NORTHERN Northern Trust 8.16% 30-Sep-08 10,965,356 INSTALLMENT APEX National City 7.55% 15-Sep-02 453,300 MORTGAGE CLOUD Public Bonds 4.75% VARIES 1,331,585 BILL REINDERS - CANADA Seller Note 8.00% 30-Jun-02 285,965 ------------- 47,441,956 ------------- TOTAL ON BALANCE SHEET DEBT 412,017,453 ============= OFF BALANCE SHEET MANUFACTURING EQUIPMENT: DURAPLATE PLANT National City 23-Dec-04 9,638,234 PLASMA FABRICATOR National City 27-Oct-04 469,576
- --------------- (1) The Canadian revolving credit facility includes any and all renewals, extensions, continuations and refinancings of any of the foregoing, to the extent that the maximum principal amount thereof is not increased. 1 PRODUCTION LINE EQUIP Key Bank 30-Sep-06 3,853,401 DRY KILNS Key Bank 22-Dec-06 1,240,642 DURAPLATE PLANT II GE Capital 20-Nov-08 9,327,575 ------------- 24,529,428 (continued next page) NEW AND USED TRAILERS: SALES LEASEBACK National City 31-Dec-01 - SALES LEASEBACK Bank Boston 5-Sep-04 3,878,124 SALES LEASEBACK Bank Boston 5-Aug-05 5,155,290 SALES LEASEBACK Pitney Bowes 30-Aug-04 8,959,759 SALES LEASEBACK Bank Boston 31-Mar-05 5,877,740 ------------- 23,870,914 ------------- TOTAL OFF BALANCE SHEET DEBT 48,400,342 ============= TOTAL CONSOLIDATED DEBT 460,417,795 =============
S-5.14-2 Permitted Existing Investments Wabash National Corporation Investment Accounts as of April 8, 2002
=============================== ========================================= ======================================= BANK ONE, NA NORTHERN TRUST BANK =============================== ========================================= ======================================= Address 111 Monument Circle 50 S. LaSalle Indianapolis, IN 46204 Chicago, IL 60675 - ------------------------------- ----------------------------------------- --------------------------------------- Relationship Officer Linda Taylor Greta Satek - ------------------------------- ----------------------------------------- --------------------------------------- Bank Account Title Wabash National Corp. Wabash National Corp. Finance - ------------------------------- ----------------------------------------- --------------------------------------- Balance $45,900,000 $47,000 - ------------------------------- ----------------------------------------- --------------------------------------- Description of Account WNC Fidelity Accounts WNC Northern Trust Bank - ------------------------------- ----------------------------------------- --------------------------------------- Account Number B6681120 5677211 - ------------------------------- ----------------------------------------- ---------------------------------------
S-5.14-3 SCHEDULE 8D Existing Liens
================================ ================================================= ========================================= DEBTOR/JURISDICTION SECURED PARTY COLLATERAL ================================ ================================================= ========================================= APEX RENTALS, INC. - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Associates Commercial Corporation Specific vehicles, accessions, chattel paper, etc. - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Associates Commercial Corporation Specific vehicles, accessions, chattel paper, etc. - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Apex Trailer & Truck Equip. Sales, Inc. Specific equipment, replacement, proceeds, etc. - ---------------------------------------------------------------------------------------------------------------------------- APEX TRAILER LEASING & RENTALS, L.P. - -------------------------------- ------------------------------------------------- ----------------------------------------- Specific equipment/inventory, A/R, Delaware Secretary of State Fleet Capital Corp., as Collateral Agent and rents, proceeds related thereto. Assignee of Wabash Statutory Trust-2000 (Vehicles sold to Fleet Boston) - -------------------------------- ------------------------------------------------- ----------------------------------------- Specific vehicles, accessions, chattel Delaware Secretary of State Fleet Capital Corp., as Collateral Agent and paper, general intangibles, proceeds, Assignee of Wabash Statutory Trust-2000 etc. - -------------------------------- ------------------------------------------------- ----------------------------------------- Specific equipment/inventory, A/R, Indiana Secretary of State Fleet Capital Corporation, as Collateral Agent rents, proceeds related thereto. and Assignee of Wabash Statutory Trust-2000 (Vehicles sold to Fleet Boston) - -------------------------------- ------------------------------------------------- ----------------------------------------- Specific equipment/inventory, A/R, Missouri Secretary of State Fleet Capital Corp., as Collateral Agent and rents, proceeds related thereto. Assignee of Wabash Statutory Trust-2000 (Vehicles sold to Fleet Boston) - ---------------------------------------------------------------------------------------------------------------------------- CLOUD OAK FLOORING COMPANY, INC. - -------------------------------- ------------------------------------------------- ----------------------------------------- All tangible personal property purchased with $2,350,000 Arkansas Arkansas Secretary of State Boatmen's Trust Company of Arkansas Development Finance Authority Economic Development Revenue Bonds (1996 Series D) (Plant) - -------------------------------- ------------------------------------------------- ----------------------------------------- FRUEHAUF TRAILER SERVICES, INC. - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Caterpillar Financial Services Corporation 3 trucks (substitutions, additions, proceeds) - -------------------------------- ------------------------------------------------- ----------------------------------------- Iowa Secretary of State Norwest Bank Iowa, NA 1 Digital On Hold download, w/ productions - -------------------------------- ------------------------------------------------- ----------------------------------------- Missouri Secretary of State US Fleet Leasing, as Agent Receivables and Related Security and Collection Accounts. - -------------------------------- ------------------------------------------------- ----------------------------------------- Missouri Secretary of State US Fleet Leasing Specific equipment (trucks and proceeds) - -------------------------------- ------------------------------------------------- ----------------------------------------- Recorder of Deeds; US Fleet Leasing, as Agent Receivables and Related Security and St. Louis County, Missouri Collection Accounts. - -------------------------------- ------------------------------------------------- ----------------------------------------- Ohio Secretary of State Caterpillar Financial Services Corporation 3 trucks (substitutions, additions, proceeds) - -------------------------------- ------------------------------------------------- ----------------------------------------- Ohio Secretary of State Raymond Leasing Corporation, as Assignee (from Specific leased equipment (order Storage Concepts, Inc.) pickers, batteries and chargers) - -------------------------------- ------------------------------------------------- ----------------------------------------- Franklin County Ohio Raymond Leasing Corporation, as Assignee (from Specific leased equipment (order Storage Concepts, Inc.) pickers, batteries and chargers) - -------------------------------- ------------------------------------------------- ----------------------------------------- City of Richmond, Virginia Raymond Leasing Corporation, as Assignee (from Specific leased equipment (order Storage Concepts, Inc.) pickers, batteries and chargers) - -------------------------------- ------------------------------------------------- ----------------------------------------- Scranton, Pennsylvania City of Scranton sewer authority $431.26 sewer treatment charges filed Court of Common Pleas (Lackawanna County) 1/11/98 - -------------------------------- ------------------------------------------------- ----------------------------------------- Greenville County, Williamson Thermo King Dealerships, Inc. Specific equipment (Thermo King unit) South Carolina - -------------------------------- ------------------------------------------------- -----------------------------------------
S-5.14-4 - -------------------------------- ------------------------------------------------- ----------------------------------------- Texas Secretary of State US Fleet Leasing Specific equipment (trucks and proceeds) - ---------------------------------------------------------------------------------------------------------------------------- NOAMTC, INC. - -------------------------------- ------------------------------------------------- ----------------------------------------- Specific equipment (combination system, Delaware Secretary of State Bankers/Softech Divisions of EAB Leasing Corp. liner bags, filter pads and extended warranty) - ---------------------------------------------------------------------------------------------------------------------------- WABASH NATIONAL, L.P. - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State General Electric Capital Corporation Equipment and Production line (sale lease-back) - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State National City Leasing Corporation Leased equipment (Whitney Plasma Fabricator) - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State First Bank Richmond, assigned from Mid Leased equipment (fax copier) Continent Financial Corp. - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Copelco Capital, Inc. Leased equipment - ---------------------------------------------------------------------------------------------------------------------------- WABASH NATIONAL CORPORATION - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Bank One, Indiana, N.A. (f/k./a NBD Bank, N.A., Specific equipment (accessions, proceeds) successor by merger to INB National Bank; f/k/a Lafayette National Bank, original Secured Party) - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Caterpillar Financial Services truck (substitutions, additions, proceeds) - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Caterpillar Financial Services 2 trucks (substitutions, additions, proceeds) - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State IBM Credit Corporation Leased computer equipment and proceeds - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State National City Leasing Corp. Specific leased equipment (Duraplate) - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Marlin Leasing Corporation Specific leased equipment - -------------------------------- ------------------------------------------------- ----------------------------------------- Indiana Secretary of State Computer Technologies Leasing, Inc. [Description Unavailable] - -------------------------------- ------------------------------------------------- ----------------------------------------- Greenville County, S.C. Williamson Thermo King Dealerships, Inc. Specific equipment (Thermo King unit) - -------------------------------- ------------------------------------------------- ----------------------------------------- WABASH NATIONAL FINANCE CORP. - -------------------------------- ------------------------------------------------- ----------------------------------------- Specific chattel paper (leases) and Indiana Secretary of State First Union National Bank, as successor by inventory of leased personal property, merger to CoreStates Bank, N.A. accessions and rights. - -------------------------------- ------------------------------------------------- ----------------------------------------- WNC CLOUD MERGER SUB, INC. - -------------------------------- ------------------------------------------------- ----------------------------------------- Arkansas Secretary of State KeyCorp Leasing Specific equipment, accessions, proceeds - -------------------------------- ------------------------------------------------- ----------------------------------------- Arkansas Secretary of State KeyCorp Leasing Specific equipment, accessions, proceeds - -------------------------------- ------------------------------------------------- ----------------------------------------- Boone County, Arkansas KeyCorp Leasing Specific equipment, accessions, proceeds Circuit Clerk - -------------------------------- ------------------------------------------------- -----------------------------------------
The Liens in favor of Fleet Capital Corporation noted on certificates of title for vehicles titled in the name of Apex Trailer Leasing & Rentals, L.P. or Wabash Statutory Trust - 2000. S-5.14-5 EX-10.27 11 c68906a1ex10-27.txt AMENDED AND RESTATED CREDIT AGREEMENT EXHIBIT 10.27 EXECUTION COPY AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 11, 2002 among WABASH NATIONAL CORPORATION, as Borrower, THE INSTITUTIONS FROM TIME TO TIME PARTY HERETO, as Lenders, BANK ONE, INDIANA, N.A. as Administrative Agent TABLE OF CONTENTS
PAGE ---- ARTICLE I: DEFINITIONS...........................................................................................1 1.1 Certain Defined Terms........................................................................................1 1.2 References..................................................................................................24 ARTICLE II: THE CREDITS.........................................................................................25 2.1 (A) Revolving Loans.........................................................................................25 2.2 Rate Options for All Advances...............................................................................27 2.3 Prepayments of Loans........................................................................................27 2.4 Reduction of Revolving Loan Commitments.....................................................................29 2.5 Method of Borrowing Revolving Advances......................................................................29 2.6 Method of Selecting Types and Interest Periods for Advances; Determination of Applicable Margins............29 2.7 Minimum Amount of Each Revolving Advance....................................................................30 2.8 Method of Selecting Types and Interest Periods for Conversion and Continuation of Loans.....................31 2.9 Intentionally Omitted.......................................................................................31 2.10 Intentionally Omitted......................................................................................31 2.11 Default Rate...............................................................................................31 2.12 Method of Payment..........................................................................................31 2.13 Notes, Telephonic Notices..................................................................................32 2.14 Promise to Pay; Interest and Fees; Interest Payment Dates; Interest and Fee Basis; Loan Accounts...........33 2.15 Notification of Advances, Interest Rates, Prepayments and Aggregate Revolving Loan Commitment Reductions...34 2.16 Lending Installations......................................................................................34 2.17 Non-Receipt of Funds by the Administrative Agent...........................................................34 2.18 Termination Date...........................................................................................35 2.19 Letter of Credit Facility..................................................................................35 2.20 Revolver Letter of Credit Participation....................................................................35 2.21 Reimbursement Obligation...................................................................................36 2.22 Cash Collateral............................................................................................37 2.23 Letter of Credit Fees......................................................................................37 2.24 Indemnification; Exoneration...............................................................................38 ARTICLE III: CHANGE IN CIRCUMSTANCES............................................................................39 3.1 Yield Protection............................................................................................39 3.2 Changes in Capital Adequacy Regulations.....................................................................40 3.3 Availability of Types of Advances...........................................................................41 3.4 Funding Indemnification.....................................................................................41 3.5 Taxes.......................................................................................................41
3.6 Mitigation; Lender Statements; Survival of Indemnity........................................................44 ARTICLE IV: CONDITIONS PRECEDENT................................................................................45 4.1 Effectiveness...............................................................................................45 4.2 Each Revolving Loan and Revolver Letter of Credit...........................................................46 ARTICLE V: REPRESENTATIONS AND WARRANTIES.......................................................................46 5.1 Corporate Existence and Standing............................................................................46 5.2 Authorization and Validity..................................................................................47 5.3 No Conflict; Government Consent.............................................................................47 5.4 Financial Statements........................................................................................47 5.5 Material Adverse Change.....................................................................................48 5.6 Taxes.......................................................................................................48 5.7 Litigation and Contingent Liabilities.......................................................................48 5.8 Subsidiaries................................................................................................48 5.9 ERISA.......................................................................................................49 5.10 Accuracy of Information....................................................................................49 5.11 Securities Activities......................................................................................49 5.12 Material Agreements........................................................................................49 5.13 Compliance with Laws.......................................................................................49 5.14 Assets and Properties......................................................................................50 5.15 Statutory Indebtedness Restrictions........................................................................50 5.16 Environmental Matters......................................................................................50 5.17 Labor Matters..............................................................................................51 5.18 Foreign Employee Benefit Matters...........................................................................51 5.19 Patents, Trademarks, Permits, Etc..........................................................................51 5.20 Note Agreement Representations.............................................................................51 5.21 [Restructuring Fees........................................................................................52 ARTICLE VI: COVENANTS...........................................................................................52 6.1 Reporting...................................................................................................52 6.2 Affirmative Covenants.......................................................................................57 6.3 Negative Covenants..........................................................................................63 6.4 Financial Covenants.........................................................................................72 ARTICLE VII: DEFAULTS...........................................................................................74 7.1 Defaults....................................................................................................74 ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES................................77 8.1 Remedies....................................................................................................77 8.2 Defaulting Lender...........................................................................................78 8.3 Amendments..................................................................................................79
ii 8.4 Preservation of Rights......................................................................................80 ARTICLE IX: GENERAL PROVISIONS..................................................................................80 9.1 Survival of Representations.................................................................................80 9.2 Governmental Regulation.....................................................................................80 9.3 Headings....................................................................................................80 9.4 Entire Agreement............................................................................................80 9.5 Several Obligations; Benefits of this Agreement.............................................................81 9.6 Expenses; Indemnification...................................................................................81 9.7 Numbers of Documents........................................................................................82 9.8 Accounting..................................................................................................82 9.9 Severability of Provisions..................................................................................83 9.10 Nonliability of Lenders....................................................................................83 9.11 CHOICE OF LAW..............................................................................................83 9.12 WAIVER OF JURY TRIAL.......................................................................................83 9.13 No Strict Construction.....................................................................................83 9.14 Supplemental Disclosure....................................................................................83 9.15 Amendment and Restatement of Original Credit Agreement.....................................................84 9.16 Release....................................................................................................84 ARTICLE X: THE ADMINISTRATIVE AGENT.............................................................................84 10.1 Appointment; Nature of Relationship........................................................................84 10.2 Powers.....................................................................................................85 10.3 General Immunity...........................................................................................85 10.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc...............................................85 10.5 Action on Instructions of Lenders..........................................................................86 10.6 Employment of Agents and Counsel...........................................................................86 10.7 Reliance on Documents; Counsel.............................................................................86 10.8 The Administrative Agent's Reimbursement and Indemnification...............................................86 10.9 Rights as a Lender.........................................................................................86 10.10 Lender Credit Decision....................................................................................87 10.11 Successor Administrative Agent............................................................................87 ARTICLE XI: SETOFF; RATABLE PAYMENTS............................................................................87 11.1 Setoff.....................................................................................................87 11.2 Intentionally Omitted......................................................................................87 11.3 Relations Among Lenders....................................................................................88 ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..................................................88 12.1 Successors and Assigns.....................................................................................88 12.2 Participations.............................................................................................88 12.3 Assignments................................................................................................89 12.4 Confidentiality............................................................................................90 12.5 Dissemination of Information...............................................................................91
iii ARTICLE XIII: NOTICES...........................................................................................91 13.1 Giving Notice..............................................................................................91 13.2 Change of Address..........................................................................................91 ARTICLE XIV: COUNTERPARTS.......................................................................................91
iv EXHIBITS AND SCHEDULES EXHIBITS EXHIBIT A -- Revolving Loan Commitments and Term Credit (Definitions) EXHIBIT B-1 -- Form of Revolving Note (Definitions) EXHIBIT B-2 -- Form of Term Note (Definitions) EXHIBIT B-3 -- Form of PIK Note (Definitions) EXHIBIT C -- Form of Assignment Agreement (ss.ss. 2.19, 12.3) EXHIBIT D -- List of Closing Documents (ss. 4.1) EXHIBIT E -- Form of Officer's Certificate (ss.ss.4.2, 6.1(A)(iv)) EXHIBIT F -- Form of Compliance Certificate (ss.ss.4.2, 6.1(A)(iv)) v SCHEDULES Schedule 1.1.1 -- Permitted Existing Contingent Obligations (Definitions) Schedule 1.1.2 -- Permitted Existing Indebtedness (Definitions) Schedule 1.1.3 -- Permitted Existing Investments (Definitions) Schedule 1.1.4 -- Permitted Existing Liens (Definitions) Schedule 1.1.17 -- Covenant Case Projection Schedule 2.1 -- Existing Letters of Credit (ss.2.1) Schedule 5.7 -- Litigation; Loss Contingencies (ss.5.7) Schedule 5.8 -- Subsidiaries (ss.5.8) Schedule 5.14 -- Assets and Properties (ss.5.14) Schedule 5.16 -- Environmental Matters (ss.5.16) Section 6.2(A) -- Inactive Subsidiaries (ss.6.2(A)) Schedule 6.3(B) -- Asset Sales Under Consideration on the Effective Date (ss.6.3(B)) Schedule 6.3(L) -- Other Indebtedness (ss.6.3(L)) vi AMENDED AND RESTATED CREDIT AGREEMENT This Amended and Restated Credit Agreement dated as of April 11, 2002 is entered into among Wabash National Corporation, a Delaware corporation, the institutions from time to time a party hereto as Lenders, whether by execution of this Agreement or an assignment and acceptance pursuant to Section 12.3 and Bank One, Indiana, N.A., in its capacity as Administrative Agent for itself and the other Lenders. The parties hereto agree as follows: ARTICLE I: DEFINITIONS 1.1 Certain Defined Terms. In addition to the terms defined in other sections of this Agreement, the following terms used in this Agreement shall have the following meanings, applicable both to the singular and the plural forms of the terms defined: As used in this Agreement: "ACQUISITION" means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Borrower or any of its Subsidiaries (a) acquires any going business or all or substantially all of the assets of any firm, corporation or division thereof which constitutes a going business, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage of voting power) of the outstanding partnership interests of a partnership or a majority (by percentage or voting power) of the outstanding ownership interests of a limited liability company. "ADMINISTRATIVE AGENT" means Bank One in its capacity as contractual representative for itself and the Lenders pursuant to Article X hereof and any successor Administrative Agent appointed pursuant to Article X hereof. "ADVANCE" means a borrowing hereunder consisting of the aggregate amount of the several Loans made by the Lenders to the Borrower of the same Type and, in the case of Eurodollar Rate Advances, for the same Interest Period. "AFFILIATE" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person is the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of greater than ten percent (10%) or more of any class of voting securities (or other voting interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Capital Stock, by contract or otherwise. In addition, each director of the Borrower or any Subsidiary of the Borrower shall be deemed to be an Affiliate of the Borrower. "AGREED CURRENCIES" means (i) Dollars and (ii) any other Eligible Agreed Currency which the Borrower requests the Issuing Lender to include as an Agreed Currency hereunder and which is acceptable to the Issuing Lender and the Administrative Agent. For purposes of this definition, "ELIGIBLE AGREED CURRENCY" means any currency other than Dollars (i) that is readily available, (ii) that is freely traded, (iii) in which deposits are customarily offered to banks in the London interbank market, (iv) which is convertible into Dollars in the international interbank market and (v) as to which an Equivalent Amount may be readily calculated. "AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the Revolving Loan Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is $18,000,000.00, of which $10,444,995.69 is outstanding as of the Effective Date. "AGREEMENT" means this Amended and Restated Credit Agreement, as it may be amended, restated or otherwise modified and in effect from time to time. "AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting principles as in effect from time to time in the United States, applied in a manner consistent with those used in preparing the financial statements referred to in Section 5.4 hereof. "ALTERNATE BASE RATE" means, for any day, a fluctuating interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) as shall be in effect from time to time, which rate per annum shall at all times be equal to the greatest of (a) the Prime Rate in effect on such day; and (b) the sum of one-half of one percent (0.50%) and the Federal Funds Effective Rate in effect on such day. For purposes hereof, "Prime Rate" shall mean the rate of interest per annum publicly announced from time to time by Bank One or its parent as its prime rate (it being acknowledged that such announced rate may not necessarily be the lowest rate charged to any customer), and each change in the Prime Rate shall be effective on the date such change is publicly announced as being effective. "Federal Funds Effective Rate" shall mean, for any day, a fluctuating interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent in its sole discretion. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms hereof, the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change. "APPLICABLE LETTER OF CREDIT FEE" as at any date of determination, shall be the rate per annum then applicable in the determination of the amount payable under Section 2.23 with respect to Letters of Credit, determined in accordance with the provisions of Section 2.6(b). 2 "APPLICABLE MARGIN" shall have the meaning ascribed to that term in Section 2.6(b)(i). "APPLICABLE REVOLVING LOAN COMMITMENT FEE" as at any date of determination, shall be the rate per annum then applicable in the determination of the amount payable under Section 2.14(C) with respect to the unused Aggregate Revolving Loan Commitment, determined in accordance with the provisions of Section 2.6(b). "AUTHORIZED OFFICER" means any of the chief executive officer, chief financial officer, controller and treasurer of the Borrower, acting singly. "AVAILABLE LIQUIDITY" means, for any period, the sum of the average monthly balances during such period of (i) the amount by which (A) the Aggregate Revolving Loan Commitment in effect during such period exceeds (B) the aggregate outstanding amount of the Revolving Advances and Revolver L/C Obligations during such period and (ii) "Availability" (as defined in the Receivables Purchase Agreement) during such period. "BANK ONE" means Bank One, Indiana, N.A. in its individual capacity, together with its successors. "BANK PRINCIPAL ALLOCATION" shall mean, at any time, the percentage determined by dividing (a) the sum of (i) the outstanding principal amount of all of the Term Loans (other than the PIK Notes) plus (ii) the amount then available for drawing under all Term Letters of Credit plus (iii) the amount of unpaid reimbursement obligations with respect to drawings under all Term Letters of Credit by (b) the sum of (i) the outstanding principal amount of the Senior Notes (excluding in any event the Related Notes) as of such time by (ii) the sum of (A) the outstanding principal amount of all of the Term Loans (other than the PIK Notes) plus (B) the amount then available for drawing under all Term Letters of Credit plus (C) the amount of unpaid reimbursement obligations with respect to drawings under all Term Letters of Credit. "BASE RATE ADVANCE" means an Advance which bears interest at the Alternate Base Rate plus the Applicable Margin. "BASE RATE LOAN" means a Loan, or portion thereof, which bears interest at the Alternate Base Rate plus the Applicable Margin. "BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which the Borrower or any other member of the Controlled Group is, or within the immediately preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA. "BORROWER" means Wabash National Corporation, a Delaware corporation, and its successors and assigns. "BORROWING DATE" means a date on which an Advance is made hereunder. "BORROWING NOTICE" means a Revolving Advance Borrowing Notice. 3 "BUSINESS DAY" means (i) with respect to any borrowing, payment or rate selection of Loans bearing interest at the Eurodollar Rate and with respect to Revolver Letter of Credit denominated in Agreed Currency, a day (other than a Saturday or Sunday) on which banks are open for business in Chicago, Illinois and New York, New York and on which dealings in United States Dollars are carried on in the London interbank market (and, if the Revolver Letter of Credit which is the subject of such issuance or payment is denominated in euro, a day upon which such clearing system as is determined by the Administrative Agent to be suitable for clearing or settlement of the euro is open for business) and (ii) for all other purposes a day (other than a Saturday or Sunday) on which banks are open for business in Chicago, Illinois and New York, New York. "CAPITAL EXPENDITURES" means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including Capitalized Leases and purchase money Indebtedness to the extent permitted hereunder) by the Borrower and its Subsidiaries during that period that, in conformity with Agreement Accounting Principles, are required to be included in or reflected by the property, plant, equipment or similar fixed asset accounts reflected in the consolidated balance sheet of the Borrower and its Subsidiaries. "CAPITAL STOCK" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership, partnership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "CAPITALIZED LEASE" of a Person means any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles. "CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles. "CASH EQUIVALENTS" means (i) marketable direct obligations issued or unconditionally guaranteed by the government of the United States; (ii) domestic and Eurodollar certificates of deposit and time deposits, bankers' acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, or its branches or agencies and having capital and surplus in an aggregate amount not less than $500,000,000 (fully protected against currency fluctuations for any such deposits with a term of more than ten (10) days); (iii) shares of money market, mutual or similar funds having net assets in excess of $500,000,000 maturing or being due or payable in full not more than one hundred eighty (180) days after the Borrower's acquisition thereof and the investments of which are limited to investment grade securities (i.e., securities rated at least Baa by Moody's Investors Service, Inc. or at least BBB by Standard & Poor's Ratings Group) and (iv) commercial paper of United States banks and bank holding companies and their subsidiaries and United States finance, commercial, industrial or utility companies which, at the time of acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better) by 4 Moody's Investors Service, Inc.; provided that the maturities of such Cash Equivalents shall not exceed 365 days. "CHANGE" is defined in Section 3.2 hereof. "CHANGE OF CONTROL" means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock of the Borrower. "CODE" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. "COLLATERAL" means all real and personal property and interests in real and personal property now owned or hereafter acquired by the Borrower or any of the Borrower's Domestic Subsidiaries in or upon which a security interest or lien is granted to the Collateral Agent, for the benefit of the Secured Parties, whether under the Security Agreement, under any of the other Collateral Documents or under any of the other Loan Documents. "COLLATERAL AGENT" means Bank One, NA, a national banking association, in its capacity as contractual representative for itself and the Secured Parties pursuant to the terms of the Intercreditor Agreement and any successor Collateral Agent appointed pursuant to the terms thereof. "COLLATERAL DOCUMENTS" means the Security Agreement, the Pledge Agreements, the Mortgages and all other security agreements, pledges, powers of attorney, assignments, financing statements, vehicle titles and all other instruments and documents delivered to the Collateral Agent pursuant to Section 6.2(O) hereof, together with all agreements, instruments and documents referred to therein or contemplated thereby. "COMMISSION" means the Securities and Exchange Commission and any Person succeeding to the functions thereof. "COMPLIANCE CERTIFICATE" means a certificate substantially in the form of Exhibit F delivered to the Administrative Agent and each Lender by the Borrower pursuant to the provisions of this Agreement and covering, among other things, its compliance with the financial covenants contained in Section 6.4 and certain other provisions of this Agreement. "COMPUTATION DATE" is defined in Section 2.3(B). "CONSOLIDATED EBITDA" means, for any period, on a consolidated basis for the Borrower and its consolidated Subsidiaries, the sum of the amounts for such period, without duplication, of (i) Consolidated Operating Income, plus (ii) charges against income for foreign taxes and U.S. income taxes to the extent deducted in computing Consolidated Operating Income, plus (iii) Interest Expense to the extent deducted in computing Consolidated Operating Income, plus (iv) depreciation expense to the extent deducted in computing Consolidated Operating Income, plus (v) amortization expense, including, without limitation, amortization of goodwill and other intangible assets to the extent deducted in computing Consolidated Operating 5 Income, plus (vi) other non-cash charges (in an aggregate amount not in excess of $15,000,000 during any fiscal year of the Borrower) in accordance with Agreement Accounting Principles to the extent deducted in computing Consolidated Operating Income, minus (x) the total interest income of the Borrower and its Subsidiaries to the extent included in computing Consolidated Operating Income minus (y) the total tax benefit reported by the Borrower and its Subsidiaries to the extent included in computing Consolidated Operating Income. "CONSOLIDATED EQUITY" means as of the date of any determination thereof, the total stockholders' equity of the Borrower and its Subsidiaries on a consolidated basis, all as determined in accordance with Agreement Accounting Principles. "CONSOLIDATED OPERATING INCOME" means, with reference to any period, the net operating income (or loss) of the Borrower and its Subsidiaries for such period (taken as a cumulative whole on a consolidated basis) including without limitation all restructuring expenses for such period (exclusive of "other income/expenses" as reflected in the Borrower's consolidated statement of income of the Borrower and its Subsidiaries for such period and related to non-operating and non-recurring income and expenses), as determined in accordance with Agreement Accounting Principles, after eliminating all offsetting debits and credits between the Borrower and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Borrower and its Subsidiaries in accordance with Agreement Accounting Principles. "CONSOLIDATED TAX ADJUSTED EQUITY" means as of the date of any determination thereof, Consolidated Equity plus the cumulative federal, state and local income tax benefit reported by the Borrower in accordance with Agreement Accounting Principles. "CONSOLIDATED TOTAL ASSETS" means as of the date of any determination thereof, total assets of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with Agreement Accounting Principles. "CONTAMINANT" means any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any constituent of any such substance or waste, and includes but is not limited to these terms as defined in Environmental, Health or Safety Requirements of Law. "CONTINGENT OBLIGATION", as applied to any Person, means any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet 6 condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or (d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof. In any computation of the Indebtedness or other liabilities of the obligor under any Contingent Obligation, the Indebtedness or other obligations that are the subject of such Contingent Obligation shall be assumed to be direct obligations of such obligor. "CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of any equity or debt securities issued by that Person or any indenture, mortgage, deed of trust, security agreement, pledge agreement, guaranty, contract, undertaking, agreement or instrument, in any case in writing, to which that Person is a party or by which it or any of its properties is bound, or to which it or any of its properties is subject. "CONTROLLED GROUP" means the group consisting of (i) any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Borrower; (ii) a partnership or other trade or business (whether or not incorporated) which is under common control (within the meaning of Section 414(c) of the Code) with the Borrower; and (iii) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Borrower, any corporation described in clause (i) above or any partnership or trade or business described in clause (ii) above. "CONVERSION/CONTINUATION NOTICE" is defined in Section 2.8(D) hereof. "CURE LOAN" is defined in Section 8.2 hereof. "CUSTOMARY PERMITTED LIENS" means: (i) Liens (other than Environmental Liens and Liens in favor of the IRS or the PBGC) with respect to the payment of taxes, assessments or governmental charges in all cases which are not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with Agreement Accounting Principles; (ii) statutory Liens of landlords and Liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other similar Liens imposed by law created in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with Agreement Accounting Principles; 7 (iii) Liens (other than Environmental Liens and Liens in favor of the IRS or the PBGC) incurred or deposits made in the ordinary course of business in connection with worker's compensation, unemployment insurance or other types of social security benefits or to secure the performance of bids, tenders, sales, contracts (other than for the repayment of borrowed money), surety, appeal and performance bonds; provided that (A) all such Liens do not in the aggregate materially detract from the value of assets or property of the Borrower and its Subsidiaries taken as a whole or materially impair the use thereof in the operation of their businesses taken as a whole, and (B) all Liens securing bonds to stay judgments or in connection with appeals that do not secure at any time an aggregate amount exceeding $5,000,000; (iv) Liens arising with respect to zoning restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other similar charges or encumbrances on the use of real property which do not interfere in any material respect with the ordinary conduct of the business of the Borrower or any Subsidiary of the Borrower; (v) Liens of attachment or judgment with respect to judgments, writs or warrants of attachment, or similar process against the Borrower or any Subsidiary of the Borrower which do not constitute a Default under Section 7.1(h); (vi) Liens arising from leases, subleases or licenses granted to others which do not interfere in any material respect with the business of the Borrower or any Subsidiary of the Borrower; and (vii) any interest or title of the lessor in the property subject to any operating lease entered into by the Borrower or any Subsidiary of the Borrower in the ordinary course of business. "DEFAULT" means an event described in Article VII hereof. "DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the Termination Date. "DOL" means the United States Department of Labor and any Person succeeding to the functions thereof. "DOLLAR" and "$" means dollars in the lawful currency of the United States of America. "DOLLAR AMOUNT" of any currency at any date shall mean (i) the amount of such currency if such currency is Dollars or (ii) the equivalent in such currency of such amount of Dollars if such currency is any currency other than Dollars, calculated on the basis of the arithmetical mean of the buy and sell spot rates of exchange of the Administrative Agent for such currency on the London market at 11:00 a.m., London time, on or as of the most recent Computation Date provided for in Section 2.3(B). 8 "DOMESTIC SUBSIDIARY" means a Subsidiary organized under the laws of a jurisdiction located in the United States of America, including, without limitation, those Subsidiaries identified as "Domestic Subsidiaries" on Schedule 5.8 hereto. "EFFECTIVE DATE" means April 12, 2002. "EMU" means Economic and Monetary Union as contemplated in the Treaty on European Union. "ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all Requirements of Law derived from or relating to federal, state and local laws or regulations relating to or addressing pollution or protection of the environment, or protection of worker health or safety, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq., the Occupational Safety and Health Act of 1970, 29 U.S.C. ss. 651 et seq., and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss. 6901 et seq., in each case including any amendments thereto, any successor statutes, and any regulations or guidance promulgated thereunder, and any state or local equivalent thereof. "ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority for (a) any liability under Environmental, Health or Safety Requirements of Law, or (b) damages arising from, or costs incurred by such Governmental Authority in response to, a Release or threatened Release of a Contaminant into the environment. "ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of law that conditions, restricts, prohibits or requires any notification or disclosure triggered by the closure of any property or the transfer, sale or lease of any property or deed or title for any property for environmental reasons, including, but not limited to, any so-called "Industrial Site Recovery Act" or "Responsible Property Transfer Act." "EQUITY INTERESTS" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (including any debt security that is convertible into, or exchangeable for, Capital Stock). "EQUIVALENT AMOUNT" of any currency with respect to any amount of Dollars at any date shall mean the equivalent in such currency of such amount of Dollars, calculated on the basis of the arithmetical mean of the buy and sell spot rates of exchange of the Administrative Agent for such other currency at 11:00 a.m., London time, on the date on or as of which such amount is to be determined. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time including (unless the context otherwise requires) any rules or regulations promulgated thereunder. "EURO" and/or "EUR" means the euro referred to in Council Regulation (EC) No. 1103/97 dated June 17, 1997 passed by the Council of the European Union, or, if different, the then lawful currency of the member states of the European Union that participate in the third stage of EMU. 9 "EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate Advance for the relevant Interest Period, the applicable British Bankers' Association Interest Settlement Rate for deposits in Dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, provided that, (i) if Reuters Screen FRBD is not available to the Administrative Agent for any reason, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the applicable British Bankers' Association Interest Settlement Rate for deposits in Dollars as reported by any other generally recognized financial information service as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, and (ii) if no such British Bankers' Association Interest Settlement Rate is available to the Administrative Agent, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the rate determined by the Administrative Agent to be the rate at which Bank One or one of its affiliate banks offers to place deposits in Dollars with first class banks in the London interbank market at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, in the approximate amount of Bank One's relevant Eurodollar Rate Loan, and having a maturity equal to such Interest Period. "EURODOLLAR RATE" means, with respect to a Eurodollar Rate Advance for the relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable to such Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (ii) the Applicable Margin. The Eurodollar Rate shall be rounded to the next higher multiple of 1/16 of 1% if the rate is not such a multiple. "EURODOLLAR RATE ADVANCE" means an Advance which bears interest at the Eurodollar Rate. "EURODOLLAR RATE LOAN" means a Loan, or portion thereof, which bears interest at the Eurodollar Rate. "EXCESS CASH FLOW" means, without duplication, for any fiscal quarter of the Borrower, an amount equal to: (i) the sum of cash and Cash Equivalents of the Borrower and its Subsidiaries on the last day of such fiscal quarter; (plus) (ii) Available Liquidity on the last day of such fiscal quarter; minus (iii) the Projected Liquidity Amount on the last day of such fiscal quarter; minus (iv) $5,000,000. "EXCLUDED TAXES" means, in the case of each Lender or applicable Lending Installation and the Administrative Agent, taxes imposed on its overall net income, and franchise taxes imposed on it, by (i) the jurisdiction under the laws of which such Lender or the Administrative Agent is incorporated or organized or any political subdivision thereof or (ii) the jurisdiction in which the Administrative Agent's or such Lender's principal executive office or such Lender's applicable Lending Installation is located or any political subdivision thereof. 10 "EXISTING LETTERS OF CREDIT" is defined in Section 2.1. "EXISTING LOANS" is defined in Section 2.1. "FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning assigned to that term in the definition of Alternate Base Rate above. "FINANCE CONTRACTS" means any chattel paper originated by the Borrower or any of its Subsidiaries pursuant to a bona fide sale in the ordinary course of business with a customer or any Subsidiary. "FIRST TIER FOREIGN SUBSIDIARY" means each Foreign Subsidiary with respect to which any one or more of the Borrower or its Domestic Subsidiaries directly owns or controls more than 50% of such Foreign Subsidiary's Capital Stock. "FLEET LEASE TRANSACTION" means (i) the lease transaction among Wabash Statutory Trust - 2000 as lessor and Apex Trailer Leasing & Rentals, L.P. as lessee under that certain Amended and Restated Equipment Lease dated as of March 30, 2001, as amended, restated, supplemented or otherwise modified from time to time and all other investments and documents related thereto and (ii) the lease transaction among Fleet Capital Corporation (as successor to BancBoston Leasing, Inc.) as lessor and Apex Trailer Leasing & Rentals, L.P. as lessee under that certain Master Lease Agreement dated as of September 5, 1997, as amended, restated, supplemented or otherwise modified from time to time and all other instruments and documents related thereto. "FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as defined in Section 3(3) of ERISA which is maintained or contributed to for the benefit of the employees of the Borrower, any of its Subsidiaries or any members of its Controlled Group and is not covered by ERISA pursuant to ERISA Section 4(b)(4). "FOREIGN PENSION PLAN" means any employee benefit plan as described in Section 3(3) of ERISA which (i) is maintained or contributed to for the benefit of employees of the Borrower, any of its Subsidiaries or any of its ERISA Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA, and (iii) under applicable local law, is required to be funded through a trust or other funding vehicle. "FOREIGN SUBSIDIARY" means a Subsidiary of the Borrower which is not a Domestic Subsidiary. "FRUEHAUF PREFERRED STOCK" means the Series A 6% Cumulative Convertible Exchangeable Preferred Stock of the Borrower. "GOVERNMENTAL ACTS" is defined in Section 2.24(a) hereof. "GOVERNMENTAL AUTHORITY" means any nation or government, any foreign, federal, state, local or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 11 "GROSS NEGLIGENCE" means recklessness, or actions taken or omitted with conscious indifference to or the complete disregard of consequences. Gross Negligence does not mean the absence of ordinary care or diligence or an inadvertent act or inadvertent failure to act. If the term "gross negligence" is used with respect to the Administrative Agent or any Lender or any indemnitee in any of the other Loan Documents, it shall have the meaning set forth herein. "GUARANTOR" means each Initial Guarantor and each other Domestic Subsidiary that executes and delivers a supplemental guaranty pursuant to Section 6.2(N) hereof and Section 19 of the Guaranty (a "SUPPLEMENTAL GUARANTOR"), and in each case their respective successors and assigns. "GUARANTY" means the unconditional guaranty of payment of the Obligations, in form and substance satisfactory to the Administrative Agent, executed by the Initial Guarantors and any Supplemental Guarantors pursuant to Section 6.2(N), as the same may from time to time be amended, modified, supplemented and/or restated. "HEDGING OBLIGATIONS" of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, commodity prices, exchange rates or forward rates applicable to such party's assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any of the foregoing. "INDEBTEDNESS" means, with respect to any Person, without duplication, (a) its liabilities for borrowed money, including reimbursement obligations (contingent or otherwise) with respect to letters of credit; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) its Capitalized Lease Obligations; (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) its Off-Balance Sheet Liabilities; (f) its Receivables Facility Attributed Indebtedness; and 12 (g) any Contingent Obligation of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof. Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under Agreement Accounting Principles. In no event shall Indebtedness include Unfunded Liabilities of any Plan of the Borrower and its Subsidiaries, which amount, as of December 31, 2001, was zero. "INDEMNIFIED MATTERS" is defined in Section 9.6(B) hereof. "INDEMNITEES" is defined in Section 9.6(B) hereof. "INITIAL GUARANTORS" means each Domestic Subsidiary (other than WNC, WNC Receivables Management Corp., WNC Funding LLC and WNC Funding Manager Corp.) in existence on the Effective Date. "INITIAL REVOLVER LETTER OF CREDIT" means that certain Existing Letter of Credit bearing number 82001398 and denominated in euro. "INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral Agency Agreement dated as of the date hereof among the Collateral Agent, the Administrative Agent and the Secured Parties, as such agreement may be amended, restated, supplemented (including by way of joinder of additional parties thereto in accordance with its terms) or otherwise modified from time to time. "INTEREST COVERAGE RATIO" means, as of any date the same is to be determined, the ratio of (i) Consolidated EBITDA as of such date for (A) in the case of calculating Consolidated EBITDA for each relevant month in the Borrower's fiscal year ending on or about December 31, 2002, the cumulative period of months ending on and after April 30, 2002 and (B) in the case of calculating Consolidated EBITDA for each month thereafter, the period of four consecutive fiscal quarters then ending to (ii) Interest Expense during the same applicable periods. "INTEREST EXPENSE" means, for any period, the total interest expense of the Borrower and its consolidated Subsidiaries, whether paid or accrued (including the total interest expense under the Permitted Receivables Transfer), including interest expense not payable in cash (including amortization or write-off of debt discount and debt issuance costs and commissions and discounts and other fees and charges associated with Indebtedness (including the Obligations)), all as determined in conformity with Agreement Accounting Principles. "INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan, a period of one (1), two (2), three (3) or six (6) months commencing on a Business Day selected by the Borrower pursuant to this Agreement. Such Interest Period shall end on (but exclude) the day which corresponds numerically to such date one, two, three or six months thereafter; provided, however, that if there is no such numerically corresponding day in such next, second, third or sixth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, 13 provided, however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day. "INTEREST RATE AGREEMENTS" is defined in Section 6.3(P) hereof. "INVESTMENT" means, with respect to any Person, (i) any purchase or other acquisition by that Person any Indebtedness, Equity Interests or other securities, or of a beneficial interest in any Indebtedness, Equity Interests or other securities, issued by any other Person, (ii) any purchase by that Person of all or substantially all of the assets of a business conducted by another Person, and (iii) any loan, advance (other than deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts receivable, advances to employees and similar items made or incurred in the ordinary course of business) or capital contribution by that Person to any other Person, including all Indebtedness to such Person arising from a sale of property by such Person other than in the ordinary course of its business. "IRS" means the Internal Revenue Service and any Person succeeding to the functions thereof. "ISSUING LENDER" means Bank One. "LAFAYETTE PROPERTY" means all of the real property owned by Wabash National, L.P. in Lafayette, Indiana which includes the central offices and manufacturing facilities of the Borrower. "L/C DRAFT" means a draft drawn on the Issuing Lender pursuant to a Letter of Credit. "L/C INTEREST" means a Revolver L/C Interest and a Term L/C Interest. "L/C OBLIGATIONS" means, without duplication, an amount equal to the sum of (i) the aggregate of the amount then available for drawing under each of the Letters of Credit, (ii) the face amount of all outstanding L/C Drafts corresponding to the Letters of Credit, which L/C Drafts have been accepted by the Issuing Lender, (iii) the aggregate outstanding amount of all Reimbursement Obligations at such time and (iv) the aggregate face amount of all Revolver Letters of Credit requested by the Borrower but not yet issued (unless the request for an unissued Revolver Letter of Credit has been denied). "LENDERS" means the lending institutions listed on the signature pages of this Agreement, including the Issuing Lender, and their respective successors and assigns. "LENDING INSTALLATION" means, with respect to a Lender or the Administrative Agent, any office, branch, subsidiary or affiliate of such Lender or the Administrative Agent. "LETTER(S) OF CREDIT" means any or all of the Term Letters of Credit, and the Revolver Letters of Credit to be issued by the Issuing Lender pursuant to Section 2.19 hereof. "LEVERAGE VALUATION RATIO" means, as of any date the same is to be determined, the ratio of (i) the sum of the aggregate outstanding principal amount of the Obligations (excluding L/C Obligations) and the Indebtedness under the Note Agreements to (ii) Consolidated Total 14 Assets only to the extent consisting of cash and Cash Equivalents, net inventory, net prepaid and other expenses and net property, plant and equipment as of such date, in all cases as determined in accordance with Agreement Accounting Principles. "LIEN" means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement). "LOAN(S)" means, with respect to a Lender, such Lender's portion of any Advance described or made pursuant to Section 2.1 hereof, and collectively all Term Loans and Revolving Loans, whether made or continued as or converted to Base Rate Loans or Eurodollar Rate Loans. "LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranty, the Collateral Documents and all other documents, instruments and agreements executed in connection therewith or contemplated thereby, including the letter agreement regarding fees among the Administrative Agent, the Collateral Agent and the Borrower, in each case as the same may be amended, restated or otherwise modified and in effect from time to time. "LOAN PARTIES" means the Borrower and each of the Guarantors. "MARGIN STOCK" shall have the meaning ascribed to such term in Regulation U. "MATERIAL" means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Borrower and its Subsidiaries taken as a whole. "MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the business, condition (financial or otherwise), operations, performance or Properties of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower and its Subsidiaries to perform their respective obligations under the Loan Documents, or (c) the ability of the Lenders or the Administrative Agent to enforce the Obligations in any material respect. "MATERIAL REAL ESTATE PROPERTY" shall mean each individual parcel of property owned by the Borrower or its Domestic Subsidiaries that has a net book value in excess of $3,000,000, excluding therefrom any parcels that are anticipated to be included in the SunTrust Sale and Leaseback. "MORTGAGES" means the mortgages and deeds of trust from time to time executed pursuant to the terms of Section 6.2(O) by one or more of the Loan Parties in favor of the Collateral Agent for the benefit of the Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. "MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section 4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years was, contributed to by either the Borrower or any member of the Controlled Group. "NATIONAL CITY LEASE TRANSACTION" means the lease transaction among National City Leasing Corporation as lessor and Apex Trailer Leasing & Rentals, L.P. (as successor to Wabash 15 National Finance Corporation) as lessee under that certain Master Equipment Lease Agreement No. 07008 dated as of December 30, 1996, as amended, restated, supplemented or otherwise modified from time to time. "NON PRO RATA REVOLVING LOAN" is defined in Section 8.2 hereof. "NOTE AGREEMENTS" means, in the case of the holders of the Borrower's Series A Senior Notes, those certain separate and several Amended and Restated Note Purchase Agreements, each dated as of the Effective Date, between the Borrower and such holders, in the case of the holders of the Borrower's Series C through H Senior Notes, those certain separate and several Amended and Restated Note Purchase Agreement, dated as of the Effective Date, between the Borrower and such holders, and in the case of the holders of the Borrower's Series I Senior Notes, that certain Amended and Restated Note Purchase Agreement, dated as of the Effective Date, between the Borrower and such holders, in each case as amended from time to time in accordance with Section 6.3 (T) hereof. "NOTES" means the Revolving Notes, Term Notes and PIK Notes. "NOTICE OF ASSIGNMENT" is defined in Section 12.3(B) hereof. "OBLIGATIONS" means all Loans, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the Administrative Agent, any Lender, the Issuing Lender, any Affiliate of any of the foregoing or any Indemnitee, of any kind or nature, present or future, arising under this Agreement, the Notes, the PIK Notes or any other Loan Document, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term includes, without limitation, all interest, charges, expenses, fees, attorneys' fees and disbursements, paralegals' fees (in each case whether or not allowed), and any other sum chargeable to the Borrower under this Agreement or any other Loan Document. "OFF-BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase obligation or liability of such Person or any of its Subsidiaries with respect to accounts or notes receivable sold by such Person or any of its Subsidiaries, (b) any liability of such Person or any of its Subsidiaries under any sale and leaseback transactions which do not create a liability on the consolidated balance sheet of such Person, (c) any liability of such person or any of its Subsidiaries under any so-called "synthetic" lease transaction, or (d) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheets of such Person and its Subsidiaries. "ORIGINAL CREDIT AGREEMENT" means the Credit Agreement dated as of September 30, 1997 among the Borrower, the financial institutions parties thereto and the Administrative Agent, as amended by Amendment No. 1 dated as of January 30, 1998, Amendment No. 2 dated as of September 30, 1999 and Amendment No. 3 dated as of November 30, 2000. 16 "ORIGINATORS" means Wabash National, L.P. and NOAMTC, Inc., in their capacities as parties to the Receivables Sale Agreement. "OTHER TAXES" is defined in Section 3.5 hereof. "PARTICIPANTS" is defined in Section 12.2(A) hereof. "PAYMENT DATE" means the first Business Day of each calendar month. "PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto. "PERMITTED ACQUISITION" means any Acquisition made by the Borrower or any of its Subsidiaries provided that: (a) as of the date of such Acquisition, no Default or Unmatured Default shall have occurred and be continuing or would result from such Acquisition or from the incurrence of any Indebtedness in connection with such Acquisition; (b) prior to the date of such Acquisition, such Acquisition shall have been approved by the board of directors and, if applicable, the shareholders of the Person whose stock or assets are being acquired in connection with such Acquisition and no claim or challenge has been asserted or threatened by any shareholder or director of such Person which could reasonably be expected to have a material adverse effect on such Acquisition or a Material Adverse Effect; (c) as of the date of any such Acquisition, all approvals required in connection with such Acquisition shall have been obtained and (d) the Purchase Price paid or payable the Borrower and its Subsidiaries for all Permitted Acquisitions during any fiscal year of the Borrower shall not exceed $2,500,000. "PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent Obligations of the Borrower and its Subsidiaries identified as such on Schedule 1.1.1 to this Agreement. "PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower and its Subsidiaries identified as such on Schedule 1.1.2 to this Agreement. "PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower and its Subsidiaries identified as such on Schedule 1.1.3 to this Agreement. "PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower or its Subsidiaries identified as such on Schedule 1.1.4 to this Agreement. "PERMITTED RECEIVABLES TRANSFER" means (i) a sale or other transfer by any Originator to WNC of "Receivables," and "Collections" under, and as such terms are defined in, the Receivables Sale Agreement, in accordance with the terms of the Receivables Sale Agreement, and/or (ii) a sale by WNC to purchasers of "Purchaser Interests" under, and as such term is defined in, the Receivables Purchase Agreement, in accordance with the terms of the Receivables Purchase Agreement. "PERSON" means any individual, corporation, firm, enterprise, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company or other entity of any kind, or any government or political subdivision or any agency, department or instrumentality thereof. 17 "PIK NOTES" means those certain promissory notes of the Borrower payable to the order of each Lender, in substantially the form of Exhibit B-3 hereto, evidencing the aggregate deferral fees payable by the Borrower to such Lender under Section 2.14(C)(ii). "PLAN" means an employee benefit plan defined in Section 3(3) of ERISA in respect of which the Borrower or any member of the Controlled Group is, or within the immediately preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA. "PLEDGE AGREEMENTS" means the pledge agreements from time to time executed pursuant to the terms of clause (a) and clause (b) of Section 6.2(O) in favor of the Collateral Agent for the benefit of the Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. "PROJECTED LIQUIDITY AMOUNT" means, for any period, the applicable amount so designated for such period in the Borrower's "Covenant Case Projection" as set forth in Schedule 1.1.17 to this Agreement. "PROPERTY" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. "PRO RATA SHARE" means, at any particular time and with respect to any Lender, the percentage obtained by dividing (A) the sum of such Lender's Term Loans and Revolving Loan Commitment at such time (in each case, as adjusted from time to time in accordance with the provisions of this Agreement) by (B) the sum of the aggregate amount of all of the Term Loans and the Aggregate Revolving Loan Commitment at such time; provided, however, if all of the Revolving Loan Commitments are terminated pursuant to the terms of this Agreement, then "Pro Rata Share" means the percentage obtained by dividing (x) the sum of (A) such Lender's Term Loans and Revolving Loans, plus (B) such Lender's participations in L/C Interests, by (y) the sum of (A) the aggregate outstanding amount of all Term Loans and Revolving Loans, plus (B) the aggregate outstanding Dollar Amount of all Revolver L/C Obligations. "PURCHASE PRICE" means the total consideration and other amounts payable in connection with any Acquisition, including, without limitation, any portion of the consideration payable in cash, the value of any Capital Stock or other equity interests of the Borrower or any Subsidiary issued as consideration for such Acquisition, all Indebtedness and other monetary liabilities incurred or assumed in connection with such Acquisition and all transaction costs and expenses incurred in connection with such Acquisition. "PURCHASERS" is defined in Section 12.3(A) hereof. "RATE OPTION" means the Eurodollar Rate or the Alternate Base Rate. "RECEIVABLES FACILITY ATTRIBUTED INDEBTEDNESS" means the amount of obligations outstanding under a receivables purchase facility on any date of determination that would be characterized as principal if such facility were structured as a secured lending transaction rather than as a purchase. 18 "RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables Purchasing and Servicing Agreement dated as of April 11, 2002 by and among WNC, as seller, Wabash Financing LLC, as servicer, WNC Receivables Management Corporation, as independent member, General Electric Capital Corporation as the sole initial purchaser and as agent, and the other purchasers from time to time party thereto, as such agreement may be amended, restated or otherwise modified from time to time, or any replacement or substitution therefor. "RECEIVABLES PURCHASE DOCUMENTS" means the Receivables Sale Agreement and the Receivables Purchase Agreement. "RECEIVABLES SALE AGREEMENT" means that certain Receivables Sale and Contribution Agreement, dated as of April 11, 2002, by and among the Borrower, Wabash National, L.P., NOAMTC, Inc., and WNC, as such agreement may be amended, restated or otherwise modified from time to time, or any replacement or substitution therefor. "REGISTER" is defined in Section 12.3(C) hereof. "REGULATION T" means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by and to brokers and dealers of securities for the purpose of purchasing or carrying margin stock (as defined therein). "REGULATION U" means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks and nonbank, nonbroker lenders for the purpose of purchasing or carrying Margin Stock. "REGULATION X" means Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by foreign lenders for the purpose of purchasing or carrying margin stock (as defined therein). "REIMBURSEMENT OBLIGATION" is defined in Section 2.21 hereof. "RELATED NOTES" means the PIK Notes under and as defined in the Note Agreements. "RELEASE" means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including the movement of Contaminants through or in the air, soil, surface water or groundwater. "REPORTABLE EVENT" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days after such event occurs, provided, however, that a failure to meet the minimum funding standards of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code. 19 "REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate, are greater than fifty percent (50%) of the sum of: (i) the aggregate outstanding principal balance of all Term Loans plus (ii) the Aggregate Revolving Loan Commitment in effect as of the date of determination, or, if the Revolving Loan Commitments have been terminated pursuant to the terms of this Agreement, the aggregate outstanding principal balance of the Revolving Loans and the Revolver L/C Obligations; provided, however, that, if any of the Revolving Lenders shall have failed to fund its Revolving Loan Pro Rata Share of any Revolving Loan requested by the Borrower or any Lender shall have failed to fund its participation in any L/C Obligations which such Lenders are obligated to fund under the terms of this Agreement and such failure has not been cured, then for so long as such failure continues, "REQUIRED LENDERS" excludes Lenders whose failure to so fund has not been so cured. "REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or other organizational or governing documents of such Person, and any law, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject including, without limitation, the Securities Act of 1933, the Securities Exchange Act 1934, Regulations T, U and X promulgated by the Board of Governors of the Federal Reserve System, ERISA, the Fair Labor Standards Act, the Worker Adjustment and Retraining Notification Act, Americans with Disabilities Act of 1990, and any certificate of occupancy, zoning ordinance, building, environmental or land use requirement or permit or environmental, labor, employment, occupational safety or health law, rule or regulation, including Environmental, Health or Safety Requirements of Law. "RESERVE REQUIREMENT" means the maximum reserve requirement, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) with respect to "Eurocurrency liabilities" or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Eurodollar Rate Loans is determined or category of extensions of credit or other assets which includes loans by a non-United States office of any Lender to United States residents. "RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct or indirect, on account of any Equity Interests of the Borrower now or hereafter outstanding, except a dividend payable solely in the Borrower's Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock, (ii) any redemption, retirement, purchase or other acquisition for value, direct or indirect, of any Equity Interests of the Borrower or any of its Subsidiaries now or hereafter outstanding, other than in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Borrower) of other Equity Interests of the Borrower (other than Disqualified Stock), (iii) any redemption, purchase, retirement, defeasance, prepayment or other acquisition for value, direct or indirect, of any Indebtedness prior to the stated maturity thereof, other than the Obligations and (iv) any payment of a claim for the rescission of the purchase or sale of, or for material damages arising from the purchase or sale of, any Indebtedness (other than the Obligations) or any Equity Interests of the Borrower or any of the Borrower's Subsidiaries, or of a claim for reimbursement, indemnification or contribution arising out of or related to any such claim for damages or rescission. 20 "RESTRUCTURING TRANSACTION" means the transactions contemplated by this Agreement and the Note Agreements which include the extension of the maturities of certain of the Senior Notes, the execution and delivery of the Collateral Documents, the execution and delivery of the Permitted Receivables Transfer, the amendments and/or waivers to the Fleet Lease Transaction and all transactions relating thereto. "REVOLVER L/C DRAFT" means a draft drawn on the Issuing Lender pursuant to a Revolver Letter of Credit. "REVOLVER L/C INTEREST" shall have the meaning ascribed to such term in Section 2.20. "REVOLVER L/C OBLIGATIONS" means, without duplication, an amount equal to the sum of (i) the aggregate of the Dollar Amount then available for drawing under each of the Revolver Letters of Credit, (ii) the Dollar Amount equal to the stated amount of all outstanding Revolver L/C Drafts corresponding to the Revolver Letters of Credit, which Revolver L/C Drafts have been accepted by the Issuing Lender, (iii) the aggregate outstanding Dollar Amount of all Reimbursement Obligations at such time and (iv) the aggregate Dollar Amount equal to the stated amount of all Revolver Letters of Credit requested by the Borrower but not yet issued (unless the request for an unissued Revolver Letter of Credit has been denied). "REVOLVER LETTER(S) OF CREDIT" means any or all of the letters of credit to be issued by the Issuing Lender pursuant to Section 2.19 hereof. "REVOLVING ADVANCE" means a borrowing consisting of simultaneous Revolving Loans of the same Type made to the Borrower by each of the Lenders pursuant to Section 2.1(a), and for, in the case of Eurodollar Rate Advances, the same Interest Period. "REVOLVING ADVANCE BORROWING NOTICE" has the meaning specified in Section 2.6(a). "REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of (i) the outstanding principal amount of the Revolving Loans at such time, plus (ii) the Revolver L/C Obligations at such time. "REVOLVING LENDER" means any Lender with a Revolving Loan Commitment. "REVOLVING LOAN" means a loan by a Lender to the Borrower as part of a Revolving Advance. "REVOLVING LOAN COMMITMENT" means, for each Lender, the obligation of such Lender to make Revolving Loans and to purchase participations in Revolver Letters of Credit in an aggregate amount not exceeding the amount set forth on Exhibit A to this Agreement opposite its name thereon under the heading "Revolving Loan Commitment" or the signature page of the Assignment and Acceptance by which it became a Lender, as such amount may be modified from time to time pursuant to the terms of this Agreement or to give effect to any applicable Assignment and Acceptance. "REVOLVING LOAN PRO RATA SHARE" means, at any particular time and with respect to any Lender, the percentage obtained by dividing (A) the then aggregate amount of such Lender's 21 Revolving Loan Commitment (as adjusted from time to time in accordance with the provisions in this Agreement) by (B) the Aggregate Revolving Loan Commitment at such time; provided, however, if all of the Revolving Loan Commitments are terminated pursuant to the terms of this Agreement, then "Revolving Loan Pro Rata Share" means the percentage obtained by dividing (x) the sum of (A) such Lender's Revolving Loans, plus (B) such Lender's share of the obligations to purchase participations in Revolver Letters of Credit by (y) the sum of (A) the aggregate outstanding amount of all Revolving Loans, plus (B) the aggregate outstanding Dollar Amount of all Revolver Letters of Credit. "REVOLVING NOTE" means a promissory note of the Borrower payable to the order of any Revolving Lender, in substantially the form of Exhibit B-1 hereto, evidencing the aggregate indebtedness of the Borrower to such Revolving Lender resulting from the Revolving Loans made by such Revolving Lender to the Borrower. "RISK-BASED CAPITAL GUIDELINES" is defined in Section 3.2 hereof. "SECURED OBLIGATIONS" has the meaning ascribed to such term in the Intercreditor Agreement. "SECURED PARTIES" has the meaning ascribed to such term in the Intercreditor Agreement. "SECURITY AGREEMENT" means that certain Security Agreement dated as of the date hereof executed pursuant to the terms of Section 6.2(O) by the Borrower and the Initial Guarantors in favor of the Collateral Agent for the benefit of the Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. "SENIOR NOTES" means $192,000,000 aggregate principal amount of the Borrower's Senior Notes, Series A and Series C through I, due 2004-2008. "SIGNIFICANT REAL ESTATE PROPERTY" shall mean each individual parcel of property owned by the Borrower or its Domestic Subsidiaries that has a net book value in excess of $1,000,000 and less than $3,000,000, excluding therefrom any parcels that are anticipated to be included in the SunTrust Sale and Leaseback. "SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any member of the Controlled Group for employees of the Borrower or any member of the Controlled Group. "SUBORDINATED DEBT" means, for any period, on a consolidated basis for the Borrower and its Subsidiaries, the sum of Indebtedness of such Persons the payment of which is subordinated to the payment of the Secured Obligations to the written satisfaction of the Administrative Agent. "SUBSIDIARY" of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any company, partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. 22 Unless otherwise expressly provided, all references herein to a "Subsidiary" shall mean a direct or indirect Subsidiary of the Borrower. "SUNTRUST SALE AND LEASEBACK" means that certain sale and leaseback of certain real property owned by the Borrower and/or certain of its Domestic Subsidiaries to be effected pursuant to that certain engagement letter agreement between the Borrower and SunTrust Robinson Humphrey dated February 1, 2002. "SUPPLEMENTAL GUARANTOR" has the meaning set forth in the definition of "Guarantor" above. "TANGIBLE ASSETS" means as of the date of any determination thereof, with respect to any Person, total assets of such Person in accordance with Agreement Accounting Principles, but excluding therefrom goodwill, patents, patent applications, permits, trademarks, trade names, copyrights, licenses, franchises, experimental expense, organizational expense, unamortized debt discount and expense, the excess of cost of shares acquired over book value of related assets and such other assets as are properly classified as "intangible assets" in accordance with Agreement Accounting Principles. "TAXES" is defined in Section 3.5(i). "TERM CREDIT" means the Term Loans and the Term Letters of Credit. "TERM L/C DRAFT" means a draft drawn on the Issuing Lender pursuant to a Term Letter of Credit. "TERM L/C INTEREST" shall have the meaning ascribed to such term in Section 2.1. "TERM L/C OBLIGATIONS" means, without duplication, an amount equal to the sum of (i) the aggregate of the amount then available for drawing under each of the Term Letters of Credit, (ii) the face amount of all outstanding Term L/C Drafts corresponding to the Term Letters of Credit, which Term L/C Drafts have been accepted by the Issuing Lender and (iii) the aggregate outstanding amount of all reimbursement obligations of the Borrower with respect to such Term Letters of Credit at such time. "TERM LETTER(S) OF CREDIT" means any or all of the Existing Letters of Credit (other than the Initial Revolver Letter of Credit). "TERM LOANS" means any or all of the Existing Loans which are converted into the Term Credit as described in Section 2.1(B). "TERM LOAN LENDER" means any Lender which has outstanding Term Loans or Term L/C Obligations owing from the Borrower. "TERM NOTE" means a promissory note of the Borrower payable to the order of any Term Loan Lender, in substantially the form of Exhibit B-2 hereto, evidencing the aggregate indebtedness of the Borrower to such Term Loan Lender resulting from the Term Loans deemed to have been made by such Term Loan Lender to the Borrower. 23 "TERMINATION DATE" means the earlier of (a) March 30, 2004 and (b) the date of termination of the Revolving Loan Commitments pursuant to Section 2.4 or Section 8.1. "TERMINATION EVENT" means (i) a Reportable Event with respect to any Benefit Plan; (ii) the withdrawal of the Borrower or any member of the Controlled Group from a Benefit Plan during a plan year in which the Borrower or such Controlled Group member was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the cessation of operations which results in the termination of employment of twenty percent (20%) of Benefit Plan participants who are employees of the Borrower or any member of the Controlled Group; (iii) the imposition of an obligation on the Borrower or any member of the Controlled Group under Section 4041 of ERISA to provide affected parties written notice of intent to terminate a Benefit Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Benefit Plan; (v) any event or condition which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Benefit Plan; or (vi) the partial or complete withdrawal of the Borrower or any member of the Controlled Group from a Multiemployer Plan. "TRANSFEREE" is defined in Section 12.5 hereof. "TREATY ON EUROPEAN UNION" means the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1986 and the Maastricht Treaty (which was signed at Maastricht on February 7, 1992 and came into force on November 1, 1993), as amended from time to time. "TYPE" means, (a) with respect to any Loan, its nature as a Base Rate Loan or a Eurodollar Rate Loan and (b) with respect to any Advance, its nature as a Base Rate Advance or a Eurodollar Rate Advance. "UNFUNDED LIABILITIES" means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations. "UNMATURED DEFAULT" means an event which, but for the lapse of time or the giving of notice, or both, would constitute a Default. "WNC" means WNC Receivables, LLC, a Delaware limited liability company and a wholly-owned Subsidiary of the Borrower. The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. Any accounting terms used in this Agreement which are not specifically defined herein shall have the meanings customarily given them in accordance with generally accepted accounting principles in existence as of the date hereof. 1.2 References. The existence throughout this Agreement of references to the Borrower's Subsidiaries is for convenience only. Any references to Subsidiaries of the Borrower 24 set forth herein shall not in any way be construed as consent by the Administrative Agent or any Lender to the establishment, maintenance or acquisition of any Subsidiary, except as may otherwise be permitted hereunder. ARTICLE II: THE CREDITS 2.1 (A) Revolving Loans. Upon the satisfaction of the conditions precedent set forth in Sections 4.1 and 4.2 hereof, from and including the date of this Agreement and prior to the Termination Date, each Revolving Lender severally and not jointly agrees, on the terms and conditions set forth in this Agreement, to make Revolving Loans to the Borrower from time to time, in Dollars, in an amount not to exceed in the aggregate at any one time outstanding the amount of such Lender's Revolving Loan Commitment; provided, however, that (i) the Aggregate Revolving Loan Commitment shall be deemed used from time to time to the extent of the aggregate Revolver L/C Obligations then outstanding, and such deemed use of the Aggregate Revolving Loan Commitment shall be applied to the Revolving Lenders ratably according to their respective Revolving Loan Commitments and (ii) at no time shall the Revolving Credit Obligations exceed the Aggregate Revolving Loan Commitment. Each Revolving Advance under this Section 2.1(A) shall consist of Revolving Loans made by each Revolving Lender ratably in proportion to such Revolving Lender's respective Revolving Loan Pro Rata Share. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow Revolving Loans at any time prior to the Termination Date. The Revolving Loans made on the Effective Date, if any, shall initially be Base Rate Loans and thereafter may be continued as Base Rate Loans or converted into Eurodollar Rate Loans in the manner provided in Section 2.8 and subject to the other conditions and limitations therein set forth and set forth in this Article II. On the Termination Date, the outstanding principal balance of the Revolving Loans shall be paid in full by the Borrower. (B) Term Credit. (a) Conversion to Term Credit. Prior to the Effective Date, certain "Syndicated Loans" (the "Existing Loans") and "Letters of Credit" (as described in Schedule 2.1 to this Agreement, the "Existing Letters of Credit") were previously made to, or issued for the account of, the Borrower under, or evidenced by, the Original Credit Agreement the aggregate outstanding principal balance of which as of the Effective Date equals $117,444,995.69 (collectively, the "Existing Credit"). Subject to terms and conditions set forth in this Agreement, each of the parties hereto agrees that on the Effective Date (a) $107,000,000 of the Existing Credit (consisting of $80,402,057 of the Existing Loans and $26,597,943 of the Existing Letters of Credit) shall be reevidenced by this Agreement as the Term Credit hereunder and the terms and conditions of such Existing Credit shall be amended and restated in its entirety as set forth in this Agreement and (b) the remaining $10,444,995.69 outstanding principal balance of the Existing Credit (consisting of $9,497,943 of the Existing Loans and $947,052.69 attributable to the Initial Revolver Letter of Credit) which is outstanding as of the Effective Date shall continue in effect as Revolving Loans and Revolver Letters of Credit hereunder. The parties hereto acknowledge and agree that the "Commitment" of each Lender under the Original Credit Agreement has been terminated to the extent and in the amount of the Term Credit hereunder. 25 (b) Amount of Term Credit. Subject to the terms and conditions set forth in this Agreement, One Hundred and Seven Million Dollars ($107,000,000) of the Existing Credit are reevidenced hereby as the Term Credit held by each Term Loan Lender in the amounts set forth on Exhibit A hereto. (c) Repayment of the Term Credit. (i) The unpaid principal balance of the Term Credit shall be repaid in twenty-one (21) consecutive monthly principal installments, payable on the last Business Day of each calendar month, commencing on April 30, 2002, and continuing thereafter until December 31, 2003, and the Term Credit shall be permanently reduced by the amount of each installment on the date payment thereof is made hereunder. Each monthly installment on the Term Credit shall be in an aggregate principal amount equal to the product of the Bank Principal Allocation times $1,166,667 with respect to the first nine (9) installments and the product of the Bank Principal Allocation times $4,958,333 with respect to the remaining twelve (12) installments. The then outstanding principal balance of the Term Credit, if any, shall be due and payable on the Termination Date. No installment of any Term Credit shall be reborrowed once repaid. (ii) Each Term Loan Lender is deemed to have automatically, irrevocably and unconditionally purchased and received from the Issuing Lender an undivided interest and participation in and to each Term Letter of Credit, the obligations of the Borrower in respect thereof, and the liability of the Issuing Lender thereunder (collectively, a "Term L/C Interest") in an amount equal to the amount available for drawing under such Term Letter of Credit multiplied by such Lender's Pro Rata Share. The Issuing Lender will notify the Administrative Agent promptly upon presentation to it of a Term L/C Draft or upon any other draw under a Term Letter of Credit and the Administrative Agent will promptly notify each Term Lender. On or before the Business Day on which the Issuing Lender makes payment of each such Term L/C Draft or any other draw on a Term Letter of Credit, on demand of the Issuing Lender received by each Term Lender not later than 11:00 a.m. (Chicago time) on such Business Day, each Term Lender shall make payment on such Business Day to the Administrative Agent for the account of the Issuing Lender, in immediately available funds in an amount equal to such Lender's Pro Rata Share of the amount of such payment or draw. Upon the Administrative Agent's receipt of funds as a result of the Issuing Lender's payment on a Term L/C Draft or any other draw on a Term Letter of Credit issued by the Issuing Lender, the Administrative Agent shall promptly pay such funds to the Issuing Lender. The obligation of each Term Lender to pay the Administrative Agent for the account of the Issuing Lender under this Section 2.1 shall be unconditional, continuing, irrevocable and absolute. In the event that any Term Lender fails to make payment to the Administrative Agent of any amount due under this Section 2.1, the Administrative Agent shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Term Lender hereunder until the Administrative Agent on behalf of the Issuing Lender receives such payment from such Term Lender or such obligation is otherwise fully satisfied; provided, however, that nothing contained in this sentence shall relieve such Term Lender of its obligation to reimburse the Administrative Agent for such amount in accordance with this Section 2.1. 26 If any Term Letter of Credit expires without having been drawn upon or is otherwise cancelled, the aggregate principal balance of the Term Credit shall be reduced by the amount of such Term Letter of Credit and such amount may not be reborrowed; the parties hereto acknowledging and agreeing that a Term Letter of Credit may, upon request of the Borrower, be renewed for additional consecutive periods of 12 months or less (but not beyond the date that is twenty-one (21) days prior to the Termination Date) unless the Issuing Lender notifies the beneficiary thereof at least 30 days prior to the then-applicable expiry date that such Term Letter of Credit will not be renewed (it being understood and agreed that the Issuing Lender shall not send such a notice unless (x) an Unmatured Default or Default has occurred and is continuing or (y) such renewal would cause such Term Letter of Credit to expire on a date that is beyond twenty-one (21) days prior to the Termination Date). (iii) Notwithstanding anything to the contrary herein or in any application for a Term Letter of Credit, to the extent the then outstanding principal balance of the Term Loans have been repaid in full, the Borrower shall, upon the Administrative Agent's demand, deliver to the Collateral Agent for the benefit of the Term Lenders, cash, or other collateral of a type satisfactory to the Required Lenders, having a value, as determined by such Lenders, equal to the aggregate outstanding Term L/C Obligations of the Borrower. Any such collateral shall be held by the Collateral Agent in a separate account appropriately designated as a cash collateral account in relation to this Agreement and the Term Letters of Credit and retained by the Collateral Agent for the benefit of the Term Lenders as collateral security for the Borrower's obligations in respect of this Agreement and each of the Term Letters of Credit and Term L/C Drafts. Such amounts shall be applied to reimburse the Administrative Agent or the Issuing Lender, as applicable, for drawings or payments under or pursuant to Term Letters of Credit or Term L/C Drafts, or if no such reimbursement is required, to payment of such of the other Obligations as the Administrative Agent shall determine. (iv) In addition to the scheduled payments on the Term Credit, the Borrower (a) may make the voluntary prepayments described in Section 2.3(A) for credit against the scheduled payments on the Term Credit pursuant to Section 2.3(A) and (b) shall make the mandatory prepayments prescribed in Section 2.3(B) for credit against the scheduled payments on the Term Credit pursuant to Section 2.3(B). 2.2 Rate Options for All Advances. The Advances may be Base Rate Advances or Eurodollar Rate Advances, or a combination thereof, selected by the Borrower in accordance with Sections 2.6 and 2.8. The Borrower may select, in accordance with Sections 2.6 and 2.8, Rate Options and Interest Periods applicable to portions of the Revolving Loans and the Term Loans; provided that there shall be no more than six (6) Interest Periods in effect with respect to all of the Loans at any one time. 2.3 Prepayments of Loans. (A) Optional Prepayments. Subject to Section 3.4 and the requirements of Section 2.7, the Borrower may (a) following notice given to the Administrative Agent by the Borrower, by not later than 10:00 a.m. (Chicago time) on the date of the proposed prepayment, such notice specifying the aggregate principal amount of and the proposed date of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding principal amounts of the Base 27 Rate Advances in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid and (b) following notice given to the Administrative Agent by the Borrower by not later than 10:00 a.m. (Chicago time) on, if the Advance to be prepaid is a Eurodollar Rate Advance, the fifth Business Day preceding the date of the proposed prepayment, such notice specifying the Advance to be prepaid and the proposed date of the prepayment, and, if such notice is given, the Borrower shall, prepay the outstanding principal amounts of the Eurodollar Rate Loans comprising a Eurodollar Rate Advance in whole (and not in part), together with accrued interest to the date of such prepayment on the principal amount prepaid; provided that the Borrower may not so prepay any Advances consisting of Term Loans unless such prepayment is made in accordance with the terms of the Intercreditor Agreement. Each partial prepayment shall be in an aggregate principal amount not less than $1,000,000 and `an integral multiple of $1,000,000. Optional prepayments of the Loans shall be applied to each of the then remaining installments payable under the Term Loans, on a ratable basis based upon the respective amounts of such installments and, upon payment in full of the Term Loans, shall be applied to then outstanding Revolving Loans. (B) Mandatory Prepayments. (a) Intentionally Omitted. (b) Intentionally Omitted. (c) By no later than three (3) Business Days after the end of each fiscal quarter of the Borrower (beginning with the fiscal quarter ending on June 30, 2002), the Borrower shall make a mandatory prepayment of the Term Credit in an aggregate amount equal to the product of the Bank Principal Allocation times the Excess Cash Flow, if positive, for such prior fiscal quarter. (d) Nothing in this Section 2.3(B) shall be construed to constitute the Lenders' consent to any transaction referred to in clauses (a), (b) and (c) above which is not expressly permitted by the terms of this Agreement. (e) Following the payment in full of the Term Loans, the amount of each such mandatory prepayment shall be applied to cash collateralize the Term L/C Obligations as contemplated by Section 2.1(c), and following the cash collateralization in full of the Term L/C Obligations, the amount of each such mandatory prepayment shall be applied to repay Revolving Loans (and shall reduce Revolving Loan Commitments) and following the payment in full of the Revolving Loans, the amount of each such mandatory prepayment shall be applied first to interest on the Reimbursement Obligations, then to principal on the Reimbursement Obligations, then to fees on account of Letters of Credit and then, to the extent any Revolver L/C Obligations are contingent, deposited with the Collateral Agent as cash collateral in respect of such Revolver L/C Obligations. (f) On the date any such mandatory prepayment is received by the Administrative Agent, such prepayment shall be applied first to Base Rate Loans and to any Eurodollar Rate Loans maturing on such date and then to subsequently maturing Eurodollar Rate Loans. (g) The Administrative Agent will determine the Dollar Amount of: 28 (i) each Letter of Credit on the date three (3) Business Days prior to the issuance date, or, if applicable, renewal date of such Letter of Credit; and (ii) all outstanding L/C Obligations on and as of the last Business Day of each calendar month and on any other Business Day elected by the Administrative Agent in its discretion or upon instruction by the Required Lenders. Each day upon or as of which the Administrative Agent determines Dollar Amounts as described in the preceding clauses (i) and (ii) is herein described as a "COMPUTATION DATE" with respect to each Letter of Credit for which a Dollar Amount is determined on or as of such day. If at any time and for any reason (other than as the result of fluctuations in currency exchange rates) the Dollar Amount of the Revolving Credit Obligations (calculated, with respect to all Revolver L/C Obligations denominated in Agreed Currencies other than Dollars, as of the most recent Computation Date with respect to each such Revolver L/C Obligation) is greater than the Aggregate Commitment, the Borrowers shall immediately make a mandatory prepayment of the Obligations in an amount equal to such excess. The Borrower shall also make all prepayments required under Section 2.3(B). If, on any Computation Date, as a result of fluctuations in currency exchange rates the Dollar Amount of the Revolving Credit Obligations exceeds one hundred five percent (105%) of the Aggregate Commitment, the Administrative Agent shall so notify the Borrower and the Lenders of such occurrence and the Borrower shall immediately make a mandatory prepayment of the Obligations in an aggregate principal amount sufficient to eliminate any such excess. 2.4 Reduction of Revolving Loan Commitments. The Borrower may permanently reduce the Aggregate Revolving Loan Commitment in whole, or in part ratably among the Lenders, in an aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in excess of that amount, upon at least five Business Days' prior written notice to the Administrative Agent, which notice shall specify the amount of any such reduction; provided, however, that the amount of the Aggregate Revolving Loan Commitment may not be reduced below the aggregate principal amount of the outstanding Revolving Credit Obligations. All accrued commitment fees shall be payable on the effective date of any termination of the obligations of the Revolving Lenders to make Revolving Loans hereunder. 2.5 Method of Borrowing Revolving Advances. The Administrative Agent shall notify each Revolving Lender by 11:00 a.m. (Chicago time) of each Revolving Advance on the Borrowing Date of each Base Rate Advance and three Business Days before the Borrowing Date of each Eurodollar Rate Advance and, not later than 12:00 noon (Chicago time) on each Borrowing Date, each Revolving Lender shall make available its Revolving Loan or Loans, in funds immediately available in Chicago to the Administrative Agent at its address specified pursuant to Article XIII hereof. The Administrative Agent will promptly make the funds so received from the Revolving Lenders available to the Borrower. 2.6 Method of Selecting Types and Interest Periods for Advances; Determination of Applicable Margins. 29 (a) Method of Selecting Types and Interest Periods for Advances. For all Revolving Loans, the Borrower shall select the Type of Advance and, in the case of each Eurodollar Rate Advance, the Interest Period applicable to each Advance from time to time. The Borrower shall give the Administrative Agent irrevocable notice (a "REVOLVING ADVANCE BORROWING Notice") not later than 10:00 a.m. (Chicago time) on the Borrowing Date of each Base Rate Advance and three Business Days before the Borrowing Date for each Eurodollar Rate Advance, specifying: (i) the Borrowing Date (which shall be a Business Day) of such Advance; (ii) the aggregate amount of such Advance; (iii) the Type of Advance selected; and (iv) in the case of each Eurodollar Rate Advance, the Interest Period applicable thereto. For all Loans, the Borrower shall select Interest Periods so that, to the best of the Borrower's knowledge, it will not be necessary to prepay all or any portion of any Eurodollar Rate Advance prior to the last day of the applicable Interest Period in order to make mandatory prepayments as required pursuant to the terms hereof. Each Base Rate Advance shall bear interest from and including the date of the making of such Advance to (but not including) the date of repayment thereof at the interest rate determined as applicable to such Base Rate Advance, changing when the Alternate Base Rate changes. Changes in the rate of interest on that portion of any Advance maintained as a Base Rate Loan will take effect simultaneously with each change in the Alternate Base Rate. Each Eurodollar Rate Advance shall bear interest from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the interest rate determined as applicable to such Eurodollar Rate Advance. (b) Determination of Applicable Margin, Applicable Letter of Credit Fee and Applicable Revolving Loan Commitment Fee. As used in this Section 2.6(b) and in this Agreement, the following terms shall have the following meanings: "Applicable Margin", "Applicable Revolving Loan Commitment Fee" and "Applicable Letter of Credit Fee" shall mean the per annum rates constituting the Applicable Margin, Applicable Revolving Loan Commitment Fee and Applicable Letter of Credit Fee, respectively, as set forth below:
- ------------------------------------------------------------------------------------------------------------------------- APPLICABLE APPLICABLE APPLICABLE MARGIN WITH MARGIN WITH MARGIN WITH APPLICABLE RESPECT TO RESPECT TO RESPECT TO MARGIN WITH APPLICABLE APPLICABLE BASE RATE BASE RATE EURODOLLAR RESPECT TO APPLICABLE LETTER OF LETTER OF LOANS WHICH LOANS WHICH RATE LOANS EURODOLLAR REVOLVING CREDIT FEE CREDIT FEE ARE ARE WHICH ARE RATE LOANS LOAN FOR REVOLVER FOR TERM REVOLVING TERM REVOLVING WHICH ARE COMMITMENT LETTERS OF LETTERS OF LOANS LOANS LOANS TERM LOANS FEE CREDIT CREDIT - ------------------------------------------------------------------------------------------------------------------------- 1.50% 1.50% 3.55% 3.80% 0.50% 3.55% 3.80% - -------------------------------------------------------------------------------------------------------------------------
2.7 Minimum Amount of Each Revolving Advance. Each Eurodollar Rate Advance shall be in the minimum amount of $1,000,000 (and in multiples of $1,000,000 if in excess thereof), and each Base Rate Advance shall be in the minimum amount of $1,000,000 (and in multiples of $1,000,000 if in excess thereof), provided, however, that any Base Rate Advance may be in the amount of the unused Aggregate Revolving Loan Commitment if such amount is less than $1,000,000. 30 2.8 Method of Selecting Types and Interest Periods for Conversion and Continuation of Loans. (A) Right to Convert. The Borrower may elect from time to time, subject to the provisions of Section 2.6, Section 2.7 and this Section 2.8, to convert all or any part of a Loan of any Type into any other Type or Types of Loans; provided that any conversion of any Eurodollar Rate Advance shall be made on, and only on, the last day of the Interest Period applicable thereto. (B) Automatic Conversion and Continuation. Base Rate Loans shall continue as Base Rate Loans unless and until such Base Rate Loans are converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as Eurodollar Rate Loans until the end of the then applicable Interest Period therefor, at which time such Eurodollar Rate Loans shall be automatically converted into Base Rate Loans unless the Borrower shall have given the Administrative Agent notice in accordance with Section 2.8(D) requesting that, at the end of such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate Loan. (C) No Conversion Post-Default or Post-Unmatured Default. Notwithstanding anything to the contrary contained in Section 2.8(A) or Section 2.8(B), no Loan may be converted into or continued as a Eurodollar Rate Loan except with the consent of the Required Lenders when any Default or Unmatured Default has occurred and is continuing. (D) Conversion/Continuation Notice. The Borrower shall give the Administrative Agent irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of a Base Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar Rate Loan not later than 10:00 a.m. (Chicago time) three Business Days prior to the date of the requested conversion or continuation, specifying: (1) the requested date (which shall be a Business Day) of such conversion or continuation; (2) the amount and Type of the Loan to be converted or continued; and (3) the amounts of Eurodollar Rate Loan(s) into which such Loan is to be converted or continued and the duration of the Interest Periods applicable thereto. 2.9 Intentionally Omitted. 2.10 Intentionally Omitted. 2.11 Default Rate. After the occurrence and during the continuance of an Unmatured Default or a Default, at the option of the Administrative Agent or at the direction of the Required Lenders, the interest rate(s) applicable to the Obligations and the letter of credit fee payable under Section 2.23 with respect to Letters of Credit shall be increased by two percent (2.0%) per annum above the interest rate or fee otherwise applicable. 2.12 Method of Payment. All payments of principal, interest, and fees hereunder shall be made, without setoff, deduction or counterclaim, to the Administrative Agent at the Administrative Agent's office in Chicago, Illinois or at any other Lending Installation of the Administrative Agent specified in writing, in immediately available funds (by 9:00 a.m. (Chicago time) on the day before the date when due) by the Administrative Agent to the Borrower on the date when due and shall be made ratably among the Lenders (unless such amount is not to be shared ratably in accordance with the terms hereof). Each Advance shall be 31 repaid or prepaid in Dollars and interest payable thereon shall be paid in Dollars. Each Revolver L/C Obligation denominated in an Agreed Currency other than Dollars shall be repaid, and all interest and fees to be paid in respect thereof shall be paid, in the currency in which the related Revolver Letter of Credit was issued, or where such currency has converted to euro, in euro. Each payment delivered to the Administrative Agent for the account of any Lender shall be delivered promptly by the Administrative Agent to such Lender in the same type of funds which the Administrative Agent received at its address specified pursuant to Article XIII or at any Lending Installation specified in a notice received by the Administrative Agent from such Lender. The Borrower authorizes the Administrative Agent to charge any account of the Borrower maintained with Bank One for each payment of principal, interest and fees as it becomes due hereunder. If, after the designation by the Issuing Lender and the Administrative Agent of any currency as an Agreed Currency, in the reasonable opinion of the Borrower, the Issuing Lender, the Required Lenders or the Administrative Agent, (x) there shall occur any change in national or international financial, political or economic conditions or currency exchange rates or currency control or other exchange regulations are imposed in the country which issues such currency with the result that it shall be impractical for any Revolver L/C Obligation to be denominated in such currency or different types of such currency are introduced, (y) such currency is no longer readily available or freely traded or (z) an Equivalent Amount of such currency is not readily calculable (any such event a "MARKET DISRUPTION"), the Borrower, the Issuing Lender, the Required Lenders or the Administrative Agent, as applicable, shall promptly notify the Lenders, the Issuing Lender, the Administrative Agent and the Borrower, and such currency shall no longer be an Agreed Currency until such time as the Administrative Agent and the Issuing Lender agrees to reinstate such currency as an Agreed Currency, and all payments to be made by the Borrower hereunder in such currency shall instead be made when due in Dollars in an amount equal to the Dollar Amount (as of the date of repayment) of such payment due, it being the intention of the parties hereto that the Borrower takes all risks of the imposition of any such currency control or exchange regulations. For purposes of this Section 2.12, the commencement of the third stage of EMU shall not constitute the imposition of currency control or exchange regulations. 2.13 Notes, Telephonic Notices. Each Lender is authorized to record the principal amount of each of its Loans and each repayment with respect to its Loans on the schedule attached to its respective Notes; provided, however, that the failure to so record shall not affect the Borrower's obligations under any such Note. The Borrower authorizes the Lenders and the Administrative Agent to extend Revolving Advances, effect selections of Types of Revolving Advances and to transfer funds based on telephonic notices made by any person or persons the Administrative Agent or any Lender in good faith believes to be acting on behalf of the Borrower. The Borrower agrees to deliver promptly to the Administrative Agent a written confirmation, signed by an Authorized Officer, if such confirmation is requested by the Administrative Agent or any Lender, of each telephonic notice. If the written confirmation differs in any material respect from the action taken by the Administrative Agent and the Lenders, (i) the telephonic notice shall govern absent manifest error and (ii) the Administrative Agent or the Lender, as applicable, shall promptly notify the Authorizing Officer who provided such confirmation of such difference. 32 2.14 Promise to Pay; Interest and Fees; Interest Payment Dates; Interest and Fee Basis; Loan Accounts. (A) Promise to Pay. The Borrower unconditionally promises to pay when due the principal amount of each Loan made to it and all other Obligations incurred by it, and to pay all unpaid interest accrued thereon, in accordance with the terms of this Agreement. (B) Interest Payment Dates. Interest accrued on each Base Rate Loan shall be payable on each Payment Date, commencing with the first such date to occur after the date hereof, on any date on which such Base Rate Loan is prepaid, whether due to acceleration or otherwise, and at maturity (whether by acceleration or otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on the last day of its applicable Interest Period, on any date on which the Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued on each Eurodollar Rate Loan having an Interest Period longer than three months shall also be payable on the last day of each three-month interval during such Interest Period. Interest accrued on the principal balance of all other Obligations shall be payable in arrears (i) on each Payment Date, commencing on the first such date following the incurrence of such Obligation, (ii) upon repayment thereof in full or in part, (iii) if not theretofore paid in full, at the time such other Obligation becomes due and payable (whether by acceleration or otherwise) and (iv) if not theretofore paid in full, on demand, commencing on the first such day following the date such Obligation became payable pursuant to the terms of this Agreement or the other Loan Documents. (C) Fees. (i) The Borrower shall pay or cause the appropriate Subsidiary to pay to the Administrative Agent, for the account of the Revolving Lenders in accordance with their Revolving Loan Pro Rata Shares, a commitment fee accruing at the rate of the Applicable Revolving Loan Commitment Fee per annum from and after the date hereof until the Termination Date on the amount by which (A) the Aggregate Revolving Loan Commitment in effect from time to time exceeds (B) the aggregate outstanding amount of the Revolving Advances and Revolver L/C Obligations from time to time. All such commitment fees payable under this clause (C)(i) shall be payable quarterly in arrears on the first Business Day of each calendar quarter occurring after the date hereof and, in addition, on the Termination Date. (ii) The Borrower shall deliver to the Lenders PIK Notes evidencing a deferral fee payable by the Borrower to the Lenders in accordance with their Pro Rata Shares, subject to the terms and conditions of the PIK Notes. The deferral fee evidenced by the PIK Notes shall accrue monthly (commencing on October 1, 2002) at a per annum rate equal to 0.50% of the sum of the Revolving Credit Obligations and the aggregate outstanding principal amount of the Term Credit as of September 30, 2002. Interest on the PIK Notes shall accrue monthly, shall be computed at a rate per annum equal to the sum of the Alternate Base Rate plus the Applicable Margin for Term Loans which are Base Rate Loans and shall be added to the interest-bearing principal amount of the PIK Notes. (D) Interest and Fee Basis Interest and fees shall be calculated for actual days elapsed on the basis of a 360-day year and shall be payable for the day an Obligation is incurred but not for the day of any payment on 33 the amount paid if payment is received prior to 12:00 noon local time in Chicago at the place of payment. If any payment of principal of or interest on a Loan or any payment of any other Obligations shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment. (E) Loan Account. Each Lender shall maintain in accordance with its usual practice an account or accounts (a "LOAN ACCOUNT") evidencing the Obligations of the Borrower to such Lender owing to such Lender from time to time, including the amount of principal and interest payable and paid to such Lender from time to time hereunder and under the Notes. (F) Entries Binding. The entries made in the Register and each Loan Account shall be conclusive and binding for all purposes, absent manifest error, unless the Borrower objects to information contained in the Register and each Loan Account within thirty (30) days of the Borrower's receipt of such information. 2.15 Notification of Advances, Interest Rates, Prepayments and Aggregate Revolving Loan Commitment Reductions. Promptly after receipt thereof, the Administrative Agent will notify each Lender of the contents of each Aggregate Revolving Loan Commitment reduction notice, Borrowing Notice, Continuation/Conversion Notice, and repayment notice received by it hereunder. The Administrative Agent will notify each Lender of the interest rate applicable to each Eurodollar Rate Loan promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Alternate Base Rate. 2.16 Lending Installations. Each Lender may book its Loans at any Lending Installation selected by such Lender and may change its Lending Installation from time to time. All terms of this Agreement shall apply to any such Lending Installation and the Notes shall be deemed held by each Lender for the benefit of such Lending Installation. Each Lender may, by written or facsimile notice to the Administrative Agent and the Borrower, designate a Lending Installation through which Loans will be made by it and for whose account Loan payments are to be made. 2.17 Non-Receipt of Funds by the Administrative Agent. Unless the Borrower or a Lender, as the case may be, notifies the Administrative Agent prior to the date on which it is scheduled to make payment to the Administrative Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal, interest or fees to the Administrative Agent for the account of the Lenders, that it does not intend to make such payment, the Administrative Agent may assume that such payment has been made. The Administrative Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or the Borrower, as the case may be, has not in fact made such payment to the Administrative Agent, the recipient of such payment shall, on demand by the Administrative Agent, repay to the Administrative Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Administrative Agent until the date the Administrative Agent recovers such amount at a rate per annum equal to (i) in the case of payment by a Lender, the Federal Funds Effective Rate for such day or (ii) in the case of payment by the Borrower, the interest rate applicable to the relevant Loan. 34 2.18 Termination Date. This Agreement shall be effective until the Termination Date. Notwithstanding the termination of this Agreement on the Termination Date, until all of the Obligations (other than contingent indemnity and reimbursement obligations) shall have been fully and indefeasibly paid and satisfied, all financing arrangements among the Borrower and the Lenders shall have been terminated (other than under Interest Rate Agreements or other agreements with respect to Hedging Obligations) and all of the Letters of Credit shall have expired, been canceled or terminated, all of the rights and remedies under this Agreement and the other Loan Documents shall survive and the Collateral Agent shall be entitled to retain its security interest in and to all existing and future Collateral for the benefit of itself and the Secured Parties. 2.19 Letter of Credit Facility. Upon receipt of duly executed applications therefor, and such other documents, instructions and agreements as the Issuing Lender may reasonably require, and subject to the provisions of Section 2.1 and Article IV, the Issuing Lender shall issue Revolver Letters of Credit denominated in Dollars for the account of the Borrower (or for the account of the Borrower and any of its Subsidiaries, provided that the Borrower's obligations hereunder with respect thereto shall be several and not joint), on terms as are satisfactory to the Issuing Lender; provided, however, that no Revolver Letter of Credit will be issued for the account of Borrower by the Issuing Lender if on the date of issuance, before or after taking such Revolver Letter of Credit into account, (i) the aggregate Dollar Amount of the Revolving Advances and the Revolver L/C Obligations at such time would exceed the Aggregate Revolving Loan Commitment at such time or (ii) the aggregate outstanding Dollar Amount of the Revolver L/C Obligations exceeds $5,000,000; and provided, further, that no Revolver Letter of Credit shall be issued which has an expiration date later than the date which is twenty-one (21) days immediately preceding the Termination Date. The parties hereto acknowledge and agree that the Initial Revolver Letter of Credit shall be deemed to constitute a Revolver Letter of Credit issued pursuant to this Section 2.19 in which the Revolving Lenders participate pursuant to Section 2.20 and with respect to which fees shall accrue as provided in Section 2.23 beginning as of the Effective Date. Each Revolver Letter of Credit may, upon the request of the Borrower, include a provision whereby such Revolver Letter of Credit shall be renewed automatically for additional consecutive periods of 12 months or less (but not beyond the date that is twenty-one (21) days prior to the Termination Date) unless the Issuing Lender notifies the beneficiary thereof at least 30 days prior to the then-applicable expiry date that such Revolver Letter of Credit will not be renewed (it being understood and agreed that the Issuing Lender shall not send such a notice unless (x) an Unmatured Default or Default has occurred and is continuing or (y) such renewal would cause such Revolver Letter of Credit to expire on a date that is beyond twenty-one (21) days prior to the Termination Date). 2.20 Revolver Letter of Credit Participation. On the Effective Date, with respect to the Initial Revolver Letters of Credit, and immediately upon the issuance of each Revolver Letter of Credit by the Issuing Lender hereunder, each Revolving Lender shall be deemed to have automatically, irrevocably and unconditionally purchased and received from the Issuing Lender an undivided interest and participation in and to such Revolver Letter of Credit, the obligations of the Borrower in respect thereof, and the liability of the Issuing Lender thereunder (collectively, a "REVOLVER L/C INTEREST") in an amount equal to the Dollar Amount available for drawing under such Revolver Letter of Credit multiplied by such Revolving Lender's Revolving Loan Pro Rata Share. 35 The Issuing Lender will notify the Administrative Agent promptly upon presentation to it of a Revolver L/C Draft or upon any other draw under a Revolver Letter of Credit and the Administrative Agent will promptly notify each Revolving Lender. On or before the Business Day on which the Issuing Lender makes payment of each such Revolver L/C Draft or any other draw on a Revolver Letter of Credit, on demand of the Issuing Lender received by each Revolving Lender not later than 12:00 noon (Chicago time) on such Business Day, each Revolving Lender shall make payment on such Business Day to the Administrative Agent for the account of the Issuing Lender, in immediately available funds in Dollars in an amount equal to such Lender's Revolving Loan Pro Rata Share of the Dollar Amount of such payment or draw. Upon the Administrative Agent's receipt of funds as a result of the Issuing Lender's payment on a Revolver L/C Draft or any other draw on a Revolver Letter of Credit issued by the Issuing Lender, the Administrative Agent shall promptly pay such funds to the Issuing Lender. The obligation of each Revolving Lender to pay the Administrative Agent for the account of the Issuing Lender under this Section 2.20 shall be unconditional, continuing, irrevocable and absolute. In the event that any Revolving Lender fails to make payment to the Administrative Agent of any amount due under this Section 2.20, the Administrative Agent shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Revolving Lender hereunder until the Administrative Agent on behalf of the Issuing Lender receives such payment from such Revolving Lender or such obligation is otherwise fully satisfied; provided, however, that nothing contained in this sentence shall relieve such Revolving Lender of its obligation to reimburse the Administrative Agent for such amount in accordance with this Section 2.20. 2.21 Reimbursement Obligation. The Borrower agrees unconditionally, irrevocably and absolutely upon receipt of notice from the Administrative Agent or the Issuing Lender to pay immediately to the Administrative Agent, for the account of the Issuing Lender or the account of the Revolving Lenders, as the case may be, the amount of each advance which may be drawn under or pursuant to a Revolver Letter of Credit issued for its account or a Revolver L/C Draft related thereto (such obligation of the Borrower to reimburse the Issuing Lender or the Administrative Agent for an advance made under a Revolver Letter of Credit or Revolver L/C Draft being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with respect to such Revolver Letter of Credit or Revolver L/C Draft), each such payment to be made by the Borrower to the Administrative Agent no later than 1:00 p.m. (Chicago time) on the Business Day on which the Issuing Lender makes payment of each such Revolver L/C Draft or, in the case of any other draw on a Revolver Letter of Credit, 1:00 p.m. (Chicago time) on the date specified in a demand by the Administrative Agent, which shall be the date on which a corresponding payment is to be made by the Issuing Lender. The Issuing Lender may direct the Administrative Agent to make such demand with respect to Revolver Letters of Credit issued by the Issuing Lender. If the Borrower at any time fails to repay a Reimbursement Obligation pursuant to this Section 2.21, such unpaid Reimbursement Obligation shall at that time be automatically converted into an obligation denominated in Dollars and the Borrower shall be deemed to have elected to borrow a Revolving Advance from the Revolving Lenders, as of the date of the payment by the Issuing Lender giving rise to the Reimbursement Obligation equal in amount to the Dollar Amount of the unpaid Reimbursement Obligation. Such Revolving Advance shall be made as of the date of the payment giving rise to such Reimbursement Obligation, automatically, without notice and without any requirement to satisfy the conditions precedent otherwise 36 applicable to a Revolving Advance if the Borrower shall have failed to make such payment to the Administrative Agent for the account of the applicable Issuing Lender prior to such time. Such Revolving Advance shall constitute a Base Rate Advance and the proceeds of such Advance shall be used to repay such Reimbursement Obligation. If, for any reason, the Borrower fails to repay a Reimbursement Obligation on the day such Reimbursement Obligation arises and, for any reason, the Revolving Lenders are unable to make or have no obligation to make a Revolving Advance, then such Reimbursement Obligation shall bear interest from and after such day, until paid in full, at the interest rate applicable to a Base Rate Advance (or, in the case of a Reimbursement Obligation denominated in an Agreed Currency other than Dollars, at the rate determined by the Issuing Lender in good faith to represent the Issuing Lender's cost of overnight or short-term funds in the applicable Agreed Currency plus the then effective Applicable Margin with respect to Eurodollar Rate Loans which are Revolving Loans). The Borrower agrees to indemnify the Issuing Lender against any loss or expense determined by such Issuing Lender in good faith to have resulted from any conversion pursuant to this Section 2.21 by reason of the inability of the Issuing Lender to convert the Dollar Amount received from the Borrower or from the Lenders, as applicable, into an amount in the applicable Agreed Currency of such Letter of Credit equal to the amount of such Reimbursement Obligation. 2.22 Cash Collateral. Notwithstanding anything to the contrary herein or in any application for a Revolver Letter of Credit, after the occurrence and during the continuance of Default, the Borrower shall, upon the Administrative Agent's demand, deliver to the Collateral Agent, cash having a value equal to the aggregate outstanding Revolver L/C Obligations of the Borrower. In addition, if the amount of Revolver L/C Obligations outstanding at any time exceeds the Aggregate Revolving Loan Commitment, the Borrower shall deposit cash collateral with the Collateral Agent in an amount equal to the amount by which such Revolver L/C Obligations exceed the Aggregate Revolving Loan Commitment. Any such collateral shall be held by the Collateral Agent in the Letter of Credit Collateral Account (as defined in the Intercreditor Agreement). 2.23 Letter of Credit Fees. The Borrower agrees to pay (i) monthly, in arrears, on each Payment Date to the Administrative Agent for the ratable benefit of the Revolving Lenders (with respect to Revolver Letters of Credit) and the Term Lenders (with respect to Term Letters of Credit), except as set forth in Section 8.2, a letter of credit fee in the Dollar Amount of the Applicable Letter of Credit Fee per annum on the aggregate average daily outstanding amount available for drawing under all of the Letters of Credit and (ii) to the Administrative Agent for the benefit of the Issuing Lender, a fronting fee of 1/8 of one percent (0.125%) of the initial outstanding Dollar Amount available for drawing under each Letter of Credit, payable on the date of issuance of such Letter of Credit, plus all customary fees and other issuance, amendment, document examination, negotiation and presentment expenses and related charges in connection with the issuance, amendment, presentation of L/C Drafts, and the like customarily charged by the Issuing Lender with respect to standby and commercial Letters of Credit, including, without limitation, standard commissions with respect to commercial Letters of Credit, payable at the time of invoice of such amounts. 2.24 Indemnification; Exoneration. 37 (a) In addition to amounts payable as elsewhere provided in this Agreement, the Borrower agrees to protect, indemnify, pay and save harmless the Administrative Agent, the Issuing Lender and each Lender from and against any and all liabilities and costs which the Administrative Agent, the Issuing Lender or any Lender may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit other than, in the case of the Issuing Lender, as a result of its Gross Negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, or (ii) the failure of the Issuing Lender of a Letter of Credit to honor a drawing under such Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority (all such acts or omissions herein called "GOVERNMENTAL ACTS"). (b) As among the Borrower, the Lenders, the Issuing Lender and the Administrative Agent, the Borrower assumes all risks of the acts and omissions of, or misuse of such Letter of Credit by, the beneficiary of any Letter of Credit. In furtherance and not in limitation of the foregoing, subject to the provisions of the Letter of Credit applications and Letter of Credit reimbursement agreements executed by the Borrower at the time of request for any Letter of Credit, the Issuing Lender of a Letter of Credit, the Administrative Agent and the Lenders shall not be responsible (in the absence of Gross Negligence or willful misconduct in connection therewith, as determined by the final judgment of a court of competent jurisdiction): (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of the Letters of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of a Letter of Credit to comply duly with conditions required in order to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, or other similar form of teletransmission or otherwise; (v) for errors in interpretation of technical trade terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (vii) for the misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (viii) for any consequences arising from causes beyond the control of the Administrative Agent, the Issuing Lender and the Lenders including, without limitation, any Governmental Acts. None of the above shall affect, impair, or prevent the vesting of any of the Issuing Lender's rights or powers under this Section 2.24. (c) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Issuing Lender under or in connection with Letters of Credit issued on behalf of the Borrower or any related certificates shall not, in the absence of Gross Negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, put the Issuing Lender, the Administrative Agent or any Lender under any resulting liability to the Borrower or relieve the Borrower of any of its obligations hereunder to any such Person. (d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 2.24 shall survive the 38 payment in full of principal and interest hereunder, the termination of the Letters of Credit and the termination of this Agreement. 2.25 Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due from the Borrower hereunder or under any of the Notes in the currency expressed to be payable herein or under the Notes (the "specified currency") into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the specified currency with such other currency at the Administrative Agent's office in Chicago, Illinois on the Business Day preceding that on which the final, non-appealable judgment is given. The obligations of the Borrower in respect of any sum due to any Lender or the Administrative Agent hereunder or under any Note shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Administrative Agent (as the case may be) of any sum adjudged to be so due in such other currency such Lender or the Administrative Agent (as the case may be) may in accordance with normal, reasonable banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to such Lender or the Administrative Agent, as the case may be, in the specified currency, the Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Administrative Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender or the Administrative Agent, as the case may be, in the specified currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 11.2, such Lender or the Administrative Agent, as the case may be, agrees to remit such excess to the Borrower. ARTICLE III: CHANGE IN CIRCUMSTANCES 3.1 Yield Protection. If any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) adopted after the date of this Agreement and having general applicability to all banks within the jurisdiction in which such Lender operates (excluding, for the avoidance of doubt, the effect of and phasing in of capital requirements or other regulations or guidelines passed prior to the date of this Agreement), or any interpretation or application thereof by any Governmental Authority charged with the interpretation or application thereof, or the compliance of any Lender therewith, (i) subjects any Lender (each reference in this Section 3.1 to a Lender being in its capacity as a Lender or the Issuing Lender, or both) or any applicable Lending Installation to any tax, duty, charge or withholding on or from payments due from the Borrower (excluding Excluded Taxes), or changes the basis of taxation of payments (other than with respect to Excluded Taxes) to any Lender in respect of its Loans, its L/C Interests, the Letters of Credit or other amounts due it hereunder, provided, that this clause (i) shall not apply with respect to any Taxes to which Section 3.5 applies, or 39 (ii) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation with respect to its Eurodollar Rate Loans, L/C Interests or the Letters of Credit, or (iii) imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation of making, funding or maintaining the Eurodollar Rate Loans, the L/C Interests or the Letters of Credit or reduces any amount received by any Lender or any applicable Lending Installation in connection with Eurodollar Rate Loans or Letters of Credit, or requires any Lender or any applicable Lending Installation to make any payment calculated by reference to the amount of Loans or L/C Interests held or interest received by it or by reference to the Letters of Credit, by an amount deemed material by such Lender; and the result of any of the foregoing is to increase the cost to that Lender of making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or to reduce any amount received under this Agreement, then, within 15 days after receipt by the Borrower of written demand by such Lender pursuant to Section 3.6, the Borrower shall pay or cause the appropriate Subsidiary to pay such Lender that portion of such increased expense incurred or reduction in an amount received which such Lender determines is attributable to making, funding and maintaining its Loans, L/C Interests, Letters of Credit and its Revolving Loan Commitment. 3.2 Changes in Capital Adequacy Regulations. If a Lender (each reference in this Section 3.2 to a Lender being in its capacity as a Lender or the Issuing Lender, or both) determines (i) the amount of capital required or expected to be maintained by such Lender, any Lending Installation of such Lender or any corporation controlling such Lender is increased as a result of a "Change" (as defined below), and (ii) such increase in capital will result in an increase in the cost to such Lender of maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to make Loans hereunder, then, within 15 days after receipt by the Borrower of written demand by such Lender pursuant to Section 3.6, the Borrower shall pay or cause the appropriate Subsidiary to pay such Lender the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender determines is attributable to this Agreement, its Loans, its L/C Interests, the Letters of Credit or its obligation to make Loans hereunder (after taking into account such Lender's policies as to capital adequacy). "CHANGE" means (i) any change after the date of this Agreement in the "Risk-Based Capital Guidelines" (as defined below) excluding, for the avoidance of doubt, the effect of any phasing in of such Risk-Based Capital Guidelines or any other capital requirements passed prior to the date hereof, or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the date of this Agreement and having general applicability to all banks and financial institutions within the jurisdiction in which such Lender operates which affects the amount of capital required or expected to be maintained by any Lender or any Lending Installation or any corporation controlling any Lender. "RISK-BASED CAPITAL Guidelines" means (i) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory Practices Entitled 40 "International Convergence of Capital Measurements and Capital Standards," including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement. 3.3 Availability of Types of Advances. If (i) any Lender determines that maintenance of any of its Eurodollar Rate Loans at a suitable Lending Installation would violate any applicable law, rule, regulation or directive, whether or not having the force of law, or (ii) the Required Lenders determine that (x) deposits of a type, currency and maturity appropriate to match fund Eurodollar Rate Advances are not available or (y) the interest rate applicable to a Eurodollar Rate Advance does not accurately reflect the cost of making or maintaining such a Eurodollar Rate Advance, then the Administrative Agent shall suspend the availability of Eurodollar Rate Advances of the affected Type or in the affected currency and, in the case of any occurrence set forth in clause (i), require any affected Eurodollar Rate Advances to be repaid or, in the case of Eurodollar Rate Loans in Dollars, at the option of the Borrower, converted to Base Rate Advances. 3.4 Funding Indemnification. If any payment of a Eurodollar Rate Advance occurs on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate Advance is not made or continued on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower agrees to indemnify each Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain the Eurodollar Rate Advance. 3.5 Taxes. (i) Any and all payments by the Borrower hereunder shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings or any liabilities with respect thereto including those arising after the date hereof as a result of the adoption of or any change in any law, treaty, rule, regulation, guideline or determination of a Governmental Authority or any change in the interpretation or application thereof by a Governmental Authority but excluding, in the case of each Lender and the Administrative Agent, such taxes (including income taxes, franchise taxes and branch profit taxes) as are imposed on or measured by such Lender's or Administrative Agent's, as the case may be, net income by the United States of America or any Governmental Authority of the jurisdiction (or any political subdivision thereof) under the laws of which such Lender or the Administrative Agent, as the case may be, is organized, carries on a business (other than as a result of a connection arising solely from the execution, delivery or performance of obligations under this Agreement), or maintains a Lending Installation (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings, and liabilities which the Administrative Agent or a Lender determines to be applicable to this Agreement, the other Loan Documents, the Revolving Loan Commitments, the Loans or the Letters of Credit being hereinafter referred to as "Taxes"). Notwithstanding the foregoing sentence, the Borrower shall not be obligated to make any deductions, charges or withholdings from any and all payments to a 41 Lender that is both a Purchaser and is organized or incorporated outside the United States of America (or a political subdivision thereof), unless either (v) the Borrower consents to the assignment of such Purchaser's interest or (w) the Purchaser delivers IRS form W-8BEN, W-8ECI or other applicable form in the manner and by the procedures described in Section 3.5(vi) and continues to comply with Section 3.5(vi). If the Borrower or the Administrative Agent shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under the other Loan Documents to any Lender or the Administrative Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.5) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. If any Taxes, including, without limitation, any withholding tax of the United States of America or any other Governmental Authority shall be or become applicable (y) after the date of this Agreement, to such payments by the Borrower made to the Lending Installation or any other office that a Lender may claim as its Lending Installation, or (z) after such Lender's selection and designation of any other Lending Installation, to such payments made to such other Lending Installation, such Lender shall use reasonable efforts to make, fund and maintain its Loans through another Lending Installation of such Lender in another jurisdiction so as to reduce the Borrower's liability hereunder, if the making, funding or maintenance of such Loans through such other Lending Installation of such Lender does not, in the reasonable judgment of such Lender, otherwise adversely affect such Loans, the obligations under the Revolving Loan Commitments or such Lender. (ii) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges, or similar levies which arise from any payment made hereunder, from the issuance of Letters of Credit hereunder, or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, the other Loan Documents, the Revolving Loan Commitments, the Loans or the Letters of Credit (hereinafter referred to as "Other Taxes"). (iii) The Borrower indemnifies each Lender and the Administrative Agent for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any Governmental Authority on amounts payable under this Section 3.5) paid by such Lender or the Administrative Agent (as the case may be) and any liability (including penalties, interest, and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within thirty (30) days after the date such Lender or the Administrative Agent (as the case may be) makes written demand therefor. A certificate as to any additional amount payable to any Lender or the 42 Administrative Agent under this Section 3.5 submitted to the Borrower and the Administrative Agent (if a Lender is so submitting) by such Lender or the Administrative Agent shall show in reasonable detail the amount payable and the calculations used to determine such amount and shall, absent manifest error, be final, conclusive and binding upon all parties hereto. With respect to such deduction or withholding for or on account of any Taxes and to confirm that all such Taxes have been paid to the appropriate Governmental Authorities, the Borrower shall promptly (and in any event not later than thirty (30) days after receipt) furnish to each Lender and the Administrative Agent such certificates, receipts and other documents as may be required (in the judgment of such Lender or the Administrative Agent) to establish any tax credit to which such Lender or the Administrative Agent may be entitled. Notwithstanding the foregoing, the Borrower shall not be required to indemnify any Lender or the Administrative Agent under this Section 3.5(iii) if such Lender or the Administrative Agent, as applicable, fails to comply with Section 3.5(vi). (iv) Within thirty (30) days after the date of any payment of Taxes or Other Taxes by the Borrower, the Borrower shall furnish to the Administrative Agent the original or a certified copy of a receipt evidencing payment thereof. (v) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 3.5 shall survive the payment in full of principal and interest hereunder, the termination of the Letters of Credit and the termination of this Agreement. (vi) Each Lender that is not created or organized under the laws of the United States of America or a political subdivision thereof shall deliver to the Borrower and the Administrative Agent on or before the Effective Date, or, if later, the date on which such Lender becomes a Lender pursuant to Section 12.3 and from time to time when requested by the Borrower, a true and accurate certificate executed in duplicate by a duly authorized officer of such Lender, in a form satisfactory to the Borrower and the Administrative Agent, to the effect that (A) such Lender is capable of receiving payments of interest hereunder without deduction or withholding of United States federal income tax and accompanied by two executed copies of Form W-8BEN or Form W-8ECI of the IRS, or applicable successor forms or, (B) such Lender is not (1) a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (2) a "10 percent shareholder" of the Borrower or any Subsidiary within the meaning of Section 881(c)(3)(B) of the Code, or (3) a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code and accompanied by two executed copies of Form W-8BEN or applicable successor form. Each such Lender further agrees to deliver to the Borrower and the Administrative Agent from time to time a true and accurate certificate executed in duplicate by a duly authorized officer of such Lender substantially in a form satisfactory to the Borrower and the Administrative Agent, before or promptly upon the occurrence of any event requiring a change in the most recent certificate previously delivered by it to the 43 Borrower and the Administrative Agent pursuant to this Section 3.5(vi). Further, each Lender which delivers a certificate pursuant to this Section 3.5(vi) covenants and agrees to deliver to the Borrower and the Administrative Agent within fifteen (15) days prior to the expiration of such form, another such certificate and/or two accurate and complete original signed copies of the applicable form (or any successor form or forms required under the Code or the applicable regulations promulgated thereunder). Each such certificate shall certify as to one of the following: (1) that such Lender is capable of receiving payments of interest hereunder without deduction or withholding of United States of America federal income tax; (2) that such Lender is not capable of receiving payments of interest hereunder without deduction or withholding of United States of America federal income tax as specified therein but is capable of recovering the full amount of any such deduction or withholding from a source other than the Borrower and will not seek any such recovery from the Borrower; or (3) that, as a result of the adoption of or any change in any law, treaty, rule, regulation, guideline or determination of a Governmental Authority or any change in the interpretation or application thereof by a Governmental Authority after the date such Lender became a party hereto, such Lender is not capable of receiving payments of interest hereunder without deduction or withholding of United States of America federal income tax as specified therein and that it is not capable of recovering the full amount of the same from a source other than the Borrower. Each Lender shall promptly furnish to the Borrower and the Administrative Agent such additional documents as may be reasonably required by the Borrower or the Administrative Agent to establish any exemption from or reduction of any Taxes or Other Taxes required to be deducted or withheld and which may be obtained without undue expense to such Lender. 3.6 Mitigation; Lender Statements; Survival of Indemnity. To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the unavailability of a Type of Advance under Section 3.3, so long as such designation is not disadvantageous to such Lender. Each Lender requiring compensation pursuant to this Article III shall use its best efforts to notify the Borrower and the Administrative Agent in writing of any Change, law, policy, rule, guideline or directive giving rise to such demand for compensation not later than ninety (90) days following the date upon which the responsible account officer of such Lender knows or should have known of such Change, law, policy, rule, guideline or directive. Any demand for compensation pursuant to this Article III shall be in writing and shall state the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5 and shall set forth in reasonable detail the calculations upon which such Lender determined such amount. Such written demand shall be rebuttably presumed correct for all purposes. Determination of amounts payable under such Sections in connection with a Eurodollar Rate Loan shall be calculated as though each Lender funded its Eurodollar Rate Loan through the 44 purchase of a deposit of the type, currency and maturity corresponding to the deposit used as a reference in determining the Eurodollar Rate applicable to such Loan, whether in fact that is the case or not. The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this Agreement. ARTICLE IV: CONDITIONS PRECEDENT 4.1 Effectiveness. The effectiveness of this Agreement is subject to the satisfaction of each of the following conditions precedent: (a) The Borrower shall have furnished to the Administrative Agent, with sufficient copies (other than in the case of the Notes) for each of the Lenders, such documents as the Administrative Agent or any Lender or its counsel may have reasonably requested, including, without limitation, (1) this Agreement, the Notes, the Guaranty and all of the other documents reflected on the List of Closing Documents attached as Exhibit D to this Agreement, (2) the Collateral Documents required by the Collateral Agent to be delivered on or before the Effective Date and (3) a copy of this Agreement executed by the Borrower, the Lenders and the Administrative Agent. (b) The Note Agreements and the Intercreditor Agreement shall have been duly executed and delivered by the parties thereto and all of the transactions contemplated thereby shall have been consummated to the satisfaction of the Administrative Agent and the Lenders. (c) No injunction or temporary restraining order shall exist which, in the judgment of the Administrative Agent, would prohibit the making of the Loans or any litigation seeking such an injunction or restraining order. (d) No action, suit, proceeding, arbitration or (to the Borrower's knowledge) investigation shall exist before or by any Governmental Authority or private arbitrator pending or (to the Borrower's knowledge) shall be threatened against the Borrower or any of its Subsidiaries or any property of any of them (i) challenging the validity or the enforceability of any material provision of the Loan Documents or (ii) which will have or could reasonably be expected to have a Material Adverse Effect. (e) The Borrower shall have entered into definitive and binding documentation pertaining to, and closed on, the Permitted Receivables Transfer on terms and conditions satisfactory to the Lenders. (f) The Borrower shall have closed on an amendment to the Fleet Lease Transaction on terms and conditions satisfactory to the Administrative Agent. (g) Any consents or approvals required to be obtained from any holder of any outstanding debt of the Borrower or any Guarantor and any amendments of agreements pursuant to which any Indebtedness may have been incurred by the Borrower or any Guarantor, which shall be necessary to permit the consummation of the transactions contemplated hereby or by the Restructuring Transaction shall have been obtained and all such consents, approvals or 45 amendments shall be satisfactory in form and substance to the Administrative Agent and its counsel. (h) The Borrower shall have paid an amendment fee to the Administrative Agent for the ratable account of each Lender in an amount equal to 0.50% of the sum of such Lender's Revolving Loan Commitment and Term Credit (as computed after giving effect hereto). (i) The Borrower shall have paid all the fees agreed to in any fee letters among the Administrative Agent and the Borrower. 4.2 Each Revolving Loan and Revolver Letter of Credit. Except as expressly provided in Section 2.23, no Revolver Lender shall be required to make any Revolving Loan and the Issuing Lender shall not be required to issue any Revolver Letter of Credit, unless on the applicable Borrowing Date, or in the case of a Revolver Letter of Credit, the date on which the Revolver Letter of Credit is to be issued: (i) There exists no Default or Unmatured Default; and (ii) The representations and warranties contained in Article V are true and correct as of such Borrowing Date, except for representations and warranties made with reference solely to an earlier date, which representations and warranties shall be true and correct as of such earlier date. Each Borrowing Notice with respect to each Loan or Advance and each letter of credit application with respect to a Letter of Credit shall constitute a representation and warranty by the Borrower that the conditions contained in Sections 4.2(i) and (ii) will have been satisfied as of the date of such Loan or Advance or the issuance of such Letter of Credit. The Administrative Agent may require a duly completed officer's certificate in substantially the form of Exhibit E hereto and/or a duly completed compliance certificate in substantially the form of Exhibit F hereto as a condition to the Lenders' making any Revolving Loan or the Issuing Lender issuing any Revolver Letter of Credit. ARTICLE V: REPRESENTATIONS AND WARRANTIES In order to induce the Administrative Agent and the Lenders to enter into this Agreement and to make the Loans and the other financial accommodations to the Borrower and in order to induce the Issuing Lender to issue the Letters of Credit described herein, the Borrower represents and warrants as follows to each Lender as of the Effective Date, having given effect to the consummation of the transactions contemplated by the Loan Documents on the Effective Date, and thereafter on each date as required by Section 4.2: 5.1 Corporate Existence and Standing. The Borrower is a corporation and each of its Subsidiaries is a corporation, partnership or limited liability company, in each case duly incorporated or organized, as the case may be, validly existing and (to the extent such concept applies to such entity) in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except to the extent that, in the case of any Subsidiary of the Borrower, 46 the failure to be in good standing or authorized to conduct business in any jurisdiction could not, when taken together with all similar failures by such Subsidiary and each other Subsidiary, reasonably be expected to have a Material Adverse Effect. 5.2 Authorization and Validity. (A) Each Loan Party has the requisite power and authority (i) to execute, deliver and perform each of the Loan Documents executed, or which are to be executed, by it and (ii) to file the Loan Documents or which must be filed by it or which have been filed by it as required by this Agreement or the other Loan Documents or otherwise on or prior to the Effective Date with any Governmental Authority. (B) The execution, delivery, performance and filing, as the case may be, of each of the Loan Documents which must be executed or filed by any Loan Party or which have been executed or filed as required by this Agreement, the other Loan Documents or otherwise on or prior to the Effective Date and to which any Loan Party is party, and the consummation of the transactions contemplated thereby, have been duly approved by the respective boards of directors or comparable governing bodies and, if necessary, the shareholders of such Loan Party, and such approvals have not been rescinded. No other action or proceeding on the part of any Loan Party is necessary to consummate such transactions. (C) Each of the Loan Documents to which any Loan Party is a party has been duly executed, delivered or filed, as the case may be, by it and constitutes its legal, valid and binding obligation, enforceable against such Loan Party in accordance with its terms (except as enforceability may be limited by bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally and general principles of equity, regardless of whether the application of such principles is considered in a proceeding in equity or at law), is in full force and effect and no Default or Unmatured Default exists thereunder. 5.3 No Conflict; Government Consent. The execution, delivery and performance of the Loan Documents by the Loan Parties party thereto, the consummation of the transactions therein contemplated, and compliance with the provisions thereof will not violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Borrower or any Subsidiary or the Borrower's or any Subsidiary's articles of incorporation or by-laws or comparable constitutive documents or the provisions of any indenture, instrument or agreement to which the Borrower or any Subsidiary is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien in, of or on the Property of the Borrower or any Subsidiary pursuant to the terms of any such indenture, instrument or agreement which violation, conflict or imposition could reasonably be expected to have a Material Adverse Effect. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any Governmental Authority is required to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents. 5.4 Financial Statements. The December 31, 2000, consolidated financial statements of the Borrower and its Subsidiaries, previously delivered to the Lenders, were prepared in 47 accordance with Agreement Accounting Principals in effect on the date such statements were prepared and fairly present the consolidated financial condition of the Borrower and its Subsidiaries at the date thereof and the consolidated results of their operations for the period then ended. The consolidated financial statements of the Borrower and its Subsidiaries dated as of March 31, 2001, June 30, 2001 and September 30, 2001, previously delivered to the Lenders, were prepared in accordance with Agreement Accounting Principles in effect on the dates such statements were prepared and fairly present the consolidated financial condition of the Borrower and its Subsidiaries at the respective dates thereof and the consolidated results of their operations for the three-month, six-month and nine-month periods, respectively, then ended, subject to normal year-end adjustments. 5.5 Material Adverse Change. Except as set forth on Schedule 5.7 hereto, since December 31, 2001, there has been no change in the business, Property, prospects, condition (financial or otherwise) or results of operations of the Borrower and its Subsidiaries which could reasonably be expected to have a Material Adverse Effect. 5.6 Taxes. All tax returns required to be filed by the Borrower or any of its Subsidiaries in any jurisdiction have, in fact, been filed, all such tax returns have been prepared in accordance with applicable laws, and all taxes, assessments, fees and other governmental charges upon the Borrower or any Subsidiary or upon any of their respective properties, income or franchises, which are shown on such returns have been paid except to the extent such tax payments are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with Agreement Accounting Principles. For all taxable years ending on or before December 31, 1996, the United States Federal income tax liability of the Borrower and its Subsidiaries has been satisfied and either the period of limitations on assessment of additional United States Federal income tax has expired or the Borrower or the applicable Subsidiary has entered into an agreement with the IRS closing conclusively the total tax liability for the taxable year. Neither the Borrower nor any of its Subsidiaries knows of any proposed additional tax assessment against it or any of them for which adequate provision has not been made on its or their accounts, and no controversy in respect of additional income or other taxes due or claimed to be due to any Governmental Authority is pending or to the knowledge of the Borrower or its Subsidiaries threatened the outcome of which could reasonably be expected to have a Material Adverse Effect except as set forth on Schedule 5.7 hereto. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of any taxes or other governmental charges are adequate. 5.7 Litigation and Contingent Liabilities. Except as set forth on Schedule 5.7 hereto, there is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their officers, threatened against or affecting the Borrower or any Subsidiary of the Borrower which could reasonably be expected to have a Material Adverse Effect. Other than any liability incident to such litigation, arbitration or proceedings, to the knowledge of the Borrower's officers neither the Borrower nor any of its Subsidiaries has any material contingent liabilities not provided for or disclosed in the financial statements referred to in Section 5.4. 5.8 Subsidiaries. (i) Schedule 5.8 hereto contains an accurate list of all of the Subsidiaries (except for inactive Subsidiaries with immaterial assets and liabilities) of the 48 Borrower, setting forth their respective jurisdictions of incorporation or organization and the percentage of their respective capital stock or other ownership interests owned by the Borrower or its Subsidiaries; and (ii) all of the issued and outstanding shares of capital stock or other ownership interests of the Subsidiaries of the Borrower listed on Schedule 5.8 hereto have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable and are free and clear of all Liens, except Liens permitted under Section 6.3(C). 5.9 ERISA. The Unfunded Liabilities of all Single Employer Plans do not in the aggregate exceed $5,000,000. Neither the Borrower nor any other member of the Controlled Group has incurred, or is reasonably expected to incur, any withdrawal liability to Multiemployer Plans in excess of $5,000,000 in the aggregate. Each Plan complies in all material respects with all applicable requirements of law and regulations, no Reportable Event has occurred with respect to any Plan, none of the Borrower or any other member of the Controlled Group has withdrawn from any Multiemployer Plan or initiated steps to do so, and no steps have been taken to reorganize or terminate any Benefit Plan. 5.10 Accuracy of Information. The information, exhibits and reports furnished by or on behalf of the Borrower and any of its Subsidiaries to the Administrative Agent or to any Lender in connection with the negotiation of, or compliance with, the Loan Documents, including, without limitation, the Confidential Information Memorandum dated September, 1997 prepared by the Borrower, the representations and warranties of the Borrower and its Subsidiaries contained in the Loan Documents, and all certificates and documents delivered to the Administrative Agent and the Lenders pursuant to the terms thereof do not contain as of the date furnished any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. 5.11 Securities Activities. The Borrower and its Subsidiaries are in compliance with Regulations T, U and X. Neither the Borrower nor any of its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock. 5.12 Material Agreements. Neither the Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any charter or other contractual or corporate restriction which will have or is reasonably likely to have a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries has received notice or has knowledge that (i) it is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Contractual Obligation applicable to it, or (ii) any condition exists which, with the giving of notice or the lapse of time or both, would constitute a default with respect to any such Contractual Obligation, in each case, except where such default or defaults, if any, will not have or are not reasonably likely to have a Material Adverse Effect. 5.13 Compliance with Laws. The Borrower and its Subsidiaries are in compliance with all Requirements of Law applicable to them and their respective businesses, in each case where the failure to so comply individually or in the aggregate will have or is reasonably likely to have a Material Adverse Effect. 49 5.14 Assets and Properties. Except as disclosed on Schedule 5.14 hereto, the Borrower and each of its Subsidiaries has good and marketable title to all of its assets and properties (tangible and intangible, real or personal) owned by it or a valid leasehold interest in all of its leased assets (except insofar as marketability may be limited by any laws or regulations of any Governmental Authority affecting such assets), and all such assets and property are free and clear of all Liens, except Liens permitted under Section 6.3(C). Substantially all of the assets and properties owned by, leased to or used by the Borrower and/or each such Subsidiary of the Borrower are in adequate operating condition and repair, ordinary wear and tear excepted. Except for Liens granted to the Collateral Agent for the benefit of the Secured Parties, neither this Agreement nor any other Loan Document, nor any transaction contemplated under any such agreement, will affect any right, title or interest of the Borrower or such Subsidiary in and to any of such assets in a manner that would have or could reasonably be expected to have a Material Adverse Effect. 5.15 Statutory Indebtedness Restrictions. Neither the Borrower, nor any of its Subsidiaries is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the Investment Company Act of 1940, or any other federal or state statute or regulation which limits its ability to incur indebtedness or its ability to consummate the transactions contemplated hereby. 5.16 Environmental Matters. (a) Except as disclosed on Schedule 5.16 to this Agreement (i) the operations of the Borrower and its Subsidiaries comply in all material respects with Environmental, Health or Safety Requirements of Law; (ii) the Borrower and its Subsidiaries have all material permits, licenses or other authorizations required under Environmental, Health or Safety Requirements of Law and are in material compliance with such permits; (iii) neither the Borrower, any of its Subsidiaries nor any of their respective present property or operations, or, to the best of the Borrower's or any of its Subsidiaries' knowledge, any of their respective past property or operations, are subject to or the subject of any investigation known to the Borrower or any of its Subsidiaries, any judicial or administrative proceeding, order, judgment, decree, settlement or other agreement respecting: (A) any material violation of Environmental, Health or Safety Requirements of Law; (B) any material remedial action; or (C) any material claims or liabilities arising from the Release or threatened Release of a Contaminant into the environment; (iv) there is not now, nor to the best of the Borrower's or any of its Subsidiaries' knowledge has there ever been, on or in the property of the Borrower or any of its Subsidiaries any landfill, waste pile, underground storage tanks, aboveground storage tanks, surface impoundment or hazardous waste storage facility of any kind, polychlorinated biphenyls (PCBs) used in hydraulic oils, electric transformers or other equipment, or asbestos-containing material the consequences of which, in each case or in the aggregate, could be material; and 50 (v) neither the Borrower nor any of its Subsidiaries has any material Contingent Obligation or material contingent liability in connection with any Release or threatened Release of a Contaminant into the environment. (b) For purposes of this Section 5.16 "material" means any noncompliance or basis for liability which could reasonably be likely to subject the Borrower to liability in excess of $5,000,000. 5.17 Labor Matters. As of the Effective Date, no attempt to organize the employees of the Borrower and no labor disputes, strikes or walkouts affecting the operations of the Borrower or any of its Subsidiaries, is pending, or, to the Borrower's knowledge, threatened, planned or contemplated, which could reasonably be expected to have a Material Adverse Effect. 5.18 Foreign Employee Benefit Matters. Each Foreign Employee Benefit Plan is in compliance in all respects with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Plan, except for any non-compliance the consequences of which, in the aggregate, would not result in a material obligation to pay money. The aggregate of the accumulated benefit obligations under all Foreign Pension Plans does not exceed the current fair market value of the assets held in the trusts or similar funding vehicles for such Plans or reasonable reserves have been established in accordance with prudent business practices or as required by Agreement Accounting Principles with respect to any shortfall. With respect to any Foreign Employee Benefit Plan maintained or contributed to by the Borrower or any Subsidiary or any member of its Controlled Group (other than a Foreign Pension Plan), reasonable reserves have been established in accordance with prudent business practice or where required by ordinary accounting practices in the jurisdiction in which such Plan is maintained. There are no actions, suits or claims (other than routine claims for benefits) pending or, to the knowledge of the Borrower, threatened against the Borrower or any Subsidiary or any ERISA Affiliate with respect to any Foreign Employee Benefit Plan. 5.19 Patents, Trademarks, Permits, Etc. The Borrower and each of its Subsidiaries owns, is licensed or otherwise has the lawful right to use, or has all permits and other approvals of Governmental Authorities, patents, trademarks, service marks, trade names, copyrights, technology, know-how and processes used in or necessary for the conduct of its business as currently conducted which are material to the financial condition, business, operations, assets and prospects of the Borrower and its Subsidiaries taken as a whole. The use of such permits and other approvals of Governmental Authorities, patents, trademarks, service marks, trade names, copyrights, technology, know-how and processes by the Borrower or any of its Subsidiaries does not infringe on the rights of any Person, subject to such claims and infringements the existence of which do not have and could not reasonably be expected to have a Material Adverse Effect. 5.20 Note Agreement Representations. The representations and warranties of the Borrower set forth in each of the Note Agreements are hereby incorporated by reference herein as if such representations and warranties were set forth herein in full. 51 5.21 Restructuring Fees. Neither the Borrower nor any Subsidiary has agreed to or has paid any amendment fee, default premium or fee or any other fee, premium or charge to any holder of Indebtedness in connection with the Restructuring Transaction other than (a) the fees and charges specifically set forth in the Wabash National Corporation Proposal for Debt Restructure letter dated April 1, 2002, (b) the fees, costs and expenses specifically provided for in the Master Amendment dated as of the Effective Date to certain of the Fleet Lease Transaction documentation, (c) the extension fee paid to National City Leasing Corporation in connection with the extension of the National City Lease Transaction, and (d) fees paid to the Administrative Agent and the Collateral Agent solely in their respective capacities as Administrative Agent or Collateral Agent. The Borrower and its Subsidiaries have disclosed to the Lenders all written fee letters or other agreements regarding the payment of the fees and charges described in this Section 5.21 paid or agreed to in connection with the Restructuring Transaction other than with respect to those fees which are described in clause (d) above. ARTICLE VI: COVENANTS The Borrower covenants and agrees that so long as any Revolving Loan Commitments are outstanding and thereafter until payment in full of all of the Obligations (other than contingent indemnity and reimbursement obligations), unless the Required Lenders shall otherwise give prior written consent: 6.1 Reporting. the Borrower shall: (A) Financial Reporting. Furnish to the Administrative Agent (which will furnish copies of the following to the Lenders): (i) Monthly Reports. As soon as practicable and in any event within thirty (30) days after the end of each monthly accounting period of the Borrower, the consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such period, and the related consolidated statements of income and cash flow for the period commencing at the end of the previous fiscal year and ending with the end of such period setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the chief financial officer or treasurer of the Borrower as having been prepared in accordance with Agreement Accounting Principles, together with a certificate of the chief financial officer or treasurer of the Borrower on behalf of the Borrower stating that no Unmatured Default or Default has occurred and is continuing or, if an Unmatured Default or Default has occurred and is continuing, a statement setting forth the details thereof and the action which the Borrower has taken and proposes to take with respect thereto; (ii) Quarterly Reports. As soon as practicable, and in any event within forty-five (45) days (or such shorter period of time as is required by the Commission for delivery of quarterly financial statements) after the end of each of the first three fiscal quarters in each fiscal year, the consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as at the end of such period and the related consolidated and consolidating statements of income and cash flow of the Borrower and its Subsidiaries for such fiscal 52 quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, certified by the chief financial officer or treasurer of the Borrower on behalf of the Borrower as fairly presenting in all material respects the consolidated and consolidating financial position of the Borrower and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in accordance with Agreement Accounting Principles, subject to normal year end adjustments. Delivery within the time period specified above of copies of the Borrower's Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Commission shall be deemed to satisfy the requirements of this Section 6.1(A)(ii). (iii) Annual Reports. As soon as practicable, and in any event within ninety (90) days (or such shorter period of time as is required by the Securities and Exchange Commission for delivery of annual financial statements) after the end of each fiscal year (including the fiscal year ended on or about December 31, 2001), (a) the consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and the related consolidated and consolidating statements of income, stockholders' equity and cash flow of the Borrower and its Subsidiaries for such fiscal year and, in comparative form the corresponding figures for the previous fiscal year and (b) an audit report on the items (other than the consolidating financial statements) listed in clause (a) hereof of independent certified public accountants of recognized national standing, which audit report shall be unqualified and shall state that such financial statements fairly present in all material respects the consolidated financial position of the Borrower and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in conformity with Agreement Accounting Principles and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards. Delivery within the time period specified above of the Borrower's Annual Report on Form 10-K for such fiscal year (together with the Borrower's annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Securities Exchange Act of 1934) prepared in accordance with the requirements therefor and filed with the Commission shall be deemed to satisfy the foregoing requirements of this Section 6.1(A)(iii), provided that the auditors' report contained therein satisfies the requirements specified in clause (b) above. The deliveries made pursuant to this clause (iii) shall be accompanied by a certificate of such accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Unmatured Default, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist, stating the nature and status thereof. (iv) Officer's Certificate. Together with each delivery of any financial statement pursuant to clauses (i), (ii) and (iii) of this Section 6.1(A), (a) an Officer's Certificate of the Borrower, substantially in the form of Exhibit E attached hereto and made a part hereof, stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof and (b) a Compliance Certificate, substantially in the form of Exhibit F attached hereto and made a part hereof, signed by the Borrower's chief financial officer or treasurer, setting forth (1) calculations 53 which demonstrate compliance with the provisions of Section 6.4 and (2) in the case of a Compliance Certificate accompanying the financial statements delivered pursuant to Section 6.1(A)(ii), a detailed description and calculation of the Excess Cash Flow for the applicable fiscal quarter then-ended; (v) Valuations and Appraisals. By no later than such date as the Collateral Agent may specify, such valuations, appraisals and certificates (all costs and expenses with respect to which shall be for the account of the Borrower) as the Collateral Agent may require with respect to the value of the Collateral, the financial condition and insurance coverage of the Borrower and its Subsidiaries and the material Contingent Obligations of the Borrower and its Subsidiaries; and (vi) Other Information. Promptly, such other information respecting the business, properties operations or financial condition of the Borrower or any of its Subsidiaries, or the Collateral, including, without limitation, schedules identifying and describing the Collateral and any dispositions thereof or any disposition of Property (and the use of the proceeds thereof), as any Lender, the Administrative Agent may from time to time reasonably request. (B) Notice of Default. Promptly upon any of the chief executive officer, chief operating officer, chief financial officer, treasurer or controller of the Borrower obtaining knowledge (i) of any condition or event which constitutes a Default or Unmatured Default, or becoming aware that any Lender or Administrative Agent has given any written notice with respect to a claimed Default or Unmatured Default under this Agreement, or (ii) that any Person has given any written notice to the Borrower or any Subsidiary of the Borrower or taken any other action with respect to a claimed default or event or condition of the type referred to in Section 7.1(e), deliver to the Administrative Agent and the Lenders an Officer's Certificate specifying (a) the nature and period of existence of any such claimed default, Default, Unmatured Default, condition or event, (b) the notice given or action taken by such Person in connection therewith, and (c) what action the Borrower has taken, is taking and proposes to take with respect thereto. (C) Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of the institution of, or written threat of, any action, suit, proceeding, governmental investigation or arbitration against or affecting the Borrower or any of its Subsidiaries or any property of the Borrower or any of its Subsidiaries not previously disclosed pursuant to Section 5.7, which action, suit, proceeding, governmental investigation or arbitration exposes, or in the case of multiple actions, suits, proceedings, governmental investigations or arbitrations arising out of the same general allegations or circumstances which expose, in the Borrower's reasonable judgment, the Borrower or any of its Subsidiaries to liability in an amount aggregating $1,000,000 or more (exclusive of claims covered by insurance policies of the Borrower or any of its Subsidiaries unless the insurers of such claims have disclaimed coverage or reserved the right to disclaim coverage on such claims and exclusive of claims covered by the indemnity of a financially responsible indemnitor in favor of the Borrower or any of its Subsidiaries (unless the indemnitor has disclaimed or reserved the right to disclaim coverage thereof)), give written notice thereof to the Administrative Agent on behalf of the Lenders and provide such other information as may be reasonably available to enable each Lender and the Administrative Agent and its counsel to evaluate such matters; and (ii) in addition to the requirements set forth in clause (i) of this 54 Section 6.1(C), upon request of the Administrative Agent or the Required Lenders, promptly give written notice of the status of any action, suit, proceeding, governmental investigation or arbitration covered by a report delivered pursuant to clause (i) above and provide such other information as may be reasonably available to it that would not result in loss of any attorney-client privilege by disclosure to the Lenders to enable each Lender and the Administrative Agent and its counsel to evaluate such matters. (D) Material Developments. Promptly (i) and in any event within three (3) calendar days after the Borrower obtaining knowledge of the occurrence of any development in the business or affairs of the Borrower or any of its Subsidiaries which has resulted in or, which is likely in the reasonable judgment of the Borrower to result in, a Material Adverse Effect, or affects the value of, or the Collateral Agent's interest in, the Collateral, taken as a whole, in any material respect, deliver to the Administrative Agent on behalf of the Lenders a statement of the chief financial officer or treasurer of the Borrower setting forth details of each such development and the action which the Borrower or such Subsidiary, as the case may be, has taken and proposes to take with respect thereto. (E) ERISA Notices. Deliver or cause to be delivered to the Administrative Agent and the Lenders, at the Borrower's expense, the following information and notices as soon as reasonably possible, and in any event: (i) (a) within ten (10) Business Days after the Borrower obtains knowledge that a Termination Event has occurred, a written statement of the chief financial officer of the Borrower describing such Termination Event and the action, if any, which the Borrower has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto and (b) within ten (10) Business Days after any member of the Controlled Group obtains knowledge that a Termination Event has occurred which could reasonably be expected to subject the Borrower to liability in excess of $1,000,000, a written statement of the chief financial officer of the Borrower describing such Termination Event and the action, if any, which the member of the Controlled Group has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto; (ii) within ten (10) Business Days after the Borrower or any of its Subsidiaries obtains knowledge that a non-exempt prohibited transaction (as defined in ERISA and the Code) has occurred, a statement of the chief financial officer of the Borrower describing such transaction and the action which the Borrower or such Subsidiary has taken, is taking or proposes to take with respect thereto; (iii) within ten (10) Business Days after the Borrower or any of its Subsidiaries receives notice of any unfavorable determination letter from the IRS regarding the qualification of a Plan under Section 401(a) of the Code, copies of each such letter; (iv) within ten (10) Business Days after the filing thereof with the IRS, a copy of each funding waiver request filed with respect to any Benefit Plan and all 55 communications received by the Borrower or a member of the Controlled Group with respect to such request; (v) within ten (10) Business Days after receipt by the Borrower or any member of the Controlled Group of the PBGC's intention to terminate a Benefit Plan or to have a trustee appointed to administer a Benefit Plan, copies of each such notice; (vi) within ten (10) Business Days after receipt by the Borrower or any member of the Controlled Group of a notice from a Multiemployer Plan regarding the imposition of withdrawal liability, copies of each such notice; (vii) within ten (10) Business Days after the Borrower or any member of the Controlled Group fails to make a required installment or any other required payment under Section 412 of the Internal Revenue Code on or before the due date for such installment or payment, a notification of such failure; and (viii) within ten (10) Business Days after the Borrower or any member of the Controlled Group knows or has reason to know that (a) a Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan. For purposes of this Section 6.1(E), the Borrower, any of its Subsidiaries and any member of the Controlled Group shall be deemed to know all facts known by the Administrator of any Plan of which the Borrower or any member of the Controlled Group or such Subsidiary is the plan sponsor. (F) Other Reports. Deliver or cause to be delivered to the Administrative Agent and the Lenders copies of all financial statements, reports and notices, if any, sent or made available generally by the Borrower to owners of ownership, membership or other equity interests in the Borrower or filed with the Commission by the Borrower, all press releases made available generally by the Borrower or any of the Borrower's Subsidiaries to the public concerning material developments in the business of the Borrower or any such Subsidiary and all notifications received from the Commission by the Borrower or its Subsidiaries pursuant to the Securities Exchange Act and the rules promulgated thereunder. (G) Environmental Notices. As soon as possible and in any event within ten (10) days after receipt by the Borrower or any of its Subsidiaries, a copy of (i) any notice or claim to the effect that the Borrower or any of its Subsidiaries is or may be liable to any Person as a result of the Release by the Borrower, any of its Subsidiaries, or any other Person of any Contaminant into the environment, and (ii) any notice alleging any violation of any Environmental, Health or Safety Requirements of Law by the Borrower or any of its Subsidiaries if, in either case, such notice or claim relates to an event which could reasonably be expected to subject the Borrower or any of its Subsidiaries to liability in excess of $5,000,000. (H) Other Information. Promptly upon receiving a request therefor from the Administrative Agent, prepare and deliver to the Administrative Agent and the Lenders such other information with respect to the business, Property, prospects, condition (financial or 56 otherwise) or results of operations of the Borrower and its Subsidiaries as from time to time may be reasonably requested by the Administrative Agent or the Administrative Agent. 6.2 Affirmative Covenants. (A) Existence, Etc. Except with respect to the inactive Subsidiaries identified on Schedule 6.2(A) hereto, the Borrower shall, and shall cause each of its Subsidiaries to, at all times maintain its existence and preserve and keep, or cause to be preserved and kept, in full force and effect its rights and franchises material to its businesses, and except that any Subsidiary of the Borrower may merge with or liquidate into the Borrower or any other Subsidiary of the Borrower, provided that the surviving entity expressly assumes any liabilities, if any, of either of such Subsidiaries with respect to the Obligations pursuant to an assumption agreement reasonably satisfactory to the Administrative Agent and provided further that the consolidated net worth of the surviving corporation is not less than the consolidated net worth of the Subsidiary with any liability with respect to the Obligations immediately prior to such merger. The Administrative Agent and the Lenders acknowledge that the Borrower intends to, and the Borrower hereby agrees to, legally dissolve by no later than sixty (60) days after the Effective Date the inactive Subsidiaries identified on Schedule 6.2(A) hereto, and the Administrative Agent and the Lenders expressly consent to such dissolution. (B) Powers. The Borrower shall, and shall cause each of its Subsidiaries to, qualify and remain qualified to do business in each jurisdiction in which the nature of its business requires it to be so qualified and where the failure to be so qualified will have or is reasonably likely to have a Material Adverse Effect. (C) Compliance with Laws, Etc. The Borrower shall, and shall cause its Subsidiaries to, (a) comply with all Requirements of Law and all restrictive covenants affecting such Person or the business, properties, assets or operations of such Person, and (b) obtain as needed all permits, licenses and franchises necessary for its operations and maintain such permits in good standing unless failure to comply or obtain could not reasonably be anticipated to have a Material Adverse Effect. (D) Payment of Taxes and Claims. The Borrower shall pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and other governmental charges imposed upon it or on any of its properties or assets or in respect of any of its franchises, business, income or property before any penalty or interest accrues thereon, and (ii) all claims (including, without limitation, claims for labor, services, materials and supplies) for sums which have become due and payable and which by law have or may become a Lien (other than a Lien permitted by Section 6.3(C)) upon any of the Borrower's or such Subsidiary's property or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, however, that no such taxes, assessments and governmental charges referred to in clause (i) above or claims referred to in clause (ii) above (and interest, penalties or fines relating thereto) need be paid if being contested in good faith by appropriate proceedings diligently instituted and conducted and if such reserve or other appropriate provision, if any, as shall be required in conformity with Agreement Accounting Principles shall have been made therefor; and provided further that no Default or Unmatured Default shall arise or occur with respect to this Section 6.2(D) unless 57 unpaid taxes, assessments, governmental charges and claims (other than those being contested pursuant to the preceding proviso) exceed $1,000,000 in the aggregate. (E) Intentionally Omitted. (F) Inspection of Property; Books and Records; Discussions. The Borrower shall permit, and cause each of the Borrower's Subsidiaries to permit, (i) any authorized representative(s) designated by either the Administrative Agent or any Lender to visit and inspect any of the properties of the Borrower or any of its Subsidiaries, to examine, audit, check and make copies of their respective financial and accounting records, books, journals, orders, receipts and any correspondence and other data relating to their respective businesses or the transactions contemplated hereby (including, without limitation, in connection with environmental compliance, hazard or liability), and to discuss their affairs, finances and accounts with their directors, officers, employees and independent certified public accountants, and (ii) permit the Collateral Agent or any of its agents or representatives to conduct a comprehensive field audit of its books, records, properties and assets, including without limitation, the Collateral, all upon reasonable notice, at such reasonable times during normal business hours, as often as may be reasonably requested and at the cost and expense of the Borrower. The Borrower shall keep and maintain, and cause each of the Borrower's Subsidiaries to keep and maintain, in all material respects, proper books of record and account in which entries in conformity with Agreement Accounting Principles shall be made of all dealings and transactions in relation to their respective businesses and activities. If a Default has occurred and is continuing, the Borrower, upon the Administrative Agent's request, shall turn over any such records to the Administrative Agent or its representatives. (G) ERISA Compliance. The Borrower shall, and shall cause each of the Borrower's U.S. Subsidiaries to, establish, maintain and operate all Plans to comply in all material respects with the provisions of ERISA, the Code, all other applicable laws, and the regulations and interpretations thereunder and the respective requirements of the governing documents for such Plans. (H) Maintenance of Properties; Insurance. The Borrower shall maintain, preserve and protect all Property that is material to the conduct of the business of the Borrower or any of its Subsidiaries and keep such Property in good repair, working order and condition and from time to time make, or cause to be made all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times in accordance with customary and prudent business practices for similar businesses; and maintain in full force and effect insurance with responsible and reputable insurance companies or associations in such amounts, on such terms and covering such risks, including fire and other risks insured against by extended coverage, as is usually carried by companies engaged in similar businesses and owning similar properties similarly situated and maintain in full force and effect public liability insurance, insurance against claims for personal injury or death or property damage occurring in connection with any of its activities or any properties owned, occupied or controlled by it, in such amounts as it shall reasonably deem necessary, and maintain such other insurance as may be required by law. The Borrower shall deliver to the Collateral Agent, by no later than thirty (30) days after the Effective Date, endorsements (y) to all "All Risk" physical damage insurance policies on all 58 of the Borrower's and its Subsidiaries' tangible personal property and assets and business interruption insurance policies naming the Collateral Agent as loss payee, and (z) to all general liability and other liability policies naming the Collateral Agent as an additional insured. In the event the Borrower or any of its Subsidiaries, at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required herein or to pay any premium in whole or in part relating thereto, then the Collateral Agent, without waiving or releasing any obligations or resulting Default hereunder, may at any time or times thereafter (but shall be under no obligation to do so) obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto which the Collateral Agent deems advisable. (I) Environmental Compliance. The Borrower and its Subsidiaries shall comply with all Environmental, Health or Safety Requirements of Law, except where noncompliance will not have or is not reasonably likely to subject the Borrower and its Subsidiaries to liability, individually or in the aggregate, in excess of $5,000,000 (excluding amounts covered by indemnity claims that are not in dispute). (J) Use of Proceeds. The Borrower shall use the proceeds of the Loans to provide funds for the working capital needs and other general corporate purposes of the Borrower and its Subsidiaries and to repay outstanding Indebtedness. The Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds of the Loans to purchase or carry any "Margin Stock" or to make any Acquisition. (K) Foreign Employee Benefit Compliance. The Borrower shall, and shall cause each of its Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Foreign Employee Benefit Plans to comply in all material respects with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Plans, except for failures to comply which, in the aggregate, would not result in liability in excess of $1,000,000. (L) Maintenance of Rights. The Borrower shall obtain and maintain, and shall cause each of its Subsidiaries to obtain and maintain, in full force and effect all licenses, franchises, permits other similar rights necessary for the operation of its business, except where the failure to obtain or maintain such rights does not have and could not reasonably be expected to have a Material Adverse Effect. (M) Conduct of Business. Subject to Sections 6.2(A) and 6.3(H), the Borrower will continue, and will cause each Subsidiary to continue, to engage primarily in the material lines of business which the Borrower and its Subsidiaries operate, respectively, as of the Effective Date. (N) Subsidiary Documentation. As soon as practicable and in any event within 30 days after any Person becomes a Domestic Subsidiary of the Borrower, the Borrower shall cause each such Person to execute and deliver a Guaranty to the Administrative Agent and Collateral Documents to the Collateral Agent and to deliver or cause to be delivered to the Administrative Agent (in the case of a Guaranty) and the Collateral Agent (in the case of any Collateral Documents) all related documentation with respect to the execution and delivery of such Guaranty and Collateral Documents by such Person that the Administrative Agent or Collateral Agent may reasonably request, including, without limitation, certified resolutions, incumbency certificates, organizational documents and legal opinions. 59 (O) Collateral Documents. The Borrower shall execute or cause to be executed: (i) on or prior to the Effective Date, (a) the Security Agreement, (b) one or more Pledge Agreements with respect to all of the Capital Stock owned by the Borrower and its Domestic Subsidiaries of each of the Domestic Subsidiaries in existence on the Effective Date, (c) Mortgages from each Loan Party, accompanied by the relevant title reports with respect to such locations as the Administrative Agent may request and (d) such vehicle title applications (other than with respect to vehicles subject to the Fleet Lease Transaction or the National City Lease Transaction) as the Administrative Agent may request, accompanied by the relevant vehicle titles and fees to be filed with the applicable Governmental Authorities to reflect the Collateral Agent as lienholder; (ii) (x) within five (5) Business Days after any Subsidiary becoming a Domestic Subsidiary, a Pledge Agreement (or supplement thereto) with respect to all of the Capital Stock of such Subsidiary owned by the Borrower and its Domestic Subsidiaries and (y) within thirty (30) days after any Subsidiary becoming a First Tier Foreign Subsidiary, a pledge agreement (or supplement thereto) or share mortgage in favor of the Collateral Agent for the benefit of the Secured Parties with respect to the lesser of (i) 100% (or, in respect of any First Tier Foreign Subsidiary, 65% so long as a 100% pledge would cause such First Tier Foreign Subsidiary's accumulated and undistributed earnings and profits to be deemed to be repatriated to the Borrower or a Domestic Subsidiary for U.S. federal income tax purposes) of all the outstanding Capital Stock of each First Tier Foreign Subsidiary and (ii) all of the outstanding Capital Stock of each First Tier Foreign Subsidiary currently or hereafter owned by the Borrower and its Domestic Subsidiaries; and provided that no such pledge of the Capital Stock of a First Tier Foreign Subsidiary shall be required hereunder to the extent such pledge is prohibited by applicable law or the Collateral Agent and its counsel reasonably determine that such pledge would not provide material Collateral for the benefit of the Secured Parties pursuant to legally binding, valid and enforceable Pledge Agreements; (iii) within five (5) Business Days after any Subsidiary becoming a Guarantor, a supplement to the Security Agreement (in the form attached thereto), and the other documents required by the Administrative Agent in connection therewith; (iv) within thirty (30) days after the Borrower or any Domestic Subsidiary acquires any fee interest in real property, a Mortgage executed by such acquiring Person, accompanied by such title reports, title insurance, surveys, appraisals and environmental reports (collectively, "Real Estate Instruments") as are requested by the Administrative Agent; (v) within ten (10) days after any Loan Party acquires an ownership interest in any vehicle and other item of rolling stock subject to a certificate of title law, to the extent so required by the Administrative Agent, an appropriate vehicle title application (other than with respect to a vehicle subject to the Fleet Lease Transaction or the National City Lease Transaction) accompanied by the relevant vehicle title and fee to be filed with the applicable Governmental Authority to reflect the Collateral Agent as lienholder with respect to such vehicle or other item of rolling stock; 60 and the Borrower shall deliver to the Collateral Agent all such Pledge Agreements, Guarantees and other Collateral Documents, together with appropriate corporate resolutions and other documentation (including opinions, UCC financing statements, real estate title insurance policies, environmental reports, the stock certificates representing the Capital Stock subject to such pledge, stock powers with respect thereto executed in blank, and such other documents as shall be reasonably requested to perfect the Lien of such pledge) in each case in form and substance reasonably satisfactory to the Collateral Agent; provided that, with respect to the pledge of Capital Stock in First Tier Foreign Subsidiaries in existence on the date hereof and vehicles and real estate owned by the Borrower or any of its Domestic Subsidiaries on the date hereof, such relevant Pledge Agreements, vehicle title applications and Real Estate Instruments (to the extent not being delivered on the Effective Date) are required to be delivered to the Collateral Agent at the times and in the manner required in writing by the Administrative Agent. In addition to the terms and provisions set forth hereinabove, the Borrower shall, and shall cause its Subsidiaries to, within the time periods set forth below (to the extent such actions have not occurred on or prior to the Effective Date), cause the following to occur: (1) with respect to the Layfayette Property: (a) within seven (7) days of the Effective Date, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; (b) within seven (7) days of the Effective Date, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the Lafayette Property; (c) within sixty (60) days of the Effective Date, deliver a Phase I Environmental Assessment addressed to and in form and substance reasonably satisfactory to the Administrative Agent, and prepared by an environmental engineering firm reasonably acceptable to the Administrative Agent; (d) within seven (7) days of the Effective Date, deliver a legal opinion in form and substance satisfactory to the Administrative Agent from Baker & Daniels regarding such Mortgage; (e) within seventy-five (75) days of the Effective Date, deliver an ALTA plat of survey prepared by a surveyor licensed in the State of Indiana with respect to the Layfayette Property; and (f) within sixty (60) days of delivery of the survey, cause any necessary adjustments or modifications to the Mortgage or the title insurance policy as may be reasonably required to reflect the survey and the facts set forth therein on the title insurance policy and the Mortgage; (2) with respect to each Material Real Estate Property: (a) within fifteen (15) days of the Effective Date, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; (b) within thirty (30) days of the Effective Date, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the such property; (c) within sixty (60) days of the Effective Date, deliver a Phase I Environmental Assessment addressed to and in form and substance reasonably satisfactory to the Administrative Agent, and prepared by an environmental engineering firm reasonably acceptable to the Administrative Agent; (d) within thirty (30) days of the Effective Date, deliver a legal opinion in form and substance satisfactory to the Administrative Agent from special local counsel reasonably satisfactory to the Administrative Agent regarding such Mortgage; (e) within seventy-five (75) days of the Effective Date, deliver an ALTA plat of survey prepared by a surveyor licensed in the state where such property is located with respect to such property; and (f) within sixty (60) days of delivery of the survey, cause any necessary adjustments or modifications to the Mortgage or the 61 title insurance policy as may be reasonably required to reflect the survey and the facts set forth therein on the title insurance policy and the Mortgage; (3) with respect to each Significant Real Estate Property: (a) within forty-five (45) days of the Effective Date, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; and (b) within forty-five (45) days of the Effective Date, deliver a Lender's 1970 ALTA form of title insurance policy (or executed Pro-Forma thereof) in favor of the Collateral Agent in the amount of the net book value of the such property; (4) with respect to all other real property owned by the Borrower or its Domestic Subsidiaries: (a) within sixty (60) days of the Effective Date, deliver an executed Mortgage and record and/or file such Mortgage with the local recorder of deeds/registrar of titles; and (5) with respect to all properties which are anticipated to be included in the SunTrust Sale and Leaseback, the Borrower agrees that if such SunTrust Sale and Leaseback is not consummated on or prior to December 31, 2002, or if any property which was anticipated to be included in such SunTrust Sale and Leaseback and is not so included, the Borrower shall comply or cause its Domestic Subsidiaries to comply with the terms and provisions of this Section 6.2(O) with respect to each such property on or prior to December 31, 2002 in the case of all such properties if the SunTrust Sale and Leaseback is not consummated and within forty-five (45) days from the date any property is no longer anticipated to be included in the SunTrust Sale and Leaseback. (P) Restructuring Consultant. The Borrower shall engage and retain, until such time as the Required Lenders (as defined in the Intercreditor Agreement) so require, a restructuring consulting firm acceptable to the Required Lenders (as so defined) and the Borrower shall cause such restructuring consulting firm to deliver such financial reports, statements and analysis to any Lender as such Lender may reasonably request from time to time. The Administrative Agent and each Lender hereby acknowledges that the Borrower has engaged and retained PricewaterhouseCoopers as its restructuring consultant and agrees that PricewaterhouseCoopers is acceptable to the Administrative Agent and each Lender. (Q) Chief Restructuring Officer. In the event the Borrower has not appointed a full-time permanent chief executive officer by September 30, 2002, the Borrower shall appoint and retain, until a full-time permanent chief executive officer of the Borrower is appointed, a chief restructuring officer with such qualifications and experience as are acceptable to the Required Lenders (as defined in the Intercreditor Agreement), which officer shall report directly to the Borrower's board of directors. The Borrower shall vest such officer with control over the operations of the Borrower and its Subsidiaries. Furthermore, until a full-time permanent chief executive officer of the Borrower is appointed, the Borrower hereby agrees to furnish to the Administrative Agent, promptly and in any event within (i) three (3) calendar days after the Borrower obtaining knowledge thereof, a statement of the chief financial officer or treasurer of the Borrower setting forth details of any and all material developments in the Borrower's search for a full-time permanent chief executive officer and (ii) fifteen (15) days after the end of each calendar month, a statement of the chief financial officer or treasurer of the Borrower setting forth details of any and all steps the Borrower proposes to take with respect to such material developments. 62 6.3 Negative Covenants. (A) Indebtedness. Neither the Borrower nor any of its Subsidiaries shall directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except: (a) the Obligations; (b) Permitted Existing Indebtedness; (c) Indebtedness arising from intercompany loans from the Borrower or any Subsidiary to any Subsidiary so long as intercompany loans from the Borrower or any Domestic Subsidiary to a Foreign Subsidiary shall not exceed an aggregate of $5,000,000 during the term of this Agreement; (d) Indebtedness with respect to surety, appeal and performance bonds obtained by the Borrower or any of its Subsidiaries in the ordinary course of business; (e) Indebtedness constituting Contingent Obligations permitted by Section 6.3(E); (f) unsecured Indebtedness and other liabilities incurred in the ordinary course of business and consistent with past practice, but not incurred through the borrowing of money or the obtaining of credit (other than customary trade terms); (g) Indebtedness evidenced by the Note Agreements, Senior Notes and Related Notes; (h) Indebtedness incurred in connection with the Receivables Purchase Documents; provided that Receivables Facility Attributed Indebtedness incurred in connection therewith does not exceed $110,000,000 in the aggregate at any time; and (i) other unsecured Indebtedness in an aggregate principal amount not exceeding $3,000,000 at any time outstanding. (B) Sales of Assets. Except in connection with the SunTrust Sale and Leaseback and the sale of any of the assets and properties or consummation of the transactions identified on Schedule 6.3(B), neither the Borrower nor any of its Subsidiaries shall sell, assign, transfer, lease, convey or otherwise dispose of any property, whether now owned or hereafter acquired, or any income or profits therefrom, or enter into any agreement to do so, except: (i) sales of inventory in the ordinary course of business; (ii) the disposition of obsolete equipment in the ordinary course of business; (iii) Permitted Receivables Transfer; (iv) sales by Apex Trailer Leasing & Rentals, L.P. in the ordinary course of business of lease and other finance contract receivables and equipment subject to lease, if 63 such transaction (a) is for not less than fair market value and (b) when combined with all other such sales during the then current fiscal year represents disposition of not greater than 50% of Apex Trailer Leasing & Rentals, L.P.'s Tangible Assets at the end of the immediately preceding fiscal year; (v) sales, assignments, transfers, leases, conveyances or other dispositions of other assets (but not including assets of Apex Trailer Leasing & Rentals, L.P.) if such transaction (a) is for not less than fair market value, and (b) when combined with all such other sales, assignments, transfers, conveyances or other dispositions during the then current fiscal year represents the disposition of assets with a fair market value of not greater than $5,000,000; and (vi) transfers of assets by the Borrower or any Subsidiary to any Subsidiary so long as (i) in the case of a transferee which is a Domestic Subsidiary, the security interests granted pursuant to the Collateral Documents in the events so transferred shall remain in full force and effect and perfected and (ii) transfers of assets by the Borrower or any Domestic Subsidiary to any Foreign Subsidiary shall not exceed an aggregate of $1,000,000 during the term of this Agreement. (C) Liens. Neither the Borrower nor any of its Subsidiaries shall directly or indirectly create, incur, assume or permit to exist any Lien on or with respect to any of their respective property or assets except: (i) Permitted Existing Liens; (ii) Customary Permitted Liens; (iii) purchase money Liens (including the interest of a lessor under a Capitalized Lease and Liens to which any property is subject at the time of the acquisition thereof by the Borrower or one of its Subsidiaries) securing permitted purchase money Indebtedness; provided that such Liens shall not apply to any property of the Borrower or its Subsidiaries other than that purchased or subject to such Capitalized Lease; (iv) Liens arising in connection with the Permitted Receivables Transfer; (v) Environmental Liens securing liabilities, claims, costs or damages not exceeding $5,000,000 in the aggregate; (vi) Liens created by the Loan Documents; and (vii) Liens granted by a Foreign Subsidiary on Property located in Canada to the extent securing Indebtedness permitted by Section 6.3(A)(b). In addition, neither the Borrower nor any or its Subsidiaries shall, after the date hereof, become a party to any agreement, note, indenture or other instrument (other than the Intercreditor Agreement), or take any other action, which would prohibit the creation of a Lien on any of its properties or other assets in favor of the Collateral Agent for the benefit of itself and the Secured Parties as collateral for the Secured Obligations; provided that any agreement, note, indenture or 64 other instrument in connection with permitted purchase money Indebtedness (including Capitalized Lease Obligations) may prohibit the creation of a Lien in favor of the Administrative Agent for the benefit of itself and the Lenders on the items of property obtained with the proceeds of such permitted purchase money Indebtedness; and provided further that the Receivables Purchase Documents may prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of itself and the other Secured Parties on the assets of WNC and on the "Transferred Assets" (as defined in the Receivables Sale Agreement) of the Originators. (D) Investments. Neither the Borrower nor any of its Subsidiaries shall directly or indirectly make or own any Investment except: (i) Investments in Cash Equivalents; (ii) Permitted Existing Investments; (iii) Investments received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (iv) Investments consisting of deposit accounts maintained by the Borrower or any of its Subsidiaries in connection with their cash management systems; (v) Investments with respect to Indebtedness permitted pursuant to Section 6.3(A)(c); (vi) Existing Investments in any Subsidiaries; (vii) Investments consisting of minority interests and joint ventures and loans or advances to such entities, provided that at the time any such Investment is made the amount of all Investments under this clause (vii) (including such new Investment, and including all Permitted Existing Investments that are of the type covered by this clause (vii)) does not exceed $5,000,000 at such time; (viii) Investments in WNC required in connection with the Receivables Purchase Documents; and (ix) Investments in connection with Permitted Acquisitions. (E) Contingent Obligations. Neither the Borrower nor any of its Subsidiaries shall directly or indirectly create or become or be liable with respect to any Contingent Obligation, except: (i) recourse obligations resulting from endorsement of negotiable instruments for collection in the ordinary course of business; (ii) Permitted Existing Contingent Obligations and any extensions, renewals or replacements thereof, provided that any such extension, renewal or replacement is not greater than the Indebtedness under, and shall be on terms no less favorable to the Borrower or such Subsidiary than the terms of, the Permitted Existing Contingent Obligation being extended, renewed or replaced; (iii) obligations, warranties, and indemnities, not relating to Indebtedness of any Person, which have been or are undertaken or made in the ordinary course of business and not for the benefit of or in favor of an Affiliate of the Borrower or such 65 Subsidiary; (iv) Contingent Obligations of the Borrower or any of its Subsidiaries with respect to any Indebtedness permitted by this Agreement; and (v) Contingent Obligations with respect to surety, appeal and performance bonds obtained by the Borrower or any Subsidiary in the ordinary course of business. (F) Acquisitions. Neither the Borrower nor any of its Subsidiaries shall make any Acquisition other than a Permitted Acquisition. (G) Transactions with Shareholders or Affiliates. Neither the Borrower nor any of its Subsidiaries shall directly or indirectly enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder or holders of any Equity Interests of the Borrower, or with any Affiliate of the Borrower which is not its Subsidiary, on terms that are less favorable to the Borrower or its Subsidiaries, as applicable, than those that might be obtained in an arm's length transaction at the time from Persons who are not such a holder or Affiliate. (H) Restriction on Fundamental Changes. Neither the Borrower nor any of its Subsidiaries shall enter into any merger or consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell, transfer or otherwise dispose of, in one transaction or series of transactions, all or substantially all of the Borrower's or any such Subsidiary's business or property, whether now or hereafter acquired, except transactions permitted under Section 6.3(B) and except that any Subsidiary of the Borrower may merge with or liquidate into the Borrower or any other Subsidiary of the Borrower, provided that the surviving entity expressly assumes any liabilities, if any, of either of such Subsidiaries with respect to the Obligations pursuant to an assumption agreement reasonably satisfactory to the Administrative Agent and provided further that the consolidated net worth of the surviving corporation is not less than the consolidated net worth of the Subsidiary with any liability with respect to the Obligations immediately prior to such merger. (I) Margin Regulations. Neither the Borrower nor any of its Subsidiaries shall use all or any portion of the proceeds of any credit extended under this Agreement to purchase or carry Margin Stock. (J) ERISA. The Borrower shall not: (i) engage, or permit any of its Subsidiaries to engage, in any prohibited transaction described in Sections 406 of ERISA or 4975 of the Code for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the DOL; (ii) permit to exist any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of the Internal Revenue Code), with respect to any Benefit Plan, whether or not waived; (iii) fail, or permit any Controlled Group member to fail, to pay timely required contributions or annual installments due with respect to any waived funding deficiency to any Benefit Plan; 66 (iv) terminate, or permit any Controlled Group member to terminate, any Benefit Plan which would result in any liability of the Borrower or any Controlled Group member under Title IV of ERISA; (K) Fiscal Year. Neither the Borrower nor any of its consolidated Subsidiaries shall change its fiscal year for accounting or tax purposes from a period consisting of the 12-month period ending on December 31 of each calendar year. (L) Prepayment of Other Indebtedness. Neither the Borrower nor any of its Subsidiaries shall make any optional prepayment, redemption, repurchase or defeasance of any Indebtedness of the Borrower or any such Subsidiary which would, in accordance with Agreement Accounting Principles, constitute long-term Indebtedness, other than the Obligations, any intercompany indebtedness permitted by Section 6.3(A)(c) and other Indebtedness described on Schedule 6.3(L) hereto. (M) Limitations on Restrictive Agreements. Neither the Borrower nor any of its Subsidiaries shall enter into, or suffer to exist, any agreement (other than the Note Agreements) with any Person which, directly or indirectly, prohibits or limits the ability of any Subsidiary to (i) pay dividends or make other distributions to the Borrower or prepay any Indebtedness owed to Borrower or (ii) transfer any of its properties or assets to the Borrower (other than with respect to assets subject to Liens permitted by Section 6.3(C)). (N) Leases. Except in connection with the SunTrust Sale and Leaseback, the Fleet Lease Transaction and the National City Lease Transaction, create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any obligation as lessee for the rental or hire of any real or personal property, except: (i) leases existing on the date of this Agreement and any extensions or renewals thereof, but no increase in the amount payable thereunder; and (ii) leases (other than Capitalized Leases or leases constituting Off-Balance Sheet Liabilities) which do not in the aggregate require the Borrower and its Subsidiaries on a consolidated basis to make payments (including taxes, insurance, maintenance and similar expenses which the Borrower or any Subsidiary is required to pay under the terms of any lease) at any time during the term of this Agreement in excess of $3,500,000. (O) Restricted Payments. Neither the Borrower nor any of its Subsidiaries shall declare or make any Restricted Payment; provided that (a) the foregoing shall not operate to restrict, prohibit or prevent (1) lease payments made by the Borrower or any Subsidiary in accordance with the terms and conditions of the Fleet Lease Transaction and the National City Lease Transaction, (2) the payment of proceeds arising from, and upon, the disposition of Property subject to and in accordance with the terms and conditions of the Fleet Lease Transaction and the National City Lease Transaction and (3) distributions to the Originators in connection with the Permitted Receivables Transfer and (b) the Borrower may, commencing with the March 15, 2003 scheduled dividend, resume (but may not make any payments that were previously due and not paid) making the regularly scheduled 6% dividends on the Fruehauf Preferred Stock on a quarterly basis in an amount per quarter not to exceed 6% of the Stated Value Per Share (as defined in the Fruehauf Preferred Stock) so long as (i) no Unmatured Default or Default shall have occurred and be continuing hereunder, (ii) no Unmatured Default or Default would have occurred under the financial covenants set forth in clause (1), (2), (3) and (4) below if such 67 financial covenants had been in full force and effect from the Effective Date to the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock and (iii) the Borrower has appointed a full-time permanent chief executive officer as of the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock. For purposes of this Section 6.3(O), on and prior to the date of the declaration of any proposed Restricted Payment on the Fruehauf Preferred stock pursuant to this Section 6.3(O), the Borrower shall have, and shall have caused each of its Subsidiaries to have, complied with the following financial covenants set forth in clauses (1), (2), (3) and (4) below: (1) (A) If the Borrower shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Borrower shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below: Minimum Consolidated Fiscal Quarter Ending Tax Adjusted Equity --------------------- ------------------- June 30, 2002 $106,376,000 September 30, 2002 $113,535,000 December 31, 2002 $107,267,000 March 31, 2003 $ 99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 $ 96,504,000 (B) If the Borrower shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Borrower shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below: Minimum Consolidated Fiscal Quarter Ending Equity --------------------- -------------------- June 30, 2002 $101,492,000 September 30, 2002 $110,961,000 December 31, 2002 $100,966,000 March 31, 2003 $ 87,882,000 June 30, 2003 $ 90,461,000 September 30, 2003 $ 94,751,000 December 31, 2003 $ 84,077,000 (2) (A) The Borrower shall not permit the Interest Coverage Ratio as of the last day of each of the calendar months specified below, for the cumulative period commencing on April, 2002 and ending on the last day of such calendar month, to be less than the applicable "Minimum Interest Coverage Ratio" specified below: 68 Minimum Interest Fiscal Quarter Ending Coverage Ratio --------------------- ---------------- June 30, 2002 1.50 to 1 September 30, 2002 1.50 to 1 December 31, 2002 1.25 to 1 (B) The Borrower shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Borrower specified below, for the period of four consecutive fiscal quarters then ending, to be less than the applicable "Minimum Interest Coverage Ratio" specified below: Minimum Interest Fiscal Quarter Ending Coverage Ratio --------------------- -------------- March 31, 2003 1.25 to 1 June 30, 2003 1.25 to 1 September 30, 2003 1.25 to 1 December 31, 2003 1.25 to 1 (3) The Borrower shall, as of the last day of each of the calendar months specified below, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such calendar month, at an amount not less than the applicable "Minimum Cumulative Consolidated EBITDA" specified below: Minimum Cumulative Consolidated Month Ending EBITDA ------------ ----------------- April 30, 2002 $ 3,841,000 May 31, 2002 $ 8,389,000 June 30, 2002 $14,722,000 July 31, 2002 $22,084,000 August 31 2002 $28,732,000 September 30, 2002 $33,110,000 October 31, 2002 $36,753,000 November 30, 2002 $37,818,000 December 31, 2002 $37,856,000 (4) The Borrower shall, as of the last day of each of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending: 69 Minimum Rolling 12 Month Consolidated Month Ending EBITDA ------------ ------------------ January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000 (P) Hedging Obligations. Enter into any interest rate, commodity or foreign currency exchange, swap, collar, cap or similar agreements evidencing Hedging Obligations, other than interest rate, foreign currency or commodity exchange, swap, collar, cap or similar agreements entered into by the Borrower pursuant to which the Borrower has hedged its actual or forecasted interest rate, foreign currency or commodity exposure. Such permitted hedging agreements entered into by the Borrower and any Lender or any affiliate of any Lender to hedge floating interest rate risk in an aggregate notional amount not to exceed at any time an amount equal to the outstanding balance of the Term Loans and the principal Indebtedness under the Note Agreements at such time are sometimes referred to herein as "INTEREST RATE AGREEMENTS". (Q) Sales and Leasebacks. Neither the Borrower nor any of its Subsidiaries shall become liable, directly, by assumption or by Contingent Obligation, with respect to any lease, whether an operating lease or a Capitalized Lease, of any Property (whether real or personal or mixed) (i) which it or one of its Subsidiaries sold or transferred or is to sell or transfer to any other Person, or (ii) which it or one of its Subsidiaries intends to use for substantially the same purposes as any other Property which has been or is to be sold or transferred by it or one of its Subsidiaries to any other Person in connection with such lease, unless (a) in either case the sale involved is not prohibited under Section 6.3(B) and the lease involved is not prohibited under Section 6.3(A) or (b) such sale and leaseback transaction is the SunTrust Sale and Leaseback. The parties hereto acknowledge and agree that (1) the foregoing shall not operate to restrict, prohibit or prevent the Fleet Lease Transaction and the National City Lease Transaction and (2) the Borrower and its Subsidiaries are permitted to dispose of Property pursuant to the SunTrust Sale and Leaseback and the Collateral Agent is authorized to release its Liens on such Property in connection with such disposition. (R) Issuance of Disqualified and Preferred Stock. Neither the Borrower nor any of its Subsidiaries shall issue any Disqualified Stock. The Borrower shall not issue any new shares of preferred stock and shall not permit any Subsidiary to issue any shares of preferred stock. 70 (S) Corporate Documents. Neither the Borrower nor any of its Subsidiaries shall amend, modify or otherwise change any of the terms or provisions in any of their respective constituent documents as in effect on the date hereof in any manner materially adverse to the ability of the Borrower or any of its Subsidiaries to perform their respective obligations under the Loan Documents, without the prior written consent of the Required Lenders. (T) Other Indebtedness. The Borrower shall not amend, modify or supplement, or permit any Subsidiary to amend, modify or supplement (or consent to any amendment, modification or supplement of), any document, agreement or instrument evidencing the Note Agreements, the Senior Notes, the Related Notes, the National City Lease Transaction, the Fleet Lease Transaction, the Permitted Receivables Transfer or Subordinated Indebtedness (or any replacements, substitutions or renewals thereof) or pursuant to which any such Indebtedness is issued where such amendment, modification or supplement provides for the following or which has any of the following effects: (i) increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest; (ii) shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions; (iii) shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness; (iv) increases the rate of interest accruing on such Indebtedness; (v) provides for the payment of additional fees or increases existing fees; (vi) amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Borrower or a Subsidiary of the Borrower from taking certain actions) in a manner which is more onerous or more restrictive to the Borrower (or any Subsidiary of the Borrower) or which is otherwise materially adverse to the Borrower and/or the Lenders or, in the case of adding covenants, which places additional restrictions on the Borrower (or a Subsidiary of the Borrower) or which requires the Borrower or any such Subsidiary to comply with more restrictive covenants than the covenants set forth herein or which requires the Borrower to better its financial performance from that set forth in the financial covenants set forth herein; (vii) amends, modifies or adds any covenant in a manner which, when taken as a whole, is materially adverse to the Borrower and/or the Lenders; (viii) amends, modifies or supplements any subordination provisions thereof; or (ix) amends or modifies the limitations on transfer provided therein. (U) No Changes to Standard Warranty. The Borrower shall not, and shall cause its Subsidiaries to not, make any material changes to the warranty policies of the Borrower and its Subsidiaries in effect on the date of this Agreement. 71 (V) Prohibition Against Trade-In Value Guaranties. The Borrower shall not, and shall cause its Subsidiaries to not, make any guarantee of trade-in values of trailers beyond six months in duration. 6.4 Financial Covenants. The Borrower shall, and shall cause each of its Subsidiaries to, comply with the following: (A) Minimum Consolidated Tax Adjusted Equity. If the Borrower shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Borrower shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below: Minimum Consolidated Tax Fiscal Quarter Ending Adjusted Equity --------------------- ------------------------ March 31, 2003 $ 99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 $ 96,504,000 (B) Minimum Consolidated Equity. If the Borrower shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Borrower shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below: Minimum Consolidated Fiscal Quarter Ending Equity --------------------- -------------------- March 31, 2003 $87,882,000 June 30, 2003 $90,461,000 September 30, 2003 $94,751,000 December 31, 2003 $84,077,000 (C) Maximum Leverage Valuation Ratio. The Borrower shall not permit, as of the last day of each of the fiscal quarters specified below, the Leverage Valuation Ratio to exceed the applicable "Maximum Leverage Valuation Ratio" specified below: Maximum Leverage Fiscal Quarter Ending Valuation Ratio --------------------- ---------------- June 30, 2002 0.95 to 1 September 30, 2002 0.95 to 1 December 31, 2002 0.95 to 1 March 31, 2003 0.85 to 1 June 30, 2003 0.80 to 1 September 30, 2003 0.80 to 1 December 31, 2003 0.75 to 1 72 (D) Minimum Consolidated EBITDA. (i) The Borrower shall, as of the last day of each of the fiscal quarters of the Borrower occurring in calendar year 2002, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such fiscal quarter, at an amount not less than $(20,000,000). (ii) The Borrower shall, as of the last day of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending: Minimum Rolling 12 Month Month Ending Consolidated EBITDA ------------ ------------------------ January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000 (E) Minimum Interest Coverage Ratio. The Borrower shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Borrower (commencing with the fiscal quarter ending on or about March 31, 2003), for the period of four consecutive fiscal quarters then ending, to be less than 1.25 to 1. (F) Maximum Capital Expenditures. The Borrower will not, and will not permit any Subsidiary to, expend for Capital Expenditures during any fiscal year of the Borrower and its Subsidiaries, in excess of $6,000,000 in the aggregate for the Borrower and its Subsidiaries. (G) Maximum Finance Contracts. The Borrower will not, and will not permit any Subsidiary to, enter into any new Finance Contract if and to the extent that the sum of such Finance Contract (a) when added to the aggregate amount of all Finance Contracts entered into by the Borrower or any of its Subsidiaries during the twelve (12) month period that commences on the Effective Date exceeds $5,000,000 or (b) when added to the aggregate amount of all Finance Contracts entered by the Borrower or any of its Subsidiaries during the twelve (12) month period that commences on the first (1st) anniversary of the Effective Date exceeds $5,000,000. 73 ARTICLE VII: DEFAULTS 7.1 Defaults. Each of the following occurrences shall constitute a Default under this Agreement: (a) Failure to Make Payments When Due. The Borrower shall (i) fail to pay when due any of the Obligations consisting of principal with respect to the Loans or (ii) shall fail to pay within three (3) Business Days of the date when due any of the other Obligations under this Agreement or the other Loan Documents. (b) Breach of Certain Covenants. The Borrower shall fail duly and punctually to perform or observe any agreement, covenant or obligation binding on the Borrower under: (i) Sections 6.1(C), 6.1(D), 6.1(E), 6.1(F), 6.1(G), 6.2(B), 6.2(C) or 6.2(F) and such failure shall continue unremedied for fifteen (15) days; (ii) Section 6.1(A) or 6.1(B) or Section 6.2(N) or Section 6.2(O) or Section 6.2(P) or Section 6.2(Q) and such failure shall continue unremedied for five (5) Business Days; or (iii) Section 6.3 or 6.4. (c) Breach of Representation or Warranty. Any representation or warranty made or deemed made by the Borrower to the Collateral Agent, the Administrative Agent or any Lender herein or by the Borrower or any of its Subsidiaries in any of the other Loan Documents or in any statement or certificate at any time given by any such Person pursuant to any of the Loan Documents shall be false or misleading in any material respect on the date as of which made (or deemed made). (d) Other Defaults. The Borrower shall default in the performance of or compliance with any term contained in this Agreement (other than as covered by paragraphs (a), (b) or (c) of this Section 7.1), or the Borrower or any of its Subsidiaries shall default in the performance of or compliance with any term contained in any of the other Loan Documents, and such default shall continue for thirty (30) days after the earlier of (i) notice from the Administrative Agent or the Collateral Agent or (ii) the date on which the Borrower knew of such default or should have known of such default exercising reasonable diligence. (e) Default as to Other Indebtedness. Any of the Borrower or any of its Subsidiaries shall fail to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) with respect to any Indebtedness (other than the Obligations) the outstanding principal amount of which Indebtedness is in excess of $2,000,000; or any breach, default or event of default shall occur, or any other condition shall exist under any instrument, agreement or indenture pertaining to any such Indebtedness, if the effect thereof is to cause an acceleration, mandatory redemption, a requirement that the Borrower or any such Subsidiary offer to purchase such Indebtedness or other required repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness to accelerate the maturity of any such Indebtedness or require a redemption or other repurchase of such Indebtedness; or any such Indebtedness shall be otherwise declared to be due and payable (by acceleration or otherwise) or 74 required to be prepaid, redeemed or otherwise repurchased by the Borrower or any of its Subsidiaries (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof. (f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) An involuntary case shall be commenced against the Borrower or any of its Subsidiaries and the petition shall not be dismissed, stayed, bonded or discharged within sixty (60) days after commencement of the case; or a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Borrower or any of its Subsidiaries in an involuntary case, under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or any other similar relief shall be granted under any applicable federal, state, local or foreign law. (ii) A decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Borrower or any of its Subsidiaries or over all or a substantial part of the property of the Borrower or any of its Subsidiaries shall be entered; or an interim receiver, trustee or other custodian of the Borrower or any of its Subsidiaries or of all or a substantial part of the property of the Borrower or any of its Subsidiaries shall be appointed or a warrant of attachment, execution or similar process against any substantial part of the property of the Borrower or any of its Subsidiaries shall be issued and any such event shall not be stayed, dismissed, bonded or discharged within sixty (60) days after entry, appointment or issuance. (g) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower or any of its Subsidiaries shall (i) commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, (iii) consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property, (iv) make any assignment for the benefit of creditors or (v) take any corporate, partnership or comparable action to authorize any of the foregoing. (h) Judgments and Attachments. Any money judgment(s) (other than a money judgment covered by insurance as to which the insurance company has not disclaimed or reserved the right to disclaim coverage), writ or warrant of attachment, or similar process against any of the Borrower or any of its Subsidiaries or any of their respective assets involving in any single case or in the aggregate an amount in excess of $1,000,000 is (are) entered and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event later than fifteen (15) days prior to the date of any proposed sale thereunder. (i) Dissolution. Any order, judgment or decree shall be entered against the Borrower or any of its Subsidiaries decreeing its involuntary dissolution or split up and such order shall remain undischarged and unstayed for a period in excess of sixty (60) days; or the Borrower or any of its Subsidiaries shall otherwise dissolve or cease to exist except as specifically permitted 75 by this Agreement unless the dissolving entity is a limited liability company which elects to continue its existence. (j) Loan Documents; Failure of Security. At any time, for any reason, (i) any Loan Document as a whole that materially affects the ability of the Administrative Agent, the Collateral Agent or any of the Lenders to enforce the Obligations against the Borrower or any Guarantor or enforce their rights against the Collateral ceases to be in full force and effect or (ii) any Loan Party seeks to repudiate its obligations thereunder or (iii) after the execution and delivery of the Collateral Documents, except to the extent permitted by the terms thereof, the Collateral Documents, shall cease to create a valid and perfected first priority Lien subject only to Liens permitted by the Loan Documents in any of the Collateral purported to be covered thereby or (iv) any title insurance coverage in respect of any Material portion of the Collateral is disavowed or become ineffective. (k) Termination Event. Any Termination Event occurs which the Required Lenders believe is reasonably likely to subject the Borrower or any of its Subsidiaries to liability in excess of $1,000,000. (l) Waiver of Minimum Funding Standard. If the plan administrator of any Plan applies under Section 412(d) of the Code for a waiver of the minimum funding standards of Section 412(a) of the Code and any Lender believes the substantial business hardship upon which the application for the waiver is based could reasonably be expected to subject either the Borrower or any Controlled Group member to liability in excess of $1,000,000. (m) Change of Control. A Change of Control shall occur. (n) Environmental Matters. The Borrower or any of its Subsidiaries shall be the subject of any proceeding or investigation pertaining to (i) the Release by the Borrower or any of its Subsidiaries of any Contaminant into the environment, (ii) the liability of any of the Borrower or any of its Subsidiaries arising from the Release by any other Person of any Contaminant into the environment, or (iii) any violation of any Environmental, Health or Safety Requirements of Law by the Borrower or any of its Subsidiaries, which, in any case, has or is reasonably likely to subject the Borrower or any of its Subsidiaries to liability individually or in the aggregate in excess of $5,000,000 (exclusive of liabilities with respect to which the Borrower is maintaining reserves as of the date hereof in accordance with Agreement Accounting Principles). (o) Collateral Documents. The Borrower or any Subsidiary shall fail to comply with any of the terms or provisions of any Collateral Document for five (5) Business Days, subject to any applicable cure periods contained therein, after notice of such non-compliance from the Collateral Agent. (p) Interest Rate Agreements. Nonpayment by the Borrower or any Subsidiary of any obligation under any Interest Rate Agreement or the breach by the Borrower or any Subsidiary of any term, provision or condition contained in any such Interest Rate Agreement. (q) Material Adverse Effect. A Material Adverse Effect shall occur. 76 (r) Intercreditor Agreement. The intercreditor provisions of the Intercreditor Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, any Person (including any Secured Party) shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations hereunder shall for any reason be subordinated or shall not have the priority contemplated by this Agreement and the Intercreditor Agreement. A Default shall be deemed "continuing" until cured or until waived in writing in accordance with Section 8.3. ARTICLE VIII: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES 8.1 Remedies (a) Termination of Revolving Loan Commitments; Acceleration. If any Default described in Section 7.1(f) or 7.1(g) occurs with respect to the Borrower, the obligations of the Revolving Lenders to make Revolving Loans hereunder and the obligation of the Issuing Lender to issue Revolver Letters of Credit hereunder shall automatically terminate and the Obligations shall immediately become due and payable without any election or action on the part of the Administrative Agent, any Lender or the Issuing Lender. If any other Default occurs, (i) the Lenders with Revolving Loan Pro Rata Shares greater than fifty percent (50%) may terminate or suspend the obligations of the Revolving Lenders to make Revolving Loans hereunder and the obligation of the Issuing Lender to issue Revolver Letters of Credit hereunder, or (ii) the Required Lenders may declare the Obligations to be due and payable, or both, and upon any declaration under clause (ii), the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrower expressly waives. (b) Rescission. If at any time after termination of the Revolving Lenders' obligations to make Revolving Loans or acceleration of the maturity of the Loans, Borrower shall pay all arrears of interest and all payments on account of principal of the Obligations which shall have become due otherwise than by acceleration (with interest on principal and, to the extent permitted by law, on overdue interest, at the rates specified in this Agreement) and all Defaults and Unmatured Defaults (other than nonpayment of principal of and accrued interest on the Loans due and payable solely by virtue of acceleration) shall be remedied or waived pursuant to Section 8.3, then upon the written consent of the Required Lenders and written notice to the Borrower, the termination of Revolving Lenders' respective obligations to make Revolving Loans and the respective Revolving Lenders' and the Issuing Lender's obligations to participate in or issue Letters of Credit or the aforesaid acceleration and its consequences may be rescinded and annulled; but such action shall not affect any subsequent Default or Unmatured Default or impair any right or remedy consequent thereon. The provisions of the preceding sentence are intended merely to bind the Lenders and the Issuing Lender to a decision which may be made at the election of the Required Lenders; they are not intended to benefit the Borrower and do not give the Borrower the right to require the Lenders to rescind or annul any termination of the aforesaid obligations of the Lenders or the Issuing Lender or any acceleration hereunder, even if the conditions set forth herein are met. 77 (c) Enforcement. The Borrower acknowledges that in the event the Borrower fails to perform, observe or discharge any of its obligations or liabilities under this Agreement or any other Loan Document, any remedy of law may prove to be inadequate relief to the Administrative Agent, the Issuing Lender and the Lenders; therefore, the Borrower agrees that the Administrative Agent, the Issuing Lender and the Lenders shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages. 8.2 Defaulting Lender. In the event that any Revolving Lender fails to fund its Revolving Loan Pro Rata Share of any Revolving Advance requested or deemed requested by the Borrower which such Revolving Lender is obligated to fund under the terms of this Agreement (the funded portion of such Advance being hereinafter referred to as a "NON PRO RATA REVOLVING LOAN"), until the earlier of such Revolving Lender's cure of such failure and the termination of the Revolving Loan Commitments, the proceeds of all amounts thereafter repaid to the Administrative Agent by the Borrower and otherwise required to be applied to such Revolving Lender's share of all other Obligations pursuant to the terms of this Agreement shall be advanced to the Borrower by the Administrative Agent ("CURE LOANS") on behalf of such Revolving Lender to cure, in full or in part, such failure by such Revolving Lender, but shall nevertheless be deemed to have been paid to such Revolving Lender in satisfaction of such other Obligations. Notwithstanding anything in this Agreement to the contrary: (i) the foregoing provisions of this Section 8.2 shall apply only with respect to the proceeds of payments of Obligations and shall not affect the conversion or continuation of Loans pursuant to Section 2.8; (ii) any such Revolving Lender shall be deemed to have cured its failure to fund its Revolving Loan Pro Rata Share of any Revolving Advance at such time as an amount equal to such Revolving Lender's original Revolving Loan Pro Rata Share of the requested principal portion of such Advance is fully funded to the Borrower, whether made by such Revolving Lender itself or by operation of the terms of this Section 8.2, and whether or not the Non Pro Rata Revolving Loan with respect thereto has been repaid, converted or continued; (iii) amounts advanced to the Borrower to cure, in full or in part, any such Revolving Lender's failure to fund its Revolving Loan Pro Rata Share of any Revolving Advance shall bear interest at the rate applicable to Revolving Loans which are Base Rate Loans, in effect from time to time, and for all other purposes of this Agreement shall be treated as if they were Base Rate Loans; (iv) regardless of whether or not a Default has occurred or is continuing, and notwithstanding the instructions of the Borrower as to its desired application, all repayments of principal which, in accordance with the other terms of this Agreement, would be applied to the outstanding Base Rate Loans shall be applied first, ratably to all Base Rate Loans constituting Non Pro Rata Revolving Loans, second, ratably to Base Rate Loans other than those constituting Non Pro Rata Revolving Loans or Cure Loans and, third, ratably to Base Rate Loans constituting Cure Loans; and 78 (v) for so long as and until any such Revolving Lender's failure to fund its Revolving Loan Pro Rata Share of any Revolving Advance is cured in accordance with Section 8.2(ii), (A) such Revolving Lender shall not be entitled to any commitment fees with respect to its Revolving Loan Commitment and (B) such Revolving Lender shall not be entitled to any letter of credit fees, which commitment fees and letter of credit fees shall accrue in favor of the Revolving Lenders which have funded their respective Revolving Loan Pro Rata Share of such requested Advance, shall be allocated among such performing Revolving Lenders ratably based upon their relative Revolving Loan Commitments, and shall be calculated based upon the average amount by which the Aggregate Revolving Loan Commitment of such performing Revolving Lenders exceeds the sum of (I) the outstanding principal amount of the Revolving Loans owing to such performing Revolving Lenders, plus (II) the outstanding Reimbursement Obligations owing to such performing Revolving Lenders, plus (III) the aggregate participation interests of such performing Revolving Lenders arising pursuant to Section 2.20 with respect to undrawn and outstanding Letters of Credit. 8.3 Amendments. Subject to the provisions of this Article VIII, the Required Lenders (or the Administrative Agent with the consent in writing of the Required Lenders) and the Borrower may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing in any manner the rights of the Lenders or the Borrower hereunder or waiving any Default hereunder; provided, however, that no such supplemental agreement shall, without the consent of each Lender affected thereby: (i) Postpone or extend the Termination Date, or any other date fixed for any payment of principal of, or interest on, the Loans, the Reimbursement Obligations or any fees or other amounts payable to such Lender (except with respect to a waiver of the application of the default rate of interest pursuant to Section 2.11 hereof). (ii) Reduce the principal Dollar Amount of any Loans or L/C Obligations, or reduce the rate or extend the time of payment of interest or fees thereon (except with respect to a waiver of the application of the default rate of interest pursuant to Section 2.11 hereof). (iii) Reduce the percentage specified in the definition of Required Lenders or any other percentage of Lenders specified to be the applicable percentage in this Agreement to act on specified matters or amend the definitions of "Required Lenders" or "Pro Rata Share". (iv) Increase the amount of any Revolving Loan Commitment of any Revolving Lender hereunder or increase any Revolving Lender's Revolving Loan Pro Rata Share. (v) Permit the Borrower to assign its rights under this Agreement. (vi) Release any Loan Party from its obligations under the Guaranty or any Collateral Document. 79 (vii) Other than pursuant to a transaction permitted by the terms of this Agreement or any Loan Document, release all or substantially all of the Collateral which is subject to the Loan Documents. (viii) Amend this Section 8.3. No amendment of any provision of this Agreement relating to the Administrative Agent shall be effective without the written consent of the Administrative Agent. No amendment of any provision of this Agreement relating to the Issuing Lender shall be effective without the written consent of the Administrative Agent and the Issuing Lender. The Administrative Agent may waive payment of the fee required under Section 12.3(B) without obtaining the consent of any of the Lenders. 8.4 Preservation of Rights. No delay or omission of the Lenders, the Issuing Lender or the Administrative Agent to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein, and the making of a Loan or the issuance of a Letter of Credit notwithstanding the existence of a Default or the inability of the Borrower to satisfy the conditions precedent to such Loan or issuance of such Letter of Credit shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing signed by the Lenders required pursuant to Section 8.3, and then only to the extent in such writing specifically set forth. All remedies contained in the Loan Documents or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the Lenders until the Obligations have been paid in full. ARTICLE IX: GENERAL PROVISIONS 9.1 Survival of Representations. All representations and warranties of the Borrower contained in this Agreement shall survive delivery of any Notes and the making of the Loans herein contemplated. 9.2 Governmental Regulation. Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be obligated to extend credit to the Borrower and neither the Administrative Agent nor the Issuing Lender shall be obligated to issue any Letter of Credit for the account of the Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation. 9.3 Headings. Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents. 9.4 Entire Agreement. The Loan Documents embody the entire agreement and understanding among the Borrower, the Administrative Agent and the Lenders and supersede all prior agreements and understandings among the Borrower, the Administrative Agent and the Lenders relating to the subject matter thereof. 80 9.5 Several Obligations; Benefits of this Agreement. The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other Lender. The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns. 9.6 Expenses; Indemnification. (A) Expenses. The Borrower shall reimburse the Administrative Agent for any reasonable costs, internal charges and out-of-pocket expenses (including (i) attorneys' and paralegals' fees and time charges of attorneys and paralegals for the Administrative Agent, which attorneys and paralegals may be employees of the Administrative Agent and (ii) other advisors and professionals engaged from time to time by the Administrative Agent) paid or incurred by either the Administrative Agent in connection with the preparation, negotiation, execution, delivery, syndication, review, amendment, modification, and administration of the Loan Documents or in connection with any work-out or restructuring of the transactions contemplated hereby, including without limitation, the reasonable professional fees and expenses of Ernst & Young Corporate Finance LLC incurred in connection with its engagement to assist the Lenders in their evaluation of the projections, business assumptions and other financial information presented by the Borrower in connection with the transactions contemplated herein. All such fees, costs and expenses incurred after the Effective Date shall be paid by the Borrower on a monthly basis. The Borrower also agrees to reimburse the Administrative Agent, the Lenders and the Issuing Lender for any costs, internal charges and out-of-pocket expenses (including attorneys' and paralegals' fees and time charges of attorneys and paralegals for the Administrative Agent, the Lenders and the Issuing Lender, which attorneys and paralegals may be employees of the Administrative Agent, the Lenders or the Issuing Lender) paid or incurred by the Administrative Agent, any Lender or the Issuing Lender in connection with the collection of the Obligations and enforcement of the Loan Documents. (B) Indemnity. The Borrower further agrees to defend, protect, indemnify, and hold harmless the Administrative Agent, each and all of the Lenders, the Issuing Lender and each of their respective Affiliates, and each of such Administrative Agent's, Lender's, Issuing Lender's or Affiliate's respective officers, directors, employees, attorneys and agents (including, without limitation, those retained in connection with the satisfaction or attempted satisfaction of any of the conditions set forth in Article IV) (collectively, the "INDEMNITEES") from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses of any kind or nature whatsoever (including, without limitation, the fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding, whether or not such Indemnitees shall be designated a party thereto), imposed on, incurred by, or asserted against such Indemnitees in any manner relating to or arising out of: (i) this Agreement, the other Loan Documents, or any act, event or transaction related or attendant thereto, the making of or participating in the Loans, and the issuance of and participation in Letters of Credit hereunder, the management of such Loans or 81 Letters of Credit, the use or intended use of the proceeds of the Loans or Letters of Credit hereunder, or any of the other transactions contemplated by the Loan Documents; or (ii) any liabilities, obligations, responsibilities, losses, damages, personal injury, death, punitive damages, economic damages, consequential damages, treble damages, intentional, willful or wanton injury, damage or threat to the environment, natural resources or public health or welfare, costs and expenses (including, without limitation, attorney, expert and consulting fees and costs of investigation, feasibility or remedial action studies), fines, penalties and monetary sanctions, interest, direct or indirect, known or unknown, absolute or contingent, past, present or future relating to violation of any Environmental, Health or Safety Requirements of Law arising from or in connection with the past, present or future operations of the Borrower, its Subsidiaries or any of their respective predecessors in interest, or, the past, present or future environmental, health or safety condition of any respective property of the Borrower or its Subsidiaries, the presence of asbestos-containing materials at any respective property of the Borrower or its Subsidiaries or the Release or threatened Release of any Contaminant into the environment (collectively, the "INDEMNIFIED MATTERS"); provided, however, the Borrower shall have no obligation to an Indemnitee hereunder with respect to Indemnified Matters caused solely by or resulting solely from the willful misconduct or Gross Negligence of such Indemnitee or breach of contract by such Indemnitee with respect to the Loan Documents, in each case, as determined by the final non-appealable judgment of a court of competent jurisdiction. If the undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, the Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees. (C) Waiver of Certain Claims; Settlement of Claims. The Borrower further agrees to assert no claim against any of the Indemnitees on any theory of liability for consequential, special, indirect, exemplary or punitive damages. No settlement shall be entered into by the Borrower or any of its Subsidiaries with respect to any claim, litigation, arbitration or other proceeding relating to or arising out of the transactions evidenced by this Agreement or the other Loan Documents (whether or not the Administrative Agent, any Lender, the Issuing Lender or any Indemnitee is a party thereto) unless such settlement releases all Indemnitees from any and all liability with respect thereto. (D) Survival of Agreements. The obligations and agreements of the Borrower under this Section 9.6 shall survive the termination of this Agreement. 9.7 Numbers of Documents. All statements, notices, closing documents, and requests hereunder shall be furnished to the Administrative Agent with sufficient counterparts so that the Administrative Agent may furnish one to each of the Lenders. 9.8 Accounting. Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles. 82 9.9 Severability of Provisions. Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable. 9.10 Nonliability of Lenders. The relationship among the Borrower and the Lenders, the Issuing Lender, and the Administrative Agent shall be solely that of borrower and lender. Neither the Administrative Agent nor any Lender nor the Issuing Lender shall have any fiduciary responsibilities to the Borrower. Neither the Administrative Agent, nor any Lender, nor the Issuing Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the Borrower's business or operations. 9.11 CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF INDIANA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. 9.12 WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER. 9.13 No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement. 9.14 Supplemental Disclosure. At any time at the request of the Administrative Agent and at such additional times as the Borrower determines, the Borrower shall supplement each schedule or representation herein or in the other Loan Documents with respect to any matter hereafter arising which, if existing or occurring at the date of this Agreement, would have been required to be set forth or described in such schedule or as an exception to such representation or which is necessary to correct any information in such schedule or representation which has been rendered inaccurate thereby. Any such supplement to such schedule or representation which discloses the existence or occurrence of events, facts or circumstances which are prohibited by the terms of this Agreement or any other Loan Documents shall not be deemed an amendment thereof unless expressly consented to in writing by the Administrative Agent and the Required Lenders or each Lender, as may be applicable, and no such supplement to such schedule or representation, except as the same may be consented to in a writing which expressly includes a waiver, shall be or be deemed a waiver by the Administrative Agent or any Lender of any Default disclosed therein. 83 9.15 Amendment and Restatement of Original Credit Agreement. The Borrower, the Lenders, the Administrative Agent and the Issuing Lender agree that, upon (i) the execution and delivery of this Agreement by the Borrower, the Administrative Agent, the Issuing Lender and the Lenders and (ii) satisfaction (or waiver by the Lenders in their sole discretion) of the conditions precedent set forth in Section 4.1 hereof, the terms and provisions of the Original Credit Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement. This Agreement is not intended to and shall not constitute a novation of the Original Credit Agreement or the indebtedness created thereunder, including, without limitation, all "Obligations" under and as defined therein. All outstanding "Loans" and "Letters of Credit" (under and as defined in the Original Credit Agreement) shall continue as Loans and Letters of Credit under (and shall be governed by the terms of) this Agreement. The "Commitments" of each Lender under the Original Credit Agreement shall, on the Effective Date, automatically be deemed amended and converted into, and in the amount of, the Revolving Loan Commitments hereunder. 9.16 Release. The Borrower hereby acknowledges and confirms that (i) it does not have any grounds, and hereby agrees not to challenge (or to allege or to pursue any matter, cause or claim arising under or with respect to), in any case based upon acts or omissions of the Administrative Agent or any of the Lenders occurring prior to the date hereof or facts otherwise known to it as of the date hereof, the effectiveness, genuineness, validity, collectibility or enforceability of this Agreement or any of the other Loan Documents, the Obligations, the Liens securing such Obligations, or any of the terms or conditions of any Loan Document (it being understood that such acknowledgment and confirmation do not preclude the Borrower from challenging the Administrative Agent's or any Lender's interpretation of any term or provision of this Agreement or other Loan Document) and (ii) it does not possess (and hereby forever waives, remises, releases, discharges and holds harmless the Lenders, the Administrative Agent and their respective affiliates, stockholders, directors, officers, employees, attorneys, agents and representatives and each of their respective heirs, executors, administrators, successors and assigns (collectively, the "Released Parties") from and against, and agrees not to allege or pursue) any action, cause of action, suit, debt, claim, counterclaim, cross-claim, demand, defense, offset, opposition, demand and other right of action whatsoever, whether in law, equity or otherwise (which it, all those claiming by, through or under it, or its successors or assigns, have or may have) against the Released Parties, or any of them, by reason of, any matter, cause or thing whatsoever, with respect to events or omissions occurring or arising on or prior to the date hereof and relating to this Agreement or any of the other Loan Documents (including, without limitation, with respect to the payment, performance, validity or enforceability of the Obligations, the Liens securing the Obligations or any or all of the terms or conditions of any Loan Document) or any transaction relating thereto; provided, however, that the Borrower does not release or hold harmless any Released Party for actions or omissions by any such Released Party constituting, or losses or expenses directly resulting from, the gross negligence or willful misconduct of such Released Party as determined by a final judgment of a court of competent jurisdiction. ARTICLE X: THE ADMINISTRATIVE AGENT 10.1 Appointment; Nature of Relationship. Bank One is appointed by the Lenders (each reference in this Article X to a Lender being in its capacity either as a Lender or the Issuing 84 Lender, or any or all of the foregoing) as the Administrative Agent hereunder and under each other Loan Document to which the Administrative Agent is a party, and each of the Lenders irrevocably authorizes the Administrative Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in such other Loan Documents. The Administrative Agent agrees to act as such contractual representative upon the express conditions contained in this Article X. Notwithstanding the use of the defined term "Administrative Agent", it is expressly understood and agreed that the Administrative Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement and that the Administrative Agent is merely acting as the representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders' contractual representative the Administrative Agent (i) does not assume any fiduciary duties to any Person and (ii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders agrees to assert no claim against the Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender waives. 10.2 Powers. The Administrative Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Administrative Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied duties or fiduciary duties to the Lenders, or any obligation to the Lenders to take any action hereunder or under any of the other Loan Documents except any action specifically provided by the Loan Documents required to be taken by the Administrative Agent. 10.3 General Immunity. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to any of the Borrower, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from (i) the Gross Negligence or willful misconduct of such Person or (ii) breach of contract by such Person with respect to the Loan Documents. 10.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (i) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document; (iii) the satisfaction of any condition specified in Article IV; (iv) the existence or possible existence of any Default or (v) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith. Neither the Administrative Agent nor the Administrative Agent shall be responsible to any Lender for any recitals, statements, representations or warranties herein or in any of the other Loan Documents, for the execution, effectiveness, genuineness, validity, legality, enforceability, collectibility, or sufficiency of this Agreement or any of the other Loan Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of its Subsidiaries. 85 10.5 Action on Instructions of Lenders. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders (except with respect to actions that require the consent of all of the Lenders as provided in Section 8.3), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Notes. The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. 10.6 Employment of Agents and Counsel. The Administrative Agent may execute any of their respective duties hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact, and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall be entitled to advice of counsel concerning the contractual arrangement among the Administrative Agent and the Lenders and all matters pertaining to such Agent's duties hereunder and under any other Loan Document. 10.7 Reliance on Documents; Counsel. The Administrative Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent. 10.8 The Administrative Agent's Reimbursement and Indemnification. The Lenders agree to reimburse and indemnify the Administrative Agent ratably in proportion to their respective Pro Rata Shares (i) for any amounts not reimbursed by the Borrower for which the Administrative Agent is entitled to reimbursement or indemnification by the Borrower under the Loan Documents, (ii) for any other expenses incurred by the Administrative Agent on behalf of the Lenders in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents, including as a result of a dispute among the Lenders or between any Lender and the Administrative Agent, and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, including as a result of a dispute among the Lenders or between any Lender and the Administrative Agent, provided that no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from the Gross Negligence or willful misconduct of the Administrative Agent. 10.9 Rights as a Lender. With respect to its Revolving Loan Commitment, Loans made by it and the Notes issued to it and Letters of Credit issued by it as the Issuing Lender, the Administrative Agent shall have the same rights and powers hereunder and under any other Loan Document as any Lender and may exercise the same as through it were not the Administrative 86 Agent, as applicable, and the term "Lender" or "Lenders" or "Issuing Lender", as applicable, shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent may accept deposits from, lend money to and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Subsidiaries in which such Person is not prohibited hereby from engaging with any other Person. 10.10 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. 10.11 Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right to appoint, on behalf of the Lenders, a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days after the retiring Administrative Agent's giving notice of resignation, then the retiring Administrative Agent may appoint, on behalf of the Lenders, a successor Administrative Agent. Notwithstanding anything herein to the contrary, so long as no Default has occurred and is continuing, each such successor Administrative Agent shall be subject to approval by the Borrower, which approval shall not be unreasonably withheld. Such successor Administrative Agent shall be a commercial bank having capital and retained earnings of at least $500,000,000. Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article X shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Loan Documents. ARTICLE XI: SETOFF; RATABLE PAYMENTS 11.1 Setoff. In addition to, and without limitation of, any rights of the Lenders or the Issuing Lender under applicable law, if any Default occurs and is continuing, any indebtedness from any Lender or the Issuing Lender to the Borrower (including all account balances, whether provisional or final and whether or not collected or available) may be offset and applied in accordance with the Intercreditor Agreement. 11.2 Intentionally Omitted. 87 11.3 Relations Among Lenders. (a) Except with respect to the exercise of set-off rights of any Lender in accordance with Section 11.1, the proceeds of which are applied in accordance with this Agreement, and except as set forth in Section 11.3(b) below, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or any other obligor hereunder or with respect to any Collateral Document or Loan Document, without the prior written consent of the Required Lenders or, as may be provided in this Agreement or the other Loan Documents, at the direction of the Administrative Agent. (b) The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender. Notwithstanding the foregoing, and subject to Section 11.2, any Lender shall have the right to enforce on an unsecured basis the payment of the principal of and interest on any Loan made by it after the date such principal or interest has become due and payable pursuant to the terms of this Agreement. ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 12.1 Successors and Assigns. The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrower and the Lenders and their respective successors and assigns, except that (i) the Borrower shall not have the right to assign its rights or obligations under the Loan Documents and (ii) any assignment by any Lender must be made in compliance with Section 12.3 hereof. Notwithstanding clause (ii) of this Section 12.1, any Lender may at any time, without the consent of the Borrower or the Administrative Agent, assign all or any portion of its rights under this Agreement and its Notes to a Federal Reserve Bank; provided, however, that no such assignment shall release the transferor Lender from its obligations hereunder. The Administrative Agent may treat the payee of any Note as the owner thereof for all purposes hereof unless and until such payee complies with Section 12.3 hereof in the case of an assignment thereof or, in the case of any other transfer, a written notice of the transfer is filed with the Administrative Agent. Any assignee or transferee of a Note agrees by acceptance thereof to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the holder of any Note, shall be conclusive and binding on any subsequent holder, transferee or assignee of such Note or of any Note or Notes issued in exchange therefor. 12.2 Participations. (A) Permitted Participants; Effect. Subject to the terms set forth in this Section 12.2, any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks or other entities ("PARTICIPANTS") participating interests in any Loan owing to such Lender, any Note held by such Lender, any Revolving Loan Commitment of such Lender, any L/C Interest of such Lender or any other interest of such Lender under the Loan Documents on a pro rata basis; provided that the amount of such participation shall not be for 88 less than $5,000,000. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the holder of any such Note for all purposes under the Loan Documents, all amounts payable by the Borrower under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under the Loan Documents except that, for purposes of Article III hereof, the Participants shall be entitled to the same rights as if they were Lenders provided however that no Participant shall be entitled to receive any greater payment under Article III than the Lender would have been entitled to receive with respect to the rights participated. (B) Voting Rights. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents, other than any amendment, modification or waiver with respect to any Loan or Revolving Loan Commitment in which such Participant has an interest which forgives principal, interest or fees or reduces the interest rate or fees payable pursuant to the terms of this Agreement with respect to any such Loan or Revolving Loan Commitment, or postpones any date fixed for any regularly-scheduled payment of principal of, or interest or fees on, any such Loan or Revolving Loan Commitment or releases all or substantially all of the Collateral, if any, securing any such Loan. (C) Benefit of Setoff. The Borrower agrees that each Participant shall be deemed to have the right of setoff provided in Section 11.1 hereof in respect to its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of setoff provided in Section 11.1 hereof with respect to the amount of participating interests sold to each Participant except to the extent such Participant exercises its right of set off. The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 11.1 hereof, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 11.2 as if each Participant were a Lender. 12.3 Assignments. (A) Permitted Assignments. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time assign to one or more banks or other entities ("PURCHASERS") all or a portion of its rights and obligations under this Agreement (including, without limitation, its Revolving Loan Commitment (if any), all Loans owing to it, all of its interests as Issuing Lender with respect to Letters of Credit, all of its participation interests in existing Letters of Credit, and its obligation to participate in additional Letters of Credit hereunder) in accordance with the provisions of this Section 12.3. Each assignment shall be of a constant, and not a varying, ratable percentage of all of the rights and obligations of any assigning Lender under this Agreement. Such assignment shall be substantially in the form of Exhibit C hereto and shall not be permitted hereunder unless such assignment is either for all of such Lender's rights and obligations under the Loan Documents or involves loans and Revolving 89 Loan Commitments in an aggregate amount of at least $5,000,000. Notice to the Administrative Agent and consent of the Administrative Agent and, so long as no Default shall have occurred and be continuing, notice to and consent of the Borrower (which consents will not be unreasonably withheld) shall be required prior to an assignment becoming effective with respect to a Purchaser which is not a Lender or an Affiliate thereof. (B) Effect; Effective Date. Upon (i) delivery to the Administrative Agent of a notice of assignment, substantially in the form attached as Appendix I to Exhibit C hereto (a "NOTICE OF ASSIGNMENT"), together with any consent required by Section 12.3(A) hereof, and (ii) except in the case of an assignment from a Lender to an Affiliate thereof or to a fund managed by the same investment manager, payment of a $3,500 fee to the Administrative Agent for processing such assignment, such assignment shall become effective on the effective date specified in such Notice of Assignment. The Notice of Assignment shall contain a representation by the Purchaser to the effect that none of the consideration used to make the purchase of the Revolving Loan Commitment, Loans and L/C Obligations under the applicable assignment agreement are "plan assets" as defined under ERISA and that the rights and interests of the Purchaser in and under the Loan Documents will not be "plan assets" under ERISA. On and after the effective date of such assignment, such Purchaser, if not already a Lender, shall for all purposes be a Lender party to this Agreement and any other Loan Documents executed by the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party hereto, and no consent or action by any of the Borrower or the Lenders and no further consent or action by the Administrative Agent shall be required to release the transferor Lender with respect to the percentage of the Aggregate Revolving Loan Commitment, Loans and Letter of Credit participations assigned to such Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to this Section 12.3(B), the transferor Lender, the Administrative Agent and the Borrower shall make appropriate arrangements so that replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their Revolving Loan Commitment, as adjusted pursuant to such assignment. (C) The Register. The Administrative Agent shall maintain at its address referred to in Section 13.1 a copy of each assignment delivered to and accepted by it pursuant to this Section 12.3 and a register (the "REGISTER") for the recordation of the names and addresses of the Lenders and the Revolving Loan Commitment of and principal amount of the Loans owing to, each Lender from time to time and whether such Lender is an original Lender or the assignee of another Lender pursuant to an assignment under this Section 12.3. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower and each of its Subsidiaries, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. 12.4 Confidentiality. Subject to Section 12.5, the Administrative Agent and the Lenders shall hold all nonpublic information obtained pursuant to the requirements of this Agreement and identified as such by the Borrower in accordance with such Person's customary procedures for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosure reasonably required by a prospective Transferee 90 (as defined in Section 12.5 below) in connection with the contemplated participation or assignment or as required or requested by any Governmental Authority or representative thereof or pursuant to legal process and shall require any such Transferee or prospective Transferee to agree (and require any of its Transferees to agree) to comply with this Section 12.4. In no event shall the Administrative Agent or any Lender be obligated or required to return any materials furnished by the Borrower; provided, however, each prospective Transferee shall be required to agree that if it does not become a participant or assignee it shall return all materials furnished to it by or on behalf of the Borrower in connection with this Agreement. 12.5 Dissemination of Information. The Borrower authorizes each Lender to disclose to any Participant or Purchaser or any other Person acquiring an interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any prospective Transferee any and all information in such Lender's possession concerning the Borrower and its Subsidiaries and the Collateral; provided that prior to any such disclosure, such prospective Transferee shall agree to preserve in accordance with Section 12.4 the confidentiality of any confidential information described therein. ARTICLE XIII: NOTICES 13.1 Giving Notice. Except as otherwise permitted by Article II with respect to Borrowing Notices, all notices and other communications provided to any party hereto under this Agreement or any other Loan Documents shall be in writing or by telex or by facsimile and addressed or delivered to such party at its address set forth below its signature hereto or at such other address as may be designated by such party in a notice to the other parties. Any notice, if mailed and properly addressed with postage prepaid, shall be deemed given when received; any notice, if transmitted by telex or facsimile, shall be deemed given when transmitted (answerback confirmed in the case of telexes); or, if by courier, one (1) Business Day after deposit with a reputable overnight carrier service; with all charges paid. 13.2 Change of Address. Any of the Borrower, the Administrative Agent and any Lender may each change the address for service of notice upon it by a notice in writing to the other parties hereto. ARTICLE XIV: COUNTERPARTS This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Borrower, the Administrative Agent and the Lenders and each party hereto has notified the Administrative Agent by telex, facsimile or telephone, that it has taken such action. [Remainder of This Page Intentionally Blank] 91 IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent have executed this Agreement as of the date first above written. WABASH NATIONAL CORPORATION By: ------------------------------------ Name: Christopher A. Black Title: Vice President and Treasurer Address: 1000 Sagamore Parkway South Lafayette, IN 47905 Attention: Christopher A. Black, Vice President and Treasurer Telephone No.: (765) 772-2206 Facsimile No.: (765) 772-2600 SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT BANK ONE, INDIANA, N.A. as the Administrative Agent, the Issuing Lender, and as a Lender By: ------------------------------------ Name: _____________________________ Title: _____________________________ Address: One Bank One Plaza Chicago, IL 60670 Attention: Patricia Carpen Telephone No.: (312) 732-1418 Facsimile No.: (312) 732-1775 SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT THE NORTHERN TRUST COMPANY By: ------------------------------------ Name: _____________________________ Title: _____________________________ Address: 50 South LaSalle Street Chicago, IL 60675 Attention: _____________________________ Telephone No.: (312) ___________________ Facsimile No.: (312) ___________________ SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT U.S. BANK NATIONAL ASSOCIATION By: ------------------------------------ Name: _____________________________ Title: _____________________________ Address: 425 Walnut Street, 8th Floor Cincinnati, OH 45202 Attention: _____________________________ Telephone No.: (513) ___________________ Facsimile No.: (513) ___________________ SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT SUNTRUST BANK By: ------------------------------------ Name: _____________________________ Title: _____________________________ Address: 303 Peachtree Street, N.E. 4th Floor Atlanta, GA 30080 Attention: Steve Newby Telephone No.: (404) 658-4916 Facsimile No.: (404) 230-1800 SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT FIFTH THIRD BANK By: ------------------------------------ Name: _____________________________ Title: _____________________________ Address: P.O. Box 1663 Lafayette, IN 47902 Attention: _____________________________ Telephone No.: (765) ___________________ Facsimile No.: (765) ___________________ SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT KEYBANK NATIONAL ASSOCIATION By: ------------------------------------ Name: _____________________________ Title: _____________________________ Address: ________________________________________ ________________________________________ Attention: _____________________________ Telephone No.: (___) ___-_______________ Facsimile No.: (___) ___-_______________ SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT NATIONAL CITY BANK OF INDIANA By: ------------------------------------ Name: _____________________________ Title: _____________________________ Address: ________________________________________ ________________________________________ Attention: _____________________________ Telephone No.: (___) ___-_______________ Facsimile No.: (___) ___-_______________ SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT EX-10.28 12 c68906a1ex10-28.txt RECEIVABLES PURCHASE AND SERVICING AGREEMENT EXHIBIT 10.28 - -------------------------------------------------------------------------------- RECEIVABLES PURCHASE AND SERVICING AGREEMENT DATED AS OF APRIL 11, 2002, BY AND AMONG WNC RECEIVABLES, LLC, AS SELLER, WABASH FINANCING LLC, AS SERVICER, WNC RECEIVABLES MANAGEMENT CORP., AS INDEPENDENT MEMBER, AND GENERAL ELECTRIC CAPITAL CORPORATION, AS INITIAL PURCHASER AND AS AGENT - -------------------------------------------------------------------------------- WNC Receivables, LLC Receivables Purchase and Servicing Agreement TABLE OF CONTENTS
Page ---- ARTICLE I. DEFINITIONS AND INTERPRETATION.........................................................................1 Section 1.01. Definitions................................................................................1 Section 1.02. Rules of Construction......................................................................2 ARTICLE II. AMOUNTS AND TERMS OF PURCHASES........................................................................2 Section 2.01. Purchases..................................................................................2 Section 2.02. Optional Changes in Maximum Purchase Limit.................................................2 Section 2.03. Investment Base Certificates; Notices Relating to Purchases and Reductions in Capital Investment.............................................................................3 Section 2.04. Conveyance of Receivables..................................................................4 Section 2.05. Facility Termination Date..................................................................5 Section 2.06. Daily Yield................................................................................5 Section 2.07. Fees.......................................................................................6 Section 2.08. Time and Method of Payments................................................................6 Section 2.09. Capital Requirements; Additional Costs; Illegality.........................................7 Section 2.10. Breakage Costs.............................................................................8 Section 2.11. Purchase Excess............................................................................8 ARTICLE III. CONDITIONS PRECEDENT.................................................................................9 Section 3.01. Conditions to Effectiveness of Agreement...................................................9 Section 3.02. Conditions Precedent to All Purchases.....................................................10 ARTICLE IV. REPRESENTATIONS AND WARRANTIES.......................................................................11 Section 4.01. Representations and Warranties of the Seller..............................................11 Section 4.02. Representations and Warranties of the Servicer............................................17 Section 4.03. Representations and Warranties of the Independent Member..................................18 ARTICLE V. GENERAL COVENANTS OF THE SELLER AND THE INDEPENDENT MEMBER............................................22 Section 5.01. Affirmative Covenants of the Seller.......................................................22 Section 5.02. Reporting Requirements of the Seller; Bringdown Certificates..............................24 Section 5.03. Negative Covenants of the Seller..........................................................24 Section 5.04. Affirmative Covenants of Independent Member...............................................26 Section 5.05. Negative Covenants of Independent Member..................................................28 Section 5.06. Post-Closing Deliveries...................................................................29 ARTICLE VI. COLLECTIONS AND DISBURSEMENTS........................................................................30 Section 6.01. Establishment of Accounts.................................................................30 Section 6.02. Funding of Collection Account.............................................................32 Section 6.03. Daily Disbursements From the Collection Account...........................................32
i WNC Receivables, LLC Receivables Purchase and Servicing Agreement Section 6.04. [Reserved]................................................................................33 Section 6.05. Liquidation Settlement Procedures.........................................................33 Section 6.06. Termination Procedures....................................................................34 ARTICLE VII. SERVICER PROVISIONS.................................................................................35 Section 7.01. Appointment of the Servicer...............................................................35 Section 7.02. Duties and Responsibilities of the Servicer...............................................35 Section 7.03. Collections on Receivables................................................................35 Section 7.04. Authorization of the Servicer.............................................................36 Section 7.05. Servicing Fees............................................................................36 Section 7.06. Representations and Warranties of the Servicer............................................37 Section 7.07. Covenants of the Servicer.................................................................38 ARTICLE VIII. GRANT OF SECURITY INTERESTS........................................................................39 Section 8.01. Seller's Grant of Security Interest.......................................................39 Section 8.02. Seller's Certification....................................................................40 Section 8.03. [Reserved]................................................................................40 Section 8.04. Delivery of Collateral....................................................................40 Section 8.05. Seller Remains Liable.....................................................................41 Section 8.06. Covenants of the Seller and the Servicer Regarding the Seller Collateral..................41 ARTICLE IX. TERMINATION EVENTS...................................................................................44 Section 9.01. Termination Events........................................................................44 Section 9.02. Events of Servicer Termination............................................................47 ARTICLE X. REMEDIES..............................................................................................49 Section 10.01. Actions Upon Termination Event...........................................................49 Section 10.02. Exercise of Remedies.....................................................................51 Section 10.03. Power of Attorney........................................................................51 Section 10.04. Continuing Security Interest.............................................................51 ARTICLE XI. SUCCESSOR SERVICER PROVISIONS........................................................................52 Section 11.01. Servicer Not to Resign...................................................................52 Section 11.02. Appointment of the Successor Servicer....................................................52 Section 11.03. Duties of the Servicer...................................................................52 Section 11.04. Effect of Termination or Resignation.....................................................53 ARTICLE XII. INDEMNIFICATION.....................................................................................53 Section 12.01. Indemnities by the Seller................................................................53 Section 12.02. Indemnities by the Servicer..............................................................55 Section 12.03. Limitation of Damages; Indemnified Persons...............................................56 ARTICLE XIII. AGENT..............................................................................................56
ii WNC Receivables, LLC Receivables Purchase and Servicing Agreement Section 13.01. Authorization and Action.................................................................56 Section 13.02. Reliance.................................................................................56 Section 13.03. GECC and Affiliates......................................................................57 ARTICLE XIV. MISCELLANEOUS.......................................................................................57 Section 14.01. Notices..................................................................................57 Section 14.02. Assignment and Participations............................................................58 Section 14.03. Termination; Survival of Seller Secured Obligations Upon Facility Termination Date.......60 Section 14.04. Costs, Expenses and Taxes................................................................60 Section 14.05. Confidentiality..........................................................................62 Section 14.06. Binding Effect; Successors and Assigns...................................................62 Section 14.07. Complete Agreement; Modification of Agreement............................................62 Section 14.08. Amendments and Waivers...................................................................62 Section 14.09. No Waiver; Remedies......................................................................63 Section 14.10. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.............................63 Section 14.11. Counterparts.............................................................................64 Section 14.12. Severability.............................................................................65 Section 14.13. Section Titles...........................................................................65 Section 14.14. Further Assurances.......................................................................65
iii WNC Receivables, LLC Receivables Purchase and Servicing Agreement EXHIBITS, SCHEDULES AND ANNEXES Exhibit 2.02(a) Form of Commitment Reduction Notice Exhibit 2.02(b) Form of Commitment Termination Notice Exhibit 2.03(a)(i) Form of Daily Investment Base Certificate Exhibit 2.03(a)(ii) Form of Weekly Investment Base Certificate Exhibit 2.03(a)(iii) Form of Monthly Report Exhibit 2.03(b) Form of Purchase Request Exhibit 2.04(a) Form of Purchase Assignment Exhibit 5.02 Form of Bringdown Certificate Exhibit 10.03 Form of Power of Attorney Exhibit A Credit and Collection Policy Schedule 4.01(b) Seller's Executive Offices; Collateral Locations; Legal or Other Names; Organizational Identification Number FEIN Schedule 4.01(h) Membership Interests of Seller; Equity Interests of Independent Member Schedule 4.01(r) Seller's Deposit and Disbursement Accounts Schedule 5.05(b) Independent Member's Existing Liens Annex 5.02 Reporting Requirements of the Seller Annex 7.02 Investment Reports Annex X Definitions iv WNC Receivables, LLC Receivables Purchase and Servicing Agreement THIS RECEIVABLES PURCHASE AND SERVICING AGREEMENT (as amended, supplemented or otherwise modified and in effect from time to time, this "Agreement") is entered into as of April 11, 2002, by and among WNC RECEIVABLES, LLC, a Delaware limited liability company (the "Seller"), WABASH FINANCING LLC, a Delaware limited liability company ("WFL"), in its capacity as servicer hereunder (in such capacity, the "Servicer"), WNC RECEIVABLES MANAGEMENT CORP., a Delaware corporation (the "Independent Member"), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as the sole initial purchaser (a "Purchaser" and, together with its successors and assigns, the "Purchasers") and as administrative agent for the Purchasers hereunder (in such capacity, the "Agent"). RECITALS A. The Seller is a special purpose limited liability company owned by Wabash National, L.P., a Delaware limited partnership, and NOAMTC, Inc., a Delaware corporation (each, an "Originator", and collectively, the "Originators") and by the Independent Member (the Independent Member, the Originators, the Seller, WFL and the Performance Guarantor being sometimes hereinafter referred to collectively as the "Seller Parties"). B. The Seller has been formed for the purpose of purchasing, or otherwise acquiring by capital contribution, all trade receivables of the Originators. C. The Seller intends to sell, and subject to the terms and conditions hereof, the Purchasers intend to purchase, undivided percentage interests in such trade receivables from time to time as described herein. D. The Agent has been requested and is willing to act as Agent on behalf of the Purchasers in connection with the making of such purchases. E. In order to effectuate the purposes of this Agreement, the Purchasers desire to appoint WFL to service, administer and collect the receivables acquired by the Purchasers pursuant to this Agreement and WFL is willing to act in such capacity as Servicer hereunder on the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: WNC Receivables, LLC Receivables Purchase and Servicing Agreement ARTICLE I. DEFINITIONS AND INTERPRETATION Section 1.01. Definitions. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Annex X. Section 1.02. Rules of Construction. For purposes of this Agreement, the rules of construction set forth in Annex X shall govern. All Appendices hereto, or expressly identified to this Agreement, are incorporated herein by reference and, taken together with this Agreement, shall constitute but a single agreement. ARTICLE II. AMOUNTS AND TERMS OF PURCHASES Section 2.01. Purchases. From and after the Closing Date and until the Facility Termination Date and subject to the terms and conditions hereof, each of the Purchasers severally agrees to purchase its Pro Rata Share of each Purchaser Interest (each such purchase hereunder, a "Purchase") from the Seller from time to time, and the Seller agrees to sell such Purchaser Interests to the Purchasers. Under no circumstances shall the Purchasers make any Purchase if, after giving effect thereto, a Purchase Excess would exist. Section 2.02. Optional Changes in Maximum Purchase Limit. (a) So long as no Incipient Termination Event or Termination Event shall have occurred and be continuing, the Seller may, not more than twice during each calendar year, reduce the Maximum Purchase Limit permanently; provided that (i) the Seller shall give ten Business Days' prior written notice of any such reduction to the Agent substantially in the form of Exhibit 2.02(a) (each such notice, a "Commitment Reduction Notice"), (ii) any partial reduction of the Maximum Purchase Limit shall be in a minimum amount of $5,000,000 or an integral multiple thereof, (iii) no such reduction shall reduce the Maximum Purchase Limit below $15,000,000, and (iv) any such reduction must be accompanied by payment of the fee required by Section 2.02(c). (b) The Seller may at any time on at least 90 days' prior written notice by the Seller to the Agent irrevocably terminate the Maximum Purchase Limit; provided that (i) such notice of termination shall be substantially in the form of Exhibit 2.02(b) (the "Commitment Termination Notice"), (ii) the Seller shall reduce the Capital Investment to zero and make all payments required by Section 2.03(c) at the time and in the manner specified therein, and (iii) such reduction must be accompanied by payment of the fee required by Section 2.02(c). Upon such termination, the Seller's right to request that the Purchasers make Purchases hereunder shall simultaneously terminate and the Facility Termination Date shall automatically occur. 2 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (c) If all or any portion of the Maximum Purchase Limit is reduced or terminated in accordance with this Section 2.02 prior to the first anniversary of the Closing Date, then the Seller shall pay the Agent, for the ratable account of the Purchasers, an amount equal to (i) the amount by which the Maximum Purchase Limit is so reduced multiplied by (ii) 1.0%. (d) Each written notice required to be delivered pursuant to Sections 2.02(a) and (b) shall be irrevocable, shall be promptly delivered by the Agent to the Purchasers and shall be effective (i) on the day of receipt if received by the Agent not later than 4:00 p.m. (New York time) on any Business Day and (ii) on the immediately succeeding Business Day if received by the Agent after such time on such Business Day or if any such notice is received on a day other than a Business Day (regardless of the time of day such notice is received). Each such notice of termination or reduction shall specify, respectively, the amount of, or the amount of the proposed reduction in, the Maximum Purchase Limit. Section 2.03. Investment Base Certificates; Notices Relating to Purchases and Reductions in Capital Investment. (a) (i) Not later than 1:00 p.m. (New York time) on each Business Day (other than the first Business Day of each week), the Servicer shall deliver to the Agent for distribution to the Purchasers an Officer's Certificate in the form of Exhibit 2.03(a)(i) (each, a "Daily Investment Base Certificate"). (ii) Not later than 1:00 p.m. (New York time) on the first Business Day of each week, the Servicer shall deliver to the Agent for distribution to the Purchasers an Officer's Certificate for the period of the immediately preceding week in the form of Exhibit 2.03(a)(ii) (each, a "Weekly Investment Base Certificate"); provided that if (i) an Incipient Termination Event or a Termination Event shall have occurred and be continuing or (ii) the Agent, in good faith, believes that an Incipient Termination Event or a Termination Event is imminent or deems the Purchasers' rights or interests in the Transferred Receivables or the Seller Collateral insecure, the Servicer shall deliver a Weekly Investment Base Certificate to the Agent for distribution to the Purchasers at such more frequent intervals as the Agent may request from time to time. (iii) Not later than the 18th day of each month, commencing with May 18, 2002 (or if any such day is not a Business Day, the next succeeding Business Day thereafter, the Servicer shall deliver to the Agent for distribution to the Purchasers a Monthly Report in the form of Exhibit 2.03(a)(iii) hereto. (iv) Capital Investment Available shall be determined by the Agent based on information related to the Seller Collateral available to it, including (A) any information obtained in connection with any audit or reflected in the most recent Daily Investment Base Certificate, Weekly Investment Base Certificate or any other Investment Report delivered to the Agent for distribution to the Purchasers or (B) any other information that may be available to the Purchasers and the Agent. 3 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (b) Each Purchase shall be made upon the provision of notice by the Seller to the Agent in the manner provided herein. Any such notice must be given in writing no later than 1:00 p.m. (New York time) (i) the day of the proposed Purchase Date set forth therein if an Index Rate Purchase is being requested; or (ii) at least two (2) LIBOR Business Days immediately preceding the proposed Purchase Date set forth therein if a LIBOR Rate Purchase is being requested or if the request is to convert a LIBOR Rate Purchase to an Index Rate Purchase, if applicable. Each such notice (a "Purchase Request") shall (i) be substantially in the form of Exhibit 2.03(b), (ii) be irrevocable and (iii) specify the amount of the requested increase in Capital Investment (which shall be in an amount not less than (i) $1,000,000 (or a larger integral multiple of $500,000) for a LIBOR Rate Purchase request; or (ii) $100,000 (or a larger integral multiple of $10,000) for an Index Rate Purchase request) and the proposed Purchase Date (which shall be a Business Day), and shall include such other information as may be required by any Purchaser or the Agent. Section 2.04. Conveyance of Receivables. (a) Purchase Assignment. On or prior to the Closing Date, the Seller shall complete, execute and deliver to the Agent for the benefit of the Purchasers an assignment substantially in the form of Exhibit 2.04(a) (the "Purchase Assignment") in order to evidence the Purchases. (b) Funding of Collection Account; Increases in Capital Investment. (i) Funding of Collection Account by Purchasers. Following receipt of any Purchase Request, and subject to satisfaction of the conditions set forth in Section 3.02, each of the Purchasers shall make available to or on behalf of the Seller on the Purchase Date specified therein such Purchaser's Pro Rata Share of the lesser of the requested increase in Capital Investment specified in such Purchase Request and Capital Investment Available by depositing such amount in same day funds into the Collection Account. (ii) Payment of Purchase Price. Each of the Purchasers shall, or shall cause the Agent to, deposit into the Seller Account on each Business Day during the Revolving Period, in same day funds, all amounts on deposit in the Collection Account that are to be disbursed to or on behalf of the Seller pursuant to Section 6.03 as payment for the Purchaser Interests. (c) Vesting of Ownership. (i) Effective on and as of each Purchase Date, the Agent on behalf of the Purchasers shall own each the Purchaser Interests sold by the Seller hereunder on such Purchase Date. The Seller shall not take any action inconsistent with such ownership and shall not claim any ownership interest in such Purchaser Interests. 4 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (ii) The Seller shall indicate in its Records that interests in the Transferred Receivables have been sold hereunder and that ownership of such interests is vested in the Agent on behalf of the Purchasers. In addition, the Seller shall respond to any inquiries with respect to the ownership of any Transferred Receivable by stating that interests therein have been sold hereunder and that ownership of such interests is vested in the Agent for the benefit of the Purchasers. The Seller and the Servicer shall hold all Contracts and other documents and incidents relating to such Transferred Receivables in trust for the benefit of the Agent on behalf of the Purchasers, as the owner thereof, and for the sole purpose of facilitating the servicing of such Transferred Receivables. The Seller and the Servicer hereby acknowledge that their retention and possession of such Contracts and documents shall at all times be at the sole discretion of the Agent and in a custodial capacity for the Agent's (on behalf of the Purchasers) benefit only. (d) Repurchases of Transferred Receivables. If any Originator is required to repurchase Transferred Receivables from the Seller pursuant to Section 4.05 of the Sale Agreement, each of the Purchasers shall sell and reconvey its Pro Rata Share of the Purchaser Interests in such Transferred Receivables to the Seller, if and to the extent a Purchase Excess exists or would exist pursuant to such sale and reconveyance, for cash in an amount equal to such Purchaser's Pro Rata Share of the Outstanding Balance of the Receivables being repurchased. Section 2.05. Facility Termination Date. Notwithstanding anything to the contrary set forth herein, the Purchasers shall not have any obligation to purchase any additional Purchaser Interests from and after the Facility Termination Date. Section 2.06. Daily Yield. (a) The Seller shall pay Daily Yield to the Agent, for the account of the Purchasers, for each day on which any Capital Investment is outstanding, in the manner and at the times specified in Sections 6.03 and 6.05. (b) Notwithstanding the foregoing, the Seller shall pay interest at the applicable Daily Yield Rate on unpaid Daily Yield and on any other amount payable by the Seller hereunder (to the extent permitted by law) that shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise) for the period commencing on the due date thereof to (but excluding) the date the same is indefeasibly paid in full. (c) Solely for purposes of calculating Daily Yield, funds will be deemed to be credited to the outstanding Capital Investment one day after receipt thereof. Section 2.07. Fees. (a) On or prior to the Closing Date, the Seller shall pay to the Agent, for the account of itself and the Purchasers, the fees set forth in the Fee Letter that are payable on the Closing Date. 5 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (b) On each Settlement Date, the Seller shall pay to the Servicer or to the Successor Servicer, as applicable, the Servicing Fee or the Successor Servicing Fees and Expenses, respectively, in each case to the extent of available funds therefor as provided in Section 6.03(b). Section 2.08. Time and Method of Payments. (a) Subject to the provisions of Sections 6.02, 6.03, and 6.05 all payments in reduction of Capital Investment and all payments of Daily Yield, fees and other amounts payable by the Seller hereunder shall be made in Dollars, in immediately available funds, to the Agent (for its account or the account of the Purchasers or the applicable Affected Parties or Indemnified Persons) not later than 1:00 p.m. (New York time) on the due date therefor. Any such payment made on such date but after such time shall be deemed to have been made on, and Daily Yield shall continue to accrue and be payable thereon until, the next succeeding Business Day. If any such payment becomes due on a day other than a Business Day, the maturity thereof will be extended to the next succeeding Business Day and Daily Yield thereon shall be payable during such extension. The Agent is hereby authorized to add the amount of any Daily Yield, fees and other amounts payable by the Seller hereunder which are not paid when due to the Capital Investment. (b) Any and all payments by the Seller hereunder shall be made in accordance with this Section 2.08 without setoff or counterclaim and free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, excluding taxes on or measured by the net income of any Affected Party imposed by the United States, the Affected Party's jurisdiction of organization (or, in the case of an individual, jurisdiction in which individual's primary residence is located) or any other jurisdiction in which such Affected Party has established a taxable nexus other than in connection with the transactions contemplated hereby and by the Sale Agreement on or measured by the overall net income of such Affected Party to the extent that the computation of such taxes is consistent with the Intended Characterization (such non-excluded taxes, levies, imposts, deductions, charges and withholdings being "Indemnified Taxes"). If the Seller shall be required by law to deduct any Indemnified Taxes from or in respect of any sum payable hereunder, (i) the sum payable shall be increased as much as shall be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.08) the Affected Party entitled to receive any such payment receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Seller shall make such deductions, and (iii) the Seller shall pay the full amount deducted to the relevant taxing or other authority in accordance with applicable law. Within 30 days after the date of any payment of Indemnified Taxes, the Seller shall furnish to the Agent the original or a certified copy of a receipt evidencing payment thereof. The Seller shall indemnify any Affected Party from and against, and, within ten days of demand therefor, pay any Affected Party for, the full amount of Indemnified Taxes (together with any taxes imposed by any jurisdiction on amounts payable under this Section 2.08) paid by such Affected Party and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally asserted. 6 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (c) Any Purchaser exercising a right of setoff or otherwise receiving any payment on account of the Seller Secured Obligations in excess of its Pro Rata Share thereof shall purchase for cash (and the other Purchasers or holders shall sell) such participations in each such other Purchaser's or holder's Pro Rata Share of the Seller Secured Obligations as would be necessary to cause such Purchaser to share the amount so offset or otherwise received with each other Purchaser or holder in accordance with their respective Pro Rata Shares (other than offset rights exercised by any Purchaser with respect to this Section 2.08 or Section 2.09). Section 2.09. Capital Requirements; Additional Costs; Illegality. (a) If the Agent on behalf of any Affected Party shall have determined that the adoption after the date hereof of any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, reserve requirements or similar requirements or compliance by such Affected Party with any request or directive regarding capital adequacy, reserve requirements or similar requirements (whether or not having the force of law) from any central bank or other Governmental Authority increases or would have the effect of increasing the amount of capital, reserves or other funds required to be maintained by such Affected Party against commitments made by it under this Agreement or any other Related Document and thereby reducing the rate of return on such Affected Party's capital as a consequence of its commitments hereunder or thereunder, then the Seller shall from time to time upon demand by the Agent pay to the Agent on behalf of such Affected Party additional amounts sufficient to compensate such Affected Party for the Seller's Share of such reduction together with interest thereon from the date of any such demand until payment in full at the applicable Daily Yield Rate. A certificate as to the amount of that reduction and showing the basis of the computation thereof submitted by the Agent to the Seller shall be final, binding and conclusive on the parties hereto (absent manifest error) for all purposes. (b) If, due to any Regulatory Change, there shall be any increase in the cost to any Affected Party of agreeing to make or making, funding or maintaining any commitment hereunder, under any other Related Document, including with respect to any Purchases, Capital Investment, or any reduction in any amount receivable by such Affected Party hereunder or thereunder, including with respect to any Purchases, Capital Investment (any such increase in cost or reduction in amounts receivable are hereinafter referred to as "Additional Costs"), then the Seller shall, from time to time upon demand by the Agent, pay to the Agent on behalf of such Affected Party additional amounts sufficient to compensate such Affected Party for the Seller's Share of such Additional Costs together with interest thereon from the date demanded until payment in full thereof at the applicable Daily Yield Rate. Such Affected Party agrees that, as promptly as practicable after it becomes aware of any circumstance referred to above that would result in any such Additional Costs, it shall, to the extent not inconsistent with its internal policies of general application, use reasonable commercial efforts to minimize costs and expenses incurred by it and payable to it by the Seller pursuant to this Section 2.09(b). (c) Notwithstanding anything to the contrary contained herein, if the introduction of or any change in any law or regulation (or any change in the interpretation 7 WNC Receivables, LLC Receivables Purchase and Servicing Agreement thereof) shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Purchaser to agree to make or to make or to continue to fund or maintain any LIBOR Rate Purchase, then, unless such Purchaser is able to make or to continue to fund or to maintain such LIBOR Rate Purchase at another branch or office of such Purchaser without, in Purchaser's opinion, adversely affecting it or its Purchases or the income obtained therefrom, on notice thereof and demand therefor by such Purchaser to Seller, Seller shall forthwith (i) repurchase all outstanding LIBOR Rate Purchases; or (ii) convert all LIBOR Rate Purchases into Index Rate Purchases. (d) Determinations by any Affected Party for purposes of this Section 2.09 of the effect of any Regulatory Change on its costs of making, funding or maintaining any commitments hereunder, under any other Related Document or on amounts receivable by it hereunder or thereunder or of the additional amounts required to compensate such Affected Party in respect of any Additional Costs shall be set forth in a written notice to the Seller in reasonable detail and shall be final, binding and conclusive on the Seller (absent manifest error) for all purposes. Section 2.10. Breakage Costs. The Seller shall pay to the Agent for the account of the applicable Purchaser, upon request of such Purchaser, such amount as shall compensate the Purchaser for any loss, cost or expense incurred by such Purchaser (as determined by such Purchaser) as a result of any reduction by the Seller in Capital Investment (and accompanying loss of Daily Yield thereon) other than on the maturity date of the financing used to fund such Capital Investment, which compensation shall include an amount equal to any loss or expense incurred by the Purchaser during the period from the date of such reduction or to (but excluding) such maturity date if the rate of interest obtainable by the Purchaser upon the redeployment of funds in an amount equal to such reduction is less than the interest rate applicable to such financing source (any such loss, cost or expense, "Breakage Costs"). The determination by a Purchaser of the amount of any such loss or expense shall be set forth in a written notice to the Seller in reasonable detail and shall be final, binding and conclusive on the Seller (absent manifest error) for all purposes. Section 2.11. Purchase Excess. On each Business Day during the Revolving Period and after completion of the disbursements specified in Section 6.03, the Agent shall notify the Seller and the Servicer of any Purchase Excess on such day, and the Seller shall deposit the amount of such Purchase Excess in the Collection Account by 1:00 p.m. (New York time) on the immediately succeeding Business Day. ARTICLE III. CONDITIONS PRECEDENT Section 3.01. Conditions to Effectiveness of Agreement. The Purchasers shall not be obligated to purchase Purchaser Interests hereunder on the occasion of the initial Purchase, nor shall the Purchasers or the Agent be obligated to take, fulfill or perform any other 8 WNC Receivables, LLC Receivables Purchase and Servicing Agreement action hereunder, until the following conditions have been satisfied, in the sole discretion of, or waived in writing by, the Purchasers and the Agent: (a) Purchase Agreement; Other Related Documents. This Agreement shall have been duly executed by, and delivered to, the parties hereto and the Purchasers and the Agent shall have received such other documents, instruments, agreements and legal opinions as each Purchaser and the Agent shall request in connection with the transactions contemplated by this Agreement, including all those listed in the Schedule of Documents, each in form and substance satisfactory to each Purchaser and the Agent. (b) Governmental Approvals. Each of the Seller Parties shall have obtained all required consents and approvals of all Persons, including all requisite Governmental Authorities, to the execution, delivery and performance of this Agreement and the other Related Documents to which it is a party and the consummation of the transactions contemplated hereby or thereby. (c) Compliance with Laws. Each of the Seller Parties shall be in compliance in all material respects with all applicable foreign, federal, state and local laws and regulations, including those specifically referenced in Section 5.01(a). (d) Payment of Fees. The Seller shall have paid all fees required to be paid by it on the Closing Date, including all fees required hereunder and under the Fee Letter, and shall have reimbursed each Purchaser for all fees, costs and expenses of closing the transactions contemplated hereunder and under the other Related Documents, including each Purchaser's legal and audit expenses, and other document preparation costs. (e) Representations and Warranties. Each representation and warranty by any of the Seller Parties contained herein and in each other Related Document to which such Seller Party is a party shall be true and correct as of the Closing Date, except to the extent that such representation or warranty expressly relates solely to an earlier date. (f) No Termination Event. No Incipient Termination Event or Termination Event hereunder shall have occurred and be continuing or would result after giving effect to any of the transactions contemplated on the Closing Date. (g) Intercreditor Agreement. The Agent shall have received, in form and substance satisfactory to the Agent, a fully executed Intercreditor Agreement. (h) Consents. The Agent shall have received, in form and substance satisfactory to Agent, fully executed copies of all consents required from creditors of the various members of the Parent Group necessary to permit the transactions contemplated by the Sale Agreement and hereby. 9 WNC Receivables, LLC Receivables Purchase and Servicing Agreement Section 3.02. Conditions Precedent to All Purchases. The Purchasers shall not be obligated to purchase Purchaser Interests hereunder on any Purchase Date if, as of the date thereof: (a) any representation or warranty of the Seller, the Servicer or the Independent Member contained herein or in any of the other Related Documents shall be untrue or incorrect in any material respect as of such date, either before or after giving effect to the Purchase of Purchaser Interests on such date and to the application of the proceeds therefrom, except to the extent that such representation or warranty expressly relates to an earlier date and except for changes therein expressly permitted by this Agreement; (b) any event shall have occurred, or would result from the Purchase of Purchaser Interests on such Purchase Date or from the application of the proceeds therefrom, that constitutes an Incipient Termination Event, a Termination Event, an Incipient Servicer Termination Event or an Event of Servicer Termination; (c) the Seller or the Servicer is not in compliance with any of its covenants or other agreements set forth herein, including, without limitation, the delivery of Monthly Reports and Investment Base Certificates. (d) the Facility Termination Date shall have occurred; (e) either before or after giving effect to such Purchase and to the application of the proceeds therefrom, a Purchase Excess would exist; (f) any of the Seller Parties shall fail to have taken such other action, including delivery of approvals, consents, opinions, documents and instruments to the Agent (on behalf of the Purchasers), as any Purchaser or the Agent may reasonably request; or (g) the Agent shall have determined that any event or condition has occurred that has had, or could reasonably be expected to have or result in, a Material Adverse Effect The delivery by the Seller of a Purchase Request and the acceptance by the Seller of the funds from such Purchase on any Purchase Date shall be deemed to constitute, as of any such Purchase Date, a representation and warranty by the Seller that the conditions in this Section 3.02 have been satisfied. ARTICLE IV. REPRESENTATIONS AND WARRANTIES Section 4.01. Representations and Warranties of the Seller. To induce each Purchaser to purchase the Purchaser Interests and the Agent to take any action hereunder, the Seller makes the following representations and warranties to each Purchaser and the Agent as of 10 WNC Receivables, LLC Receivables Purchase and Servicing Agreement the Closing Date and, except to the extent provided otherwise below, as of each Purchase Date, each and all of which shall survive the execution and delivery of this Agreement. (a) Legal Existence; Compliance with Law. The Seller (i) is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware (which is Seller's only state of organization); (ii) is duly qualified to conduct business and is in good standing in each other jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification; (iii) has the requisite limited liability company power and authority and the legal right to own, pledge, mortgage or otherwise encumber and operate its properties, to lease the property it operates under lease, and to conduct its business, in each case, as now, heretofore and proposed to be conducted; (iv) has all licenses, permits, consents or approvals from or by, and has made all filings with, and has given all notices to, all Governmental Authorities having jurisdiction, to the extent required for such ownership, operation and conduct; (v) is in compliance with its certificate of formation and limited liability company agreement; and (vi) subject to specific representations set forth herein regarding ERISA, tax and other laws, is in compliance with all applicable provisions of law, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (b) Executive Offices; Collateral Locations; Legal or Other Names; Organizational Identification Number; FEIN. As of the Closing Date, the current location of the Seller's chief executive office, principal place of business, other offices, the warehouses and premises within which any Seller Collateral is stored or located, and the locations of its records concerning the Seller Collateral (including originals of the Seller Assigned Agreements) are set forth in Schedule 4.01(b) and none of such locations has changed within the past 12 months (or such shorter time as the Seller has been in existence). During the prior five years (or such shorter time as the Seller has been in existence), except as set forth in Schedule 4.01(b), the Seller has not been known as or used any legal, fictitious or trade name. In addition, Schedule 4.01(b) lists the organizational identification number issued by Seller's state of organization or states that no such number has been issued and lists the federal employer identification number of the Seller. (c) Power, Authorization, Enforceable Obligations. The execution, delivery and performance by the Seller of this Agreement and the other Related Documents to which it is a party, the creation and perfection of all Liens and ownership interests provided for therein: (i) are within the Seller's limited liability company powers; (ii) have been duly authorized by all necessary or proper limited liability company and Equity Holder action; (iii) do not contravene any provision of the Seller's certificate of formation or limited liability company agreement; (iv) do not violate any law or regulation, or any order or decree of any court or Governmental Authority; (v) do not conflict with or result in the breach or termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which the Seller or any Originator is a party or by which the Seller or any Originator or any of the property of the Seller or any Originator is bound; (vi) do not result in the creation or imposition of any Adverse Claim 11 WNC Receivables, LLC Receivables Purchase and Servicing Agreement upon any of the property of the Seller or any Originator; and (vii) do not require the consent or approval of any Governmental Authority or any other Person, except those which have been duly obtained, made or complied with prior to the Closing Date as provided in Section 3.01(b). The exercise by each of the Purchasers, the Seller or the Agent of any of its rights and remedies under any Related Document to which it is a party, do not require the consent or approval of any Governmental Authority or any other Person (other than consents or approvals solely relating to or required to be obtained by a Purchaser or the Agent, and subject to the Bankruptcy Code), except those which will have been duly obtained, made or complied with prior to the Closing Date as provided in Section 3.01(b). On or prior to the Closing Date, each of the Related Documents to which the Seller is a party shall have been duly executed and delivered by the Seller and each such Related Document shall then constitute a legal, valid and binding obligation of the Seller enforceable against it in accordance with its terms. (d) No Litigation. No Litigation is now pending or, to the knowledge of the Seller, threatened against the Seller that (i) challenges the Seller's right or power to enter into or perform any of its obligations under the Related Documents to which it is a party, or the validity or enforceability of any Related Document or any action taken thereunder, (ii) seeks to prevent the transfer, sale, pledge or contribution of any Receivable or the consummation of any of the transactions contemplated under this Agreement or the other Related Documents, or (iii) has a reasonable risk of being determined adversely to the Seller and that, if so determined, could have a Material Adverse Effect. As of the Closing Date there is no Litigation pending or threatened that seeks damages or injunctive relief against, or alleges criminal misconduct by, the Seller. (e) Solvency. Both before and after giving effect to (i) the transactions contemplated by this Agreement and the other Related Documents and (ii) the payment and accrual of all transaction costs in connection with the foregoing, the Seller is and will be Solvent. (f) Material Adverse Effect. Since the date of the Seller's organization, (i) the Seller has not incurred any obligations, contingent or non-contingent liabilities, liabilities for charges, long-term leases or unusual forward or long-term commitments that, alone or in the aggregate, could reasonably be expected to have a Material Adverse Effect, (ii) no contract, lease or other agreement or instrument has been entered into by the Seller or has become binding upon the Seller's assets and no law or regulation applicable to the Seller has been adopted that has had or could reasonably be expected to have a Material Adverse Effect and (iii) the Seller is not in default and no third party is in default under any material contract, lease or other agreement or instrument to which the Seller is a party that alone or in the aggregate could reasonably be expected to have a Material Adverse Effect. Since the date of the Seller's organization, no event has occurred that alone or together with other events could reasonably be expected to have a Material Adverse Effect. (g) Ownership of Property; Liens. No Transferred Receivable is subject to any Adverse Claim, none of the other properties and assets of the Seller are subject to any Adverse Claims other than Permitted Seller Encumbrances, and there are no facts, circumstances or conditions known to the Seller that may result in (i) with respect to the Transferred 12 WNC Receivables, LLC Receivables Purchase and Servicing Agreement Receivables, any Adverse Claims (including Adverse Claims arising under Environmental Laws) and (ii) with respect to its other properties and assets, any Adverse Claims (including Adverse Claims arising under Environmental Laws) other than Permitted Seller Encumbrances. The Seller has received all assignments, bills of sale and other documents, and has duly effected all recordings, filings and other actions necessary to establish, protect and perfect the Seller's right, title and interest in and to the Transferred Receivables and its other properties and assets. The Seller has rights in and the power to transfer the Transferred Receivables. The Seller has rights in and the power to transfer each item of the Seller Collateral upon which it purports to grant a Lien hereunder free and clear of any and all Liens other than Permitted Seller Encumbrances. The Liens granted to the Agent for the benefit of the Purchasers pursuant to Section 8.01 will at all times be fully perfected first priority Liens in and to the Seller Collateral. (h) Ventures, Subsidiaries and Affiliates; Outstanding Equity Interests and Indebtedness. The Seller has no Subsidiaries, is not engaged in any joint venture or partnership with any other Person, and is not an Affiliate of any other Person. All of the issued and outstanding Equity Interests of the Seller are owned by each of its members in the amounts set forth on Schedule 4.01(h). There are no outstanding rights to purchase, options, warrants or similar rights or agreements pursuant to which the Seller may be required to issue, sell, repurchase or redeem any of its Equity Interests or other equity securities or any Equity Interest or other equity securities of its Subsidiaries. All outstanding Indebtedness of the Seller as of the Closing Date is described in Section 5.03(i). (i) Taxes. All tax returns, reports and statements, including information returns, required by any Governmental Authority to be filed by the Seller have been filed with the appropriate Governmental Authority on or before the applicable due date (including any extensions thereof) and all charges have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof (or any such fine, penalty, interest, late charge or loss has been paid), excluding charges or other amounts being contested in accordance with Section 5.01(e). Proper and accurate amounts have been withheld by the Seller or such Affiliate from its respective employees for all periods in full and complete compliance with all applicable federal, state, local and foreign laws and such withholdings have been timely paid to the respective Governmental Authorities. Seller has not executed or filed with the IRS or any other Governmental Authority any agreement or other document extending, or having the effect of extending, the period for assessment or collection of any charges. (j) Full Disclosure. All information contained in this Agreement, any Investment Base Certificate or any of the other Related Documents, or any written statement furnished by Seller or by the Servicer or any other Seller Party on behalf of the Seller to the Agent for the benefit of the Purchasers pursuant to the terms of this Agreement or any of the other Related Documents is true and accurate in every material respect, and none of this Agreement, any Investment Base Certificate or any of the other Related Documents, or any written statement furnished by Seller or by the Servicer or any other Seller Party on behalf of the Seller to the Agent for distribution to the Purchasers pursuant to the terms of this Agreement or 13 WNC Receivables, LLC Receivables Purchase and Servicing Agreement any of the other Related Documents is misleading as a result of the failure to include therein a material fact. (k) ERISA. The Seller is in compliance with ERISA and has not incurred and does not expect to incur any liabilities (except for premium payments arising in the ordinary course of business) payable to the PBGC under ERISA. (l) Brokers. No broker or finder acting on behalf of the Seller was employed or utilized in connection with this Agreement or the other Related Documents or the transactions contemplated hereby or thereby and the Seller has no obligation to any Person in respect of any finder's or brokerage fees in connection therewith. (m) Margin Regulations. The Seller is not engaged in the business of extending credit for the purpose of "purchasing" or "carrying" any "margin security," as such terms are defined in Regulation U of the Federal Reserve Board as now and from time to time hereafter in effect (such securities being referred to herein as "Margin Stock"). The Seller owns no Margin Stock, and no portion of the proceeds of the purchase price for Transferred Receivables sold hereunder will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness that was originally incurred to purchase or carry any Margin Stock or for any other purpose that might cause any portion of such proceeds to be considered a "purpose credit" within the meaning of Regulations T, U or X of the Federal Reserve Board. The Seller will not take or permit to be taken any action that might cause any Related Document to violate any regulation of the Federal Reserve Board. (n) Nonapplicability of Bulk Sales Laws. No transaction contemplated by this Agreement or any of the Related Documents requires compliance with any bulk sales act or similar law. (o) Securities Act and Investment Company Act Exemptions. Each Purchase of Purchaser Interests under this Agreement will constitute (i) a "current transaction" within the meaning of Section 3(a)(3) of the Securities Act and (ii) a purchase or other acquisition of notes, drafts, acceptances, open accounts receivable or other obligations representing part or all of the sales price of merchandise, insurance or services within the meaning of Section 3(c)(5) of the Investment Company Act. (p) Government Regulation. The Seller is not an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act. The Purchase of Purchaser Interests by the Purchasers hereunder, the application of the proceeds thereof and the consummation of the transactions contemplated by this Agreement and the other Related Documents will not violate any provision of any such statute or any rule, regulation or order issued by the Securities and Exchange Commission. 14 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (q) Nonconsolidation. The Seller is operated in such a manner that the separate legal existence of the Seller, on the one hand, and any member of the Parent Group, on the other hand, would not be disregarded in the event of the bankruptcy or insolvency of any member of the Parent Group and, without limiting the generality of the foregoing: (i) the Seller is a limited purpose limited liability company whose activities are restricted in its certificate of formation and limited liability company agreement to those activities expressly permitted hereunder and under the other Related Documents and the Seller has not engaged, and does not presently engage, in any activity other than those activities expressly permitted hereunder and under the other Related Documents, nor has the Seller entered into any agreement other than this Agreement, the other Related Documents to which it is a party and, with the prior written consent of the Required Purchasers and the Agent, any other agreement necessary to carry out more effectively the provisions and purposes hereof or thereof; (ii) no member of the Parent Group or any individual at the time he or she is acting as an officer of any such member is or has been involved in the day-to-day management of the Seller; (iii) other than the purchase and acceptance through capital contribution of Transferred Receivables, the payment of dividends and the return of capital to the Originators, the payment of Servicing Fees to the Servicer under this Agreement and the transactions evidenced by the Ancillary Services and Lease Agreement, the Seller engages and has engaged in no inter-entity transactions with any member of the Parent Group; (iv) the Seller maintains limited liability company records and books of account separate from that of each member of the Parent Group, holds regular limited liability company meetings and otherwise observes limited liability company formalities and has a business office separate from that of each member of the Parent Group; (v) the financial statements and books and records of the Seller and the Originators reflect the separate legal existence of the Seller; (vi) (A) the Seller maintains its assets separately from the assets of each member of the Parent Group (including through the maintenance of separate bank accounts and except for any Records to the extent necessary to assist the Servicer in connection with the servicing of the Transferred Receivables), (B) the Seller's funds (including all money, checks and other cash proceeds) and assets, and records relating thereto, have not been and are not commingled with those of any member of the Parent Group and (C) the separate creditors of the Seller will be entitled to be satisfied out of the Seller's assets prior to any value in the Seller becoming available to the Seller's members; 15 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (vii) except as otherwise expressly permitted hereunder, under the other Related Documents and under the Seller's organizational documents, no member of the Parent Group (A) pays the Seller's expenses, (B) guarantees the Seller's obligations, or (C) advances funds to the Seller for the payment of expenses or otherwise; (viii) all business correspondence and other communications of the Seller are conducted in the Seller's own name, on its own stationery and through a separately-listed telephone number; (ix) the Seller does not act as agent for any member of the Parent Group, but instead presents itself to the public as a limited liability company separate from each such member and independently engaged in the business of purchasing and financing Receivables; (x) the Seller maintains at least (A) one Independent Member (as defined in Seller's limited liability company agreement as in effect on the date hereof) that has two Independent Directors (as defined in Seller's limited liability company agreement as in effect on the date hereof) and (B) two Independent Managers (as defined in Seller's limited liability company agreement as in effect on the date hereof); (xi) the Seller's certificate of formation and limited liability company agreement require (A) the affirmative vote of each manager, including the Independent Managers, and each member (including the Independent Member, pursuant to the authorization of its board of directors including the affirmative votes of its Independent Directors) before a voluntary petition under Section 301 of the Bankruptcy Code may be filed by the Seller, and (B) the Seller to maintain (1) correct and complete books and records of account and (2) minutes of the meetings and other proceedings of its members and managers. (r) Deposit and Disbursement Accounts. Schedule 4.01(r) lists all banks and other financial institutions at which the Seller maintains deposit or other bank accounts as of the Closing Date, including any Lockbox Accounts, and such schedule correctly identifies the name, address and telephone number of each depository, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor. (s) Transferred Receivables. (i) Transfers. Each Transferred Receivable was purchased by or contributed to the Seller on the relevant Transfer Date pursuant to the Sale Agreement. (ii) Eligibility. Each Transferred Receivable designated as an Eligible Receivable in each Investment Base Certificate constitutes an Eligible Receivable as of the date specified in such Investment Base Certificate. 16 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (iii) No Material Adverse Effect. The Seller has no knowledge of any fact (including any defaults by the Obligor thereunder on any other Receivable) that would cause it or should have caused it to expect that any payments on each Transferred Receivable designated as an Eligible Receivable in any Investment Base Certificate will not be paid in full when due or to expect any other Material Adverse Effect. (iv) Nonavoidability of Transfers. The Seller shall (A) have received each Contributed Receivable as a contribution to the capital of the Seller by the applicable Originator and (B) (1) have purchased each Sold Receivable from the applicable Originator for cash consideration and (2) have accepted assignment of any Eligible Receivables transferred pursuant to Section 4.05 of the Sale Agreement, in each case in an amount that constitutes fair consideration and reasonably equivalent value therefor. Each Sale of a Sold Receivable effected pursuant to the terms of the Sale Agreement shall not have been made for or on account of an antecedent debt owed by any Originator to the Seller and no such Sale is or may be avoidable or subject to avoidance under any bankruptcy laws, rules or regulations. (t) Representations and Warranties in Other Related Documents. Each of the representations and warranties of the Seller contained in the Related Documents (other than this Agreement) is true and correct in all respects and the Seller hereby makes each such representation and warranty to, and for the benefit of, the Purchasers and the Agent as if the same were set forth in full herein. (u) Servicing Software. The Seller has all necessary licenses and rights to use the Servicing Software. Section 4.02. Representations and Warranties of the Servicer. To induce the Purchasers to purchase the Purchaser Interests and the Agent to take any action required to be performed by it hereunder, the Servicer represents and warrants to the Purchasers and the Agent, which representation and warranty shall survive the execution and delivery of this Agreement, that each of the representations and warranties of the Servicer (whether made by the Servicer in its capacity as an Originator or as Servicer) contained in any Related Document is true and correct and, if made by the Servicer in its capacity as an Originator, applies with equal force to the Servicer in its capacity as Servicer, and the Servicer hereby makes each such representation and warranty to, and for the benefit of, the Purchasers and the Agent as if the same were set forth in full herein. Section 4.03. Representations and Warranties of the Independent Member. To induce each Purchaser to purchase the Purchaser Interests and the Agent to take any action hereunder, the Independent Member makes the following representations and warranties to each Purchaser and the Agent as of the Closing Date and, except to the extent provided otherwise below, as of each Purchase Date, each and all of which shall survive the execution and delivery of this Agreement. 17 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (a) Legal Existence; Compliance with Law. The Independent Member (i) is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation; (ii) is duly qualified to conduct business and is in good standing in each other jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification; (iii) has the requisite corporate power and authority and the legal right to own, pledge, mortgage or otherwise encumber and operate its properties, to lease the property it operates under lease, and to conduct its business, in each case, as now, heretofore and proposed to be conducted; (iv) has all licenses, permits, consents or approvals from or by, and has made all filings with, and has given all notices to, all Governmental Authorities having jurisdiction, to the extent required for such ownership, operation and conduct; (v) is in compliance with its certification of incorporation; and (vi) subject to specific representations set forth herein regarding ERISA, tax and other laws, is in compliance with all applicable provisions of law, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (b) Power, Authorization, Enforceable Obligations. The execution, delivery and performance by the Independent Member of this Agreement and the other Related Documents to which it is a party, the creation and perfection of all Liens and ownership interests provided for therein: (i) are within the Independent Member's corporate powers; (ii) have been duly authorized by all necessary or proper corporate and shareholder action; (iii) do not contravene any provision of the Independent Member's certificate of incorporation; (iv) do not violate any law or regulation, or any order or decree of any court or Governmental Authority; (v) do not conflict with or result in the breach or termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which the Independent Member is a party or by which the Independent Member or any of the property of the Independent Member is bound; (vi) do not result in the creation or imposition of any Adverse Claim upon any of the property of the Independent Member; and (vii) do not require the consent or approval of any Governmental Authority or any other Person, except those which have been duly obtained, made or complied with prior to the Closing Date as provided in Section 3.01(c). The exercise by each of the Purchasers or the Agent of any of its rights and remedies under any Related Document to which it is a party, do not require the consent or approval of any Governmental Authority or any other Person (other than consents or approvals solely relating to or required to be obtained by a Purchaser or the Agent, and subject to the Bankruptcy Code), except those which will have been duly obtained, made or complied with prior to the Closing Date as provided in Section 3.01(c). On or prior to the Closing Date, each of the Related Documents to which the Independent Member is a party shall have been duly executed and delivered by the Independent Member and each such Related Document shall then constitute a legal, valid and binding obligation of the Independent Member enforceable against it in accordance with its terms. (c) No Litigation. No Litigation is now pending or, to the knowledge of the Independent Member, threatened against the Independent Member that (i) challenges the Independent Member's right or power to enter into or perform any of its obligations under the Related Documents to which it is a party, or the validity or enforceability of any Related 18 WNC Receivables, LLC Receivables Purchase and Servicing Agreement Document or any action taken thereunder, or (ii) has a reasonable risk of being determined adversely to the Independent Member and that, if so determined, could have a Material Adverse Effect. As of the Closing Date there is no Litigation pending or threatened that seeks damages or injunctive relief against, or alleges criminal misconduct by, the Independent Member. (d) Solvency. Both before and after giving effect to the transactions contemplated by this Agreement and the other Related Documents, the Independent Member is and will be Solvent. (e) Material Adverse Effect. Since the date of the Independent Member's organization, (i) the Independent Member has not incurred any obligations, contingent or non-contingent liabilities, liabilities for charges, long-term leases or unusual forward or long-term commitments that, alone or in the aggregate, could reasonably be expected to have a Material Adverse Effect, (ii) no contract, lease or other agreement or instrument has been entered into by the Independent Member or has become binding upon the Independent Member's assets and no law or regulation applicable to the Independent Member has been adopted that has had or could reasonably be expected to have a Material Adverse Effect and (iii) the Independent Member is not in default and no third party is in default under any material contract, lease or other agreement or instrument to which the Independent Member is a party that alone or in the aggregate could reasonably be expected to have a Material Adverse Effect. Since the date of the Independent Member's incorporation, no event has occurred that alone or together with other events could reasonably be expected to have a Material Adverse Effect. (f) Ownership of Property; Liens. No asset of the Independent Member is subject to any Adverse Claim other than Permitted Independent Member Encumbrances, and there are no facts, circumstances or conditions known to the Independent Member that may result in any Adverse Claims (including Adverse Claims arising under Environmental Laws) other than Permitted Independent Member Encumbrances. (g) Ventures, Subsidiaries and Affiliates; Outstanding Equity Interests and Indebtedness. Except for the Seller, the Independent Member has no Subsidiaries and is not engaged in any joint venture or partnership with any other Person. All of the issued and outstanding Equity Interests of the Independent Member is owned by the Performance Guarantor. There are no outstanding rights to purchase, options, warrants or similar rights or agreements pursuant to which the Independent Member may be required to issue, sell, repurchase or redeem any of its Equity Interests or other equity securities or any Equity Interest or other equity securities of the Seller. As of the Closing Date, the Independent Member has not outstanding Indebtedness. (h) Taxes. All tax returns, reports and statements, including information returns, required by any Governmental Authority to be filed by the Independent Member have been filed with the appropriate Governmental Authority on or before the applicable due date (including any extensions thereof) and all charges have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof (or any such 19 WNC Receivables, LLC Receivables Purchase and Servicing Agreement fine, penalty, interest, late charge or loss has been paid), excluding charges or other amounts being contested in accordance with Section 5.01(e). Proper and accurate amounts have been withheld by the Independent Member from its employees for all periods in full and complete compliance with all applicable federal, state, local and foreign laws and such withholdings have been timely paid to the respective Governmental Authorities. The Independent Member has not executed or filed with the IRS or any other Governmental Authority any agreement or other document extending, or having the effect of extending, the period for assessment or collection of any charges. (i) Full Disclosure. All information contained in this Agreement or any of the other Related Documents, or any written statement furnished by or on behalf of the Independent Member to either the Agent or the Purchasers pursuant to the terms of this Agreement or any of the other Related Documents is true and accurate in every material respect, and none of this Agreement or any of the other Related Documents, or any written statement furnished by or on behalf of the Independent Member to either the Agent or the Purchasers pursuant to the terms of this Agreement or any of the other Related Documents is misleading as a result of the failure to include therein a material fact. (j) ERISA. The Independent Member is in compliance with ERISA and has not incurred and does not expect to incur any liabilities (except for premium payments arising in the ordinary course of business) payable to the PBGC under ERISA. (k) Nonconsolidation. The Independent Member is operated in such a manner that the separate legal existence of the Independent Member, on the one hand, and any other member of the Parent Group or Seller, on the other hand, would not be disregarded in the event of the bankruptcy or insolvency of any such other member of the Parent Group or Seller and, without limiting the generality of the foregoing: (i) the Independent Member is a limited purpose corporation whose activities are restricted in its certificate of incorporation to those activities expressly permitted hereunder and under the other Related Documents, and the Independent Member has not engaged, and does not presently engage, in any activity other than those activities expressly permitted hereunder and under the other Related Documents, nor has the Independent Member entered into any agreement other than this Agreement, the other Related Documents to which it is a party and, with the prior written consent of the Required Purchasers and the Agent, any other agreement necessary to carry out more effectively the provisions and purposes hereof or thereof; (ii) none of the Seller, any member of the Parent Group nor any individual at the time he or she is acting as an officer of the Seller or any such member is or has been involved in the day-to-day management of the Independent Member; 20 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (iii) other than with respect to the acquisition of membership interests of the Seller, the Independent Member engages and has engaged in no inter-entity transactions with any member of the Parent Group or the Seller; (iv) the Independent Member maintains corporate records and books of account separate from that of each member of the Parent Group and the Seller, holds regular corporate meetings and otherwise observes corporate formalities and has a business office separate from that of each member of the Parent Group and the Seller; (v) the financial statements and books and records of the Independent Member, each member of the Parent Group and the Seller reflect the separate legal existence of the Independent Member; (vi) (A) the Independent Member maintains its assets separately from the assets of each member of the Parent Group and the Seller, (B) the Independent Member's funds (including all money, checks and other cash proceeds) and assets, and records relating thereto, have not been and are not commingled with those of any member of the Parent Group or the Seller and (C) the separate creditors of the Independent Member will be entitled to be satisfied out of the Independent Member `s assets prior to any value in the Independent Member becoming available to the Independent Member's Equity Holders; (vii) except as otherwise expressly permitted hereunder, under the other Related Documents and under the Independent Member's Organic Documents, none of the Seller or any member of the Parent Group (A) pays the Independent Member's expenses, (B) guarantees the Independent Member's obligations, or (C) advances funds to the Independent Member for the payment of expenses or otherwise; (viii) all business correspondence and other communications of the Independent Member are conducted in the Independent Member's own name, on its own stationery and through a separately-listed telephone number; (ix) the Independent Member does not act as agent for any member of the Parent Group or the Seller, but instead presents itself to the public as a corporation separate from the Seller and from each such member and independently engaged in the business of purchasing and financing Receivables; (x) the Independent Member maintains at least two Independent Directors (as defined in Independent Member's certificate of incorporation) each of whom (A) is not a Equity Holder, director, officer, employee or associate, or any relative of the foregoing, of any member of the Parent Group (other than the Independent Member), all as provided in its Organic Document, (B) has (1) prior experience as an independent director for a corporation whose organizational documents required the unanimous consent of all independent directors before such company could consent to the 21 WNC Receivables, LLC Receivables Purchase and Servicing Agreement institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy, and (ii) at least three years of employment experience with one or more entities that provide, in the ordinary course of the respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreement or securities, and (iii) is otherwise acceptable to the Agent; (xi) the Organic Document of the Independent Member requires (A) the affirmative vote of each independent director before a voluntary petition under Section 301 of the Bankruptcy Code may be filed by the Independent Member, and (B) the Independent Member to maintain (1) correct and complete books and records of account and (2) minutes of the meetings and other proceedings of its Equity Holders and board of directors. ARTICLE V. GENERAL COVENANTS OF THE SELLER AND THE INDEPENDENT MEMBER Section 5.01. Affirmative Covenants of the Seller. The Seller covenants and agrees that from and after the Closing Date and until the Termination Date: (a) Compliance with Agreements and Applicable Laws. The Seller shall perform each of its obligations under this Agreement and the other Related Documents and comply with all federal, state and local laws and regulations applicable to it and the Transferred Receivables, including those relating to truth in lending, retail installment sales, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices, privacy, licensing, taxation, ERISA and labor matters and Environmental Laws and Environmental Permits, except to the extent that the failure to so comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The Seller shall comply in all respects with the Credit and Collection Policies with respect to each Transferred Receivable and the Contract therefor, except to the extent that such noncompliance could not reasonably be expected to have a Material Adverse Effect. (b) Maintenance of Existence and Conduct of Business. The Seller shall: (i) do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence and its rights and franchises; (ii) continue to conduct its business substantially as now conducted or as otherwise permitted hereunder and in accordance with (1) the terms of its certificate of formation and limited liability company agreement, (2) Sections 4.01(q) and (r) and (3) the assumptions set forth in each legal opinion of Baker & Daniels or other counsel to the Seller from time to time delivered pursuant to Section 3.02(d) of the Sale Agreement with respect to issues of substantive consolidation and true sale and absolute transfer; (iii) at all times maintain, preserve and protect all of its assets and properties used or useful in the conduct of its business, including all licenses, permits, charters and registrations, and keep the same in good repair, working order and condition in all material respects (taking into consideration ordinary 22 WNC Receivables, LLC Receivables Purchase and Servicing Agreement wear and tear) and from time to time make, or cause to be made, all necessary or appropriate repairs, replacements and improvements thereto consistent with industry practices; and (iv) transact business only in its legal name as reflected in the records of the Secretary of State of the State of Delaware. The Seller shall keep adequate books and records with respect to its business activities in which proper entries, reflecting all financial transactions, are made in accordance with the Agreement Accounting Principles and on a basis consistent with the financial statements delivered pursuant to Section 5.02(a). (c) Deposit of Collections. The Seller shall deposit or cause to be deposited promptly into a Lockbox Account, and in any event no later than the first Business Day after receipt thereof, all Collections Seller may receive with respect to any Transferred Receivable. (d) Use of Proceeds. The Seller shall utilize the proceeds of the Purchases made hereunder solely for (i) the purchase of Receivables from the Originators pursuant to the Sale Agreement, (ii) the payment of lawful distributions to its economic members, and (iii) the payment of administrative fees or Servicing Fees or expenses to the Servicer or routine administrative or operating expenses, in each case only as expressly permitted by and in accordance with the terms of this Agreement and the other Related Documents. (e) Payment, Performance and Discharge of Obligations. (i) Subject to Section 5.01(e)(ii), the Seller shall pay, perform and discharge or cause to be paid, performed and discharged promptly all charges payable by it, including (A) charges imposed upon it, its income and profits, or any of its property (real, personal or mixed) and all charges with respect to tax, social security and unemployment withholding with respect to its employees, and (B) lawful claims for labor, materials, supplies and services or otherwise before any thereof shall become past due. (ii) The Seller may in good faith contest, by appropriate proceedings, the validity or amount of any charges or claims described in Section 5.01(e)(i); provided that (A) adequate reserves with respect to such contest are maintained on the books of the Seller, in accordance with GAAP, (B) such contest is maintained and prosecuted continuously and with diligence, (C) none of the Seller Collateral becomes subject to forfeiture or loss as a result of such contest, (D) no Lien shall be imposed to secure payment of such charges or claims other than inchoate tax liens and (E) none of the Purchasers or the Agent has advised the Seller in writing that such Affected Party reasonably believes that failure to pay or to discharge such claims or charges could have or result in a Material Adverse Effect. (f) ERISA. The Seller shall give the Agent prompt written notice of any event that could result in the imposition of a Lien under Section 412 of the Code or Section 302 or 4068 of ERISA. 23 WNC Receivables, LLC Receivables Purchase and Servicing Agreement Section 5.02. Reporting Requirements of the Seller; Bringdown Certificates. The Seller hereby agrees that, from and after the Closing Date and until the Termination Date, it shall deliver or cause to be delivered to the Agent for distribution to the Purchasers, the financial statements, notices and other information at the times, to the Persons and in the manner set forth in Annex 5.02 hereto. With each delivery of the annual audited Financial Statements pursuant to and in accordance with paragraph (a) of Annex 5.02 hereto, each of the Seller, Servicer and Independent Member shall deliver to the Agent an Officer's Certificate in the form of Exhibit 5.02 hereto ("Bringdown Certificate"). Section 5.03. Negative Covenants of the Seller. The Seller covenants and agrees that, without the prior written consent of the Required Purchasers and the Agent, from and after the Closing Date until the Termination Date: (a) Sale of Equity Interests and Assets. The Seller shall not sell, transfer, convey, assign or otherwise dispose of, or assign any right to receive income in respect of, any of its properties or other assets, including its Equity Interests (whether in a public or a private offering or otherwise), any Transferred Receivable or Contract therefor or any of its rights with respect to any Lockbox or any Lockbox Account, the Collection Account or any other deposit account in which any Collections of any Transferred Receivable are deposited except as otherwise expressly permitted by this Agreement or any of the other Related Documents. Notwithstanding the foregoing, each Originator and the Independent Member can pledge its Equity Interests of Seller (including, without limitation, any income or distributions therefrom) as required by the Credit Agreement. (b) Liens. The Seller shall not create, incur, assume or permit to exist (i) any Adverse Claim on or with respect to its Transferred Receivables or (ii) any Adverse Claim on or with respect to its other properties or assets (whether now owned or hereafter acquired) except for Permitted Seller Encumbrances. In addition, the Seller shall not become a party to any agreement, note, indenture or instrument or take any other action that would prohibit the creation of a Lien on any of its properties or other assets in favor of the Agent for the benefit of the Purchasers as additional collateral for the Seller Secured Obligations, except as otherwise expressly permitted by this Agreement or any of the other Related Documents. (c) Modifications of Receivables, Contracts or Credit and Collection Policies. The Seller shall not, without the prior written consent of the Agent and with respect to clause (ii) only (i) extend, amend, rescind, forgive, discharge, compromise, waive, cancel or otherwise modify the terms of any Transferred Receivable or amend, modify or waive any term or condition of any Contract related thereto, provided that the Seller may authorize the Servicer to take such actions as are expressly permitted by the terms of any Related Document or the Credit and Collection Policies, or (ii) amend, modify or waive any term or provision of the Credit and Collection Policies to the extent such action would be a material change to its Credit and Collection Policies or would negatively affect the timing or amount collected of Receivables in any material respect. 24 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (d) Changes in Instructions to Obligors. The Seller shall not make any change in its instructions to Obligors regarding the deposit of Collections with respect to the Transferred Receivables without the prior written consent of the Agent. (e) Capital Structure and Business. The Seller shall not (i) make any changes in any of its business objectives, purposes or operations that could have or result in a Material Adverse Effect, (ii) make any change in its capital structure as described on Schedule 4.01(h), including the issuance of any Equity Interests or other securities convertible into Equity Interests or any revision of the terms of its outstanding Equity Interests, (iii) reorganize itself under the laws of any jurisdiction other than the jurisdiction in which it is organized as of the date hereof without the prior written consent of Agent, or (iv) permit the Independent Member to amend its certificate of formation or limited liability company agreement. The Seller shall not engage in any business other than as provided in its organizational documents and the Related Documents. (f) Mergers, Subsidiaries, Etc. The Seller shall not directly or indirectly, by operation of law or otherwise, (i) form or acquire any Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially all of the assets or Equity Interests of, or otherwise combine with or acquire, any Person. (g) Sale Characterization; Sale Agreement. The Seller shall not make statements or disclosures, prepare any financial statements or in any other respect account for or treat the transactions contemplated by the Sale Agreement (including for accounting, tax and reporting purposes) in any manner other than (i) with respect to each Sale of each Sold Receivable effected pursuant to the Sale Agreement, as a true sale and absolute assignment of the title to and sole record and beneficial ownership interest of the Transferred Receivables by the Originators to the Seller and (ii) with respect to each contribution of Contributed Receivables thereunder, as an increase in the stated capital of the Seller. (h) Restricted Payments. The Seller shall not enter into any lending transaction with any other Person. The Seller shall not at any time (i) advance credit to any Person or (ii) declare any dividends, repurchase any Equity Interest, return any capital, or make any other payment or distribution of cash or other property or assets in respect of the Seller's Equity Interests if, after giving effect to any such advance or distribution, a Purchase Excess, Incipient Termination Event or Termination Event would exist or otherwise result therefrom. (i) Indebtedness. The Seller shall not create, incur, assume or permit to exist any Indebtedness, except (i) Indebtedness of the Seller to any Affected Party, Indemnified Person, the Servicer or any other Person expressly permitted by this Agreement or any other Related Document, (ii) deferred taxes, (iii) unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law, and (iv) indorser liability in connection with the indorsement of negotiable instruments for deposit or collection in the ordinary course of business. 25 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (j) Prohibited Transactions. The Seller shall not enter into, or be a party to, any transaction with any Person except as expressly permitted hereunder or under any other Related Document. (k) Investments. Except as otherwise expressly permitted hereunder or under the other Related Documents, the Seller shall not make any investment in, or make or accrue loans or advances of money to, any Person, including any member, director, manager, officer or employee of the Seller or any member of the Parent Group, through the direct or indirect lending of money, holding of securities or otherwise, except with respect to Transferred Receivables and Permitted Investments. (l) Commingling. The Seller shall not deposit or permit the deposit of any funds that do not constitute Collections of Transferred Receivables or into any Lockbox Account. If such funds are nonetheless deposited into a Lockbox Account and the Seller so notifies the Agent, the Agent shall promptly remit any such amounts to the applicable Originator. (m) ERISA. The Seller shall not, and shall not cause or permit any of its ERISA Affiliates to, cause or permit to occur an event that could result in the imposition of a Lien under Section 412 of the Code or Section 302 or 4068 of ERISA. (n) Related Documents. The Seller shall not amend, modify or waive any term or provision of any Related Document without the prior written consent of the Agent. (o) Manager Policies. The Seller shall not modify the terms of any policy of its managers if such modification could have or result in a Material Adverse Effect. Section 5.04. Affirmative Covenants of Independent Member. Independent Member covenants and agrees that from and after the Closing Date and until the Termination Date: (a) Compliance with Agreements and Applicable Laws. Independent Member shall perform each of its obligations under this Agreement and the other Related Documents and comply with all federal, state and local laws and regulations applicable to it, including those relating to truth in lending, retail installment sales, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices, privacy, licensing, taxation, ERISA and labor matters and Environmental Laws and Environmental Permits, except to the extent that the failure to so comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (b) Maintenance of Existence and Conduct of Business. Independent Member shall: (i) do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and its rights and franchises; (ii) continue to conduct its business substantially as now conducted or as otherwise permitted hereunder and in accordance with (A) the terms of its Organic Document, (B) Sections 4.01(q) and (r) and (C) the assumptions set forth 26 WNC Receivables, LLC Receivables Purchase and Servicing Agreement in each legal opinion of Baker & Daniels or other counsel to Independent Member from time to time delivered pursuant to Section 3.02(f) with respect to issues of substantive consolidation; (iii) at all times maintain, preserve and protect all of its assets and properties used or useful in the conduct of its business, including all licenses, permits, charters and registrations, and keep the same in good repair, working order and condition in all material respects (taking into consideration ordinary wear and tear) and from time to time make, or cause to be made, all necessary or appropriate repairs, replacements and improvements thereto consistent with industry practices; and (iv) transact business only in such corporate and trade names as are set forth in Section 5.4(b). (c) Payment, Performance and Discharge of Obligations. (i) Subject to Section 5.4(c)(ii), Independent Member shall pay, perform and discharge or cause to be paid, performed and discharged promptly all charges payable by it, including (A) charges imposed upon it, its income and profits, or any of its property (real, personal or mixed) and all charges with respect to tax, social security and unemployment withholding with respect to its employees, and (B) lawful claims for labor, materials, supplies and services or otherwise before any thereof shall become past due./ (ii) Independent Member may in good faith contest, by appropriate proceedings, the validity or amount of any charges or claims described in Section 5.4(c)(i); provided, that (A) adequate reserves with respect to such contest are maintained on the books of Independent Member, in accordance with GAAP, (B) such contest is maintained and prosecuted continuously and with diligence, (C) no Lien shall be imposed to secure payment of such charges or claims other than inchoate tax liens and (D) none of the Purchasers or the Agent has advised Independent Member in writing that such Affected Party reasonably believes that failure to pay or to discharge such claims or charges could have or result in a Material Adverse Effect. (d) ERISA. Independent Member shall give the Agent prompt written notice of any event that could result in the imposition of a Lien under Section 412 of the Code or Section 302 or 4068 of ERISA. Section 5.05. Negative Covenants of Independent Member. Independent Member covenants and agrees that, without the prior written consent of the Purchasers and the Agent, from and after the Closing Date until the Termination Date: (a) Sale of Equity Interests and Assets. Independent Member shall not sell, transfer, convey, assign or otherwise dispose of, or assign any right to receive income in respect of, any of its properties or other assets, including its Equity Interests (whether in a public or a private offering or otherwise), except as otherwise expressly permitted by this Agreement or any of the other Related Documents. 27 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (b) Liens. Independent Member shall not create, incur, assume or permit to exist (i) any Adverse Claim on or with respect to its other properties or assets (whether now owned or hereafter acquired) except for the Liens set forth in Schedule 5.5(b) and other Permitted Independent Member Encumbrances. In addition, Independent Member shall not become a party to any agreement, note, indenture or instrument or take any other action that would prohibit the creation of a Lien on any of its properties or other assets in favor of the Agent for the benefit of the Purchasers as additional collateral for Seller Secured Obligations, except as otherwise expressly permitted by this Agreement or any of the other Related Documents. (c) Capital Structure and Business. Independent Member shall not (i) make any changes in any of its business objectives, purposes or operations that could have or result in a Material Adverse Effect, (ii) make any change in its capital structure as described on Schedule 4.01(h), including the issuance of any Equity Interest or any securities convertible into Equity Interests or any revision of the terms of its outstanding Equity Interests, or (iii) amend its Organic Document. Independent Member shall not change its jurisdiction of incorporation, legal name, identity or organizational structure. Independent Member shall not change its organization identification number, if any, issued by its state of incorporation. Independent Member shall not engage in any business other than as provided in its Organic Documents and the applicable Related Documents. (d) Mergers, Subsidiaries, Etc. Independent Member shall not directly or indirectly, by operation of law or otherwise, (i) form or acquire any Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially all of the assets or Equity Interests of, or otherwise combine with or acquire, any Person. (e) Restricted Payments. Independent Member shall not enter into any lending transaction with any other Person. Independent Member shall not at any time (i) advance credit to any Person or (ii) declare any dividends, repurchase any Equity Interest, return any capital, or make any other payment or distribution of cash or other property or assets in respect of Independent Member's Equity Interests if, after giving effect to any such advance or distribution, an Incipient Termination Event or Termination Event would exist or otherwise result therefrom. (f) Indebtedness. Independent Member shall not create, incur, assume or permit to exist any Indebtedness, except (i) Indebtedness of Independent Member to any Affected Party, Indemnified Person, or any other Person expressly permitted by this Agreement or any other Related Document, (ii) deferred taxes, (iii) unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law, and (iv) indorser liability in connection with the indorsement of negotiable instruments for deposit or collection in the ordinary course of business. (g) Prohibited Transactions. Independent Member shall not enter into, or be a party to, any transaction with any Person except as expressly permitted hereunder or under any other Related Document. 28 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (h) Investments. Except as otherwise expressly permitted hereunder or under the other Related Documents, Independent Member shall not make any investment in, or make or accrue loans or advances of money to, any Person, including any Equity Holder, director, officer or employee of Independent Member, the Parent or any of the Parent's other Subsidiaries, through the direct or indirect lending of money, holding of securities or otherwise, except with respect to its membership interest in the Seller and Permitted Investments. (i) ERISA. Independent Member shall not, and shall not cause or permit any of its ERISA Affiliates to, cause or permit to occur an event that could result in the imposition of a Lien under Section 412 of the Code or Section 302 or 4068 of ERISA. (j) Related Documents. Independent Member shall not amend, modify or waive any term or provision of any Related Document without the prior written consent of the Agent. (k) Board Policies. Independent Member shall not modify the terms of any policy or resolutions of its board of directors if such modification could have or result in a Material Adverse Effect. Section 5.06. Post-Closing Deliveries. (a) Servicing Software Rights. As soon as possible, but in no event later than June 14, 2002, the Seller shall have delivered, or shall have caused to be delivered to the Agent, in form and substance satisfactory to Agent, written authorization of the licensor of the Servicing Software to use such Servicing Software for the purpose of obtaining information about and servicing the Transferred Receivables or shall have received written documentation confirming that an Originator or the Seller owns such Servicing Software. (b) Landlord Waivers. As soon as possible, but in no event later than April 29, 2002, in the case of the St. Louis Real Estate, and in no event later than June 14, 2002, in the case of any other leased location, the Seller shall have delivered, or shall have caused to be delivered, to the Agent, in form and substance satisfactory to Agent, fully executed landlord waivers for each leased location of Originators, Servicer and Seller where such Person maintains (i) books, records, Contracts, Servicing Software or other information regarding the Transferred Receivables or (ii) chattel paper or instruments that are Transferred Receivables. 29 WNC Receivables, LLC Receivables Purchase and Servicing Agreement ARTICLE VI. COLLECTIONS AND DISBURSEMENTS Section 6.01. Establishment of Accounts. (a) Lockbox Accounts. (i) The Seller has established with each Lockbox Account Bank one or more Lockbox Accounts. The Seller agrees that the Agent shall have exclusive dominion and control of each Lockbox Account and all monies, instruments and other property from time to time on deposit therein. The Seller shall not make or cause to be made, or have any ability to make or cause to be made, any withdrawals from any Lockbox Account except as provided in Section 6.01(b)(ii). (ii) The Seller and the Servicer have instructed all existing Obligors of Transferred Receivables, and shall instruct all future Obligors of such Receivables, to make payments in respect thereof only (A) by check or money order mailed (1) to one or more lockboxes or post office boxes under the control of the Agent (each, a "Lockbox" and, collectively, the "Lockboxes") or (2) in the case of deposits to be made into a Retail Deposit Account, to an Originator for deposit into a Retail Deposit Account established with a Lockbox Account Bank for the immediately next Business Day automated clearing house credit to a Lockbox Account subject to a Lockbox Account Agreement or (B) by wire transfer or moneygram directly to a Lockbox Account. Schedule 4.01(r) lists all Lockboxes and all Lockbox Account Banks at which the Seller maintains Lockbox Accounts as of the Closing Date, and such schedule correctly identifies (1) with respect to each such Lockbox Account Bank, the name, address and telephone number thereof, (2) with respect to each Lockbox Account, the name in which such account is held and the complete account number therefor, and (3) with respect to each Lockbox, the lockbox number and address thereof. The Seller and the Servicer shall endorse, to the extent necessary, all checks or other instruments received in any Lockbox so that the same can be deposited in the Lockbox Account, in the form so received (with all necessary endorsements), on the first Business Day after the date of receipt thereof. In addition, each of the Seller and the Servicer shall deposit or cause to be deposited into a Lockbox Account all cash, checks, money orders or other proceeds of Transferred Receivables or Seller Collateral received by it other than in a Lockbox or a Lockbox Account, in the form so received (with all necessary endorsements), not later than the close of business on the first Business Day following the date of receipt thereof, and until so deposited all such items or other proceeds shall be held in trust for the benefit of the Agent. Neither the Seller nor the Servicer shall make any deposits into a Lockbox or any Lockbox Account except in accordance with the terms of this Agreement or any other Related Document. 30 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (iii) If, for any reason, a Lockbox Agreement terminates or any Lockbox Account Bank fails to comply with its obligations under the Lockbox Agreement to which it is a party, then the Seller shall promptly notify all Obligors of Transferred Receivables who had previously been instructed to make wire payments to a Lockbox Account maintained at any such Lockbox Account Bank to make all future payments to a new Lockbox Account in accordance with this Section 6.01(a)(iii). The Seller shall not close any such Lockbox Account unless it shall have (A) received the prior written consent of the Agent, (B) established a new account with the same Lockbox Account Bank or with a new depositary institution satisfactory to the Agent, (C) entered into an agreement covering such new account with such Lockbox Account Bank or with such new depositary institution substantially in the form of such Lockbox Agreement or that is satisfactory in all respects to the Agent (whereupon, for all purposes of this Agreement and the other Related Documents, such new account shall become a Lockbox Account, such new agreement shall become a Lockbox Agreement and any new depositary institution shall become a Lockbox Account Bank), and (D) taken all such action as the Agent shall require to grant and perfect a first priority Lien in such new Lockbox Account to the Agent for the benefit of the Purchasers under Section 8.01 of this Agreement. Except as permitted by this Section 6.01(a), neither the Seller nor the Servicer shall open any new Lockbox or Lockbox Account without the prior written consent of the Agent. (b) Collection Account. (i) The Agent has established and shall maintain the Collection Account with the Depositary. The Collection Account shall be registered in the name of the Agent and the Agent shall, subject to the terms of this Agreement, have exclusive dominion and control thereof and of all monies, instruments and other property from time to time on deposit therein. (ii) Pursuant to Section 6.02, the Seller shall instruct each Lockbox Account Bank to transfer, and the Seller hereby grants the Agent the authority to instruct each such Lockbox Account Bank to transfer, on each Business Day in same day funds, all available funds in each Lockbox Account to the Collection Account. The Purchasers and the Agent may deposit into the Collection Account from time to time all monies, instruments and other property received by any of them as proceeds of the Transferred Receivables. On each Business Day the Agent shall instruct and cause the Depositary (which instruction may be in writing or by telephone confirmed promptly thereafter in writing) to release funds on deposit in the Collection Account in the order of priority set forth in Section 6.03. (iii) If, for any reason, the Depositary wishes to resign as depositary of the Collection Account or fails to carry out the instructions of the Agent, then the Agent shall promptly notify the Purchasers. Neither the Purchasers nor the Agent shall close the Collection Account unless (A) a new deposit account has been established with the 31 WNC Receivables, LLC Receivables Purchase and Servicing Agreement Depositary, (B) the Agent have entered into an agreement covering such new account with such new depositary institution satisfactory in all respects to the Agent (whereupon such new account shall become the Collection Account for all purposes of this Agreement and the other Related Documents), and (C) the Agent has taken all such action as the Agent shall require to grant and perfect a first priority Lien in such new Collection Account to the Agent on behalf of the Purchasers. Section 6.02. Funding of Collection Account. As soon as practicable, and in any event no later than 1:00 p.m. (New York time) on each Business Day: (a) the Agent shall transfer or cause to be transferred, to the extent then available, all Collections deposited in any Lockbox Account prior to such Business Day to the Collection Account; (b) the Purchasers or the Agent shall deposit in the Collection Account the amount, if any, required pursuant to Sections 2.04(b)(i); (c) if, on the immediately preceding Business Day, the Agent shall have notified the Seller of any Purchase Excess, then the Seller shall deposit cash in the amount of such Purchase Excess in the Collection Account; (d) if on such Business Day the Seller is required to make other payments under this Agreement not previously paid out of Collections (including Additional Amounts and Indemnified Amounts not previously paid), then the Seller shall deposit an amount equal to such payments in the Collection Account; (e) if, on the immediately preceding Business Day, an Originator made a capital contribution or repurchased a Transferred Receivable pursuant to Section 4.05 of the Sale Agreement or made a payment as a result of any Dilution Factors pursuant to Section 4.02(p) of the Sale Agreement, then the Seller shall deposit in the Collection Account cash in the amount so received from such Originator for such contribution or for such repurchase or payment; (f) the Servicer shall deposit in the Collection Account the Outstanding Balance of any Transferred Receivable the Servicer elects to pay pursuant to Section 7.04; and (g) the Seller shall deposit in the Collection Account the Outstanding Balance of any Transferred Receivable the Seller elects to pay pursuant to Section 8.06(d). Section 6.03. Daily Disbursements From the Collection Account. On each Business Day no later than 2:00 p.m. (New York time) during the Revolving Period, and following the transfers made pursuant to Section 6.02, the Agent shall disburse all Collections then on deposit in the Collection Account in the following priority: (a) to the Agent on behalf of the Purchasers: 32 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (i) an amount equal to the sum of: (A) accrued and unpaid Daily Yield; (B) the accrued and unpaid Unused Facility Fee; and (C) any Additional Amounts or Indemnified Amounts then due and not paid. (b) To the Servicer, the accrued and unpaid Servicing Fee (calculated assuming that the Servicing Fee Rate is the applicable rate). (c) to the Purchasers: (i) their respective Pro Rata Shares of an amount equal to any Purchase Excess to be applied in reduction of Capital Investment; (ii) their respective Pro Rata Shares of an amount equal to all other deposits made in the Collection Account pursuant to Section 6.02 (other than 6.02(b)) and not otherwise disbursed pursuant to Section 6.03(a), Section 6.03(b), or 6.03(c)(i); and (iii) if, pursuant to a Repayment Notice, the Seller has requested a reduction of the Capital Investment, then to the Purchasers, their respective Pro Rata Shares of the lesser of (A) the amount of such requested reduction of Capital Investment and (B) such balance. (d) to the Seller Account, the balance of any amounts remaining after making the foregoing disbursements. Section 6.04. [Reserved] Section 6.05. Liquidation Settlement Procedures. On each Business Day from and after the Facility Termination Date until the Termination Date, the Agent shall, as soon as practicable, transfer all amounts in the Collection Account in the following priority: (a) if a Successor Servicer has assumed the responsibilities and obligations of any Servicer in accordance with Section 11.02, then to the Successor Servicer an amount equal to its accrued and unpaid Successor Servicing Fees and Expenses; (b) to the Purchasers, their respective Pro Rata Shares of an amount equal to accrued and unpaid Daily Yield; (c) to the Purchasers, their respective Pro Rata Shares of an amount equal to the unpaid Capital Investment; 33 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (d) to the Agent, an amount equal to accrued and unpaid Unused Facility Fees; (e) all Additional Amounts and Indemnified Amounts incurred and payable to any Indemnified Person; (f) to the initial Servicer an amount equal to such Servicer's ratable portion of the accrued and unpaid Servicing Fee; (g) to the Seller Account, the balance of any funds remaining after payment in full of all amounts set forth in this Section 6.5. Section 6.06. Termination Procedures. (a) On the earlier of (i) the first Business Day after the Facility Termination Date on which the Capital Investment has been reduced to zero or (ii) the Final Purchase Date, if the Seller Secured Obligations have not been paid in full, the Seller shall immediately deposit in the Collection Account an amount sufficient to make such payments in full. (b) On the Termination Date, all amounts on deposit in the Collection Account shall be disbursed to the Seller and all ownership interests or Liens of the Agent for the benefit of the Purchasers in and to all Transferred Receivables and all Liens of the Agent for the benefit of the Purchasers in and to the Seller Collateral shall be released by the Agent. Such disbursement shall constitute the final payment to which the Seller is entitled pursuant to the terms of this Agreement. (c) Seller acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the written consent of Agent and agrees that it will not do so without the prior written consent of Agent, subject to Seller's rights under Section 9-509(d)(2) of the UCC. ARTICLE VII. SERVICER PROVISIONS Section 7.01. Appointment of the Servicer. Each of the Purchasers hereby appoints the Servicer as its agent, and the Seller hereby acknowledges such appointment, to service the Transferred Receivables and enforce its rights and interests in and under each Transferred Receivable and Contract therefor and to serve in such capacity until the termination of its responsibilities pursuant to Sections 9.02 or 11.01. In connection therewith, the Servicer hereby accepts such appointment and agrees to perform the duties and obligations set forth herein. The Servicer may, with the prior written consent of each Purchaser and the Agent, subcontract with a Sub-Servicer for the collection, servicing or administration of the Transferred Receivables; provided that (a) the Servicer shall remain liable for the performance of the duties and obligations of such Sub-Servicer pursuant to the terms hereof and (b) any Sub-Servicing 34 WNC Receivables, LLC Receivables Purchase and Servicing Agreement Agreement that may be entered into and any other transactions or services relating to the Transferred Receivables involving a Sub-Servicer shall be deemed to be between the Sub-Servicer and the Servicer alone, and the Purchasers and the Agent shall not be deemed parties thereto and shall have no obligations, duties or liabilities with respect to the Sub-Servicer. Section 7.02. Duties and Responsibilities of the Servicer. Subject to the provisions of this Agreement, the Servicer shall prepare and deliver the Investment Reports in the manner set forth in Annex 7.02 when and as required under Section 2.03 and shall conduct the servicing, administration and collection of the Transferred Receivables and shall take, or cause to be taken, all actions that (i) may be necessary or advisable to service, administer and collect each Transferred Receivable from time to time, (ii) the Servicer would take if the Transferred Receivables were owned by the Servicer, and (iii) are consistent with industry practice for the servicing of such Transferred Receivables. Section 7.03. Collections on Receivables. (a) In the event that the Servicer is unable to determine the specific Transferred Receivables on which Collections have been received from the Obligor thereunder, the parties agree for purposes of this Agreement only that such Collections shall be deemed to have been received on such Receivables in the order in which they were originated with respect to such Obligor. In the event that the Servicer is unable to determine the specific Transferred Receivables on which discounts, offsets or other non-cash reductions have been granted or made with respect to the Obligor thereunder, the parties agree for purposes of this Agreement only that such reductions shall be deemed to have been granted or made (i) prior to a Termination Event, on such Receivables as determined by the Servicer, and (ii) from and after the occurrence of a Termination Event, in the reverse order in which they were originated with respect to such Obligor. (b) If the Servicer determines that amounts unrelated to the Transferred Receivables (the "Unrelated Amounts") have been deposited in the Collection Account, then the Servicer shall provide written evidence thereof to the Agent no later than the first Business Day following the day on which the Servicer had actual knowledge thereof, which evidence shall be provided in writing and shall be otherwise satisfactory to each such Affected Party. Upon receipt of any such notice, the Agent shall segregate the Unrelated Amounts and the same shall not be deemed to constitute Collections on Transferred Receivables and shall not be subject to the provisions of Article VI. Section 7.04. Authorization of the Servicer. Each of the Purchasers hereby authorizes the Servicer, and the Seller acknowledges such authorization, to take any and all reasonable steps in its name and on its behalf necessary or desirable and not inconsistent with the ownership of the Purchaser Interests purchased by the Purchasers hereunder, in the determination of the Servicer, to (a) collect all amounts due under any Transferred Receivable, including endorsing its name on checks and other instruments representing Collections on such Receivable, and execute and deliver any and all instruments of satisfaction or cancellation or of partial or full 35 WNC Receivables, LLC Receivables Purchase and Servicing Agreement release or discharge and all other comparable instruments with respect to any such Receivable and (b) after any Transferred Receivable becomes a Delinquent Receivable or a Defaulted Receivable and to the extent permitted under and in compliance with applicable law and regulations, commence proceedings with respect to the enforcement of payment of any such Receivable and the Contract therefor and adjust, settle or compromise any payments due thereunder, in each case to the same extent as the applicable Originator could have done if it had continued to own such Receivable. Each Originator, the Seller, the Agent and each Purchaser shall furnish the Servicer with any powers of attorney and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder. Notwithstanding anything to the contrary contained herein, the Agent shall have the absolute and unlimited right to direct the Servicer (whether the Servicer is WFL or otherwise) (i) to commence or settle any legal action to enforce collection of any Transferred Receivable or (ii) to foreclose upon, repossess or take any other action that the Agent deems necessary or advisable with respect thereto; provided that in lieu of commencing any such action or taking other enforcement action, the Servicer may, at its option, elect to pay to the Purchasers, their respective Pro Rata Shares of the Capital Investment with respect to the Purchaser Interest in such Transferred Receivable. In the event Servicer elects to pay the Purchasers their respective Pro Rata Shares of the Capital Investment with respect to the Purchaser Interest in such Transferred Receivable as provided above, the Agent, on behalf of the Purchasers, shall transfer to Servicer the Purchaser Interest in such Transferred Receivable. In no event shall the Servicer be entitled to make any Affected Party a party to any Litigation without such Affected Party's express prior written consent, or to make the Seller a party to any Litigation without the Agent's consent. Section 7.05. Servicing Fees. As compensation for its servicing activities and as reimbursement for its reasonable expenses in connection therewith, the Servicer shall be entitled to receive the Servicing Fees in accordance with Sections 6.03 and 6.05. The Servicer shall be required to pay for all expenses incurred by it in connection with its activities hereunder (including any payments to accountants, counsel or any other Person) and shall not be entitled to any payment therefor other than the Servicing Fees. Section 7.06. Representations and Warranties of the Servicer. To induce the Purchasers to purchase the Purchaser Interests and the Agent to take any action required to be performed by it hereunder, the Servicer represents and warrants to the Purchasers and the Agent, which representation and warranty shall survive the execution and delivery of this Agreement: (a) Existence; Compliance with Law. The Servicer (i) is a limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; (ii) is duly qualified to conduct business and is in good standing in each other jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; (iii) has the requisite limited liability company power and authority and the legal right to own and operate its properties, to lease the property it operates under lease, and to conduct its business as now, heretofore and proposed to be conducted; (iv) has all licenses, permits, consents 36 WNC Receivables, LLC Receivables Purchase and Servicing Agreement or approvals from or by, and has made all filings with, and has given all notices to, all Governmental Authorities having jurisdiction, to the extent required for such ownership, operation and conduct, except where the failure to do so would not have a Material Adverse Effect; (v) is in compliance with its charter and bylaws; and (vi) subject to specific representations set forth herein regarding ERISA, tax and other laws, is in compliance with all applicable provisions of law, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (b) Power, Authorization, Enforceable Obligations. The execution, delivery and performance by the Servicer of this Agreement and the other Related Documents to which it is a party and, solely with respect to clause (vii) below, the exercise by each of the Purchasers, the Seller or the Agent of any of its rights and remedies under any Related Document to which it is a party: (i) are within the Servicer's limited liability company power; (ii) have been duly authorized by all necessary or proper limited liability company and shareholder action; (iii) do not contravene any provision of the Servicer's charter or bylaws; (iv) do not violate any law or regulation, or any order or decree of any court or Governmental Authority; (v) do not conflict with or result in the breach or termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which the Servicer is a party or by which the Servicer or any of the property of the Servicer is bound; (vi) do not result in the creation or imposition of any Adverse Claim upon any of the property of the Servicer; and (vii) do not require the consent or approval of any Governmental Authority or any other Person, except those referred to in Section 3.01(b), all of which will have been duly obtained, made or complied with prior to the Closing Date. On or prior to the Closing Date, each of the Related Documents to which the Servicer is a party shall have been duly executed and delivered by the Servicer and each such Related Document shall then constitute a legal, valid and binding obligation of the Servicer enforceable against it in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights and by general principles of equity. (c) No Litigation. No Litigation is now pending or, to the knowledge of the Servicer, threatened against the Servicer that (i) challenges the Servicer's right or power to enter into or perform any of its obligations under the Related Documents to which it is a party, or the validity or enforceability of any Related Document or any action taken thereunder, (ii) seeks to prevent the transfer, sale, pledge or contribution of any Receivable or the consummation of any of the transactions contemplated under this Agreement or the other Related Documents, or (iii) has a reasonable risk of being determined adversely to the Servicer and that, if so determined, could have a Material Adverse Effect. (d) Full Disclosure. No information contained in this Agreement, any Investment Report or any of the other Related Documents, or any written statement furnished by or on behalf of the Servicer to any Purchaser or the Agent pursuant to the terms of this Agreement or any of the other Related Documents contains any untrue statement of a material 37 WNC Receivables, LLC Receivables Purchase and Servicing Agreement fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. (e) Other Representations and Warranties. Each of the representations and warranties of the Servicer (whether made by the Servicer in its capacity as an Originator or as the Servicer) contained in any Related Document is true and correct and, if made by the Servicer in its capacity as an Originator, applies with equal force to the Servicer in its capacity as Servicer. Section 7.07. Covenants of the Servicer. The Servicer covenants and agrees that from and after the Closing Date and until the Termination Date: (a) Ownership of Transferred Receivables. The Servicer shall identify the Transferred Receivables clearly and unambiguously in its Servicing Records to reflect that such Transferred Receivables have been sold or contributed to the Seller and, following the Purchase of Purchaser Interests in such Transferred Receivables under this Agreement, are owned by the Agent for the benefit of the Purchasers. (b) Compliance with Credit and Collection Policies. The Servicer shall comply in all respects with the Credit and Collection Policies with respect to each Transferred Receivable and the Contract therefor, except to the extent that such noncompliance could not reasonably be expected to have a Material Adverse Effect. The Servicer shall not amend, waive or modify any term or provision of the Credit and Collection Policies without the prior written consent of the Agent. ARTICLE VIII. GRANT OF SECURITY INTERESTS Section 8.01. Seller's Grant of Security Interest. The parties hereto intend that each Purchase of Purchaser Interests to be made hereunder shall constitute a purchase and sale of undivided percentage ownership interests in the Transferred Receivables and not a loan. Notwithstanding the foregoing, in addition to and not in derogation of any rights now or hereafter acquired by the Purchasers or the Agent hereunder, the parties hereto intend that this Agreement shall constitute a security agreement under applicable law. In such regard and, in any event, to secure the prompt and complete payment, performance and observance of all Seller Secured Obligations, and to induce the Purchasers to enter into this Agreement and perform the obligations required to be performed by it hereunder in accordance with the terms and conditions thereof, the Seller hereby grants, assigns, conveys, pledges, hypothecates and transfers to the Agent, for the benefit of itself and the Purchasers, a Lien upon and security interest in all of its right, title and interest in, to and under, but none of its obligations arising from, the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of, the Seller (including under any trade names, styles or derivations of the Seller), and regardless of where located (all of which being hereinafter collectively referred to as the "Seller Collateral"): 38 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (a) all Receivables, Contracts therefor and Collections thereon; (b) the Sale Agreement, all Lockbox Agreements and all other Related Documents now or hereafter in effect relating to the purchase, servicing or processing of Receivables (collectively, the "Seller Assigned Agreements"), including (i) all rights of the Seller to receive moneys due and to become due thereunder or pursuant thereto, (ii) all rights of the Seller to receive proceeds of any insurance, indemnity, warranty or guaranty with respect thereto, (iii) all claims of the Seller for damages or breach with respect thereto or for default thereunder, and (iv) the right of the Seller to amend, waive or terminate the same and to perform and to compel performance and otherwise exercise all remedies thereunder; (c) all of the following (collectively, the "Seller Account Collateral"): (i) all deposit accounts, including the Lockbox Accounts, the Lockboxes, and all funds on deposit therein and all certificates and instruments, if any, from time to time representing or evidencing any deposit account, the Lockbox Accounts, the Lockboxes or such funds, (ii) the Collection Account and all funds on deposit therein and all certificates and instruments, if any, from time to time representing or evidencing the Collection Account or such funds, (iii) all certificates, instruments and investment property, if any, from time to time representing or evidencing such Investments, (iv) all notes, certificates of deposit and other instruments from time to time delivered to or otherwise possessed by the Agent, any Purchaser or any assignee or agent on behalf of the Agent or any Purchaser in substitution for or in addition to any of the then existing Seller Account Collateral, and (v) all interest, dividends, cash, instruments, investment property and other property from time to time received, receivable or otherwise distributed with respect to or in exchange for any and all of the then existing Seller Account Collateral; (d) all software and hardware; (e) all other property that may from time to time hereafter be granted and pledged by the Seller or by any Person on its behalf under this Agreement, including any deposit with a Purchaser or the Agent of additional funds by the Seller; and (f) to the extent not otherwise included, all proceeds and products of the foregoing and all accessions to, substitutions and replacements for, and profits of, each of the foregoing Seller Collateral (including proceeds that constitute property of the types described in Sections 8.01(a) through (e). 39 WNC Receivables, LLC Receivables Purchase and Servicing Agreement Section 8.02. Seller's Certification. The Seller hereby certifies that (a) the benefit of the representations, warranties and covenants of each Originator and member of the Parent Group to the Seller under the Sale Agreement shall have been assigned by the Seller to the Agent on behalf of the Purchasers hereunder; (b) the rights of the Seller to require a capital contribution from the Originators or to require payment of a Rejected Amount from an Originator under the Sale Agreement may be enforced by the Agent on behalf of the Purchasers; and (c) the Sale Agreement provides that the representations, warranties and covenants described in Sections 4.01, 4.02 and 4.04 thereof, the indemnification and payment provisions of Article V thereof and the provisions of Sections 4.04(j), 9.03 and 9.14 thereof shall survive the sale of the Transferred Receivables (and undivided percentage ownership interests therein) and the termination of the Sale Agreement and this Agreement. Section 8.03. [Reserved]. Section 8.04. Delivery of Collateral. All certificates or instruments representing or evidencing the Seller Collateral shall be delivered to and held by or on behalf of the Agent and shall be in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Agent. The Agent shall have the right (a) at any time to exchange certificates or instruments representing or evidencing Seller Collateral for certificates or instruments of smaller or larger denominations and (b) at any time in its discretion following the occurrence and during the continuation of a Termination Event and without notice to the Seller, to transfer to or to register in the name of the Agent or its nominee any or all of the Seller Collateral. The Seller will, (A) at all times from and after the date hereof, clearly and conspicuously mark its computer and master data processing books and records with a legend describing the Agent's interest (on behalf of the Purchasers) in the Receivables, and (B) segregate (from all other receivables then owned or being serviced by the Seller) all contracts relating to each Receivable. Section 8.05. Seller Remains Liable. It is expressly agreed by the Seller that, anything herein to the contrary notwithstanding, the Seller shall remain liable under any and all of the Transferred Receivables, the Contracts therefor, the Seller Assigned Agreements and any other agreements constituting the Seller Collateral to which it is a party to observe and perform all the conditions and obligations to be observed and performed by it thereunder. Neither the Purchasers nor the Agent shall have any obligation or liability under any such Receivables, Contracts or agreements by reason of or arising out of this Agreement or the granting herein of a Lien thereon or the receipt by the Agent or any Purchaser of any payment relating thereto pursuant hereto. The exercise by any Purchaser or the Agent of any of its respective rights under this Agreement shall not release any Originator, the Seller or the Servicer from any of their respective duties or obligations under any such Receivables, Contracts or agreements. Neither the Purchasers nor the Agent shall be required or obligated in any manner to perform or fulfill any of the obligations of any Originator, the Seller or the Servicer under or pursuant to any such Receivable, Contract or agreement, or to make any payment, or to make any inquiry as to the nature or the sufficiency of any payment received by it or the sufficiency of any performance by any party under any such Receivable, Contract or agreement, or to present or file any claims, or 40 WNC Receivables, LLC Receivables Purchase and Servicing Agreement to take any action to collect or enforce any performance or the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times. Section 8.06. Covenants of the Seller and the Servicer Regarding the Seller Collateral. (a) Offices and Records. The Seller shall maintain its principal place of business and chief executive office and the office at which it stores its Records at the respective locations specified in Schedule 4.01(b) or, upon 30 days' prior written notice to the Agent, at such other location in a jurisdiction where all action requested by the Agent pursuant to Section 14.14 shall have been taken with respect to the Seller Collateral. Each of the Seller and the Servicer shall, at its own cost and expense, maintain adequate and complete records of the Transferred Receivables and the Seller Collateral, including records of any and all payments received, credits granted and merchandise returned with respect thereto and all other dealings therewith. Each of the Seller and the Servicer shall mark conspicuously with a legend, in form and substance satisfactory to the Agent, its books and records, computer tapes, computer disks and credit files pertaining to the Seller Collateral, and its file cabinets or other storage facilities where it maintains information pertaining thereto, to evidence this Agreement and the assignment and Liens granted pursuant to this Article VIII. Upon the occurrence and during the continuance of a Termination Event, the Seller and the Servicer shall deliver and turn over such books and records to the Agent or its representatives at any time on demand of the Agent. Prior to the occurrence of a Termination Event and upon notice from the Agent, the Seller and the Servicer shall permit any representative of the Agent to inspect such books and records and shall provide photocopies thereof to the Agent as more specifically set forth in Section 8.06(b). (b) Access. Each of the Seller and the Servicer shall, at its own expense, during normal business hours, from time to time upon one Business Day's prior notice as frequently as the Agent determines to be appropriate: (i) provide the Purchasers, the Agent and any of their respective officers, employees and agents access to its properties (including properties utilized in connection with the collection, processing or servicing of the Transferred Receivables), facilities, advisors and employees (including officers) and to the Seller Collateral, (ii) permit the Purchasers, the Agent and any of their respective officers, employees and agents to inspect, audit and make extracts from its books and records, including all Records, (iii) permit the Purchasers or the Agent and their respective officers, employees and agents to inspect, review and evaluate the Transferred Receivables and the Seller Collateral and (iv) permit the Purchasers or the Agent and their respective officers, employees and agents to discuss matters relating to the Transferred Receivables or its performance under this Agreement or the other Related Documents or its affairs, finances and accounts with any of its officers, directors, employees, representatives or agents (in each case, with those persons having knowledge of such matters) and with its independent certified public accountants. If (A) an Incipient Termination Event or a Termination Event shall have occurred and be continuing or (B) the Agent, in good faith, believes that an Incipient Termination Event or a Termination Event is imminent or deems the Purchasers' rights or interests in the Transferred Receivables, the Seller Assigned Agreements or any other Seller Collateral insecure, then each of the Seller and the Servicer shall, 41 WNC Receivables, LLC Receivables Purchase and Servicing Agreement at its own expense, provide such access at all times and without advance notice and provide the Purchasers or the Agent with access to its suppliers and customers. Each of the Seller and the Servicer shall make available to the Agent and its counsel, as quickly as is possible under the circumstances, originals or copies of all books and records, including Records, that the Agent may request. Each of the Seller and the Servicer shall deliver any document or instrument necessary for the Agent, as the Agent may from time to time request, to obtain records from any service bureau or other Person that maintains records for the Seller or the Servicer, and shall maintain duplicate records or supporting documentation on media, including computer tapes and disks owned by the Seller or the Servicer. (c) Communication with Accountants. Each of the Seller and the Servicer authorizes the Purchasers and the Agent to communicate directly with its independent certified public accountants and authorizes and shall instruct those accountants and advisors to disclose and make available to the Purchasers and the Agent any and all financial statements and other supporting financial documents, schedules and information relating to the Seller or the Servicer (including copies of any issued management letters) with respect to its business, financial condition and other affairs. (d) Collection of Transferred Receivables. Except as otherwise provided in this Section 8.06(d), the Servicer shall continue to collect or cause to be collected, at its sole cost and expense, all amounts due or to become due to the Seller under the Transferred Receivables, the Seller Assigned Agreements and any other Seller Collateral. In connection therewith, the Seller and the Servicer shall take such action as it, and from and after the occurrence and during the continuance of a Termination Event, the Agent, may deem necessary or desirable to enforce collection of the Transferred Receivables, the Seller Assigned Agreements and the other Seller Collateral; provided that the Seller or the Servicer may, rather than commencing any such action or taking any other enforcement action, at its option, elect to pay to the Agent, for the account of the Purchasers (in accordance with its Purchaser Interests), the Outstanding Balance of any such Transferred Receivable; provided further, that if (i) an Incipient Termination Event or a Termination Event shall have occurred and be continuing or (ii) the Agent, in good faith believes that an Incipient Termination Event or a Termination Event is imminent or deems the Purchasers' rights or interests in the Transferred Receivables, the Seller Assigned Agreements or any other Seller Collateral insecure, then the Agent may, without prior notice to the Seller or the Servicer, notify or cause the Servicers to notify any Obligor under any Transferred Receivable or obligors under the Seller Assigned Agreements of the assignment of such Transferred Receivables or Seller Assigned Agreements, as the case may be, to the Agent on behalf of the Purchasers hereunder and direct that payments of all amounts due or to become due to the Seller thereunder be made directly to the Agent or any servicer, collection agent or lockbox or other account designated by the Agent and, upon such notification and at the sole cost and expense of the Seller and the Servicer, the Agent may enforce collection of any such Transferred Receivable or the Seller Assigned Agreements and adjust, settle or compromise the amount or payment thereof. 42 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (e) Performance of Seller Assigned Agreements. Each of the Seller and the Servicer shall (i) perform and observe all the terms and provisions of the Seller Assigned Agreements to be performed or observed by it, maintain the Seller Assigned Agreements in full force and effect, enforce the Seller Assigned Agreements in accordance with their terms and take all action as may from time to time be requested by the Agent in order to accomplish the foregoing, and (ii) upon the request of and as directed by the Agent, make such demands and requests to any other party to the Seller Assigned Agreements as are permitted to be made by the Seller or the Servicer thereunder. ARTICLE IX. TERMINATION EVENTS Section 9.01. Termination Events. If any of the following events (each, a "Termination Event") shall occur (regardless of the reason therefor): (a) (i) the Seller shall fail to make any payment of any Seller Secured Obligation when due and payable and the same shall remain unremedied for one Business Day or (ii) the Seller or Independent Member shall fail or neglect to perform, keep or observe any other provision of this Agreement (including, without limitation any covenant contained in Annex 4.04(l) to the Sale Agreement) or the other Related Documents to which it is a party (other than any provision embodied in or covered by any other clause of this Section 9.01) and the same shall remain unremedied for two Business Days or more after written notice thereof shall have been given by the Agent to the Seller; or (b) a default or breach shall occur under any other agreement, document or instrument to which Independent Member, any other member of the Parent Group or the Seller is a party or by which any such Person or its property is bound, and such default or breach (i) involves the failure to make any payment when due in respect of any Indebtedness in excess of a principal amount of $1,000,000 in the aggregate (other than the Seller Secured Obligations) of any such Person or (ii) which would permit any holder of such Indebtedness or a trustee or agent to cause Indebtedness or a portion thereof which, except with respect to the Seller, is in excess of a principal amount of $1,000,000 in the aggregate to become due prior to its stated maturity or prior to its regularly scheduled dates of payment or (iii) causes Indebtedness or a portion thereof which, except with respect to the Seller, is in excess of a principal amount of $1,000,000 in the aggregate to become due prior to its stated maturity or prior to its regularly scheduled dates of payment; in each case, regardless of whether such default is waived, or such right is exercised, by such holder, trustee or agent; or (c) a case or proceeding shall have been commenced against Independent Member, any other member of the Parent Group or the Seller seeking a decree or order in respect of any such Person (i) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for any such Person or for any substantial 43 WNC Receivables, LLC Receivables Purchase and Servicing Agreement part of such Person's assets, or (iii) ordering the winding-up or liquidation of the affairs of any such Person; or (d) Independent Member, any other member of the Parent Group or the Seller shall (i) file a petition seeking relief under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) consent or fail to object in a timely and appropriate manner to the institution of proceedings thereunder or to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for any such Person or for any substantial part of such Person's assets, (iii) make an assignment for the benefit of creditors, or (iv) take any limited liability company action in furtherance of any of the foregoing; or (e) (i) Independent Member, any other member of the Parent Group or the Seller generally does not pay its debts as such debts become due or admits in writing its inability to, or is generally unable to, pay its Indebtedness as such Indebtedness become due or (ii) the fair market value of any Originator's or the Seller's liabilities exceeds the fair market value of its assets; or (f) a final judgment or judgments for the payment of money in excess of $1,000,000 in the aggregate at any time outstanding, or $500,000 for any one judgment, shall be rendered against Independent Member, any other member of the Parent Group, the Seller, or any Affiliate thereof and the same shall not, within 30 days after the entry thereof, have been discharged or execution thereof stayed or appealed (and bonded pending appeal to the extent required), or shall not have been discharged prior to the expiration of any such stay; or (g) a judgment or order for the payment of money shall be rendered against the Seller or Independent Member; or (h) (i) any information contained in any Investment Base Certificate is untrue or incorrect in any respect, or (ii) any representation or warranty of any member of the Parent Group, Independent Member, or the Seller herein or in any other Related Document or in any written statement, report, financial statement or certificate (other than an Investment Base Certificate) made or delivered by or on behalf of any member of the Parent Group or the Seller hereto or thereto is untrue or incorrect in any material respect as of the date when made or deemed made; or (i) any Governmental Authority (including the IRS or the PBGC) shall file notice of a Lien with regard to any assets of any member of the Parent Group or the Seller (other than a Lien (i) limited by its terms to assets other than Receivables and (ii) not materially adversely affecting the financial condition of such Originator or the ability of WFL to perform as Servicer hereunder); or (j) any Governmental Authority (including the IRS or the PBGC) shall file notice of a Lien with regard to any of the assets of the Seller or Independent Member; or 44 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (k) there shall have occurred any event which materially adversely impairs in the reasonable judgment of the Agent the ability of any Originator to originate Receivables of a credit quality which are at least of the credit quality of the Receivables in the initial Purchase, or the Agent shall have determined (and so notified the Seller) that any event or condition that has had or could reasonably be expected to have or result in a Material Adverse Effect has occurred; or (l) (i) a default or breach shall occur under any provision of Sections 4.02(p), 4.05, 5.01, 9.14, or Annex 4.04(l) of the Sale Agreement and the same shall remain unremedied for one Business Day or more after the occurrence thereof, (ii) a default or breach shall occur under any other provision of the Sale Agreement and the same shall remain unremedied for two Business Days or more after written notice thereof shall have been given by the Agent to the Seller or (iii) the Sale Agreement shall for any reason cease to evidence the transfer to the Seller of the legal and equitable title to, and ownership of, the Transferred Receivables; or (m) except as otherwise expressly provided herein, any Lockbox Agreement or the Sale Agreement shall have been modified, amended or terminated without the prior written consent of the Required Purchasers and the Agent; or (n) an Event of Servicer Termination shall have occurred; or (o) with respect to the Transferred Receivables, (i) prior to the Purchase of Purchaser Interests therein hereunder, the Seller shall cease to hold valid and properly perfected title to and sole record and beneficial ownership in such Transferred Receivables or (ii) after the Purchase of Purchaser Interests hereunder, the Agent (on behalf of the Purchasers) shall cease to hold either valid and properly perfected title to and sole record and beneficial ownership in the related Transferred Receivables or a first priority, perfected Lien in the related Transferred Receivables or any of the Seller Collateral; or (p) a Change of Control shall occur with respect to any member of the Parent Group or the Seller; or (q) the Seller or Independent Member shall amend its Organic Documents without the express prior written consent of the Required Purchasers and the Agent; or (r) the Seller shall have received an Election Notice pursuant to Section 2.01(d) of the Sale Agreement; or (s) the Seller's Net Worth Percentage shall be less than 5%; or (t) any Event of Default (as defined in the Credit Facility) shall occur and be continuing or the Credit Facility shall terminate or shall otherwise cease to be in full force and effect; or 45 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (u) any material provision of any Related Document shall for any reason cease to be valid, binding and enforceable in accordance with its terms (or any Originator, Independent Member, or the Seller shall challenge the enforceability of any Related Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Related Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); or (v) Performance Guarantor shall fail to perform or observe any term, covenant or agreement required to be performed by it under the Sale Agreement, or the Performance Undertaking shall cease to be effective or to be the legally valid, binding and enforceable obligation of Performance Guarantor, or Performance Guarantor shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability; or (w) the Parent's committed revolving credit agreement in effect the date hereof shall (i) terminate or (ii) fail to be refinanced prior to the maturity date thereunder on terms and provisions acceptable to the Agent and Purchasers; or (x) the Senior Notes in effect as of the date hereof shall (i) terminate or (ii) fail to be refinanced or repaid prior to the maturity dates thereunder on terms and provisions acceptable to the Agent and Purchasers; then, and in any such event, the Agent shall, at the request of, or may, with the consent of, the Required Purchasers or the Agent, by notice to the Seller, declare the Facility Termination Date to have occurred without demand, protest or further notice of any kind, all of which are hereby expressly waived by the Seller; provided that the Facility Termination Date shall automatically occur (i) upon the occurrence of any of the Termination Events described in Sections 9.01(c), (d), (e) or (r) or (ii) three days after the occurrence of the Termination Event described in Section 9.01(a)(i) if the same shall not have been remedied by such time, in each case without demand, protest or any notice of any kind, all of which are hereby expressly waived by the Seller. Section 9.02. Events of Servicer Termination. If any of the following events (each, an "Event of Servicer Termination") shall occur (regardless of the reason therefor): (a) the Servicer shall (i) fail to make any payment or deposit required to be made by it under this Agreement or any other Related Document, (ii) fail to deliver any reports required to be delivered by it under this Agreement or any other Related Document (including, without limitation, any Investment Base Certificate) and such failure shall remain unremedied for one (1) Business Day or more, or (iii) fail or neglect to perform, keep or observe any other provision of this Agreement or the other Related Documents (whether in its capacity as an Originator or as Servicer) and the same shall remain unremedied for two (2) Business Days or more after written notice thereof shall have been given by the Agent to the Servicer; or (b) a default or breach shall occur under any other agreement, document or instrument to which the Servicer is a party or by which Servicer or its property is bound, and 46 WNC Receivables, LLC Receivables Purchase and Servicing Agreement such default or breach (i) involves the failure to make any payment when due in respect of any Indebtedness (other than the Seller Secured Obligations) of Servicer which, except as provided in clause (iii) below, is not cured within a period of fifteen days, or (ii) permits any holder of such Indebtedness or a trustee or agent to cause Indebtedness or a portion thereof which is in excess of a principal amount of $100,000 in the aggregate to become due prior to its stated maturity or prior to its regularly scheduled dates of payment, and which, except as provided in clause (iii) below, is not cured within a period of thirty days, or (iii) causes Indebtedness or a portion thereof which is in excess of a principal amount of $100,000 in the aggregate to become due prior to its stated maturity or prior to its regularly scheduled dates of payment; in each case, regardless of whether such default is waived, or such right is exercised, by such holder, trustee or agent; or (c) a case or proceeding shall have been commenced against the Servicer or any Affiliate thereof which acts as a Sub-Servicer seeking a decree or order in respect of any such Person (i) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for any such Person or for any substantial part of such Person's assets, or (iii) ordering the winding-up or liquidation of the affairs of any such Person; or (d) the Servicer or any Affiliate thereof which acts as a Sub-Servicer shall (i) file a petition seeking relief under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) consent or fail to object in a timely and appropriate manner to the institution of proceedings thereunder or to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for any such Person or for any substantial part of such Person's assets, (iii) make an assignment for the benefit of creditors, or (iv) take any limited liability company action in furtherance of any of the foregoing; or (e) (i) the Servicer or any Affiliate thereof which acts as a Sub-Servicer generally does not pay its debts as such debts become due or admits in writing its inability to, or is generally unable to, pay its Indebtedness as such Indebtedness become due or (ii) the fair market value of the Servicer's liabilities exceeds the fair market value of its assets; or (f) a final judgment or judgments for the payment of money in excess of $500,000 in the aggregate at any time outstanding shall be rendered against the Servicer or any Affiliate thereof which acts as a Sub-Servicer and the same shall not, within 30 days after the entry thereof, have been discharged or execution thereof stayed or bonded pending appeal, or shall not have been discharged prior to the expiration of any such stay; or (g) (i) any information contained in any Investment Base Certificate is untrue or incorrect in any respect, or (ii) any representation or warranty of the Servicer herein or in any other Related Document or in any written statement, report, financial statement or certificate (other than an Investment Base Certificate) made or delivered by the Servicer to any Affected 47 WNC Receivables, LLC Receivables Purchase and Servicing Agreement Party hereto or thereto is untrue or incorrect in any respect as of the date when made or deemed made; or (h) the Agent shall have determined that any event or condition that materially adversely affects the ability of the Servicer to collect the Transferred Receivables or to otherwise perform hereunder has occurred; or (i) a Termination Event shall have occurred or this Agreement shall have been terminated; or (j) a deterioration has taken place in the quality of servicing of Transferred Receivables or other Receivables serviced by the Servicer that the Agent, in its sole discretion, determines to be material, and such material deterioration has not been eliminated within 30 days after written notice thereof shall have been given by the Agent to the Servicer; or (k) any Originator shall, or the Servicer shall, assign or purport to assign any of their respective obligations hereunder or under the Sale Agreement without the prior written consent of the Agent; or (l) a Change of Control shall occur with respect to the Servicer; or (m) if the Servicer is a member of the Parent Group, an Event of Default (as defined in the Credit Facility) shall occur and be continuing; or (n) the Seller's members shall have determined that it is in the best interests of the Seller to terminate the duties of the Servicer hereunder and shall have given the Servicer, the Purchasers and the Agent at least 30 days' written notice thereof; then, and in any such event, the Agent shall, at the request of, or may, with the consent of, the Required Purchasers or the Agent, by delivery of a Servicer Termination Notice to the Seller and the Servicer, terminate the servicing responsibilities of the Servicer hereunder, without demand, protest or further notice of any kind, all of which are hereby waived by the Servicer. Upon the delivery of any such notice, all authority and power of the Servicer under this Agreement and the Sale Agreement shall pass to and be vested in the Successor Servicer acting pursuant to Section 11.02; provided that notwithstanding anything to the contrary herein, the Servicer agrees to continue to follow the procedures set forth in Section 7.02 with respect to Collections on the Transferred Receivables until a Successor Servicer has assumed the responsibilities and obligations of the Servicer in accordance with Section 11.02. ARTICLE X. REMEDIES Section 10.01. Actions Upon Termination Event. If any Termination Event shall have occurred and be continuing and the Agent shall have declared the Facility Termination Date 48 WNC Receivables, LLC Receivables Purchase and Servicing Agreement to have occurred or the Facility Termination Date shall be deemed to have occurred pursuant to Section 9.01, then the Agent may exercise in respect of the Seller Collateral, in addition to any and all other rights and remedies granted to it hereunder, under any other Related Document or under any other instrument or agreement securing, evidencing or relating to the Seller Secured Obligations or otherwise available to it, all of the rights and remedies of a secured party upon default under the UCC (such rights and remedies to be cumulative and nonexclusive), and, in addition, may take the following actions: (a) The Agent may, without notice to the Seller except as required by law and at any time or from time to time, charge, offset or otherwise apply amounts payable to the Seller from the Collection Account, any Lockbox Account or any part of such accounts in accordance with the priorities set forth in Section 6.03 and 6.05 against all or any part of the Seller Secured Obligations. (b) The Agent may, without notice except as specified below, solicit and accept bids for and sell the Seller Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or any of the Purchasers' or the Agent's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Agent may deem commercially reasonable. The Agent shall have the right to conduct such sales on the Seller's premises or elsewhere and shall have the right to use any of the Seller's premises without charge for such sales at such time or times as the Agent deems necessary or advisable. The Seller agrees that, to the extent notice of sale shall be required by law, at least ten Business Days' notice to the Seller of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Agent shall not be obligated to make any sale of Seller Collateral regardless of notice of sale having been given. The Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed for such sale, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Every such sale shall operate to divest all right, title, interest, claim and demand whatsoever of the Seller in and to the Seller Collateral so sold, and shall be a perpetual bar, both at law and in equity, against each Originator, the Seller, any Person claiming the Seller Collateral sold through any Originator or the Seller, and their respective successors or assigns. The Agent shall deposit the net proceeds of any such sale in the Collection Account and such proceeds shall be disbursed in accordance with Section 6.03 and 6.05. (c) Upon the completion of any sale under Section 10.01(b), the Seller or the Servicer shall deliver or cause to be delivered to the purchaser or purchasers at such sale on the date thereof, or within a reasonable time thereafter if it shall be impracticable to make immediate delivery, all of the Seller Collateral sold on such date, but in any event full title and right of possession to such property shall vest in such purchaser or purchasers upon the completion of such sale. Nevertheless, if so requested by the Agent or by any such purchaser, the Seller shall confirm any such sale or transfer by executing and delivering to such purchaser all proper instruments of conveyance and transfer and releases as may be designated in any such request. 49 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (d) At any sale under Section 10.01(b), the Purchasers, the Agent or any other Purchaser Secured Party may bid for and purchase the property offered for sale and, upon compliance with the terms of sale, may hold, retain and dispose of such property without further accountability therefor. (e) The Agent may exercise, at the sole cost and expense of the Seller, any and all rights and remedies of the Seller under or in connection with the Seller Assigned Agreements or the other Seller Collateral, including any and all rights of the Seller to demand or otherwise require payment of any amount under, or performance of any provisions of, the Seller Assigned Agreements. Section 10.02. Exercise of Remedies. No failure or delay on the part of the Agent in exercising any right, power or privilege under this Agreement and no course of dealing between any member of the Parent Group or the Seller, on the one hand, and the Agent, on the other hand, shall operate as a waiver of such right, power or privilege, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. The rights and remedies under this Agreement are cumulative, may be exercised singly or concurrently, and are not exclusive of any rights or remedies that the Agent would otherwise have at law or in equity. No notice to or demand on any party hereto shall entitle such party to any other or further notice or demand in similar or other circumstances, or constitute a waiver of the right of the party providing such notice or making such demand to any other or further action in any circumstances without notice or demand. Section 10.03. Power of Attorney. On the Closing Date, each of the Seller and the Servicer shall execute and deliver a power of attorney substantially in the form attached hereto as Exhibit 10.03 (each, a "Power of Attorney"). The power of attorney granted pursuant to each Power of Attorney is a power coupled with an interest and shall be irrevocable until all of the Seller Secured Obligations are indefeasibly paid or otherwise satisfied in full. The powers conferred on the Agent under each Power of Attorney are solely to protect the Agent's Liens upon and interests in the Seller Collateral and shall not impose any duty upon the Agent to exercise any such powers. The Agent shall not be accountable for any amount other than amounts that it actually receives as a result of the exercise of such powers and none of the Agent's officers, directors, employees, agents or representatives shall be responsible to the Seller or the Servicer for any act or failure to act, except in respect of damages attributable solely to their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. Section 10.04. Continuing Security Interest. This Agreement shall create a continuing Lien in the Seller Collateral until the conditions to the release of the Liens of the Agent thereon set forth in Section 6.06(b) have been satisfied. 50 WNC Receivables, LLC Receivables Purchase and Servicing Agreement ARTICLE XI. SUCCESSOR SERVICER PROVISIONS Section 11.01. Servicer Not to Resign. The Servicer shall not resign from the obligations and duties hereby imposed on it except upon a determination that (a) the performance of its duties hereunder has become impermissible under applicable law or regulation and (b) there is no reasonable action that the Servicer could take to make the performance of its duties hereunder become permissible under applicable law. Any such determination shall (i) with respect to clause (a) above, be evidenced by an opinion of counsel to such effect and (ii) with respect to clause (b) above, be evidenced by an Officer's Certificate to such effect, in each case delivered to the Agent for distribution to the Purchasers. No such resignation shall become effective until a Successor Servicer shall have assumed the responsibilities and obligations of the Servicer in accordance with Section 11.02. Section 11.02. Appointment of the Successor Servicer. In connection with the termination of the Servicer's responsibilities or the resignation by the Servicer under this Agreement pursuant to Sections 9.02 or 11.01, the Agent shall (a) succeed to and assume all of the Servicer's responsibilities, rights, duties and obligations as Servicer (but not in any other capacity, it being specifically understood that the Agent shall not assume any of the obligations of the Servicer set forth in Section 12.02) under this Agreement (and except that the Agent makes no representations and warranties pursuant to Section 4.02) and (b) may at any time appoint a successor servicer to the Servicer that shall be acceptable to the Agent and shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement (the Agent, in such capacity, or such successor servicer being referred to as the "Successor Servicer"); provided that the Successor Servicer shall have no responsibility for any actions of the Servicer prior to the date of its appointment or assumption of duties as Successor Servicer. In selecting a Successor Servicer, the Agent may obtain bids from any potential Successor Servicer and may agree to any bid it deems appropriate. The Successor Servicer shall accept its appointment by executing, acknowledging and delivering to the Agent an instrument in form and substance acceptable to the Agent. Section 11.03. Duties of the Servicer. The Servicer covenants and agrees that, following the appointment of, or assumption of duties by, a Successor Servicer: (a) The Servicer shall terminate its activities as Servicer hereunder in a manner that facilitates the transfer of servicing duties to the Successor Servicer and is otherwise acceptable to each Purchaser and the Agent and, without limiting the generality of the foregoing, shall timely deliver (i) any funds to the Agent that were required to be remitted to the Agent for deposit in the Collection Account and (ii) all Servicing Records and other information with respect to the Transferred Receivables to the Successor Servicer at a place selected by the Successor Servicer. The Servicer shall account for all funds and shall execute and deliver such instruments and do such other things as may be required to vest and confirm in the Successor Servicer all rights, powers, duties, responsibilities, obligations and liabilities of the Servicer. 51 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (b) The Servicer shall terminate each existing Sub-Servicing Agreement and the Successor Servicer shall not be deemed to have assumed any of the Servicer's interests therein or to have replaced the Servicer as a party thereto. Section 11.04. Effect of Termination or Resignation. Any termination of or resignation by the Servicer hereunder shall not affect any claims that the Seller, any Purchaser or the Agent may have against the Servicer for events or actions taken or not taken by the Servicer arising prior to any such termination or resignation. ARTICLE XII. INDEMNIFICATION Section 12.01. Indemnities by the Seller. (a) Without limiting any other rights that any Purchaser, the Agent or any of their respective officers, directors, members, employees, attorneys, agents or representatives (each, an "Indemnified Person") may have hereunder or under applicable law, the Seller hereby agrees to indemnify and hold harmless each Indemnified Person from and against any and all Indemnified Amounts that may be claimed or asserted against or incurred by any such Indemnified Person in connection with or arising out of the transactions contemplated under this Agreement or under any other Related Document or any actions or failures to act in connection therewith, including any and all legal costs and expenses arising out of or incurred in connection with disputes between or among any parties to any of the Related Documents; provided that the Seller shall not be liable for any indemnification to a Indemnified Person to the extent that any such Indemnified Amount (x) results from with respect to any Indemnified Person, (i) such Indemnified Person's gross negligence or (ii) such Indemnified Person's willful misconduct, in each case as finally determined by a court of competent jurisdiction or (y) constitutes recourse for uncollectible or uncollected Transferred Receivables. Without limiting the generality of the foregoing, the Seller shall pay on demand to each Indemnified Person any and all Indemnified Amounts relating to or resulting from: (i) reliance on any representation or warranty made or deemed made by the Seller (or any of its officers) under or in connection with this Agreement or any other Related Document or on any other information delivered by the Seller pursuant hereto or thereto that shall have been incorrect in any material respect when made or deemed made or delivered; (ii) the failure by the Seller to comply with any term, provision or covenant contained in this Agreement, any other Related Document or any agreement executed in connection herewith or therewith, any applicable law, rule or regulation with respect to any Transferred Receivable or the Contract therefor, or the nonconformity of any Transferred Receivable or the Contract therefor with any such applicable law, rule or regulation; or 52 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (iii) (1) the failure to vest and maintain vested in the Seller or the Agent valid and properly perfected title to and sole record and beneficial ownership of the Receivables that constitute Transferred Receivables, together with all Collections in respect thereof, free and clear of any Adverse Claim, (2) the failure to maintain or transfer to the Agent for the benefit of the Purchasers a first, priority, perfected Lien in the Seller Collateral and (3) the failure to maintain or transfer to the Agent a first priority, perfected Lien therein; (iv) any dispute, claim, offset or defense of any Obligor (other than its discharge in bankruptcy to the payment of any Transferred Receivable that is the subject of a Purchase hereunder (including a defense based on such Receivable or the Contract therefor not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or services giving rise to such Receivable or the furnishing of or failure to furnish such merchandise or services or relating to collection activities with respect to such Receivable (if such collection activities were performed by any of its Affiliates acting as Servicer), except to the extent that such dispute, claim, offset or defense results solely from any action or inaction on the part of any Indemnified Person or is otherwise based on the inability of the Obligor to pay; (v) any products liability claim or other claim arising out of or in connection with merchandise, insurance or services that is the subject of any Contract with respect to any Transferred Receivable; (vi) the commingling of Collections with respect to Transferred Receivables by the Seller at any time with its other funds or the funds of any other Person; (vii) any failure by the Seller to cause the filing of, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or any other applicable laws with respect to any Transferred Receivable that is the subject of a Purchase hereunder, whether at the time of any such Purchase or at any subsequent time; or (viii) any failure of a Lockbox Account Bank to comply with the terms of the applicable Lockbox Agreement. (b) Any Indemnified Amounts subject to the indemnification provisions of this Section 12.01 not paid in accordance with Article VI shall be paid by the Seller to the Indemnified Person entitled thereto within five Business Days following demand therefor. Section 12.02. Indemnities by the Servicer. 53 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (a) Without limiting any other rights that an Indemnified Person may have hereunder or under applicable law, the Servicer hereby agrees to indemnify and hold harmless each Indemnified Person from and against any and all Indemnified Amounts that may be claimed or asserted against or incurred by any such Indemnified Person in connection with or arising out of any breach by the Servicer of its obligations hereunder or under any other Related Document; provided that the Servicer shall not be liable for any indemnification to an Indemnified Person to the extent that any such Indemnified Amount (x) results solely from with respect to any Indemnified Person, (i) such Indemnified Person's gross negligence or (ii) such Indemnified Person's willful misconduct, in each case as finally determined by a court of competent jurisdiction, or (y) constitutes recourse for uncollectible or uncollected Transferred Receivables. Without limiting the generality of the foregoing, the Servicer shall pay on demand to each Indemnified Person any and all Indemnified Amounts relating to or resulting from: (i) reliance on any representation or warranty made or deemed made by the Servicer (or any of its officers) under or in connection with this Agreement or any other Related Document or on any other information delivered by the Servicer pursuant hereto or thereto that shall have been incorrect in any material respect when made or deemed made or delivered; (ii) the failure by the Servicer to comply with any term, provision or covenant contained in this Agreement, any other Related Document or any agreement executed in connection herewith or therewith, any applicable law, rule or regulation with respect to any Transferred Receivable or the Contract therefor, or the nonconformity of any Transferred Receivable or the Contract therefor with any such applicable law, rule or regulation; (iii) the imposition of any Adverse Claim with respect to any Transferred Receivable or the Seller Collateral as a result of any action taken by the Servicer; or (iv) the commingling of Collections with respect to Transferred Receivables by the Servicer at any time with its other funds or the funds of any other Person. (b) Any Indemnified Amounts subject to the indemnification provisions of this Section 12.02 not paid in accordance with Article VI shall be paid by the Servicer to the Indemnified Person entitled thereto within five Business Days following demand therefor. Section 12.03. Limitation of Damages; Indemnified Persons. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES THAT MAY BE 54 WNC Receivables, LLC Receivables Purchase and Servicing Agreement ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER. ARTICLE XIII. AGENT Section 13.01. Authorization and Action. The Agent may take such action and carry out such functions under this Agreement as are authorized to be performed by it pursuant to the terms of this Agreement, any other Related Document or otherwise contemplated hereby or thereby or are reasonably incidental thereto; provided that the duties of the Agent hereunder shall be determined solely by the express provisions of this Agreement, and, other than the duties set forth in Section 13.02, any permissive right of the Agent hereunder shall not be construed as a duty. Section 13.02. Reliance. None of the Agent, any of its Affiliates or any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or the other Related Documents, except for damages solely caused by its or their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. Without limiting the generality of the foregoing, and notwithstanding any term or provision hereof to the contrary, the Seller, the Servicer, each of the Purchasers hereby acknowledges and agrees that the Agent (a) acts as agent hereunder for such Purchaser and has no duties or obligations to, shall incur no liabilities or obligations to, and does not act as an agent in any capacity for, the Seller (other than, with respect to the Agent, under the Power of Attorney with respect to remedial actions) or the Originators, (b) may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts, (c) makes no representation or warranty hereunder to any Affected Party and shall not be responsible to any such Person for any statements, representations or warranties made in or in connection with this Agreement or the other Related Documents, (d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement, or the other Related Documents on the part of the Seller, the Servicer or any Purchaser or to inspect the property (including the books and records) of the Seller, the Servicer or any Purchaser, (e) shall not be responsible to the Seller, the Servicer or any Purchaser for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Related Documents or any other instrument or document furnished pursuant hereto or thereto, (f) shall incur no liability under or in respect of this Agreement or the other Related Documents by acting upon any notice, consent, certificate or other instrument or writing believed by it to be genuine and signed, sent or communicated by the proper party or parties and (g) shall not be bound to make any investigation into the facts or matters stated in any notice or other communication hereunder and may rely on the accuracy of such facts or matters. Notwithstanding the foregoing, the Agent acknowledges that it has a duty to transfer funds 55 WNC Receivables, LLC Receivables Purchase and Servicing Agreement between and among the Accounts and the Collection Account, in accordance with Article VI and the instructions of the Servicer. Section 13.03. GECC and Affiliates. GECC and its Affiliates may generally engage in any kind of business with any Obligor, the Originators, the Seller, the Servicer or any Purchaser, any of their respective Affiliates and any Person who may do business with or own securities of such Persons or any of their respective Affiliates, all as if GECC were not the Agent and without the duty to account therefor to any Obligor, any Originator, the Seller, the Servicer, any Purchaser or any other Person. ARTICLE XIV. MISCELLANEOUS Section 14.01. Notices. Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other parties, or whenever any of the parties desires to give or serve upon any other parties any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and three Business Days after deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon transmission, when sent by facsimile (with such facsimile promptly confirmed by delivery of a copy by personal delivery or United States Mail as otherwise provided in this Section 14.01), (c) one Business Day after deposit with a reputable overnight courier with all charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address or facsimile number set forth under its name on the signature page hereof or to such other address (or facsimile number) as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration or other communication to any Person (other than the Purchasers and the Agent) designated in any written notice provided hereunder to receive copies shall in no way adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration or other communication. Notwithstanding the foregoing, whenever it is provided herein that a notice is to be given to any other party hereto by a specific time, such notice shall only be effective if actually received by such party prior to such time, and if such notice is received after such time or on a day other than a Business Day, such notice shall only be effective on the immediately succeeding Business Day. Section 14.02. Assignment and Participations. (a) Subject to the terms of this Section 14.02, any Purchaser may make an assignment to a qualified assignee of, or sale of participations in, at any time or times, the Related Documents, its Pro Rata Share of the Purchaser Interests and its Commitment or any 56 WNC Receivables, LLC Receivables Purchase and Servicing Agreement portion thereof or interest therein, including any Purchaser's rights, title, interests, remedies, powers or duties thereunder. Any assignment by a Purchaser shall: (i) require the consent of Agent (which consent shall not be unreasonably withheld or delayed with respect to a qualified assignee) and the execution of an assignment agreement in form and substance reasonably satisfactory to, and acknowledged by, Agent (an "Assignment Agreement"); (ii) be conditioned on such assignee Purchaser representing to the assigning Purchaser and Agent that it is purchasing the applicable Purchaser Interest to be assigned to it for its own account, for investment purposes and not with a view to the distribution thereof; (iii) after giving effect to any such partial assignment, the assignee Purchaser shall have Commitments in an amount at least equal to $5,000,000 and the assigning Purchaser shall have retained Commitments in an amount at least equal to $5,000,000; and (iv) include a payment to Agent of an assignment fee of $3,500. In the case of an assignment by a Purchaser under this Section 14.02(a), the assignee shall have, to the extent of such assignment, the same rights, benefits and obligations as all other Purchasers hereunder. The assigning Purchaser shall be relieved of its obligations hereunder with respect to its Commitments or assigned portion thereof from and after the date of such assignment. Seller hereby acknowledges and agrees that any assignment shall give rise to a direct obligation of Seller to the assignee and that the assignee shall be considered to be a "Purchaser". In all instances, each Purchaser's liability to invest in the Purchaser Interests hereunder shall be several and not joint and shall be limited to such Purchaser's Pro Rata Share of the applicable Commitment. In the event Agent or any Purchaser assigns or otherwise transfers all or any part of the Seller Secured Obligations, Agent or any such Purchaser shall so notify Seller. Notwithstanding the foregoing provisions of this Section 14.02(a), any Purchaser may at any time pledge the Seller Secured Obligations held by it and such Purchaser's rights under this Agreement and the other Related Documents to a Federal Reserve Bank, and any Purchaser that is an investment fund may assign the Seller Secured Obligations held by it and such Purchaser's rights under this Agreement and the other Related Documents to another investment fund managed by the same investment advisor; provided, that no such pledge to a Federal Reserve Bank shall release such Purchaser from such Purchaser's obligations hereunder or under any other Relevant Document. (b) Any participation by a Purchaser of all or any part of its Commitment shall be made with the understanding that all amounts payable by Seller hereunder shall be determined as if that Purchaser had not sold such participation, and that the holder of any such participation shall not be entitled to require such Purchaser to take or omit to take any action hereunder except actions directly affecting (i) any reduction in the principal amount of, or interest rate or Fees payable with respect to, any Seller Secured Obligations in which such holder participates, (ii) any extension of the scheduled amortization of the principal amount of any Purchaser Interest in which such holder participates or the final maturity date thereof, and (iii) any release of all or substantially all of the Seller Collateral (other than in accordance with the terms of this Agreement or the other Related Documents). Solely for purposes of Sections 2.09 and 2.10, Seller acknowledges and agrees that a participation shall give rise to a direct obligation of Seller to the participant and the participant shall be considered to be a "Purchaser". Except as set forth in the preceding sentence none of Seller, the Originators, Servicer nor Performance Guarantor shall have any obligation or duty to any participant. Neither Agent nor any Purchaser 57 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (other than the Purchaser selling a participation) shall have any duty to any participant and may continue to deal solely with the Purchaser selling a participation as if no such sale had occurred. (c) Except as expressly provided in this Section 14.02, no Purchaser shall, as between Seller and that Purchaser, or Agent and that Purchaser, be relieved of any of its obligations hereunder as a result of any sale, assignment, transfer or negotiation of, or granting of participation in, all or any part of the Purchaser Interests or Seller Secured Obligations owed to such Purchaser. (d) Each of Seller and Servicer shall assist any Purchaser permitted to sell assignments or participations under this Section 14.02 as reasonably required to enable the assigning or selling Purchaser to effect any such assignment or participation, including the execution and delivery of any and all agreements, notes and other documents and instruments as shall be requested and the preparation of informational materials for, and the participation of management in meetings with, potential assignees or participants. Each of Seller and Servicer shall certify the correctness, completeness and accuracy of all descriptions of Seller, Servicer and their respective affairs contained in any selling materials provided by it and all other information provided by it and included in such materials. (e) A Purchaser may furnish any information concerning Seller, Servicer, the Originators or Performance Guarantor in the possession of such Purchaser from time to time to assignees and participants (including prospective assignees and participants); provided that such Purchaser shall obtain from assignees or participants confidentiality covenants substantially equivalent to those contained in Section 14.05. Section 14.03. Termination; Survival of Seller Secured Obligations Upon Facility Termination Date. (a) This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until the Termination Date. (b) Except as otherwise expressly provided herein or in any other Related Document, no termination or cancellation (regardless of cause or procedure) of any commitment made by any Affected Party under this Agreement shall in any way affect or impair the obligations, duties and liabilities of the Seller or the rights of any Affected Party relating to any unpaid portion of the Seller Secured Obligations, due or not due, liquidated, contingent or unliquidated or any transaction or event occurring prior to such termination, or any transaction or event, the performance of which is required after the Facility Termination Date. Except as otherwise expressly provided herein or in any other Related Document, all undertakings, agreements, covenants, warranties and representations of or binding upon the Seller or the Servicer, and all rights of any Affected Party hereunder, all as contained in the Related Documents, shall not terminate or expire, but rather shall survive any such termination or cancellation and shall continue in full force and effect until the Termination Date; provided that 58 WNC Receivables, LLC Receivables Purchase and Servicing Agreement the rights and remedies provided for herein with respect to any breach of any representation or warranty made by the Seller or the Servicer pursuant to Article IV, the indemnification and payment provisions of Article XII and Sections 14.04, 14.05 and 14.06 shall be continuing and shall survive the Termination Date. Section 14.04. Costs, Expenses and Taxes. (a) The Seller shall reimburse the Agent for all out-of-pocket expenses incurred in connection with the negotiation and preparation of this Agreement and the other Related Documents (including the reasonable fees and expenses of all of its special counsel, advisors, consultants and auditors retained in connection with the transactions contemplated thereby and advice in connection therewith). The Seller shall reimburse the Purchasers and the Agent for all fees, costs and expenses, including the fees, costs and expenses of counsel or other advisors (including environmental and management consultants and appraisers) for advice, assistance, or other representation in connection with: (i) the forwarding to the Seller or any other Person on behalf of the Seller by the Purchasers of any payments for Purchases made by it hereunder; (ii) any amendment, modification or waiver of, consent with respect to, or termination of this Agreement or any of the other Related Documents or advice in connection with the administration thereof or their respective rights hereunder or thereunder; (iii) any Litigation, contest or dispute (whether instituted by the Seller, the Purchasers, the Agent or any other Person as a party, witness, or otherwise (except any Litigation, contest or dispute arising solely between Seller and Agent and/or the Purchasers with respect to this Agreement in which Seller prevails because a court of competent jurisdiction by final and nonappealable judgment determines that Agent and/or Purchasers, as the case may be, have acted with gross negligence or willful misconduct) in any way relating to the Seller Collateral, any of the Related Documents or any other agreement to be executed or delivered in connection herewith or therewith, including any Litigation, contest, dispute, suit, case, proceeding or action, and any appeal or review thereof, in connection with a case commenced by or against the Seller or any other Person that may be obligated to the Purchasers or the Agent by virtue of the Related Documents, including any such Litigation, contest, dispute, suit, proceeding or action arising in connection with any work-out or restructuring of the transactions contemplated hereby during the pendency of one or more Termination Events; (iv) any attempt to enforce any remedies of the Purchasers or the Agent against the Seller or any other Person that may be obligated to them by virtue of any of the Related Documents, including any such attempt to enforce any such remedies in the course of any work-out or restructuring of the transactions contemplated hereby during the pendency of one or more Termination Events; 59 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (v) any work-out or restructuring of the transactions contemplated hereby during the pendency of one or more Termination Events; and (vi) efforts to (A) monitor the Purchases or any of the Seller Secured Obligations, (B) evaluate, observe or assess the Originators, the Seller or the Servicer or their respective affairs, and (C) verify, protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of any of the Seller Collateral; including all attorneys' and other professional and service providers' fees arising from such services, including those in connection with any appellate proceedings, and all expenses, costs, charges and other fees incurred by such counsel and others in connection with or relating to any of the events or actions described in this Section 14.04, all of which shall be payable, on demand, by the Seller to the Purchasers or the Agent, as applicable. Without limiting the generality of the foregoing, such expenses, costs, charges and fees may include: fees, costs and expenses of accountants, environmental advisors, appraisers, investment bankers, management and other consultants and paralegals; court costs and expenses; photocopying and duplication expenses; court reporter fees, costs and expenses; long distance telephone charges; air express charges; telegram or facsimile charges; secretarial overtime charges; and expenses for travel, lodging and food paid or incurred in connection with the performance of such legal or other advisory services. (b) In addition, the Seller shall pay on demand any and all stamp, sales, excise and other taxes (excluding income taxes that are excluded from Indemnified Taxes in accordance with Section 2.08(b)) and fees payable or determined to be payable in connection with the execution, delivery, filing or recording of this Agreement or any other Related Document, and the Seller agrees to indemnify and save each Indemnified Person harmless from and against any and all liabilities with respect to or resulting from any delay or failure to pay such taxes and fees. Section 14.05. Confidentiality. (a) Except to the extent otherwise required by applicable law, as required to be filed publicly with the Securities and Exchange Commission, or unless the Agent shall otherwise consent in writing, the Seller and the Servicer each agrees to maintain the confidentiality of this Agreement (and all drafts hereof and documents ancillary hereto) in its communications with third parties other than any Affected Party or any Indemnified Person and otherwise and not to disclose, deliver or otherwise make available to any third party (other than its directors, officers, members, employees, accountants or counsel) the original or any copy of all or any part of this Agreement (or any draft hereof and documents ancillary hereto) except to an Affected Party or an Indemnified Person. (b) The Seller and the Servicer each agrees that it shall not (and shall not permit any of its Subsidiaries to) issue any news release or make any public announcement pertaining to the transactions contemplated by this Agreement and the other Related Documents without the prior written consent of the Purchasers and the Agent (which consent shall not be 60 WNC Receivables, LLC Receivables Purchase and Servicing Agreement unreasonably withheld) unless such news release or public announcement is required by law, in which case the Seller or the Servicer, as applicable, shall consult with the Purchasers and the Agent prior to the issuance of such news release or public announcement. The Seller may, however, disclose the general terms of the transactions contemplated by this Agreement and the other Related Documents to trade creditors, suppliers and other similarly-situated Persons so long as such disclosure is not in the form of a news release or public announcement. Section 14.06. Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Seller, the Servicer, the Purchasers and the Agent and their respective successors and permitted assigns. Section 14.07. Complete Agreement; Modification of Agreement. This Agreement and the other Related Documents constitute the complete agreement among the parties hereto with respect to the subject matter here of and thereof, supersede all prior agreements and understandings relating to the subject matter hereof and thereof, and may not be modified, altered or amended except as set forth in Section 14.08. Section 14.08. Amendments and Waivers. No amendment, modification, termination or waiver of any provision of this Agreement or any of the other Related Documents, or any consent to any departure by the Seller or the Servicer therefrom, shall in any event be effective unless the same shall be in writing and signed by each of the parties hereto or thereto. Section 14.09. No Waiver; Remedies. The failure by any Purchaser or the Agent, at any time or times, to require strict performance by the Seller or the Servicer of any provision of this Agreement or any Purchase Assignment shall not waive, affect or diminish any right of any Purchaser or the Agent thereafter to demand strict compliance and performance herewith or therewith. Any suspension or waiver of any breach or default hereunder shall not suspend, waive or affect any other breach or default whether the same is prior or subsequent thereto and whether the same or of a different type. None of the undertakings, agreements, warranties, covenants and representations of the Seller or the Servicer contained in this Agreement or any Purchase Assignment, and no breach or default by the Seller or the Servicer hereunder or thereunder, shall be deemed to have been suspended or waived by the Purchasers or the Agent unless such waiver or suspension is by an instrument in writing signed by an officer of or other duly authorized signatory of the Purchasers and the Agent and directed to the Seller or the Servicer, as applicable, specifying such suspension or waiver. The rights and remedies of the Purchasers and the Agent under this Agreement shall be cumulative and nonexclusive of any other rights and remedies that the Purchasers and the Agent may have under any other agreement, including the other Related Documents, by operation of law or otherwise. Recourse to the Seller Collateral shall not be required. Section 14.10. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. 61 WNC Receivables, LLC Receivables Purchase and Servicing Agreement (a) THIS AGREEMENT AND EACH OTHER RELATED DOCUMENT (EXCEPT TO THE EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE AGENT IN THE RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. (b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN COOK COUNTY, CITY OF CHICAGO, ILLINOIS SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT; PROVIDED THAT EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE COOK COUNTY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ANY PURCHASER OR THE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE SELLER COLLATERAL OR ANY OTHER SECURITY FOR THE SELLER SECURED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF ANY PURCHASER OR THE AGENT. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY 62 WNC Receivables, LLC Receivables Purchase and Servicing Agreement HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. (c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. Section 14.11. Counterparts. This Agreement may be executed in any number of separate counterparts, each of which shall collectively and separately constitute one agreement. Section 14.12. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. Section 14.13. Section Titles. The section titles and table of contents contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto. Section 14.14. Further Assurances. (a) Each of the Seller and the Servicer shall, at its sole cost and expense, upon request of any Purchaser or the Agent, promptly and duly execute and deliver any and all further instruments and documents and take such further action that may be necessary or desirable or that any Purchaser or the Agent may request to (i) perfect, protect, preserve, continue and maintain fully the Purchases made and the right, title and interests (including Liens) granted to the Agent under this Agreement, (ii) enable the Purchasers or the Agent to exercise and enforce its rights under this Agreement or any of the other Related Documents or (iii) otherwise carry out more effectively the provisions and purposes of this Agreement or any other Related Document. Without limiting the generality of the foregoing, the Seller shall, upon request of any Purchaser or the Agent, (A) execute and file such financing or continuation statements, or amendments 63 WNC Receivables, LLC Receivables Purchase and Servicing Agreement thereto or assignments thereof, and such other instruments or notices that may be necessary or desirable or that any Purchaser or the Agent may request to perfect, protect and preserve the Purchases made and the Liens granted pursuant to this Agreement, free and clear of all Adverse Claims, (B) mark, or cause the Servicer to mark, each Contract evidencing each Transferred Receivable with a legend, acceptable to each Purchaser and the Agent evidencing that the Agent on behalf of the Purchasers has purchased an undivided percentage ownership interest in all right and title thereto and interest therein as provided herein (for example, "This writing and the obligations evidenced or secured hereby have been sold to General Electric Capital Corporation for itself and as Agent"), (C) mark, or cause the Servicer to mark, its master data processing records evidencing such Transferred Receivables with such a legend and (D) notify or cause the Servicer to notify Obligors of the sale of undivided percentage ownership interests in the Transferred Receivables effected hereunder. (b) Without limiting the generality of the foregoing, the Seller hereby authorizes the Purchasers and the Agent, and each of the Purchasers hereby authorizes the Agent, to file one or more financing or continuation statements, or amendments thereto or assignments thereof, relating to all or any part of the Transferred Receivables, including Collections with respect thereto, or the Seller Collateral without the signature of the Seller or, as applicable, the Agent or any Purchaser to the extent permitted by applicable law. A carbon, photographic or other reproduction of this Agreement or of any notice or financing statement covering the Transferred Receivables, the Seller Collateral or any part thereof shall be sufficient as a notice or financing statement where permitted by law. 64 WNC Receivables, LLC Receivables Purchase and Servicing Agreement IN WITNESS WHEREOF, the parties have caused this Receivables Purchase and Servicing Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. WNC RECEIVABLES, LLC, as the Seller By ----------------------------------------------------- Name: Christopher A. Black Title: Manager Address: WABASH FINANCING LLC, as the Servicer By ----------------------------------------------------- Name: Christopher A. Black, Authorized Representative Address: 65 ' WNC RECEIVABLES MANAGEMENT CORP., as the Independent Member By ------------------------------------------------------ Name: Christopher A. Black Title: Manager Address: GENERAL ELECTRIC CAPITAL CORPORATION, as Purchaser By ------------------------------------------------------ Name: --------------------------------------------------- Duly Authorized Signatory Address: 500 West Monroe Street, Suite 1200 Chicago, Illinois 60661 Attention: Account Manager Telephone: (312) 463-2239 Facsimile: (312) 463-3840 GENERAL ELECTRIC CAPITAL CORPORATION, as Agent By ------------------------------------------------------ Name: --------------------------------------------------- Duly Authorized Signatory Address: 500 West Monroe Street, Suite 1200 Chicago, Illinois 60661 Attention: Account Manager Telephone: (312) 463-2239 Facsimile: (312) 463-3840 66 Exhibit 2.02(a) FORM OF COMMITMENT REDUCTION NOTICE [Insert Date] WNC Receivables LLC [Address] [Attention: ] General Electric Capital Corporation, as Agent c/o General Electric Capital Corporation 500 West Monroe Street, Suite 1200 Chicago, Illinois 60661 Attn: [Account Manager] Re: Receivables Purchase and Servicing Agreement dated as of April 11, 2002 Ladies and Gentlemen: This notice is given pursuant to Section 2.02(a) of that certain Receivables Purchase and Servicing Agreement dated as of April 11 , 2002 (the "PURCHASE AGREEMENT"), by and among WNC Receivables LLC (the "SELLER"), Wabash Financing LLC (the "SERVICER"), WNC Receivables Management Corp. (the "INDEPENDENT MEMBER") and General Electric Capital Corporation, a Delaware corporation, as the sole initial Purchaser (together with its successors and assigns, the "PURCHASERS") and as agent for the Purchasers (in such capacity, the "AGENT"). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Purchase Agreement. Pursuant to Section 2.02(a) of the Purchase Agreement, the Seller hereby irrevocably notifies the Purchasers and the Agent of its election to permanently reduce the Maximum Purchase Limit to [$_____], effective as of [_____ __], [___] (which is a Business Day at least ten days after the date this notice is given). This reduction is the [first/second] reduction [for the current calendar year] permitted by Section 2.02(a) of the Purchase Agreement. After such reduction, the Maximum Purchase Limit will not be less than the Capital Investment. 67 Very truly yours, WNC RECEIVABLES LLC By: ------------------------------------------------ Name: ---------------------------------------------- Title: --------------------------------------------- 68 Exhibit 2.02(b) FORM OF COMMITMENT TERMINATION NOTICE [Insert Date] WNC Receivables LLC [Address] [Attention: ] General Electric Capital Corporation, as Agent c/o General Electric Capital Corporation 500 West Monroe Street, Suite 1200 Chicago, Illinois 60661 Attn: [Account Manager] Re: Receivables Purchase and Servicing Agreement dated as of April 11, 2002 Ladies and Gentlemen: This notice is given pursuant to Section 2.02(b) of that certain Receivables Purchase and Servicing Agreement dated as of April 11, 2002 (the "PURCHASE AGREEMENT"), by and among WNC Receivables LLC (the "SELLER"), Wabash Financing LLC (the "SERVICER"), WNC Receivables Management Corp. (the "INDEPENDENT MEMBER") and General Electric Capital Corporation, a Delaware corporation, as the sole initial Purchaser (together with its successors and assigns, the "PURCHASERS") and as agent for the Purchasers (in such capacity, the "AGENT"). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Purchase Agreement. Pursuant to Section 2.02(b) of the Purchase Agreement, the Seller hereby irrevocably notifies the Purchasers and the Agent of its election to terminate the Maximum Purchase Limit effective as of [_____ __], [___] (which is a Business Day at least 90 days after the date this notice is given). In connection therewith, the Seller shall reduce Capital Investment to zero on or prior to such date and make all other payments required by Section 2.03(c) and pay any other fees that are due and payable pursuant to the Fee Letter at the time and in the manner specified therein. 69 Very truly yours, WNC RECEIVABLES LLC By: ------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- 70 Exhibit 2.03(a)(i) WNC RECEIVABLES LLC DAILY INVESTMENT BASE CERTIFICATE WABASH NATIONAL CORPORATION DAILY INVESTMENT BASE CERTIFICATE FOR THE DAY ENDED --------------------------
WABASH NATIONAL NATC TOTAL -------- ---- ---------- Beginning of prior borrowing base accounts receivable balance - + Sales - - Cash Collected - - Cash discounts - +/- Other - ---------- = GROSS AMOUNT OF ACCOUNTS - - - Less ineligibles: Past due (>60 days past due date or >90 days past invoice) - Cross-aging (50% rule) - Credit Balances (>60 days) - Addbacks - Foreign Customer Accounts (non-Canada) - Government Accounts - Contra Accounts - JB Hunt Pricing Adjustment - Bill & Hold (no MSO issued) - Bill & Hold (O/S > 45 days, >3% of gross A/R) - Guaranteed Buybacks - Trailers received not credited - Committed Not Received (1) - Sales Tax, FET and Commissions - COD/Cash Accounts - Billings to Individuals - Intercompany Accounts - Delayed Billings - Unissued Credits (Trade-ins) - Chargebacks - Disputed Invoices -
71 Unsatisfactory Credit Rating - Due from Bankrupt or Insolvent Customer - Customer Deposits - ---------- TOTAL INELIGIBLES - - - Eligible Accounts Receivable - - - Reserves: Concentration Excess as a % of Eligible A/R - > 40% of terms 30 (1) Until May 12, 2002, any amounts of Committed Not Received > $5MM are ineligble. After 5/12/02, all amounts of Committed Not Received will be held ineligible if no offset letters in form and substance acceptable to GECC have been received. At all times, Committed Not Received report shall be updated weekly and all offsetting accounts shall be updated daily. (2) Until 6/30/02, the greater of $7.5MM or 25% of Available A/R, not to exceed $15MM. $15MM at all times after 6/30/02. If Block is less than $15MM at 6/15/02, Block shall increase by $250M per day between 6/16/02 and 6/30/02 until it reaches $15MM. - -------------------------------------------------------------------------------- ACCRUED SERVICING FEE RESERVE Daily Servicing Fee (1% of prior day's Transferred Receivables) - Month-to-Date Servicing Fee (Accrued Month-to-date) - - -------------------------------------------------------------------------------- SERVICING FEE CALCULATION 72
TRANSFERRED SERVICING Day of Month RECEIVABLES FEE * ----------- --------- 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 - 11 - 12 - 13 - 14 - 15 - 16 - 17 - 18 - 19 - 20 - 21 - 22 - 23 - 24 - 25 - 26 - 27 - 28 - 29 - 30 - 31 - ---- Month to Date Accrual -
* 1% of Prior Day's Transferred Receivables, calculated on a 360 day basis. The undersigned hereby represents and warrants that the foregoing is a true and accurate accounting in accordance with the Receivables Purchase and Sale Agreement dated as of April 73 11, 2002, by and among WNC Receivables, LLC, as Seller, the undersigned, as Servicer, WNC Receivables Management Corp., and General Electric Capital Corporation, individually and as Agent, as amended from time to time (the "Purchase Agreement") and that all representations and warranties of the Seller and the Servicer set forth in Sections 4.01 and 4.02 of the Purchase Agreement are true and correct as of the date hereof. Further, no event has occurred and is continuing, as of the date hereof that constitutes an Incipient Termination Event, a Termination Event, an Incipient Servicer Termination Event or an Event of Servicer Termination. WABASH FINANCING LLC, as Servicer By: ------------------------------------- Name: Title: 74 Exhibit 2.03(a)(ii) WNC RECEIVABLES LLC WEEKLY INVESTMENT BASE CERTIFICATE WABASH NATIONAL CORPORATION WEEKLY INVESTMENT BASE CERTIFICATE FOR THE WEEK ENDED -----------------------
WABASH NATIONAL NATC TOTAL -------- ---- ---------- Beginning of prior borrowing base accounts receivable balance - + Sales - - Cash Collected - - Cash discounts - +/- Other - ---------- = GROSS AMOUNT OF ACCOUNTS - - - Less ineligibles: Past Due (>60 days past due date or >90 days past invoice) - Cross-aging (50% rule) - Credit Balances (>60 days) - Addbacks - Foreign Customer Accounts (non-Canada) - Government Accounts - Contra Accounts - JB Hunt Pricing Adjustment - Bill & Hold (no MSO issued) - Bill & Hold (O/S > 45 days, >3% of gross A/R) - Guaranteed Buybacks - Committed Not Received (1) - Sales Tax, FET and Commissions - COD/Cash Accounts - Billings to Individuals - Intercompany Accounts - Delayed Billings - Unissued Credits (Trade-ins) - Chargebacks - Disputed Invoices -
75 Unsatisfactory Credit Rating - Due from Bankrupt or Insolvent Customer - Customer Deposits - ---------- TOTAL INELIGIBLES - - - Eligible Accounts Receivable - - - Reserves: Concentration Excess as a % of Eligible A/R - > 40% of terms 30 (1) Until 5/12/02, any amounts of Committed Not Received > $5MM are ineligible. After 5/12/02, all amounts of Committed Not Received will be held ineligible if no offset letters in form and substance acceptable to GECC have been received. At all times, Committed Not Received report shall be updated weekly and all offsetting accounts shall be updated daily. (2) Until 6/30/02, the greater of $7.5MM or 25% of Available A/R, not to exceed $15MM. $15MM at all times after 6/30/02. If Block is less than $15MM at 6/15/02, Block shall increase by $250M per day between 6/16/02 and 6/30/02 until it reaches $15MM. - -------------------------------------------------------------------------------- ACCRUED SERVICING FEE RESERVE Daily Servicing Fee (1% of prior day's Transferred Receivables) - Month-to-Date Servicing Fee (Accrued Month-to-date) - - -------------------------------------------------------------------------------- SERVICING FEE CALCULATION 76
TRANSFERRED SERVICING Day of Month RECEIVABLES FEE * ----------- --------- 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 - 11 - 12 - 13 - 14 - 15 - 16 - 17 - 18 - 19 - 20 - 21 - 22 - 23 - 24 - 25 - 26 - 27 - 28 - 29 - 30 - 31 - ---- Month to Date Accrual -
* 1% of Prior Day's Transferred Receivables, calculated on a 360 day basis. The undersigned hereby represents and warrants that the foregoing is a true and accurate accounting in accordance with the Receivables Purchase and Sale Agreement dated as of April 11, 2002, by and among WNC Receivables, LLC, as Seller, the undersigned, as 77 Servicer, WNC Receivables Management Corp., and General Electric Capital Corporation, individually and as Agent, as amended from time to time (the "Purchase Agreement") and that all representations and warranties of the Seller and the Servicer set forth in Sections 4.01 and 4.02 of the Purchase Agreement are true and correct as of the date hereof. Further, no event has occurred and is continuing, as of the date hereof that constitutes an Incipient Termination Event, a Termination Event, an Incipient Servicer Termination Event or an Event of Servicer Termination. WABASH FINANCING LLC, as Servicer By: ------------------------------ Name: Title: 78 Exhibit 2.03(a)(iii) WNC RECEIVABLES LLC MONTHLY REPORT [MUTUALLY ACCEPTABLE FORM TO BE ATTACHED POST-CLOSING PRIOR TO MAY 18, 2002, WHICH, WHEN ATTACHED, SHALL BE A PART OF THE PURCHASE AGREEMENT] 79 Exhibit 2.03(b) FORM OF PURCHASE REQUEST [Insert Date] WNC Receivables LLC [Address] [Attention: ] General Electric Capital Corporation, as Agent c/o General Electric Capital Corporation 500 West Monroe Street, Suite 1200 Chicago, Illinois 60661 Attn: [Account Manager] Re: Receivables Purchase and Servicing Agreement dated as of April , 2002 Ladies and Gentlemen: This notice is given pursuant to Section 2.03(b) of that certain Receivables Purchase and Servicing Agreement dated as of April 11, 2002 (the "PURCHASE AGREEMENT"), by and among WNC Receivables LLC (the "SELLER"), Wabash Financing LLC (the "SERVICER"), WNC Receivables Management Corp. (the "INDEPENDENT MEMBER") and General Electric Capital Corporation, a Delaware corporation, as the sole initial Purchaser (together with its successors and assigns, the "PURCHASERS") and as agent for the Purchasers (in such capacity, the "AGENT"). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Purchase Agreement. Pursuant to Section 2.01 of the Purchase Agreement, the Seller hereby requests that a Purchase be made from the Seller on [_____ __], [____] (which is a Business Day), in the amount of [$_____], to be disbursed to the Seller in accordance with Section 2.04(b) of the Purchase Agreement. The Seller hereby confirms that the conditions set forth in Section 3.02 of the Purchase Agreement have been satisfied. Very truly yours, WNC RECEIVABLES LLC By: --------------------------------------------- Name: ------------------------------------------- Title: ------------------------------------------ 80 Exhibit 2.04(a) FORM OF PURCHASE ASSIGNMENT THIS PURCHASE ASSIGNMENT (the "PURCHASE ASSIGNMENT") is entered into as of April 11, 2002 by and between WNC RECEIVABLES LLC ("SELLER"), WNC RECEIVABLES MANAGEMENT CORP. (the "INDEPENDENT MEMBER"), and GENERAL ELECTRIC CAPITAL CORPORATION, as Agent under the Purchase Agreement described below (the "AGENT"). 1. We refer to that certain Receivables Purchase and Servicing Agreement (the "PURCHASE AGREEMENT") of even date herewith among the Seller, the Servicer, the Independent Member, the Purchasers and the Agent. All of the terms, covenants and conditions of the Purchase Agreement are hereby made a part of this Purchase Assignment and are deemed incorporated herein in full. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement. 2. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Seller hereby sells to each of the Purchasers, for the ratable benefit of the Purchasers, without recourse, except as provided in Section 12.01 of the Purchase Agreement, an undivided interest in all of the Seller's right, title and interest in, under and to all Transferred Receivables (including all Collections, Records and proceeds with respect thereto) sold from time to time by the Seller to such Purchasers under the Purchase Agreement to the extent of such Purchasers' Purchaser Interest and subject to the terms and conditions of the Purchase Agreement. 3. The Seller hereby covenants and agrees to sign, sell or execute and deliver, or cause to be signed, sold or executed and delivered, and to do or make, or cause to be done or made, upon request of the Agent and at the Seller's expense, any and all agreements, instruments, papers, deeds, acts or things, supplemental, confirmatory or otherwise, as may be reasonably required by the Agent for the purpose of or in connection with acquiring or more effectively vesting in the Agent, for the ratable benefit of the Purchasers, or evidencing the vesting in the Agent of the property, rights, title and interests of the Seller sold hereunder or intended to be sold hereunder to the Purchasers. 4. Wherever possible, each provision of this Purchase Assignment shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Purchase Assignment shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Purchase Assignment. 5. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR 81 DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS PURCHASE ASSIGNMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 6. THIS PURCHASE ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. IN WITNESS WHEREOF, the parties have caused this Purchase Assignment to be executed by their respective officers thereunto duly authorized, as of the day and year first above written. WNC RECEIVABLES LLC, GENERAL ELECTRIC CAPITAL AS SELLER CORPORATION, AS AGENT By: By: ------------------------------------- --------------------------------- Name: Name: ----------------------------------- ------------------------------- Title: Title: ---------------------------------- ------------------------------ 82 Exhibit 5.02 FORM OF BRINGDOWN CERTIFICATE - - - [INSERT NAME OF APPLICABLE COMPANY] Officer's Certificate TO: GENERAL ELECTRIC CAPITAL CORPORATION, INDIVIDUALLY AND AS AGENT I, [Name of Officer], the duly elected [Insert Title] of [Name of Company], a ________________ (the "COMPANY"), hereby certify as follows: 1. Capitalized terms herein and not otherwise defined shall have the respective meanings ascribed to them in the Receivables Sale and Contribution Agreement (the "SALE AGREEMENT"), dated as of April 11, 2002, by and among Wabash National Corporation, as Performance Guarantor, NOAMTC, Inc., Wabash National, L.P., and WNC Receivables, LLC, or the Receivables Purchase and Servicing Agreement (together with the Sale Agreement, the "AGREEMENTS"), dated as of April 11 , 2002 by and among WNC Receivables, LLC, Wabash Financing LLC, WNC Receivables Management Corp. and General Electric Capital Corporation, individually and as Agent. 2. As of the date of this Certificate, the Company is Solvent. 3. Each of the representations and warranties of the Company contained in the Related Documents to which the Company is a party is true and correct as of the date hereof as though made on the date hereof (except for those representations which speak only as of an earlier date). 4. Since September 30, 2001, no event has occurred that alone or together with other events could reasonably be expected to have a Material Adverse Effect. 5. As of the date of this Certificate, no event has occurred and is continuing that constitutes an Incipient Termination Event, a Termination Event, an Incipient Servicer Termination Event or an Event of Servicer Termination. 6. The Company is in material compliance with all applicable federal, state, and local laws and regulations, including those relating to labor and environmental matters and ERISA 7. Except as otherwise permitted under the Agreements, no Adverse Claims have arisen or been granted with respect to the property of the Company 83 IN WITNESS WHEREOF, I have signed and delivered this Officer's Certificate this __________ day of __________________, 200_. [COMPANY NAME] By: -------------------------------------------- Name: ------------------------------------------ Title: ----------------------------------------- 84 Form of POWER OF ATTORNEY This Power of Attorney is executed and delivered by Wabash Financing LLC ("COMPANY"), as the Servicer under the Purchase Agreement (each as defined below), to General Electric Capital Corporation, as Agent under the Purchase Agreement (hereinafter referred to as "ATTORNEY"), pursuant to that certain Receivables Purchase and Servicing Agreement dated as of April 11, 2002 (the "PURCHASE AGREEMENT" ), by and among Company, the other parties thereto and Attorney and the other Related Documents. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement. No person to whom this Power of Attorney is presented, as authority for Attorney to take any action or actions contemplated hereby, shall inquire into or seek confirmation from Company as to the authority of Attorney to take any action described below, or as to the existence of or fulfillment of any condition to this Power of Attorney, which is intended to grant to Attorney unconditionally the authority to take and perform the actions contemplated herein, and Company irrevocably waives any right to commence any suit or action, in law or equity, against any person or entity that acts in reliance upon or acknowledges the authority granted under this Power of Attorney. The power of attorney granted hereby is coupled with an interest and may not be revoked or cancelled by Company until all Seller Secured Obligations under the Related Documents have been indefeasibly paid in full and Attorney has provided its written consent thereto. Company hereby irrevocably constitutes and appoints Attorney (and all officers, employees or agents designated by Attorney), with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in its place and stead and in its name or in Attorney's own name, from time to time in Attorney's discretion, to take any and all appropriate action and to execute and deliver any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, hereby grants to Attorney the power and right, on its behalf, without notice to or assent by it, upon the occurrence and during the continuance of any Termination Event, to do the following: (a) open mail for it, and ask, demand, collect, give acquittances and receipts for, take possession of, or endorse and receive payment of, any checks, drafts, notes, acceptances, or other instruments for the payment of moneys due, and sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, and notices in connection with any of its property; (b) effect any repairs to any of its assets, or continue or obtain any insurance and pay all or any part of the premiums therefor and costs thereof, and make, settle and adjust all claims under such policies of insurance, and make all determinations and decisions with respect to such policies; (c) pay or discharge any taxes, Liens, or other encumbrances levied or placed on or threatened against it or its property; (d) defend any suit, action or proceeding brought against it if it does not defend such suit, action or proceeding or if Attorney believes that it is not pursuing such defense in a manner that will maximize the recovery to Attorney, and settle, compromise or adjust any suit, action, or proceeding described above and, in connection therewith, give such discharges or releases as Attorney may deem appropriate; (e) file or prosecute any claim, Litigation, suit or proceeding in 85 any court of competent jurisdiction or before any arbitrator, or take any other action otherwise deemed appropriate by Attorney for the purpose of collecting any and all such moneys due to it whenever payable and to enforce any other right in respect of its property; (f) sell, transfer, pledge, make any agreement with respect to, or otherwise deal with, any of its property, and execute, in connection with such sale or action, any endorsements, assignments or other instruments of conveyance or transfer in connection therewith; and (g) cause the certified public accountants then engaged by it to prepare and deliver to Attorney at any time and from time to time, promptly upon Attorney's request, any and all financial statements or other reports required to be delivered by or on behalf of Company under the Related Documents, all as though Attorney were the absolute owner of its property for all purposes, and to do, at Attorney's option and its expense, at any time or from time to time, all acts and other things that Attorney reasonably deems necessary (so long as such acts or other things do not conflict with the terms of the Purchase Agreement or the other Related Documents) to perfect, preserve, or realize upon its property or assets and the Purchasers' Liens thereon, all as fully and effectively as it might do. Company hereby ratifies, to the extent permitted by law, all that said attorneys shall lawfully do or cause to be done by virtue hereof. 86 IN WITNESS WHEREOF, this Power of Attorney is executed by Company, and Company has caused its seal to be affixed pursuant to the authority of its board of managers as of April 11, 2002. - -------------------------------- By: ----------------------------- Name: Title: ATTEST: ------------------------- By: (SEAL) ----------------------------- Title: -------------------------- [NOTARIZATION IN APPROPRIATE FORM FOR THE STATE OF EXECUTION IS REQUIRED.] 87 [Signature Page to Sale Agreement] Annex 5.02 REPORTING REQUIREMENTS OF THE SELLER The Seller shall furnish, or cause to be furnished, to the Agent for distribution to the Purchasers: (a) Annual Audited Financials. As soon as available, and in any event within 90 days after the end of each fiscal year, (i) audited Financial Statements for the Seller on a stand-alone basis consisting of a balance sheet and statements of income and retained earnings and cash flows, setting forth in comparative form in each case the figures for the previous fiscal year, which Financial Statements shall be prepared in accordance with GAAP and certified without qualification, by an independent certified public accounting firm of national standing or otherwise acceptable to Agent. Such Financial Statements shall be accompanied by the certification of the Seller's Authorized Officer that all such Financial Statements present fairly in accordance with GAAP the financial position, results of operations and statements of cash flows of the Seller as at the end of such fiscal year and for the period then ended, and that there was no Termination Event or Incipient Termination Event in existence as of such time or, if a Termination Event or Incipient Termination Event has occurred and is continuing, describing the nature thereof and all efforts undertaken to cure such Termination Event or Incipient Termination Event. (b) Monthly Financials. As soon as available, and in any event within 30 days after the end of each fiscal month, financial information regarding the Seller, certified by an Authorized Officer of the Seller, consisting of (i) an unaudited balance sheet as of the close of such fiscal quarter and the related statements of income and cash flows for that portion of the fiscal year ending as of the close of such fiscal quarter. Such financial information shall be accompanied by (A) a statement in reasonable detail showing the calculations used and (B) the certification of the Seller's Authorized Officer that such financial information presents fairly in accordance with GAAP (subject to normal year-end adjustments) the financial position, results of operations and statements of cash flows of the Seller and each member of the Parent Group on a consolidated and consolidating basis, as at the end of such fiscal quarter and for the period then ended. (c) Management Letters. Within five Business Days after receipt thereof by the Seller, copies of all management letters, exception reports or similar letters or reports (if any) received by the Seller from its independent certified public accountants. (d) Default Notices. As soon as practicable, and in any event within one Business Day after an Authorized Officer of the Seller has actual knowledge of the existence thereof, telephonic or telecopied notice of each of the following events, in each case specifying the nature and anticipated effect thereof and what action, if any, the applicable Seller Party proposes to take with respect thereto, which notice, if given telephonically, shall be promptly confirmed in writing on the next Business Day: (i) any Incipient Termination Event or Termination Event; 88 (ii) any Adverse Claim made or asserted against any of the Seller Collateral of which it becomes aware; (iii) the occurrence of any event that would have a material adverse effect on the aggregate value of the Seller Collateral or on the assignments and Liens granted by the Seller pursuant to this Agreement; (iv) the commencement of a case or proceeding by or against any Seller Party seeking a decree or order in respect of such Seller Party (A) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (B) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for any Seller Party or for any substantial part of its assets, or (C) ordering the winding-up or liquidation of the affairs of any Seller Party; (v) the receipt of notice that (A) any Seller Party is being placed under regulatory supervision, (B) any license, permit, charter, registration or approval necessary for the conduct of the business of any Seller Party is to be, or may be, suspended or revoked, or (C) any Seller Party is to cease and desist any practice, procedure or policy employed by it in the conduct of its business if such cessation may have a Material Adverse Effect; or (vi) any other event, circumstance or condition that has had or could reasonably be expected to have a Material Adverse Effect. (e) Litigation. Promptly upon learning thereof, written notice of any Litigation affecting the Seller, the Independent Member, the Transferred Receivables or the Seller Collateral, whether or not fully covered by insurance, and regardless of the subject matter thereof that (i) seeks money damages, (ii) seeks injunctive relief, (iii) alleges criminal misconduct on the part of the Seller or the Independent Member, or (iv) would, if determined adversely, have a Material Adverse Effect. (f) Financial Statements, Bringdown Certificates and Notices Required under the Sale Agreement. Within one Business Day after receipt thereof, all financial statements, Bringdown Certificates and notices required to be delivered by the Parent (or Performance Guarantor) or either of the Originators under the Sale Agreement, and such additional financial and other information respecting the Transferred Receivables, the Contracts therefor or the condition or operations, financial or otherwise, of any of the Seller Parties as the Agent shall, from time to time, request. (g) Miscellaneous Certifications. As soon as available, and in any event within 90 days after the end of each fiscal year, (i) a Bringdown Certificate of each of the Seller and the Independent Member, and (ii) solely if requested by the Agent due to a change in applicable law or circumstances, an opinion of counsel, in form and substance satisfactory to the Purchasers and the Agent, reaffirming as of the date of such opinion the opinions of counsel with respect to the Seller delivered to the Agent for distribution to the Purchasers on the Closing Date. 89 Annex 7.02 INVESTMENT REPORTS The Servicer shall furnish, or cause to be furnished, to the Agent for distribution to the Purchasers the following: 1. When and as required under Section 2.03 of the Purchase Agreement, the Servicer shall deliver the Daily Investment Base Certificates, Weekly Investment Base Certificates and Monthly Reports to the Agent with sufficient copies for each of the Purchasers. 2. Together with each Weekly Investment Base Certificate, Servicer shall deliver the following reports, each of which shall be prepared as of the last day of the previous week; provided that if (i) an Incipient Termination Event or a Termination Event shall have occurred and be continuing or (ii) the Agent, in good faith, believes that an Incipient Termination Event or a Termination Event is imminent or deems the Agent's rights or interests (for the benefit of the Purchasers) in the Transferred Receivables or the Seller Collateral insecure, then such reports shall be delivered for such periods and as frequently as the Agent shall request: (A) at the request of the Agent, with respect to each of the Originators, a summary trial balance showing Receivables outstanding aged from due date as follows: current, 1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more, accompanied by such supporting detail and documentation as shall be requested by the Agent in its reasonable discretion; (B) at the request of the Agent, with respect to each of the Originators, a summary of aged accounts payable listing showing total amounts owed to each vendor or supplier, with contra balances denoted and accompanied by such supporting detail and documentation as shall be requested by the Agent in its reasonable discretion; and (C) such other reports, statements and reconciliations with respect to the Investment Base or Seller Collateral as the Agent shall from time to time request in its reasonable discretion, including, without limitation, the following: (1) bill and hold; (2) bill and hold (no MSO issued); (3) top 10 customer concentration; (4) committed but not received; (5) sales tax, FET and commissions; (6) unissued credits (invoices short paid); and (7) intercompany accounts. 3. Together with each Monthly Report, the Servicer shall deliver the following reports, each of which shall be prepared as of the last day of the previous month and provided 18 days after month end; provided that if (i) an Incipient Termination Event or a Termination Event shall have occurred and be continuing or (ii) the Agent, in good faith, believes that an Incipient Termination Event or a Termination Event is imminent or deems the Agent's rights or interests (for the benefit of the Purchasers) in the Transferred Receivables or the Seller Collateral insecure, then such reports shall be delivered for such periods and as frequently as the Agent shall request: 90 (A) with respect to each of the Originators, a detailed trial balance showing Receivables outstanding aged from due date as follows: current, 1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more, accompanied by such supporting detail and documentation as shall be requested by the Agent in its reasonable discretion; and (B) with respect to each of the Originators, an aged accounts payable listing showing total amounts owed to each vendor or supplier, with contra balances denoted and accompanied by such supporting detail and documentation as shall be requested by the Agent in its reasonable discretion; and (C) with respect to each of the Originators, a Receivables reconciliation to the general ledger and Financial Statements within 18 days after month end; (D) with respect to each of the Originators, a Receivables roll-forward; (E) such other reports, statements and reconciliations with respect to the Investment Base or Seller Collateral as the Agent shall from time to time request in its reasonable discretion, including, without limitation, the following: (1) bill and hold; (2) bill and hold (no MSO issued); (3) top 10 customer concentration; (4) committed but not received (trailers received, but not accounted for); (5) sales tax, FET and commissions; (6) unissued credits (invoices short paid); (7) intercompany accounts; (8) write-offs (trailing twelve months); (9) warranty claims - cash and credits (trailing twelve months); (10) buybacks; and (11) accounts receivable due from customers with guaranteed trade-in value agreements or contracts. 91 Annex X Definitions 92 EX-10.29 13 c68906a1ex10-29.txt RECEIVABLES SALE AND CONTRIBUTION AGREEMENT Exhibit 10.29 RECEIVABLES SALE AND CONTRIBUTION AGREEMENT DATED AS OF APRIL 11, 2002 BY AND AMONG WABASH NATIONAL CORPORATION, AS PERFORMANCE GUARANTOR, NOAMTC, INC. AND WABASH NATIONAL, L.P., EACH AS AN ORIGINATOR, AND WNC RECEIVABLES, LLC, AS BUYER Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS AND INTERPRETATION.................................... 1 Section 1.01. Definitions................................................... 1 Section 1.02. Rules of Construction......................................... 1 ARTICLE II SALE OF RECEIVABLES.............................................. 2 Section 2.01. Agreement to Sell............................................. 2 Section 2.02. Grant of Security Interest.................................... 3 ARTICLE III CONDITIONS PRECEDENT............................................ 4 Section 3.01. Conditions to Initial Sale.................................... 4 Section 3.02. Conditions to all Transfers................................... 4 ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS........................ 5 Section 4.01. Representations and Warranties of Performance Guarantor and each of the Originators................................... 5 Section 4.02. Affirmative Covenants of Performance Guarantor and each Originator........................................... 13 Section 4.03. Reporting Requirements of the Performance Guarantor........... 20 Section 4.04. Negative Covenants of each of the Originators................. 20 Section 4.05. Breach of Representations, Warranties or Covenants............ 22 ARTICLE V INDEMNIFICATION................................................... 23 Section 5.01. Indemnification............................................... 23 ARTICLE VI DISTRIBUTIONS.................................................... 25 Section 6.01. Distributions................................................. 25 ARTICLE VII COLLATERAL SECURITY............................................. 25 Section 7.01. Security Interest............................................. 25 Section 7.02. Other Collateral; Rights in Receivables....................... 26 Section 7.03. Originators Remain Liable..................................... 26 ARTICLE VIII PERFORMANCE UNDERTAKING........................................ 27 Section 8.01. Guaranty of Performance of Guaranteed Obligations............. 27 Section 8.02. Performance Guarantor's Further Agreements to Pay............. 27 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement TABLE OF CONTENTS (Continued) Page ---- Section 8.03. Waivers by Performance Guarantor.............................. 28 Section 8.04. Unenforceability of Guaranteed Obligations Against Originators or Affiliated Servicer............................ 29 Section 8.05. Subrogation; Subordination.................................... 29 Section 8.06. Termination of Performance Undertaking........................ 30 Section 8.07. Effect of Bankruptcy.......................................... 30 Section 8.08. Setoff........................................................ 31 ARTICLE IX MISCELLANEOUS.................................................... 31 Section 9.01. Notices....................................................... 31 Section 9.02. No Waiver; Remedies........................................... 32 Section 9.03. Successors and Assigns........................................ 32 Section 9.04. Termination; Survival of Obligations.......................... 33 Section 9.05. Complete Agreement; Modification of Agreement................. 34 Section 9.06. Amendments and Waivers........................................ 34 Section 9.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.. 34 Section 9.08. Counterparts.................................................. 36 Section 9.09. Severability.................................................. 36 Section 9.10. Section Titles................................................ 36 Section 9.11. No Setoff..................................................... 36 Section 9.12. Press Releases................................................ 36 Section 9.13. Further Assurances............................................ 37 Section 9.14. Fees and Expenses............................................. 37 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement INDEX OF APPENDICES Exhibit 2.01(a) Form of Receivables Assignment Schedule 4.01(a) Jurisdictions of Incorporation/Organization Schedule 4.01(b) Executive Offices; Collateral Locations; Other Names Schedule 4.01(d) Litigation Schedule 4.01(f) Financial Statements Schedule 4.01(i) Labor Matters Schedule 4.01(j) Ventures, Subsidiaries and Affiliates; Outstanding Equity Interests Schedule 4.01(k) Taxes Schedule 4.01(l) Intellectual Property Schedule 4.01(o) ERISA Schedule 4.01(s) Warranty Policy Schedule 4.01(v) Deposit and Disbursement Accounts Schedule 4.02(h) Trade Names Schedule 4.04(b) Existing Liens Schedule 4.04(e) Capital Structure Schedule 4.04(o)(B) Sale of Assets Schedule 4.04(o)(L) Prepayment of Other Indebtedness Annex X Definitions Annex Y Schedule of Documents Annex 4.03 Reporting Requirements of the Performance Guarantor Annex 4.04(l) Financial Covenants Annex 4.04(o) Additional Negative Covenants Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement THIS RECEIVABLES SALE AND CONTRIBUTION AGREEMENT (as amended, supplemented or otherwise modified and in effect from time to time, this "Agreement") is entered into as of April 11, 2002, by and among WABASH NATIONAL CORPORATION, a Delaware corporation (the "Performance Guarantor"), NOAMTC, INC., a Delaware corporation, WABASH NATIONAL, L.P., a Delaware limited partnership (each, an "Originator" and collectively, the "Originators"), and WNC RECEIVABLES, LLC, a Delaware limited liability company (the "Buyer"). RECITALS A. Each of the Originators now owns, and from time to time hereafter will own, Receivables. B. Buyer has been formed for the sole purpose of purchasing, or otherwise acquiring by capital contribution, and reselling to the Agent for the benefit of the Purchasers, all Receivables originated by each Originator. C. Each of the Originators intends to sell, and Buyer intends to purchase, such Receivables, from time to time, as described herein. D. In addition, each of the Originators may, from time to time, contribute capital to Buyer in the form of Contributed Receivables or cash. E. Performance Guarantor owns, directly or indirectly, one hundred percent (100%) of the equity interests of each of the Originators and as such will receive direct and indirect economic benefits from the sales of the Receivables described in Recital C. AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATION Section 1.01. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in Annex X. Section 1.02. Rules of Construction. For purposes of this Agreement, the rules of construction set forth in Annex X shall govern. All Appendices hereto, or expressly identified to this Agreement, are incorporated herein by reference and, taken together with this Agreement, shall constitute but a single agreement. Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement ARTICLE II SALE OF RECEIVABLES Section 2.01. Agreement to Sell. (a) Sale of Receivables. Subject to the terms and conditions hereof, each of the Originators agrees to sell or contribute, without recourse except to the extent specifically provided herein, to Buyer on the Closing Date and on each Business Day thereafter including the Facility Termination Date (the Closing Date and each such Business Day, a "Transfer Date") all Receivables owned by it on each such Transfer Date, and Buyer agrees to purchase or acquire as a capital contribution all such Receivables on each such Transfer Date. All such Transfers by either Originator shall be evidenced by a single certificate of assignment substantially in the form of Exhibit 2.01(a) (the "Receivables Assignment"), and each of the Originators and Buyer shall execute and deliver the Receivables Assignment on or before the Closing Date. (b) Determination of Sold Receivables. It is understood and agreed that each Transfer of a Receivable on a Transfer Date subsequent to the Closing Date shall occur immediately upon creation of such Receivable. On and as of each Transfer Date, all Receivables owned by each of the Originators and not previously acquired by Buyer shall be identified for sale to Buyer such that the Sale Price to be paid by Buyer therefor does not exceed the amount of cash available to Buyer for the payment thereof (each such Receivable identified for sale, individually, a "Sold Receivable" and, collectively, the "Sold Receivables"). The Sold Receivables will be identified by reference to the General Trial Balance of each of the Originators. (c) Payment of Sale Price. In consideration for each Sale of Sold Receivables hereunder by an Originator, Buyer shall pay to the applicable Originator on the Transfer Date therefor the Sale Price therefor in Dollars in immediately available funds. All such payments by Buyer under this Section 2.01(c) shall be effected by means of a wire transfer on the day when due to such account or accounts as the applicable Originator may designate. (d) Determination of Contributed Receivables. To the extent that, on and as of any Transfer Date, Receivables owned by each of the Originators which do not constitute Sold Receivables pursuant to Section 2.01(b), then each of the Originators shall, unless it has delivered an Election Notice (as defined below) to Buyer, contribute such Receivables to Buyer as a capital contribution (each such contributed Receivable, individually, a "Contributed Receivable," and collectively, the "Contributed Receivables"). If any Originator elects not to contribute Receivables to Buyer on any Transfer Date, or if any Receivables eligible for sale and owned by such Originator are not sold on any Transfer Date, such Originator shall deliver to Buyer not later than 5:00 p.m. (New York City time) on such Transfer Date a notice of election thereof (each such notice, an "Election Notice"). 2 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (e) Ownership of Transferred Receivables. On and after each Transfer Date and after giving effect to the Sales to be made on each such date, Buyer shall own the Transferred Receivables and no Originator shall take any action inconsistent with such ownership. (f) Reconstruction of General Trial Balance. If at any time any Originator fails to generate its General Trial Balance, Buyer shall have the right to reconstruct such General Trial Balance so that a determination of the Sold Receivables and Contributed Receivables can be made pursuant to Section 2.01(b). Each of the Originators agrees to cooperate with such reconstruction, including by delivery to Buyer, upon Buyer's request, of copies of all applicable Contracts and Records. (g) Servicing of Receivables. So long as no Event of Servicer Termination shall have occurred and be continuing and no Successor Servicer has assumed the responsibilities and obligations of the Servicer pursuant to Section 9.02 of the Purchase Agreement, the Servicer shall (i) conduct the servicing, administration and collection of the Transferred Receivables and shall take, or cause to be taken, all such actions as may be necessary or advisable to service, administer and collect the Transferred Receivables, all in accordance with (A) the terms of the Purchase Agreement, (B) customary and prudent servicing procedures for trade receivables of a similar type and (C) all applicable laws, rules and regulations, and (ii) hold all Contracts and other documents and incidents relating to the Transferred Receivables in trust for the benefit of Buyer, as the owner thereof, and for the sole purpose of facilitating the servicing of the Transferred Receivables in accordance with the terms of the Purchase Agreement. Section 2.02. Grant of Security Interest. The parties hereto intend that each Transfer of Receivables pursuant to this Agreement shall constitute an absolute sale, transfer and assignment of all of the applicable Originator's rights, title and interest in and to the Transferred Receivables to Buyer, and not a loan from Buyer to the Originators secured by the Transferred Receivables. Notwithstanding the foregoing, in addition to and not in derogation of any rights now or hereafter acquired by Buyer under Section 2.01 hereof, the parties agree that if for any reason the Transfer of a Receivable is treated as a loan, each of the Originators does hereby grant, to the Buyer a continuing security interest in all of such Originator's right, title and interest in, to and under the Originator Collateral whether now owned or hereafter acquired by such Originator to secure the obligations of such Originator to the Buyer hereunder (including, if and to the extent that any Transfer is recharacterized as a transfer for security, the repayment of a loan deemed to have been made by the Buyer in the amount of the Sale Price with respect thereto and which secures the Buyer's right to receive all Collections of the Transferred Receivables as otherwise contemplated under this Agreement), which security interest shall be prior to all Adverse Claims thereto. 3 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement ARTICLE III CONDITIONS PRECEDENT Section 3.01. Conditions to Initial Sale. The initial Sale hereunder shall be subject to satisfaction of each of the following conditions precedent (any one or more of which may be waived in writing by each of Buyer and the Agent, as Buyer's assignee): (a) Sale Agreement; Other Documents. This Agreement or counterparts hereof shall have been duly executed by, and delivered to, Performance Guarantor, each of the Originators and Buyer, and Buyer shall have received such documents, instruments, agreements and legal opinions as Buyer shall request in connection with the transactions contemplated by this Agreement, and all those identified in the Schedule of Documents, each in form and substance satisfactory to Buyer. (b) Governmental Approvals. Buyer shall have received (i) satisfactory evidence that Performance Guarantor and each of the Originators has obtained all required consents and approvals of all Persons, including all requisite Governmental Authorities, to the execution, delivery and performance of this Agreement and the other Related Documents and the consummation of the transactions contemplated hereby and thereby or (ii) an Officer's Certificate from Performance Guarantor and each of the Originators in form and substance satisfactory to Buyer affirming that no such consents or approvals are required. (c) Compliance with Laws. Performance Guarantor and each of the Originators shall be in compliance with all applicable foreign, federal, state and local laws and regulations, including those specifically referenced in Section 4.02(g) except to the extent that the failure to so comply, individually or in the aggregate, could not be expected to have a Material Adverse Effect. (d) Purchase Agreement Conditions. Each of those conditions precedent set forth in Sections 3.01 and 3.02 of the Purchase Agreement shall have been satisfied or waived in writing as provided therein. Section 3.02. Conditions to all Transfers. Each Transfer hereunder (including the initial Transfer) shall be subject to satisfaction of the following further conditions precedent as of the Transfer Date therefor: (a) the representations and warranties of Performance Guarantor and each of the Originators contained herein or in any other Related Document shall be true and correct as of such Transfer Date or in any other Related Document, both before and after giving effect to such Transfer and to the application of the Sale Price therefor, except to the extent that any such representation or warranty expressly relates to an earlier date and except for changes therein expressly permitted by this Agreement; 4 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (b) no Incipient Termination Event or Termination Event shall have occurred and be continuing or would result after giving effect to such Transfer or the application of the Sale Price therefor; (c) Performance Guarantor, each of the Originators and each other member of the Parent Group, shall be in compliance with each of its covenants and other agreements set forth herein; and (d) Performance Guarantor and each of the Originators shall have taken such other action, including delivery of approvals, consents, opinions, documents and instruments to Buyer as Buyer may request. The acceptance by each of the Originators of the Sale Price for any of its Sold Receivables on any Transfer Date shall be deemed to constitute, as of any such Transfer Date, a representation and warranty by such Originator that the conditions in this Section 3.02 have been satisfied. On each Transfer Date, Performance Guarantor shall be deemed to have made a representation and warranty that the conditions in this Section 3.02 have been satisfied. Upon any such acceptance, title to the Transferred Receivables sold or contributed on such Transfer Date shall be vested absolutely in Buyer, whether or not such conditions were in fact so satisfied. ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS Section 4.01. Representations and Warranties of Performance Guarantor and each of the Originators. To induce Buyer to purchase the Sold Receivables and to acquire the Contributed Receivables, Performance Guarantor and each of the Originators makes the following representations and warranties to Buyer, each and all of which shall survive the execution and delivery of this Agreement. (a) Existence; Compliance with Law. Performance Guarantor and each Originator (i) is either a corporation or limited partnership, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization as set forth on Schedule 4.01(a) attached hereto; (ii) is duly qualified to conduct business and is in good standing in each other jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified is not reasonably likely to result in a Material Adverse Effect; (iii) has the requisite corporate or partnership power and authority and the legal right to own, pledge, mortgage or otherwise encumber and operate its properties, to lease the property it operates under lease, and to conduct its business, in each case, as now, heretofore and proposed to be conducted; (iv) has all licenses, permits, consents or approvals from or by, and has made all filings with, and has given all notices to, all Governmental Authorities having jurisdiction, to the extent required for such ownership, operation and conduct, except where the failure to obtain such licenses, permits, consents or approvals is not reasonably likely to result in a Material Adverse Effect; (v) is in compliance 5 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement with its Organic Documents; and (vi) subject to specific representations set forth herein regarding ERISA, Environmental Laws, tax laws and other laws, is in compliance with all applicable provisions of law, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (b) Executive Offices; Collateral Locations; Legal or Other Names; FEIN. As of the Closing Date, the current location of each Originator's chief executive office, principal place of business, other offices, the warehouses and premises within which any Originator Collateral is stored or located, and the locations of all records of the Originators and Performance Guarantor concerning the Originator Collateral are set forth in Schedule 4.01(b) and neither Originator's state of organization, chief executive office location or principal place of business location has changed within the past 12 months. During the prior five years, except as set forth in Schedule 4.01(b), neither of the Originators has been known as or used any corporate, fictitious or trade name. In addition, Schedule 4.01(b) lists the organizational identification number issued by each Originator's state of organization or states that no such number has been issued and lists the federal employer identification number of each of the Originators. (c) Power, Authorization, Enforceable Obligations. The execution, delivery and performance by Performance Guarantor and each Originator of this Agreement and the execution, delivery and performance by Performance Guarantor and each Originator of any other Related Documents to which it is a party and the creation and perfection of all Transfers and Liens provided for herein and therein: (i) are within such Person's corporate or partnership power, as the case may be; (ii) have been duly authorized by all necessary or proper corporate or partnership action, as the case may be, and all necessary shareholder or partner action, as applicable; (iii) do not contravene any provision of such Person's Organic Documents; (iv) do not violate any law or regulation, or any order or decree of any court or Governmental Authority, except where such violation could not reasonably be expected to have a Material Adverse Effect; (v) do not conflict with or result in the breach or termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which such Person is a party or by which Person or any of its property is bound; (vi) do not result in the creation or imposition of any Adverse Claim upon any of the property of Performance Guarantor and each Originator; and (vii) do not require the consent or approval of any Governmental Authority or any other Person, except those which will have been duly obtained, made or complied with prior to the Closing Date as provided Section 3.01(b). The exercise by Buyer of any of its rights and remedies under any Related Document to which it is a party, do not require the consent or approval of any Governmental Authority or any other Person (other than consents or approvals solely relating to or required to be obtained by the Buyer, and subject to the Bankruptcy Code), except those which will have been duly obtained, made or complied with prior to the Closing Date as provided in Section 3.01(b). On or prior to the Closing Date, each of the Related Documents shall have been duly executed and delivered by Performance Guarantor and each Originator that is a party thereto and each such Related Document shall then constitute a legal, valid and binding obligation of such Person enforceable against it in accordance with its terms. 6 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (d) No Litigation. No Litigation is now pending or, to the knowledge of Performance Guarantor or any Originator, threatened against any Originator or Performance Guarantor, that (i) challenges such Originator's or Performance Guarantor's right or power to enter into or perform any of its obligations under the Related Documents to which it is a party, or the validity or enforceability of any Related Document or any action taken thereunder, (ii) seeks to prevent the Transfer, Purchase, contribution or pledge of any Receivable or the consummation of any of the transactions contemplated under this Agreement or the other Related Documents or (iii) has a reasonable risk of being determined adversely to Performance Guarantor or any Originator and that, if so determined, could reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 4.01(d), as of the Closing Date there is no Litigation pending or threatened that seeks damages in excess of $500,000 or injunctive relief against, or alleges criminal misconduct by, any Originator or Performance Guarantor. (e) Solvency. Both before and after giving effect to (i) the transactions contemplated by this Agreement and the other Related Documents and (ii) the payment and accrual of all transaction costs in connection with the foregoing, each Originator and Performance Guarantor is and will be Solvent. (f) Financial Statements and Projections. All Financial Statements concerning the Performance Guarantor and each Originator that are referred to subparagraph (i) below have been prepared in accordance with Agreement Accounting Principles with procedures consistently applied throughout the periods covered (except as disclosed therein and except, with respect to unaudited Financial Statements, for the absence of footnotes and normal year-end audit adjustments) and present fairly in all material respects the financial position of the Persons covered thereby as at the dates thereof and the results of their operations and cash flows for the periods then ended. (i) Financial Statements. The following Financial Statements attached hereto as Schedule 4.01(f) have been delivered on the date hereof: (A) The audited consolidated and consolidating balance sheets at December 31, 1999 and 2000 and the related statements of income and cash flows of Parent and its consolidated Subsidiaries for the fiscal years then ended, certified by Arthur Andersen LLP. (B) A draft of the audited consolidated and consolidating balance sheets at December 31, 2001 and the related statements of income and cash flows of Parent and its consolidated Subsidiaries for the fiscal year then ended, prepared by Arthur Andersen LLP. (C) The unaudited balance sheet(s) at September 30, 2001 and the related consolidated statement(s) of income and cash flows of Parent and its consolidated Subsidiaries for the three fiscal quarters then ended. 7 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (D) The unaudited monthly balance sheets for the period between January 31, 2002 and February 28, 2002 and the related consolidated statement(s) of income of Parent and its consolidated Subsidiaries. (ii) Projections. The Projections delivered on the date hereof and attached hereto as Schedule 4.01(f) have been prepared by Parent in light of the past operations of the Parent Group's businesses and reflect Projections for the two-year period beginning on April 30, 2002 on a month-by-month basis for the first year and on a year-by-year basis thereafter. The Projections are based upon estimates and assumptions stated therein, all of which Parent believes to be reasonable and fair in light of current conditions and current facts known to Parent and, as of the Closing Date, reflect Parent's good faith and reasonable estimates of the future financial performance of Parent and of the other information projected therein for the period set forth therein. (g) Material Adverse Effect. Between September 30, 2001 and the Closing Date, (i) no member of the Parent Group has incurred any obligations, contingent or non-contingent liabilities, liabilities for charges, long-term leases or unusual forward or long-term commitments that, alone or in the aggregate, could reasonably be expected to have a Material Adverse Effect, (ii) no contract, lease or other agreement or instrument has been entered into by any member of the Parent Group or has become binding upon any member of the Parent Group's assets and no law or regulation applicable to any member of the Parent Group has been adopted that has had or could reasonably be expected to have a Material Adverse Effect; and (iii) no member of the Parent Group is in default and no third party is in default under any material contract, lease or other agreement or instrument to which any member of the Parent Group is a party that alone or in the aggregate could reasonably be expected to have a Material Adverse Effect excluding any default that has been cured or waived on or prior to the Closing Date. (h) Ownership of Receivables; Liens. Except the Lien of the Collateral Agent on the Receivables which Lien will be automatically released upon Transfer thereof pursuant to the Increditor Agreement: (i) each Originator owns each Receivable originated by it free and clear of any Adverse Claim (other than Permitted Originator Encumbrances set forth in clauses (a), (h) and (j) of the definition of such term) and, from and after each Transfer Date, Buyer will acquire valid and properly perfected title to and the sole record and beneficial ownership interest in each Transferred Receivable purchased or otherwise acquired from such Originator on such date, free and clear of any Adverse Claim or restrictions on transferability; (ii) as of the Closing Date, none of the other assets and properties of such Originator are subject to any Adverse Claims other than Permitted Originator Encumbrances, and there are no facts, circumstances or conditions known to any Originator that may result in any Adverse Claims (including Adverse Claims arising under Environmental Laws) other than Permitted Originator Encumbrances; (iii) each Originator has received all assignments, bills of sale and other documents, and has duly effected all recordings, filings and other actions necessary to establish, protect and perfect such Originator's right, title and interest in and to the Receivables originated by it and its other properties and assets; (iv) each Originator has rights in and the power to Transfer each Receivable originated by it and 8 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement included in the Originator Collateral, together with all related Contracts, Collections and Records, and upon which it purports to grant a Lien hereunder free and clear of any and all Liens other than Permitted Originator Encumbrances and (v) the Liens granted to Buyer pursuant to Section 7.01 will at all times be fully perfected first priority Liens in and to the Originator Collateral, subject only to Permitted Originator Encumbrances set forth in clauses (a), (h) and (j) of the definition of such term. (i) Labor Matters. As of the Closing Date (a) no strikes or other material labor disputes against the Performance Guarantor or any Originator are pending or, to such Person's knowledge, threatened; (b) hours worked by and payment made to employees of Performance Guarantor or each Originator comply with the Fair Labor Standards Act and each other federal, state, local or foreign law applicable to such matters; (c) all payments due from Performance Guarantor or any Originator for employee health and welfare insurance have been paid or accrued as a liability on the books of such Person; (d) [intentionally blank]; (e) there is no organizing activity involving Performance Guarantor or any Originator pending or, to such Person's knowledge, threatened by any labor union or group of employees; (f) there are no representation proceedings pending or, to Performance Guarantor's or any Originator's knowledge, threatened with the National Labor Relations Board, and no labor organization or group of employees of Performance Guarantor or any Originator has made a pending demand for recognition; and (g) except as set forth in Schedule 4.01(i), there are no material complaints or charges against Performance Guarantor or any Originator pending or, to the knowledge of such Person, threatened to be filed with any Governmental Authority or arbitrator based on, arising out of, in connection with, or otherwise relating to the employment or termination of employment of any individual by Performance Guarantor or any Originator that seek damages in excess of $1,000,000 in the aggregate or $500,000 individually. (j) Ventures, Subsidiaries and Affiliates; Outstanding Equity Interests. Except as set forth in Schedule 4.01(j), neither Performance Guarantor nor any Originator has any Subsidiaries, is engaged in any joint venture or partnership with any other Person, or is an Affiliate of any other Person. All of the issued and outstanding Equity Interests of each Originator is owned (directly or indirectly) by Performance Guarantor. There are no outstanding rights to purchase, options, warrants or similar rights or agreements pursuant to which any Originator may be required to issue, sell, repurchase or redeem any of its Equity Interest or other equity securities or any Equity Interest or other equity securities of its Subsidiaries. All outstanding Equity Interests of each Originator and Performance Guarantor as of the Closing Date is described in Schedule 4.01(j). (k) Taxes. All tax returns, reports and statements, including information returns, required by any Governmental Authority to be filed by the Parent and each of its Subsidiaries have been filed with the appropriate Governmental Authority and all charges have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof (or any such fine, penalty, interest, late charge or loss has been paid), excluding charges or other amounts being contested in accordance with Section 4.02(m)(ii). 9 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement Proper and accurate amounts have been withheld by such member of the Parent Group from its respective employees for all periods in full and complete compliance with all applicable federal, state, local and foreign laws and such withholdings have been timely paid to the respective Governmental Authorities. Schedule 4.01(k) sets forth as of the Closing Date (i) those taxable years for which Performance Guarantor's and Originator's tax returns are currently being audited by the IRS or any other applicable Governmental Authority and (ii) any assessments or threatened assessments in connection with such audit or otherwise currently outstanding. Except as described on Schedule 4.01(k), neither Performance Guarantor nor any Originator has executed or filed with the IRS or any other Governmental Authority any agreement or other document extending, or having the effect of extending, the period for assessment or collection of any charges. As of the Closing Date, none of the Performance Guarantor, any Originator or any of their Affiliates has agreed or been requested to make any adjustment under Code Section 481(a), by reason of a change in accounting method or otherwise, that would have a Material Adverse Effect. (l) Intellectual Property. As of the Closing Date, each Originator owns or has rights to use all intellectual property necessary to continue to conduct its business as now or heretofore conducted by it or proposed to be conducted by it. To the knowledge of each Originator and the Performance Guarantor after diligent inquiry, each Originator conducts its business and affairs without infringement of or interference with any intellectual property of any other Person. Except as set forth in Schedule 4.01(l), no Originator is aware of any infringement or claim of infringement by others of any intellectual property of the Originators. (m) Full Disclosure. All information contained in this Agreement, any of the other Related Documents, or any written statement furnished by or on behalf of Performance Guarantor or any Originator to Buyer, the Purchasers or the Agent pursuant to the terms of this Agreement or any of the other Related Documents is true and accurate in every material respect, and none of this Agreement, any of the other Related Documents, or any written statement furnished by or on behalf of Performance Guarantor or any Originator to Buyer, the Purchasers or the Agent pursuant to the terms of this Agreement or any of the other Related Documents is misleading as a result of the failure to include therein a material fact. (n) Notices to Obligors. Each Originator has directed all Obligors of Transferred Receivables originated by it to remit all payments with respect to such Receivables for deposit in a Lockbox or Lockbox Account. (o) ERISA. (i) Schedule 4.01(o) lists all Plans and separately identifies all Pension Plans, including all Title IV Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare Plans. Each Qualified Plan has been determined by the IRS to qualify under Section 401 of the Code, the trusts created thereunder have been determined to be exempt from tax under the provisions of Section 501 of the Code, and nothing has 10 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement occurred that would cause the loss of such qualification or tax-exempt status. Except as otherwise provided in Schedule 4.01(o), (x) each Plan is in compliance with the applicable provisions of ERISA and the Code, including the timely filing of all reports required under the Code or ERISA, (y) neither Performance Guarantor, any Originator nor any ERISA Affiliate has failed to make any contribution or pay any amount due as required by either Section 412 of the Code or Section 302 of ERISA or the terms of any such Plan and (z) neither Performance Guarantor, any Originator nor any ERISA Affiliate has engaged in a "prohibited transaction," as defined in Section 4975 of the Code, in connection with any Plan that would subject Performance Guarantor or any Originator to a material tax on prohibited transactions imposed by Section 4975 of the Code. (ii) Except as set forth in Schedule 4.01(o): (A) no Title IV Plan has any Unfunded Liability; (B) no ERISA Event or event described in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is reasonably expected to occur; (C) there are no pending or, to the knowledge of Performance Guarantor or any Originator, threatened claims (other than claims for benefits in the normal course), sanctions, actions or lawsuits, asserted or instituted against any Plan or any Person as fiduciary or sponsor of any Plan; (D) neither Performance Guarantor, any Originator nor any ERISA Affiliate has incurred or reasonably expects to incur any liability as a result of a complete or partial withdrawal from a Multiemployer Plan; (E) within the last five years no Title IV Plan with Unfunded Liabilities has been transferred outside of the "controlled group" (within the meaning of Section 4001(a)(14) of ERISA) of Performance Guarantor, any Originator or any ERISA Affiliate; (F) Equity Interests of Performance Guarantor, the Originators and their ERISA Affiliates make up, in the aggregate, no more than 10% of the assets of any Plan, measured on the basis of fair market value as of the last valuation date of any Plan. (p) Brokers. No broker or finder acting on behalf of Performance Guarantor or any Originator was employed or utilized in connection with this Agreement or the other Related Documents or the transactions contemplated hereby or thereby and neither Performance Guarantor nor any Originator has any obligation to any Person in respect of any finder's or brokerage fees in connection therewith. (q) Margin Regulations. Neither Originator nor the Performance Guarantor is engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of "purchasing" or "carrying" any "margin security" as such terms are defined in Regulation U of the Federal Reserve Board as now and from time to time hereafter in effect (such securities being referred to herein as "Margin Stock"). Neither Originator nor Performance Guarantor owns any Margin Stock, and no portion of the Sale Price for any Sale hereunder will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness that was originally incurred to purchase or carry any Margin Stock or for any other purpose that might 11 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement cause any portion of such proceeds to be considered a "purpose credit" within the meaning of Regulations T, U or X of the Federal Reserve Board. Neither Originator nor Performance Guarantor will take or permit to be taken any action that might cause any Related Document to violate any regulation of the Federal Reserve Board. (r) Nonapplicability of Bulk Sales Laws. No transaction contemplated by this Agreement or any of the other Related Documents requires compliance with any bulk sales act or similar law. (s) Warranty Policy. Attached hereto as Schedule 4.01(s) is a true and correct copy of the Originators' Warranty Policy as in effect on the date of this Agreement. (t) Government Regulation. Neither Originator nor Performance Guarantor is an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act. Neither Originator nor Performance Guarantor is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, or any other federal or state statute that restricts or limits its ability to incur Indebtedness or to perform its obligations hereunder or under the other Related Documents. The purchase or acquisition of Transferred Receivables by Buyer hereunder, the application of the Sale Price for the foregoing and the consummation of the transactions contemplated by this Agreement and the other Related Documents will not violate any provision of any such statute or any rule, regulation or order issued by the Securities and Exchange Commission. (u) Books and Records; Minutes. Each of Performance Guarantor and the Originators maintains (i) books and records of account and (ii) minutes of the meetings and other proceedings of its Equity Holders and board of directors or partners, as applicable, that are separate from the analogous records and minutes of Buyer. (v) Deposit and Disbursement Accounts. Schedule 4.01(v) lists all banks and other financial institutions at which the Originators maintains any deposit accounts established for the receipt of collections on accounts receivable as of the Closing Date, including any Lockbox Accounts, and such schedule correctly identifies the name, address and telephone number of each depository, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor, in each case as of the Closing Date. (w) Representations and Warranties in Other Related Documents. Each of the representations and warranties of Performance Guarantor and the Originators contained in the Related Documents (other than this Agreement) is true and correct in all material respects and Performance Guarantor and each Originator hereby makes each such representation and warranty to, and for the benefit of, the Purchasers and the Agent as if the same were set forth in full herein, and Performance Guarantor and each Originator consents to the assignment of Buyer's 12 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement rights to the Agent for the benefit of the Purchasers and their respective successors and assigns as contemplated in Section 4.02(f). (x) Receivables. With respect to each Receivable designated as an Eligible Receivable in any Investment Base Certificate: (i) such Receivable satisfies the criteria for an Eligible Receivable prior to its Transfer to Buyer; (ii) prior to its Transfer to Buyer, such Receivable was owned by the applicable Originator free and clear of any Adverse Claim (other than Permitted Originator Encumbrances set forth in clauses (a), (h) and (j) of the definition of such term), and such Originator had the full right, power and authority to sell, contribute, assign, transfer and pledge its interest therein as contemplated under this Agreement and the other Related Documents and, upon such Transfer, Buyer will acquire valid and properly perfected title to and the sole record and beneficial ownership interest in such Receivable, free and clear of any Adverse Claim and, following such Transfer, such Receivable will not be subject to any Adverse Claim as a result of any action or inaction on the part of such Originator; (iii) the Transfer of each such Receivable pursuant to this Agreement and the Receivables Assignment constitutes, as applicable, a valid sale, contribution, transfer, assignment, setover and conveyance to Buyer of all right, title and interest of such Originator in and to such Receivable; and (iv) none of the Performance Guarantor nor the Originators has any knowledge of any fact (including any defaults by the Obligor thereunder on any other Receivable) that would cause it or should have caused it to expect that any payments on such Receivable will not be paid in full when due or to expect any other Material Adverse Effect. The representations and warranties described in this Section 4.01 shall survive the Transfer of the Transferred Receivables to Buyer, any subsequent assignment of the Transferred Receivables by Buyer, and the termination of this Agreement and the other Related Documents and shall continue until the indefeasible payment in full of all Transferred Receivables. Section 4.02. Affirmative Covenants of Performance Guarantor and each Originator. Performance Guarantor and each Originator covenants and agrees that, unless otherwise consented to by Buyer and the Agent, from and after the Closing Date and until the Termination Date: 13 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (a) Offices and Records. Performance Guarantor and each Originator shall maintain its principal place of business and chief executive office and the office at which it keeps its Records at the respective locations specified in Schedule 4.01(b) or, upon 30 days' prior written notice to Buyer and the Agent, at such other location in a jurisdiction where all action requested by Buyer, the Purchasers or the Agent pursuant to Section 9.13 shall have been taken with respect to the Transferred Receivables. Each Originator shall at its own cost and expense, for not less than three years from the date on which each Transferred Receivable was originated, or for such longer period as may be required by law, maintain adequate Records with respect to such Transferred Receivable, including records of all payments received, credits granted and merchandise returned with respect thereto. Each Originator will, (A) at all times from and after the date hereof, clearly and conspicuously mark its computer and master data processing books and records with a legend describing the Buyer's interest in the Receivables, and (B) segregate (from all other receivables then owned by the Originators) all contracts relating to each Receivable. (b) Access. Performance Guarantor and each Originator shall, during normal business hours, from time to time upon one Business Day's prior notice and as frequently as Buyer, the Servicer or the Agent determines to be appropriate: (i) provide Buyer, the Servicer or the Agent and any of their respective officers, employees and agents access to its properties (including properties utilized in connection with the collection, processing or servicing of the Transferred Receivables), facilities, advisors and employees (including officers) and to the Originator Collateral, (ii) permit Buyer, the Servicer or the Agent and any of their respective officers, employees and agents, to inspect, audit and make extracts from its books and records, including all Records, (iii) permit Buyer, the Servicer or the Agent and their respective officers, employees and agents, to inspect, review and evaluate the Transferred Receivables and other Originator Collateral, as applicable, and (iv) permit Buyer, the Servicer or the Agent and their respective officers, employees and agents to discuss matters relating to the Transferred Receivables or Performance Guarantor's or any Originator's performance under this Agreement or the affairs, finances and accounts of Performance Guarantor and the Originators with any of their officers, directors, employees, representatives or agents (in each case, with those Persons having knowledge of such matters) and with their independent certified public accountants. If an Incipient Termination Event or a Termination Event shall have occurred and be continuing, or the Agent, in good faith, believes that an Incipient Termination Event or a Termination Event is imminent or deems the Agent's rights or interests (on behalf of the Purchasers) in the Transferred Receivables or the Originator Collateral insecure, Performance Guarantor and each Originator shall provide such access at all times and without advance notice and shall provide Buyer, the Servicer or the Agent with access to its suppliers and customers. Performance Guarantor and each Originator shall make available to Buyer, the Servicer or the Agent and their respective counsel, as quickly as is possible under the circumstances, originals or copies of all books and records, including Records, that Buyer, the Servicer or the Agent may request. Performance Guarantor and each Originator shall deliver any document or instrument necessary for Buyer, the Servicer or the Agent, as they may from time to time request, to obtain records from any service bureau or other Person that maintains records for Performance Guarantor and 14 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement the Originators, and shall maintain duplicate records or supporting documentation on media, including computer tapes and discs owned by Performance Guarantor and the Originators. (c) Supplemental Disclosure. From time to time as may be reasonably requested by Agent (which request will not be made more frequently than once each year absent the occurrence and continuance of a Termination Event), the Performance Guarantor or any Originator shall supplement each Schedule of Documents hereto, or any representation herein or in any other Related Documents, with respect to any matter hereafter arising that, if existing or occurring at the date of this Agreement, would have been required to be set forth or described in such Schedule of Documents or as an exception to such representation or that is necessary to correct any information in such Schedule of Documents or representation which has been rendered inaccurate thereby (and, in the case of any supplements to any Schedule of Documents, such Schedule of Documents shall be appropriately marked to show the changes made therein); provided that (a) no such supplement to any such Schedule of Documents or representation shall amend, supplement or otherwise modify any Schedule of Documents or representation, or be or be deemed a waiver of any Termination Event resulting from the matters disclosed therein, except as consented to by Agent in writing, and (b) no supplement shall be required or permitted as to representations and warranties that relate solely to the Closing Date. (d) Communication with Accountants. Performance Guarantor and each Originator authorize Buyer, the Servicer and the Agent to communicate directly with its independent certified public accountants, and authorizes and shall instruct those accountants and advisors to disclose and make available to Buyer, the Servicer and the Agent any and all financial statements and other supporting financial documents, schedules and information relating to Performance Guarantor and the Originators (including copies of any issued management letters) with respect to the business, financial condition and other affairs of Performance Guarantor and Originators. Performance Guarantor and each Originator agrees to render to Buyer, the Servicer and the Agent at Performance Guarantor's or such Originator's own cost and expense, such clerical and other assistance as may be reasonably requested with regard to the foregoing. If any Termination Event shall have occurred and be continuing, Performance Guarantor and each Originator shall, promptly upon request therefor, assist Buyer in delivering to the Agent Records reflecting activity through the close of business on the Business Day immediately preceding the date of such request. (e) Compliance With Credit and Collection Policies. Each Originator shall comply in all material respects with the Credit and Collection Policies applicable to each Transferred Receivable and the Contracts therefor, and with the terms of such Receivables and Contracts. (f) Assignment. Performance Guarantor and each Originator agrees that, to the extent permitted under the Purchase Agreement, Buyer may assign all of its right, title and interest in, to and under the Transferred Receivables and this Agreement, including its right to exercise the remedies set forth in Section 4.05. Performance Guarantor and each Originator agrees that, upon any such assignment, the assignee thereof may enforce directly, without joinder 15 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement of Buyer, all of the obligations of Performance Guarantor and the Originators hereunder, including any obligations of Performance Guarantor or the Originators set forth in Sections 4.02(p), 4.05, 5.01 and 9.14. (g) Compliance with Agreements and Applicable Laws. Performance Guarantor and each Originator shall perform each of its obligations under this Agreement and the other Related Documents and comply with all federal, state and local laws and regulations applicable to it and the Receivables, including those relating to truth in lending, retail installment sales, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices, privacy, licensing, taxation, ERISA and labor matters and Environmental Laws and Environmental Permits, except to the extent that the failure to so comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (h) Maintenance of Existence and Conduct of Business. Performance Guarantor and each Originator shall (i) do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence and its rights and franchises; (ii) continue to conduct its business substantially as now conducted or as otherwise permitted hereunder and in accordance with the terms of its Organic Documents; (iii) at all times maintain, preserve and protect all of its assets and properties used or useful in the conduct of its business, including all licenses, permits, charters and registrations, and keep the same in good repair, working order and condition in all material respects (taking into consideration ordinary wear and tear) and from time to time make, or cause to be made, all necessary or appropriate repairs, replacements and improvements thereto consistent with industry practices; and (iv) transact business only in such corporate and trade names as are set forth in Schedule 4.02(h) or, upon 30 days' prior written notice to Buyer, the Agent, in such other corporate or trade names with respect to which all action requested by Buyer, the Purchasers or the Agent pursuant to Section 9.13 shall have been taken with respect to the Transferred Receivables. No Originator shall change the type of entity it is, its jurisdiction of incorporation or organization, or its organization number, if any, issued by its state of incorporation or organization, except upon 30 days' prior written notice to Buyer and the Agent, and with respect to which jurisdiction all action requested by Buyer, the Purchasers or the Agent pursuant to Section 9.13 shall have been taken with respect to the Transferred Receivables. (i) Notice of Material Event. Performance Guarantor and each Originator shall promptly inform Buyer in writing of the occurrence of any of the following, in each case setting forth the details thereof and what action, if any, Performance Guarantor or such Originator proposes to take with respect thereto: (i) any Litigation commenced or threatened against Performance Guarantor or any Originator or with respect to or in connection with all or any portion of the Transferred Receivables that (A) seeks damages or penalties in an uninsured amount in excess of $500,000 in any one instance or $1,000,000 in the aggregate, (B) seeks injunctive relief, (C) is asserted or instituted against any Plan, its fiduciaries or its assets or against any Originator, Performance Guarantor or any ERISA Affiliate in connection 16 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement with any Plan, (D) alleges criminal misconduct by Performance Guarantor or any Originator, (E) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Liability, (F) would, if determined adversely, have a Material Adverse Effect; (ii) the commencement of a case or proceeding by or against Performance Guarantor or any Originator seeking a decree or order in respect of Person (A) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (B) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for Performance Guarantor or any Originator, or for any substantial part of such Person's assets, or (C) ordering the winding-up or liquidation of the affairs of any Originator or Performance Guarantor; (iii) (A) any Adverse Claim made or asserted against any of the Transferred Receivables of which it becomes aware or (B) any determination that a Transferred Receivable designated as an Eligible Receivable in an Investment Base Certificate or otherwise was not an Eligible Receivable at the time of such designation; or (iv) any other event, circumstance or condition that has had or could reasonably be expected to have a Material Adverse Effect. (j) Use of Proceeds. Each Originator shall utilize the proceeds of the Sale Price obtained by it for each Sale made by it hereunder solely for general corporate purposes and to pay any related expenses payable by each of the Originators under this Agreement and the other Related Documents in connection with the transactions contemplated hereby and thereby and for no other purpose. (k) Separate Identity. (i) Performance Guarantor and each Originator shall, and shall cause each of its Affiliates included in the Parent Group to, maintain corporate records and books of account separate from those of Buyer. (ii) The financial statements of Performance Guarantor and each Originator shall disclose the effects of the Originators' transactions in accordance with GAAP and, in addition, disclose that (A) Buyer's sole business consists of the purchase or acceptance through capital contribution of the Receivables from the Originators and the subsequent resale of such Receivables to the Agent for the benefit of the Purchasers, (B) Buyer is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of Buyer's assets prior to any value in Buyer becoming available to Buyer's equity holders and (C) the assets of Buyer are not available to pay creditors of Performance Guarantor, the Originators or any of their Affiliates. 17 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (iii) The resolutions, agreements and other instruments underlying the transactions described in this Agreement shall be continuously maintained by Performance Guarantor and the Originators as official records. (iv) The Performance Guarantor shall, and shall cause each member of the Parent Group to, maintain an arm's length relationship with Buyer and shall not hold itself out as being liable for the Indebtedness of Buyer. (v) Performance Guarantor and each Originator shall, and shall cause each member of the Parent Group to, keep its assets and its liabilities wholly separate from those of Buyer. (vi) Performance Guarantor and each Originator shall, and shall cause each member of the Parent Group to, conduct its business solely in its own name through its duly Authorized Officers or agents and in a manner designed not to mislead third parties as to the separate identity of the Buyer. (vii) Performance Guarantor and the Originators shall not, and shall not permit any member of the Parent Group to, mislead third parties by conducting or appearing to conduct business on behalf of Buyer or expressly or impliedly representing or suggesting that Performance Guarantor or any Originator or Affiliate thereof is liable or responsible for the Indebtedness of Buyer or that the assets of Performance Guarantor or any Originator or any Affiliate are available to pay the creditors of Buyer. (viii) Performance Guarantor and each Originator shall cause operating expenses and liabilities of Buyer to be paid from Buyer's own funds. (ix) Performance Guarantor and each Originator shall at all times have stationery and other business forms and a mailing address and telephone number separate from those of Buyer. (x) Performance Guarantor and each Originator shall, and shall cause each member of the Parent Group to, at all times limit its transactions with Buyer only to those expressly permitted hereunder or under any other Related Document. (xi) Performance Guarantor and each Originator shall, and shall cause each member of the Parent Group to, comply with (and cause to be true and correct) each of the facts and assumptions contained in the opinion of Baker & Daniels delivered pursuant to the Schedule of Documents. (l) ERISA. Performance Guarantor and each Originator shall give Buyer and the Agent prompt written notice of any event that could result in the imposition of a Lien under Section 412 of the Code or Section 302 or 4068 of ERISA. 18 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (m) Payment, Performance and Discharge of Obligations. (i) Subject to Section 4.02(m)(ii), Performance Guarantor and each Originator shall, and shall cause each member of the Parent Group to, pay, perform and discharge or cause to be paid, performed and discharged all of its obligations and liabilities, including all taxes, assessments and governmental charges upon its income and properties and all lawful claims for labor, materials, supplies and services, promptly when due. (ii) Performance Guarantor, its Affiliates and any Originator may in good faith contest, by appropriate proceedings, the validity or amount of any charges or claims described in Section 4.02(m)(i); provided, that (A) adequate reserves with respect to such contest are maintained on the books of such Person, in accordance with GAAP, (B) such contest is maintained and prosecuted continuously and with diligence, (C) none of the Originator Collateral may become subject to forfeiture or loss as a result of such contest, (D) no Lien may be imposed to secure payment of such charges or claims other than inchoate tax liens and (E) Buyer has affirmatively advised such Performance Guarantor (with respect to the Performance Guarantor or its Affiliates) or any Originator in writing that Buyer reasonably believes that nonpayment or nondischarge thereof could not reasonably be expected to have or result in a Material Adverse Effect. (n) Deposit of Collections. Performance Guarantor and each Originator shall deposit or cause to be deposited promptly into a Lockbox Account, and in any event no later than the first Business Day after receipt thereof, all Collections it may receive in respect of Transferred Receivables. (o) Accounting Changes. If any Accounting Changes occur and such changes result in a change in the standards or terms used herein, then the parties hereto agree to enter into negotiations in order to amend such provisions so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating the financial condition of such Persons shall be the same after such Accounting Changes as if such Accounting Changes had not been made. If the parties hereto agree upon the required amendments to this Agreement, then after appropriate amendments have been executed and the underlying Accounting Change with respect thereto has been implemented, any reference to GAAP contained herein shall, only to the extent of such Accounting Change, refer to GAAP consistently applied after giving effect to the implementation of such Accounting Change. If such parties cannot agree upon the required amendments within 30 days following the date of implementation of any Accounting Change, then all financial statements delivered and all standards and terms used herein shall be prepared, delivered and used without regard to the underlying Accounting Change. (p) Adjustments to Sale Price. If on any day the Billed Amount of any Transferred Receivable originated by an Originator is reduced as a result of any Dilution Factors, and the amount of such reduction exceeds the amount, if any, of Dilution Factors taken into account in 19 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement the calculation of the Sale Price for such Transferred Receivable, the Originator shall make a cash payment to Buyer in the amount of such excess by remitting such amount to the Collection Account in accordance with the terms of the Purchase Agreement. Section 4.03. Reporting Requirements of the Performance Guarantor. The Performance Guarantor hereby agrees that, from and after the Closing Date and until the Termination Date, it shall deliver or cause to be delivered to the Buyer and to Buyer's assignee, the Agent, for distribution to the Purchasers, the financial statements, notices and other information at the times, to the Persons and in the manner set forth in Annex 4.03. Section 4.04. Negative Covenants of each of the Originators. Performance Guarantor and each Originator covenants and agrees that, without the prior written consent of Buyer and the Agent, from and after the Closing Date and until the Termination Date: (a) [Reserved]. (b) Liens. Performance Guarantor shall not, and shall not permit any Originator to and no Originator shall, create, incur, assume or permit to exist any Adverse Claim on or with respect to its Receivables or any of its other Originator Collateral (whether now owned or hereafter acquired) except for the Liens set forth in Schedule 4.04(b) and other Permitted Originator Encumbrances. (c) Modifications of Receivables or Contracts. Performance Guarantor shall not, and shall not permit any Originator to and no Originator shall, extend, amend, forgive, discharge, compromise, cancel or otherwise modify the terms of any Transferred Receivable, or amend, modify or waive any term or condition of any Contract therefore. (d) Sale Characterization. Performance Guarantor shall not, and shall not permit any Originator to and no Originator shall, make statements or disclosures or prepare any financial statements for any purpose, including for federal income tax, reporting or accounting purposes, that shall account for the transactions contemplated by this Agreement in any manner other than (i) with respect to the Sale of each Receivable originated by it, as a true sale or absolute assignment of its full right, title and ownership interest in such Receivable and (ii) with respect to the Transfer of each of its Contributed Receivables under this Agreement, as a contribution to the capital of Buyer. (e) Capital Structure and Business. Performance Guarantor shall not, and shall not permit its Subsidiaries to, and no Originator shall, (i) make any changes in any of its business objectives, purposes or operations that could have or result in a Material Adverse Effect or (ii) make any change in its capital structure as described on Schedule 4.04(e), including the issuance of any Equity Interest, warrants or other securities convertible into Equity Interests or any revision of the terms of its outstanding Equity Interests or (iii) amend, supplement or 20 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement otherwise modify its Organic Documents, in a manner that could have or result in a Material Adverse Effect. Performance Guarantor shall not, nor shall permit any Originator to, and no Originator shall, change its jurisdiction of organization except as permitted by Section 4.02(h). Performance Guarantor shall not, nor shall permit any Originator to, engage in any business other than the businesses currently engaged in by it. (f) Actions Affecting Rights. Performance Guarantor shall not, and shall not permit any Originator to and no Originator shall, (i) take any action, or fail to take any action, if such action or failure to take action may interfere with the enforcement of any rights hereunder or under the other Related Documents, including rights with respect to the Transferred Receivables; (ii) waive or alter any rights with respect to the Transferred Receivables (or any agreement or instrument relating thereto); or (iii) fail to pay any tax, assessment, charge, fee or other obligation of any Originator with respect to the Transferred Receivables, or fail to defend any action, if such failure to pay or defend may adversely affect the priority or enforceability of the perfected title of Buyer to and the sole record and beneficial ownership interest of Buyer in the Transferred Receivables or, prior to their Sale hereunder, the Originator's right, title or interest therein. (g) ERISA. Performance Guarantor shall not, and shall not cause or permit any ERISA Affiliate to and no Originator shall, cause or permit to occur an event that could result in the imposition of a Lien under Section 412 of the Code or Section 302 or 4068 of ERISA or cause or permit to cause an ERISA Event to the extent such ERISA Event could reasonably be expected to have a Material Adverse Effect. (h) Change to Credit and Collection Policies. Each Originator shall comply with the Credit and Collection Policies, and no change shall be made to, the Credit and Collection Policies without the prior written consent of Buyer and the Agent. (i) Adverse Tax Consequences. Performance Guarantor shall not, and shall not permit any Originator to and no Originator shall, take or permit to be taken any action (other than with respect to actions taken or to be taken solely by a Governmental Authority), or fail or neglect to perform, keep or observe any of its obligations hereunder or under the other Related Documents, that would have the effect directly or indirectly of subjecting any payment to Buyer, the Purchasers or the Agent to withholding taxation. (j) No Proceedings. From and after the Closing Date and until the date one year plus one day following the date on which all Seller Secured Obligations are paid in full in cash, Performance Guarantor shall not, and shall not permit any Originator to and no Originator shall, directly or indirectly, institute or cause to be instituted against Buyer any proceeding of the type referred to in Sections 9.01(c) and 9.01(d) of the Purchase Agreement. (k) Commingling. Performance Guarantor shall not, and shall not permit any Originator to and no Originator shall, deposit or permit the deposit of any funds that do not 21 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement constitute Collections of Transferred Receivables into any Lockbox Account. If such funds are nonetheless deposited into a Lockbox Account and such Originator so notifies the Buyer and the Agent (as Buyer's assignee), the Agent shall promptly remit any such amounts as directed by such Originator. (l) Financial Covenants. The Performance Guarantor and Originators shall not, and shall not permit any member of the Parent Group to, violate any of the financial covenants set forth in Annex 4.04(l). (m) Cancellation of Indebtedness. Performance Guarantor and Originators shall not, and shall not permit any member of the Parent Group to, cancel any claim or Indebtedness owing to it, except for reasonable consideration negotiated on an arm's-length basis and in the ordinary course of its business consistent with past practices. (n) No Impairment of Intercompany Transfers. Except as may be permitted by the Credit Agreement, Performance Guarantor and Originators shall not, and shall not permit any member of the Parent Group to, directly or indirectly enter into or become bound by any agreement, instrument, indenture or other obligation (other than this Agreement and the other Related Documents) that could directly or indirectly restrict, prohibit or require the consent of any Person with respect to the payment of dividends or distributions or the making or repayment of intercompany loans by a member of the Parent Group to another member. (o) Additional Negative Covenants. The Performance Guarantor and Originators shall not, and shall not permit any member of the Parent Group to, violate any of the additional negative covenants set forth in Annex 4.04(o). Section 4.05. Breach of Representations, Warranties or Covenants. Upon discovery by Performance Guarantor, any Originators or Buyer of any breach of any representation, warranty or covenant described in Sections 4.01, 4.02 or 4.04 (other than a representation, warranty or covenant relating to the absence of Dilution Factors), which breach is reasonably likely to have a Material Adverse Effect on the value of a Transferred Receivable or the interests of Buyer therein, the party discovering the same shall give prompt written notice thereof to the other parties hereto. The applicable Originator may, at any time on any Business Day, or shall, if requested by notice from Buyer, on the first Business Day following receipt of such notice, either (a) repurchase such Transferred Receivable from Buyer for cash, or (b) make a capital contribution in cash to Buyer by remitting the amount (the "Rejected Amount") of such capital contribution to the Collection Account in accordance with the terms of the Purchase Agreement, in each case in an amount equal to the Billed Amount of such Transferred Receivable minus the sum of (A) Collections received in respect thereof and (B) the amount of any Dilution Factors taken into account in the calculation of the Sale Price therefor. Notwithstanding the foregoing, if any Receivable is not paid in full on account of any Dilution Factors, the applicable Originator's repurchase obligations under this Section 4.05 with respect to such Receivable shall be reduced by the amount of any such Dilution Factors taken into account in the calculation of the Sale Price 22 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement therefor. The applicable Originator shall ensure that no Collections or other proceeds with respect to a Transferred Receivable so reconveyed to it are paid or deposited into any Lockbox Account. ARTICLE V INDEMNIFICATION Section 5.01. Indemnification. Without limiting any other rights that Buyer or any of its members, officers, directors, employees, attorneys, agents or representatives (each, a "Buyer Indemnified Person") may have hereunder or under applicable law, Performance Guarantor and each Originator hereby agrees to indemnify and hold harmless each Buyer Indemnified Person from and against any and all Indemnified Amounts that may be claimed or asserted against or incurred by any such Buyer Indemnified Person in connection with or arising out of the transactions contemplated under this Agreement or under any other Related Document, any actions or failures to act in connection therewith, including any and all legal costs and expenses arising out of or incurred in connection with disputes between or among any parties to any of the Related Documents, or in respect of any Transferred Receivable or any Contract therefor or the use by Originator of the Sale Price therefor; provided, that neither Performance Guarantor nor the Originators shall be liable for any indemnification to a Buyer Indemnified Person to the extent that any such Indemnified Amounts result solely from (a) such Buyer Indemnified Person's gross negligence or willful misconduct, as finally determined by a court of competent jurisdiction, (b) recourse for uncollectible or uncollected Transferred Receivables due to the lack of creditworthiness of the Obligor or the occurrence of any event of bankruptcy with respect to such Obligor, or (c) any income tax or franchise tax incurred by any Buyer Indemnified Person, except to the extent that the incurrence of any such tax results from a breach of or default under this Agreement or any other Related Document. Subject to the exceptions set forth in clauses (a), (b) and (c) of the immediately preceding sentence but otherwise without limiting the generality of the foregoing, each Originator and Performance Guarantor shall pay on demand to each Buyer Indemnified Person any and all Indemnified Amounts relating to or resulting from: (i) reliance on any representation or warranty made or deemed made by Performance Guarantor or any Originator (or any of its officers) under or in connection with this Agreement or any other Related Document or on any other information delivered by Performance Guarantor or an Originator pursuant hereto or thereto that shall have been incorrect in any material respect when made or deemed made or delivered; (ii) the failure by Performance Guarantor or any Originator to comply with any term, provision or covenant contained in this Agreement, any other Related Document or any agreement executed in connection herewith or therewith, any applicable law, rule or regulation with respect to any Transferred Receivable or Contract therefor, or the nonconformity of any Transferred Receivable or the Contract therefor with any such applicable law, rule or regulation; 23 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (iii) the failure to vest and maintain vested in Buyer, or to Transfer to Buyer, valid and properly perfected title to and sole record and beneficial ownership of the Receivables that constitute Transferred Receivables, together with all Collections in respect thereof, free and clear of any Adverse Claim; (iv) any dispute, claim, offset or defense of any Obligor (other than its discharge in bankruptcy) to the payment of any Receivable that is the subject of a Transfer hereunder (including a defense based on such Receivable or the Contract therefor not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or services giving rise to such Receivable or the furnishing or failure to furnish such merchandise or services or relating to collection activities with respect to such Receivable (if such collection activities were performed by Performance Guarantor or any Originator or any Affiliate acting as the Servicer or a Sub-Servicer), except to the extent that such dispute, claim, offset or defense results solely from any action or inaction on the part of Buyer; (v) any products liability claim or other claim arising out of or in connection with merchandise, insurance or services that is the subject of any Contract; (vi) the commingling of Collections with respect to Transferred Receivables by Performance Guarantor or any Originator at any time with its other funds or the funds of any other Person; (vii) any failure by any Originator to cause the filing of, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or any other applicable laws with respect to any Receivable that is the subject of a Sale hereunder, whether at the time of any such Sale or at any subsequent time; (viii) any failure by Performance Guarantor , any Originator or any Servicer to perform, keep or observe any of their respective duties or obligations hereunder, under any other Related Document or under any Contract related to a Transferred Receivable; (ix) any investigation, Litigation or proceeding related to this Agreement or the use of the Sale Price obtained in connection with any Sale or the ownership of Receivables or Collections with respect thereto or in respect of any Receivable or Contract, except to the extent any such investigation, Litigation or proceeding relates to a matter involving a Buyer Indemnified Person for which neither Performance Guarantor nor any Originator or any of its Affiliates is at fault, as finally determined by a court of competent jurisdiction; or 24 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (x) any claim brought by any Person other than a Buyer Indemnified Person arising from any activity by Performance Guarantor, Originators or any of their Affiliates in servicing, administering or collecting any Transferred Receivables. NO BUYER INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER. ARTICLE VI DISTRIBUTIONS Section 6.01. Distributions. The Buyer may declare or pay distributions to its members at any time that, after giving effect to such distributions, the book value of the assets of the Buyer, minus reserves applicable thereto and minus all of the Buyer's liabilities (including accrued and deferred income taxes), all as determined in accordance with GAAP, shall be equal to or greater than five percent (5.0%) of the Outstanding Balance of all Transferred Receivables. ARTICLE VII COLLATERAL SECURITY Section 7.01. Security Interest. To secure the prompt and complete payment, performance and observance of any and all recourse and indemnity obligations of each of the Originators to Buyer, including those set forth in Sections 4.02(p), 4.05, 5.01 and 9.14, and to induce Buyer to enter into this Agreement in accordance with the terms and conditions hereof, each Originator hereby grants, assigns, conveys, pledges, hypothecates and transfers to Buyer a Lien upon all of such Originator's right, title and interest in, to and under the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of, such Originator (including under any trade names, styles or derivations of such Originator), and whether owned by or consigned by or to, or leased from or to, such Originator, and regardless of where located (all of which being hereinafter collectively referred to as the "Originator Collateral"): (a) all Receivables, Records (including Contracts) therefor and Collections thereon; 25 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (b) all monies, securities and other property now or hereafter in the possession or custody of, or in transit to, Buyer, for any purpose (including safekeeping, collection or pledge), from or for either of the Originators, or as to which either of the Originators may have any right or power, and all of Buyer's credits and balances with either of the Originators existing at any time; (c) to the extent not otherwise included, customer lists, credit files and other related property and rights and all computer hardware and software pertaining to the foregoing; and (d) to the extent not otherwise included, all proceeds of the foregoing and all substitutions and replacements for, each of the foregoing. Section 7.02. Other Collateral; Rights in Receivables. Nothing contained in this Article VII shall limit the rights of Buyer in and to any other collateral that may have been or may hereafter be granted to Buyer by either of the Originators or any third party pursuant to any other agreement or the rights of Buyer under any of the Transferred Receivables. Section 7.03. Originators Remain Liable. It is expressly agreed by each of the Originators that, anything herein to the contrary notwithstanding, such Originator shall remain liable under any and all of the Receivables originated by it, the Contracts therefor and all other Originator Collateral to observe and perform all the conditions and obligations to be observed and performed by it thereunder. The Buyer shall not have any obligation or liability under any such Receivables, Contracts or Originator Collateral by reason of or arising out of this Agreement or the granting herein of a Lien thereon or the receipt by the Buyer of any payment relating thereto pursuant hereto. The exercise by the Buyer of any of its respective rights under this Agreement shall not release either of the Originators from any of its respective duties or obligations under any such Receivables, Contracts or Originator Collateral. The Buyer shall not be required or obligated in any manner to perform or fulfill any of the obligations of either of the Originators under or pursuant to any such Receivable, Contract or Originator Collateral, or to make any payment, or to make any inquiry as to the nature or the sufficiency of any payment received by it or the sufficiency of any performance by any party under any such Receivable, Contract or Originator Collateral, or to present or file any claims, or to take any action to collect or enforce any performance or the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times. ARTICLE VIII PERFORMANCE UNDERTAKING Section 8.01. Guaranty of Performance of Guaranteed Obligations. Performance Guarantor hereby guarantees to Buyer, the full and punctual payment and performance by each 26 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement Originator and each Servicer that is a Subsidiary or an Affiliate of Performance Guarantor (each, an "Affiliated Servicer") of its respective Guaranteed Obligations. The undertaking embodied in this Article VIII (this "Undertaking") is an absolute, unconditional and continuing guaranty of the full and punctual performance of all Guaranteed Obligations under this Agreement or the Purchase Agreement, as applicable, and each other document executed and delivered by either of the Originators or Affiliated Servicer pursuant to such agreements, as applicable, and is in no way conditioned upon any requirement that Buyer first attempt to collect any amounts owing by the Originators or Affiliated Servicer to Buyer, the Agent or the Purchasers from any other Person or resort to any collateral security, any balance of any deposit account or credit on the books of Buyer, the Agent or the Purchasers in favor of either of the Originators or Affiliated Servicer or any other Person or other means of obtaining payment. Should either of the Originators or Affiliated Servicer default in the payment or performance of any of its Guaranteed Obligations, Buyer (or its assigns) may cause the immediate performance by Performance Guarantor of such Guaranteed Obligations and cause any payment of Guaranteed Obligations to become forthwith due and payable to Buyer (or its assigns) by Performance Guarantor, without demand or notice of any nature (other than as expressly provided herein), all of which are hereby expressly waived by Performance Guarantor. Notwithstanding the foregoing, this Undertaking is not a guarantee of the collection of any of the Receivables and Performance Guarantor shall not be responsible for any Guaranteed Obligations to the extent the failure to perform such Guaranteed Obligations by either of the Originators or Affiliated Servicer results from Receivables being uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; provided that nothing herein shall relieve either of the Originators or Affiliated Servicer from performing in full its Guaranteed Obligations under the Related Documents to which it is a party or Performance Guarantor of its Undertaking hereunder with respect to the full performance of such duties. Section 8.02. Performance Guarantor's Further Agreements to Pay. Performance Guarantor further agrees, as the principal obligor and not as a guarantor only, to pay to Buyer (and its assigns), forthwith upon demand in funds immediately available to Buyer, all reasonable costs and expenses (including court costs and reasonable legal expenses) incurred or expended by Buyer in connection with the Guaranteed Obligations, this Undertaking and the enforcement thereof, together with interest on amounts recoverable under this Undertaking from the time when such amounts become due until payment, at a rate of interest (computed for the actual number of days elapsed based on a 360-day year) equal to the sum of the Index Rate plus the Daily Margin plus the Daily Default Margin per annum, such rate of interest changing when and as the Index Rate changes. Section 8.03. Waivers by Performance Guarantor. Performance Guarantor waives notice of acceptance of this Undertaking, notice of any action taken or omitted by Buyer (or its assigns) in reliance on this undertaking, and any requirement that Buyer (or its assigns) be diligent or prompt in making demands under this undertaking, giving notice of any Termination Event, Event of Servicer Termination, other default or omission by either of the Originators or 27 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement Affiliated Servicer or asserting any other rights of Buyer under this Undertaking. Performance Guarantor warrants that it has adequate means to obtain from the Originators and Affiliated Servicer, on a continuing basis, information concerning their financial condition, and that it is not relying on Buyer to provide such information, now or in the future. Performance Guarantor also irrevocably waives all defenses (i) that at any time may be available in respect of the Guaranteed Obligations by virtue of any statute of limitations, valuation, stay, moratorium law or other similar law now or hereafter in effect or (ii) that arise under the law of suretyship, including impairment of collateral. Buyer (and its assigns) shall be at liberty, without giving notice to or obtaining the assent of Performance Guarantor and without relieving Performance Guarantor of any liability under this Undertaking, to deal with each of the Originators and Affiliated Servicer and with each other party who now is or after the date hereof becomes liable in any manner for any of the Guaranteed Obligations, in such manner as Buyer in its sole discretion deems fit, and to this end Performance Guarantor agrees that the validity and enforceability of this Undertaking, shall not be impaired or affected by any of the following: (a) any extension, modification or renewal of, or indulgence with respect to, or substitutions for, the Guaranteed Obligations or any part thereof or any agreement relating thereto at any time; (b) any failure or omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or any collateral securing the Guaranteed Obligations or any part thereof; (c) any waiver of any right, power or remedy or of any Termination Event, Event of Servicer Termination, or default with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto; (d) any release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any other obligation of any Person or entity with respect to the Guaranteed Obligations or any part thereof; (e) the enforceability or validity of the Guaranteed Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to the Guaranteed Obligations or any part thereof; (f) the application of payments received from any source to the payment of any payment obligations of either Originator or Affiliated Servicer or any part thereof or amounts which are not covered by this Undertaking even though Buyer (or its assigns) might lawfully have elected to apply such payments to any part or all of the payment obligations of Originators or Affiliated Servicer or to amounts which are not covered by this Undertaking; (g) the existence of any claim, setoff or other rights which Performance Guarantor may have at any time against Originators or Affiliated Servicer in connection herewith or any unrelated transaction; (h) any assignment or transfer of the Guaranteed Obligations or any part thereof; or (i) any failure on the part of Originators or Affiliated Servicer to perform or comply with any term of the Agreements or any other document executed in connection therewith or delivered thereunder, all whether or not Performance Guarantor shall have had notice or knowledge of any act or omission referred to in the foregoing clauses (a) through (i) of this Section 8.03. Section 8.04. Unenforceability of Guaranteed Obligations Against Originators or Affiliated Servicer. Notwithstanding (a) any change of ownership of Originators or Affiliated Servicer or the insolvency, bankruptcy or any other change in the legal status of Originators or Affiliated Servicer; (b) any change in or the imposition of any law, decree, regulation or other 28 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement governmental act which does or might impair, delay or in any way affect the validity, enforceability or the payment when due of the Guaranteed Obligations; (c) the failure of either of the Originators, Affiliated Servicer or Performance Guarantor to maintain in full force, validity or effect or to obtain or renew when required all governmental and other approvals, licenses or consents required in connection with the Guaranteed Obligations or this Undertaking, or to take any other action required in connection with the performance of all obligations pursuant to the Guaranteed Obligations or this Undertaking; or (d) if any of the moneys included in the Guaranteed Obligations have become irrecoverable from either of the Originators or Affiliated Servicer for any other reason other than final payment in full of the payment Guaranteed Obligations in accordance with their terms, this Undertaking shall nevertheless be binding on Performance Guarantor. This Undertaking shall be in addition to any other guaranty or other security for the Guaranteed Obligations, and it shall not be rendered unenforceable by the invalidity of any such other guaranty or security. In the event that acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of either of the Originators or Affiliated Servicer or for any other reason with respect to either of the Originators or Affiliated Servicer, all such amounts then due and owing with respect to the Guaranteed Obligations under the terms of the Agreements, or any other agreement evidencing, securing or otherwise executed in connection with the Guaranteed Obligations, shall be immediately due and payable by Performance Guarantor. Section 8.05. Subrogation; Subordination. Notwithstanding anything to the contrary contained herein, until the Guaranteed Obligations are paid in full, Performance Guarantor: (a) will not enforce or otherwise exercise any right of subrogation to any of the rights of Buyer, the Agent or the Purchasers against either of the Originators or Affiliated Servicer, (b) hereby waives all rights of subrogation (whether contractual, under Section 509 of the United States Bankruptcy Code, at law or in equity or otherwise) to the claims of Buyer, the Agent and the Purchasers against either of the Originators or Affiliated Servicer and all contractual, statutory or legal or equitable rights of contribution, reimbursement, indemnification and similar rights and "claims" (as such term is defined in the United States Bankruptcy Code) which Performance Guarantor might now have or hereafter acquire against either of the Originators or Affiliated Servicer that arise from the existence or performance of Performance Guarantor's obligations hereunder, (c) will not claim any setoff, recoupment or counterclaim against either of the Originators or Affiliated Servicer in respect of any liability of Performance Guarantor to either of the Originators or Affiliated Servicer and (d) waives any benefit of and any right to participate in any collateral security which may be held by the Agent or any Purchaser. The payment of any amounts due with respect to any Indebtedness of either of the Originators or Affiliated Servicer now or hereafter owed to Performance Guarantor is hereby subordinated to the prior payment in full of all of the Guaranteed Obligations. Performance Guarantor agrees that, after the occurrence of any default in the payment or performance of any of the Guaranteed Obligations, Performance Guarantor will not demand, sue for or otherwise attempt to collect any such Indebtedness of either of the Originators or Affiliated Servicer to Performance Guarantor until all of the Guaranteed Obligations shall have been paid and performed in full. If, notwithstanding the foregoing sentence, Performance Guarantor shall collect, enforce or receive any amounts in 29 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement respect of such Indebtedness while any Guaranteed Obligations are still unperformed or outstanding, such amounts shall be collected, enforced and received by Performance Guarantor as trustee for Buyer (and its assigns) and be paid over to Buyer (or its assigns) on account of the Guaranteed Obligations without affecting in any manner the liability of Performance Guarantor under the other provisions of this Undertaking. The provisions of this Section shall be supplemental to and not in derogation of any rights and remedies of Buyer under any separate subordination agreement which Buyer may at any time and from time to time enter into with Performance Guarantor. Section 8.06. Termination of Performance Undertaking. Performance Guarantor's obligations hereunder shall continue in full force and effect until all Seller Secured Obligations are finally paid and satisfied in full and the Purchase Agreement is terminated, provided that this Undertaking shall continue to be effective or shall be reinstated, as the case may be, if at any time payment or other satisfaction of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the bankruptcy, insolvency, or reorganization of either of the Originators or Affiliated Servicer or otherwise, as though such payment had not been made or other satisfaction occurred, whether or not Buyer (or its assigns) is in possession of this Undertaking. No invalidity, irregularity or unenforceability by reason of the federal bankruptcy code or any insolvency or other similar law, or any law or order of any government or agency thereof purporting to reduce, amend or otherwise affect the Guaranteed Obligations shall impair, affect, be a defense to or claim against the obligations of Performance Guarantor under this Undertaking. Section 8.07. Effect of Bankruptcy. This Performance Undertaking shall survive the insolvency of either of the Originators or Affiliated Servicer and the commencement of any case or proceeding by or against either of the Originators or Affiliated Servicer under the federal bankruptcy code or other federal, state or other applicable bankruptcy, insolvency or reorganization statutes. No automatic stay under the federal bankruptcy code with respect to either of the Originators or Affiliated Servicer or other federal, state or other applicable bankruptcy, insolvency or reorganization statutes to which either of the Originators or Affiliated Servicer is subject shall postpone the obligations of Performance Guarantor under this Undertaking. Section 8.08. Setoff. Regardless of the other means of obtaining payment of any of the Guaranteed Obligations, Buyer (and its assigns) is hereby authorized at any time and from time to time, without notice to Performance Guarantor (any such notice being expressly waived by Performance Guarantor) and to the fullest extent permitted by law, to set off and apply any deposits and other sums against the obligations of Performance Guarantor under this Undertaking, whether or not Buyer (or any such assign) shall have made any demand under this Undertaking and although such obligations may be contingent or unmatured. 30 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement ARTICLE IX MISCELLANEOUS Section 9.01. Notices. Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other parties, or whenever any of the parties desires to give or serve upon any other parties any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and three Business Days after deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon transmission, when sent by telecopy or other similar facsimile transmission (with such telecopy or facsimile promptly confirmed by delivery of a copy by personal delivery or United States Mail as otherwise provided in this Section 9.01), (c) one Business Day after deposit with a reputable overnight courier with all charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address or facsimile number set forth below in this Section 9.01 or to such other address (or facsimile number) as may be substituted by notice given as herein provided: Performance Guarantor: 1000 Sagamore Parkway South Lafayette, Indiana 47905 Attention: Christopher A. Black Fax: (765) 772-2600 either of the Originators: c/o Performance Guarantor at the address set forth above Buyer: 1000 Sagamore Parkway South Lafayette, Indiana 47905 Attention: Christopher A. Black Fax: (765) 772-2600 provided that each such declaration or other communication shall be deemed to have been validly delivered to the Agent under this Agreement upon delivery to the Agent in accordance with the terms of the Purchase Agreement. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration or other communication to any Person (other than Buyer) designated in any written communication provided hereunder to receive copies shall in no way adversely affect the effectiveness of such notice, demand, request, 31 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement consent, approval, declaration or other communication. Notwithstanding the foregoing, whenever it is provided herein that a notice is to be given to any other party hereto by a specific time, such notice shall only be effective if actually received by such party prior to such time, and if such notice is received after such time or on a day other than a Business Day, such notice shall only be effective on the immediately succeeding Business Day. Section 9.02. No Waiver; Remedies. Buyer's failure, at any time or times, to require strict performance by any Originators or Performance Guarantor of any provision of this Agreement or the Receivables Assignment shall not waive, affect or diminish any right of Buyer thereafter to demand strict compliance and performance herewith or therewith. Any suspension or waiver of any breach or default hereunder shall not suspend, waive or affect any other breach or default whether the same is prior or subsequent thereto and whether the same or of a different type. None of the undertakings, agreements, warranties, covenants and representations of the Originators or Performance Guarantor contained in this Agreement or the Receivables Assignment, and no breach or default by any Originator or Performance Guarantor hereunder or thereunder, shall be deemed to have been suspended or waived by Buyer unless such waiver or suspension is by an instrument in writing signed by an officer of or other duly authorized signatory of Buyer and directed to Performance Guarantor or such Originator, as applicable, specifying such suspension or waiver. Buyer's rights and remedies under this Agreement shall be cumulative and nonexclusive of any other rights and remedies that Buyer may have under any other agreement, including the other Related Documents, by operation of law or otherwise. Recourse to the Originator Collateral shall not be required. Section 9.03. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of Originators, Performance Guarantor and Buyer and their respective successors and permitted assigns, except as otherwise provided herein. Neither Performance Guarantor nor any Originator may assign, transfer, hypothecate or otherwise convey its rights, benefits, obligations or duties hereunder without the prior express written consent of Buyer, the Purchasers and the Agent. Any such purported assignment, transfer, hypothecation or other conveyance by any Originator or Performance Guarantor without the prior express written consent of Buyer, the Purchasers and the Agent shall be void. Each Originator and Performance Guarantor acknowledges that, to the extent permitted under the Purchase Agreement, Buyer may assign its rights granted hereunder, including the benefit of any indemnities under Article V and any of its rights in the Originator Collateral granted under Article VII, and upon such assignment, such assignee shall have, to the extent of such assignment, all rights of Buyer hereunder and, to the extent permitted under the Purchase Agreement, may in turn assign such rights. Each Originator and Performance Guarantor agrees that, upon any such assignment, such assignee may enforce directly, without joinder of Buyer, the rights set forth in this Agreement. All such assignees, including parties to the Purchase Agreement in the case of any assignment to such parties, shall be third party beneficiaries of, and shall be entitled to enforce Buyer's rights and remedies under, this Agreement to the same extent as if they were parties hereto. Without limiting the generality of the foregoing, all notices to be provided to the Buyer hereunder shall be delivered to both the Buyer and the Agent under the Purchase Agreement, and shall be effective 32 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement only upon such delivery to the Agent. The terms and provisions of this Agreement are for the purpose of defining the relative rights and obligations of each Originator, Performance Guarantor and Buyer with respect to the transactions contemplated hereby and, except for the Purchasers and the Agent, no Person shall be a third party beneficiary of any of the terms and provisions of this Agreement. Section 9.04. Termination; Survival of Obligations. (a) This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until the Termination Date. (b) Except as otherwise expressly provided herein or in any other Related Document, no termination or cancellation (regardless of cause or procedure) of any commitment made by Buyer under this Agreement shall in any way affect or impair the obligations, duties and liabilities of any Originator, Performance Guarantor or the rights of Buyer relating to any unpaid portion of any and all recourse and indemnity obligations of Originator and Performance Guarantor to Buyer, including those set forth in Sections 4.02(p), 4.05, 5.01 and 9.14, due or not due, liquidated, contingent or unliquidated or any transaction or event occurring prior to such termination, or any transaction or event, the performance of which is required after the Facility Termination Date. Except as otherwise expressly provided herein or in any other Related Document, all undertakings, agreements, covenants, warranties and representations of or binding upon Originators and Performance Guarantor, and all rights of Buyer hereunder, all as contained in the Related Documents, shall not terminate or expire, but rather shall survive any such termination or cancellation and shall continue in full force and effect until the Termination Date; provided, that the rights and remedies pursuant to Sections 4.02(p), 4.05, the indemnification and payment provisions of Article V, and the provisions of Sections 4.04(j), 9.03, 9.12 and 9.14 shall be continuing and shall survive any termination of this Agreement. Section 9.05. Complete Agreement; Modification of Agreement. This Agreement and the other Related Documents constitute the complete agreement between the parties with respect to the subject matter hereof and thereof, supersede all prior agreements and understandings relating to the subject matter hereof and thereof, and may not be modified, altered or amended except as set forth in Section 9.06. Section 9.06. Amendments and Waivers. No amendment, modification, termination or waiver of any provision of this Agreement or any of the other Related Documents, or any consent to any departure by any Originator or Performance Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by each of the parties hereto and the Purchasers and the Agent. No consent or demand in any case shall, in itself, entitle any party to any other consent or further notice or demand in similar or other circumstances. 33 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement Section 9.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND EACH RELATED DOCUMENT (EXCEPT TO THE EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES), EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE BUYER IN THE RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. (b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN COOK COUNTY SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF COOK COUNTY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE BUYER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE ORIGINATOR COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OF ORIGINATORS OR PERFORMANCE GUARANTOR ARISING HEREUNDER, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF BUYER. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON 34 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. (c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. Section 9.08. Counterparts. This Agreement may be executed in any number of separate counterparts, each of which shall collectively and separately constitute one agreement. Section 9.09. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. Section 9.10. Section Titles. The section titles and table of contents contained in this Agreement are provided for ease of reference only and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto. Section 9.11. No Setoff. Neither Performance Guarantor's nor any Originator's obligations under this Agreement shall be affected by any right of setoff, counterclaim, recoupment, defense or other right any Originator or Performance Guarantor might have against Buyer, the Purchasers or the Agent, all of which rights are hereby expressly waived by the Originators and Performance Guarantor. 35 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement Section 9.12. Press Releases. Each of the Performance Guarantor and the Originators agrees that it shall not (and shall not permit any of its Subsidiaries to) issue any news release or make any public announcement pertaining to the transactions contemplated by this Agreement and the Related Documents without the prior written consent of Buyer and the Agent (which consent shall not be unreasonably withheld) unless such news release or public announcement is required by law, in which case the Performance Guarantor or such Originator, as the case may be, shall consult with Buyer and each of the Committed Purchaser and the Conduit Purchaser prior to the issuance of such news release or public announcement. Each of the Performance Guarantor and the Originators may, however, disclose the general terms of the transactions contemplated by this Agreement and the Related Documents to trade creditors, suppliers and other similarly-situated Persons so long as such disclosure is not in the form of a news release or public announcement. Section 9.13. Further Assurances. (a) Performance Guarantor shall, and shall cause each Originator to, and each Originator shall, at its sole cost and expense, upon request of Buyer, the Purchasers or the Agent, promptly and duly execute and deliver any and all further instruments and documents and take such further actions that may be necessary or desirable or that Buyer, the Purchasers or the Agent may request to carry out more effectively the provisions and purposes of this Agreement or any other Related Document or to obtain the full benefits of this Agreement and of the rights and powers herein granted, including (i) using its best efforts to secure all consents and approvals necessary or appropriate for the assignment to or for the benefit of Buyer of any Transferred Receivable or Originator Collateral held by an Originator or in which any Originator has any rights not heretofore assigned, (ii) filing any financing or continuation statements under the UCC with respect to the ownership interests or Liens granted hereunder or under any other Related Document, (iii) transferring Originator Collateral to Buyer's possession if such collateral consists of chattel paper or instruments or if a Lien upon such collateral can be perfected only by possession, or if otherwise requested by Buyer; and (iv) entering into "control agreements" (as defined in the UCC with respect to any Originator Collateral to the extent that a first priority Lien upon such Originator Collateral can be perfected only by control. Each of the Originators hereby authorizes Buyer, the Purchasers and the Agent to file any such financing or continuation statements without the signature of each of the Originators to the extent permitted by applicable law. A carbon, photographic or other reproduction of this Agreement or of any notice or financing statement covering the Transferred Receivables, the Originator Collateral or any part thereof shall be sufficient as a notice or financing statement where permitted by law. If any amount payable under or in connection with any of the Originator Collateral is or shall become evidenced by any instrument, such instrument, other than checks and notes received in the ordinary course of business, shall be duly endorsed in a manner satisfactory to Buyer immediately upon the applicable Originator's receipt thereof and promptly delivered to Buyer. 36 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (b) If any Originator or Performance Guarantor fails to perform any agreement or obligation under this Section 9.13, Buyer, the Purchasers or the Agent may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the reasonable expenses of Buyer, the Purchasers or the Agent incurred in connection therewith shall be payable by such Originator or Performance Guarantor upon demand of Buyer or the Agent. Section 9.14. Fees and Expenses. In addition to its indemnification obligations pursuant to Article V, each Originator and Performance Guarantor agrees, jointly and severally, to pay on demand all costs and expenses incurred by Buyer in connection with the negotiation, preparation, execution and delivery of this Agreement and the other Related Documents, including the fees and out-of-pocket expenses of Buyer's counsel, advisors, consultants and auditors retained in connection with the transactions contemplated thereby and advice in connection therewith, and each Originator and Performance Guarantor agrees, jointly and severally, to pay all costs and expenses, if any (including attorneys' fees and expenses but excluding any costs of enforcement or collection of the Transferred Receivables), in connection with the enforcement of this Agreement and the other Related Documents. 37 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement IN WITNESS WHEREOF, the parties have caused this Receivables Sale Agreement to be executed by their respective duly authorized representatives, as of the date first above written. WABASH NATIONAL CORPORATION, AS PERFORMANCE GUARANTOR By: ------------------------------------ Name: Christopher A. Black Title: Vice President & Treasurer WABASH NATIONAL, L.P. By: NOAMTC, Inc., its general partner By: ------------------------------------ Name: Christopher A. Black, Authorized Representative NOAMTC, INC. By: ------------------------------------ Name: Christopher A. Black, Authorized Representative WNC RECEIVABLES, LLC By: ------------------------------------ Name: Christopher A. Black Title: Manager 38 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement EXHIBIT 2.01(a) Form of RECEIVABLES ASSIGNMENT THIS RECEIVABLES ASSIGNMENT (the "Receivables Assignment") is entered into as of April 11, 2002, by and between NOAMTC, INC., a Delaware corporation, WABASH NATIONAL, L.P., a Delaware limited partnership (each an "Originator" and collectively, the "Originators"), and WNC RECEIVABLES, LLC, a Delaware limited liability company (the "Buyer"). 1. We refer to that certain Receivables Sale and Contribution Agreement (as amended, restated, supplemented or otherwise modified from time to time, the "Sale Agreement") of even date herewith among the Originators, Wabash National Corporation, in its capacity as Performance Guarantor ("Performance Guarantor"), and Buyer. All of the terms, covenants and conditions of the Sale Agreement are hereby made a part of this Receivables Assignment and are deemed incorporated herein in full. Unless otherwise defined herein, capitalized terms or matters of construction defined or established in the Sale Agreement shall be applied herein as defined or established therein. 2. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Originator hereby sells, or sells and contributes, to Buyer, without recourse, except as provided in Sections 4.02(p), 4.05, and 5.01 of the Sale Agreement, all of each Originator's right, title and interest in, to and under all of its Receivables (including all Collections, Records and proceeds with respect thereto) existing as of the Closing Date and thereafter created or arising at any time until the Facility Termination Date. 3. Subject to the terms and conditions of the Sale Agreement, each Originator hereby covenants and agrees to sign, sell or contribute, as applicable, execute and deliver, or cause to be signed, sold or contributed, executed and delivered, and to do or make, or cause to be done or made, upon request of Buyer and at each Originator's expense, any and all agreements, instruments, papers, deeds, acts or things, supplemental, confirmatory or otherwise, as may be reasonably required by Buyer for the purpose of or in connection with acquiring or more effectively vesting in Buyer or evidencing the vesting in Buyer of the property, rights, title and interests of each Originator sold or contributed hereunder or intended to be sold or contributed hereunder. 4. Wherever possible, each provision of this Receivables Assignment shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Receivables Assignment shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without 39 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement invalidating the remainder of such provision or the remaining provisions of this Receivables Assignment. 5. THIS RECEIVABLES ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. 40 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement IN WITNESS WHEREOF, the parties have caused this Receivables Assignment to be executed by their respective officers thereunto duly authorized, as of the day and year first above written. NOAMTC, INC., as an Originator By: ------------------------------------ Name: Christopher A. Black, Authorized Representative WABASH NATIONAL, L.P., as an Originator By: NOAMTC, Inc., its general partner By: ------------------------------------ Name: Christopher A. Black, Authorized Representative WNC RECEIVABLES, LLC, as Buyer By: ------------------------------------ Name: Christopher A. Black Title: Manager [Signature Page to Sale Agreement] 41 SCHEDULE 4.01(A) JURISDICTION OF INCORPORATION/ORGANIZATION 42 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(B) EXECUTIVE OFFICES; COLLATERAL LOCATIONS; OTHER NAMES 43 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(D) LITIGATION 44 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(F) FINANCIAL STATEMENTS AND PROJECTIONS 45 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(I) LABOR MATTERS 46 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(J) VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING EQUITY INTERESTS 47 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(K) TAX MATTERS 48 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(L) INTELLECTUAL PROPERTY 49 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(O) ERISA 50 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(S) WARRANTY POLICY WARRANTY INFORMATION Products Warranted. Wabash National, L. P. (Wabash) provides the following WARRANTY on its Trailers and RoadRailer MarkV Trailers, which are operated in the U.S.A. and Canada (the Product), to the first retail customer. Other products are covered by a separate warranty previously furnished. Warranty. Wabash warrants to the first retail customer that any new trailer, including a RoadRailer trailer, will be free of defects in material and workmanship when properly maintained and used in normal service free from accident, derailment or collision. Unless specified otherwise, the warranty shall be for the following period. Container chassis and special trailers - one year Dry freight, refrigerated and flat trailers - five years Normal service means the loading, unloading, and carriage of uniformly distributed legal loads of non-corrosive and properly secured cargo on well maintained railways and public roads, with gross vehicle weights not exceeding the labeled gross vehicle weight rating. RoadRailer trailers shall not be subjected to rail buff and draft forces which exceed the trailer's rated capacity, nor shall the trailer be operated at a speed on rail exceeding the rail bogie's rated speed limit. Wabash does not warrant parts or accessories supplied by others. Wabash assigns to the customer any warranties in favor of Wabash with respect to any such parts or accessories which may legally be assigned by Wabash. This warranty does not cover: 1. Parts which are not defective but which may wear out and have to be replaced. 2. Alignments or adjustments which are normal maintenance items not caused by a defect in the trailer. 3. Parts which after delivery have been repaired or altered by anyone other than Wabash's service representatives unless, in Wabash's opinion, such repairs or alterations did not in any way contribute to the defective conditions. 4. Any item covered by a separate Wabash warranty. THIS NON-ASSIGNABLE WARRANTY IS MADE BY WABASH SOLELY TO THE FIRST RETAIL CUSTOMER AND SHALL BE IN 51 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement LIEU OF ANY OTHER WARRANTY, EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE, WHICH ARE DISCLAIMED. The only warranty covering the Product is the written express warranty above. All warranty remedies are subject to the following limitations. Customer and Wabash agree that Wabash's exclusive liability under this warranty or otherwise shall be the repair or replacement, at Wabash's option, of any defective Product. Customer must give notice of the defect immediately after such defect is or ought to have been discovered, and return the Product to Wabash or other mutually agreeable location, within twenty (20) days after Wabash request the return. Wabash shall have no liability for cargo loss, loss of use or any other incidental or consequential damages. 52 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.01(V) DEPOSIT AND DISBURSEMENT ACCOUNTS 53 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.02(H) TRADE NAMES 54 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.04(B) EXISTING LIENS 55 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.04(E) CAPITAL STRUCTURE 56 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.04(O)(B) SALE OF ASSETS 57 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement SCHEDULE 4.04(O)(L) PREPAYMENT OF OTHER INDEBTEDNESS 58 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement ANNEX X DEFINITIONS 59 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement ANNEX Y SCHEDULE OF DOCUMENTS 60 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement ANNEX 4.03 REPORTING REQUIREMENTS OF THE PERFORMANCE GUARANTOR The Performance Guarantor shall furnish, or cause to be furnished, to the Agent (as Buyer's assignee) for distribution to the Purchasers: (a) Annual Audited Financials. As soon as available, and in any event within 90 days after the end of each fiscal year, Financial Statements for the Parent and each of its Subsidiaries on an audited consolidated and an unaudited consolidating basis, consisting of balance sheets and statements of income and retained earnings and cash flows, setting forth in comparative form in each case the figures for the previous fiscal year, which Financial Statements shall be prepared in accordance with GAAP and, in the case of such consolidated statements, certified without qualification by an independent certified public accounting firm of national standing or otherwise acceptable to Agent. Such Financial Statements shall be accompanied by (i) a statement prepared in reasonable detail showing the calculations used in determining compliance with Section 4.04(l) of the Sale Agreement, (ii) the certification of the Chief Executive Officer or Chief Financial Officer that all such Financial Statements present fairly in accordance with GAAP the financial position, results of operations and statements of cash flows of the Parent and each of its Subsidiaries on a consolidated and consolidating basis, as at the end of such fiscal year and for the period then ended, and that there was no Termination Event or Incipient Termination Event in existence as of such time or, if a Termination Event or Incipient Termination Event has occurred and is continuing, describing the nature thereof and all efforts undertaken to cure such Termination Event or Incipient Termination Event, and (iii) a Bringdown Certificate from each of the Parent, the Originators, the Servicer, the Seller and the Independent Member. (b) Quarterly Financials. As soon as available, and in any event within 45 days after the end of each fiscal quarter, consolidated and consolidating financial information regarding the Parent and each of its Subsidiaries, certified by the Chief Executive Officer or Chief Financial Officer of such member of the Parent Group, consisting of (i) unaudited balance sheets as of the close of such fiscal quarter and the related statements of income and cash flows for that portion of the fiscal year ending as of the close of such fiscal quarter and (ii) unaudited statements of income and cash flows for such fiscal quarter, in each case setting forth in comparative form the figures for the corresponding period in the prior year and the figures contained in the Projections for such fiscal year, all prepared in accordance with GAAP (subject to normal year-end adjustments). Such financial information shall be accompanied by (A) a statement in reasonable detail showing the calculations used in determining compliance with Section 4.04(l) of the Sale Agreement that is tested on a quarterly basis and (B) the certification of the Chief Executive Officer, Chief Financial Officer or Treasurer of the Parent that (i) such financial information presents fairly in accordance with GAAP (subject to normal year-end adjustments) the financial position, results of operations and statements of cash flows of the Parent and each of its Subsidiaries on a consolidated and consolidating basis, as at the end of such fiscal quarter and for 61 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement the period then ended, and (ii) any other information presented is true, correct and complete in all material respects and that that there was no Termination Event or Incipient Termination Event in existence as of such time or, if a Termination Event or Incipient Termination Event has occurred and is continuing, describing the nature thereof and all efforts undertaken to cure such Termination Event or Incipient Termination Event. (c) Monthly Financials. As soon as available, and in any event within 30 days after the end of each fiscal month (but within 45 days if the applicable month is the end of a fiscal quarter or within 90 days if the applicable month is the end of a fiscal year), financial information regarding the Parent and each of its Subsidiaries, certified by the Chief Financial Officer of such member of the Parent Group, consisting of consolidated and consolidating (i) unaudited balance sheets as of the close of such fiscal month and the related statements of income and cash flows for that portion of the fiscal year ending as of the close of such fiscal month and (ii) unaudited statements of income and cash flows for such fiscal month, setting forth in comparative form the figures for the corresponding period in the prior year and the figures contained in the Projections for such fiscal year, all prepared in accordance with GAAP. Such financial information shall be accompanied by the certification of the Chief Executive Officer, Chief Financial Officer or Treasurer of the Parent that (A) such financial information presents fairly in accordance with GAAP the financial position and results of operations of the Parent and its Subsidiaries, on a consolidated and consolidating basis, in each case as at the end of such month and for the period then ended and (B) any other information presented is true, correct and complete in all material respects and that there was no Incipient Termination Event or Incipient Termination Event in existence as of such time or, if an Incipient Termination Event or Termination Event shall have occurred and be continuing, describing the nature thereof and all efforts undertaken to cure such Termination Event or Incipient Termination Event. (d) Operating Plan. As soon as available, but not later than 30 days prior to the end of each fiscal year, an annual operating plan for the Parent and its Subsidiaries for the following year, approved by the Chief Executive Officer and Chief Financial Officer of the Parent, which will (i) include a statement of all of the material assumptions on which such plan is based, (ii) include monthly balance sheets and income statements for the following year and (iii) monthly cash flow and Availability projections, all prepared on the same basis and in similar detail as that on which operating results are reported (and in the case of cash flow projections, representing management's good faith estimates of future financial performance based on historical performance), and including plans for personnel, capital expenditures and facilities. (e) Management Letters. Within five Business Days after receipt thereof by the Parent or any of its Subsidiaries, copies of all management letters, exception reports or similar letters or reports received by the Parent or any of its Subsidiaries from its independent certified public accountants. (f) Default Notices. As soon as practicable, and in any event within one Business Days after an Authorized Officer of the Parent or any of its Subsidiaries has actual knowledge of 62 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement the existence thereof, telephonic or telecopied notice of each of the following events, in each case specifying the nature and anticipated effect thereof and what action, if any, the Parent or its respective Subsidiary proposes to take with respect thereto, which notice, if given telephonically, shall be promptly confirmed in writing on the next Business Day: (i) any Incipient Termination Event or Termination Event; (ii) any Adverse Claim made or asserted against any of the Originator Collateral of which it becomes aware; (iii) the occurrence of any event that would have a material adverse effect on the aggregate value of the Originator Collateral or on the assignments and Liens granted by the Parent and each of its Subsidiaries pursuant to this Agreement; (iv) the occurrence of any event of the type described in Sections 4.02(i)(i), (ii) or (iii) of the Sale Agreement involving any Obligor obligated under Transferred Receivables with an aggregate Outstanding Balance at such time of $100,000 or more; (v) the commencement of a case or proceeding by or against the Parent or any of its Subsidiaries seeking a decree or order in respect of the Parent or any of its Subsidiaries (A) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (B) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for the Parent or any of its Subsidiaries or for any substantial part of its assets, or (C) ordering the winding-up or liquidation of the affairs of the Parent or any of its Subsidiaries; (vi) the receipt of notice that (A) the Parent or any of its Subsidiaries is being placed under regulatory supervision, (B) any license, permit, charter, registration or approval necessary for the conduct of the business of the Parent or any of its Subsidiaries is to be, or may be, suspended or revoked, or (C) the Parent or any of its Subsidiaries is to cease and desist any practice, procedure or policy employed by it in the conduct of its business if such cessation may have a Material Adverse Effect; or (vii) any other event, circumstance or condition that has had or could reasonably be expected to have a Material Adverse Effect. (g) SEC Filings and Press Releases. Promptly upon their becoming available, copies of: (i) all financial statements, reports, notices and proxy statements made publicly available by the Parent or any of its Subsidiaries to its security holders; (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by the Parent or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission or any governmental or private regulatory authority; and (iii) all press releases and other statements 63 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement made available by the Parent or any of its Subsidiaries to the public concerning material adverse changes or developments in the business of any such Person. (h) Litigation. Promptly upon learning thereof, written notice of any Litigation affecting the Parent or any of its Subsidiaries, the Transferred Receivables or the Originator Collateral, whether or not fully covered by insurance, and regardless of the subject matter thereof that (i) seeks damages in excess of $500,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets or against the Parent or any of its Subsidiaries or any ERISA Affiliate of the Parent or any of its Subsidiaries in connection with any Plan, (iv) alleges criminal misconduct the Parent or any of its Subsidiaries, (v) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Liabilities, or (vi) would, if determined adversely, have a Material Adverse Effect. (i) Other Documents. Within two Business Days after receipt thereof, such other financial and other information respecting the Transferred Receivables, the Contracts therefor or the condition or operations, financial or otherwise, of the Parent or any of its Subsidiaries as the Agent shall, from time to time, request. (j) Miscellaneous Certifications. As soon as available, and in any event within 90 days after the end of each fiscal year, (i) a Bringdown Certificate and (ii) if requested, an opinion of counsel, in form and substance satisfactory to the Purchasers and the Agent, reaffirming as of the date of such opinion the opinion of counsel with respect to the Parent and each of its Subsidiaries delivered to the Agent for distribution to the Purchasers on the Closing Date. 64 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement ANNEX 4.04(L) DEFINITIONS As used in this Annex 4.04(l), 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): "AFFILIATE" shall mean, with respect to any Person, (a) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five percent (5%) or more of the Equity Interest having ordinary voting power in the election of directors of such Person, (b) each Person that controls, is controlled by or is under common control with such Person, or (c) each of such Person's officers, directors, joint venturers and partners. For the purposes of this definition, "control" of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise. "AGENT" shall mean General Electric Capital Corporation, in its capacity as Agent for the Purchasers under the Purchase Agreement. "AGREEMENT ACCOUNTING PRINCIPLES" shall mean generally accepted accounting principles as in effect from time to time in the United States, applied in a manner consistent with those used in preparing the financial statements referred to in Section 4.04(f) of the Sale Agreement. "CAPITAL EXPENDITURES" shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including Capitalized Leases and purchase money Indebtedness to the extent permitted hereunder) by the Performance Guarantor and its Subsidiaries during that period that, in conformity with Agreement Accounting Principles, are required to be included in or reflected by the property, plant, equipment or similar fixed asset accounts reflected in the consolidated balance sheet of the Performance Guarantor and its Subsidiaries. "CAPITAL INVESTMENT" shall mean, as of any date of determination, the amount equal to (a) the aggregate deposits made by the Purchaser to the Collection Account pursuant to the Purchase Agreement on or before such date, minus (b) the aggregate amounts disbursed to the Purchaser in reduction of Capital Investment pursuant to the Purchase Agreement on or before such date. "CAPITALIZED LEASE" shall mean, with respect to any Person, any lease of any property (whether real, personal or mixed) by such Person as lessee that, in accordance with Agreement Accounting Principles, would be required to be classified and accounted for as a capital lease on a balance sheet of such Person. 65 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement "CAPITALIZED LEASE OBLIGATION" shall mean, with respect to any Capitalized Lease of any Person, the amount of the obligation of the lessee thereunder that, in accordance with Agreement Accounting Principles, would appear on a balance sheet of such lessee in respect of such Capitalized Lease. "CASH EQUIVALENTS" shall mean (i) marketable direct obligations issued or unconditionally guaranteed by the government of the United States; (ii) domestic and Eurodollar certificates of deposit and time deposits, bankers' acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, or its branches or agencies and having capital and surplus in an aggregate amount not less than $500,000,000 (fully protected against currency fluctuations for any such deposits with a term of more than ten (10) days); (iii) shares of money market, mutual or similar funds having net assets in excess of $500,000,000 maturing or being due or payable in full not more than one hundred eighty (180) days after the Performance Guarantor's acquisition thereof and the investments of which are limited to investment grade securities (i.e., securities rated at least Baa by Moody's Investors Service, Inc. or at least BBB by Standard & Poor's Ratings Group) and (iv) commercial paper of United States banks and bank holding companies and their subsidiaries and United States finance, commercial, industrial or utility companies which, at the time of acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better) by Moody's Investors Service, Inc.; provided that the maturities of such Cash Equivalents shall not exceed 365 days. "CLOSING DATE" shall mean the date on which the initial Purchase under the Purchase Agreement occurs. "COLLECTION ACCOUNT" shall mean an account established by the Agent designated as the Collection Account (Bankers Trust Company, New York, New York, ABA No. 021001033, Account No. 50232854, Account Name: GECC/CAF Depository, Reference: Wabash National CFC4337) and otherwise in accordance with the requirements set forth in the Purchase Agreement. "CONSOLIDATED EBITDA" shall mean, for any period, on a consolidated basis for the Performance Guarantor and its Subsidiaries, the sum of the amounts for such period, without duplication of (i) Consolidated Operating Income, plus (ii) charges against income for foreign taxes and U.S. income taxes to the extent deducted in computing Consolidated Operating Income, plus (iii) Interest Expense to the extent deducted in computing Consolidated Operating Income, plus (iv) depreciation expense to the extent deducted in computing Consolidated Operating Income, plus (v) amortization expense, including, without limitation, amortization of goodwill and other intangible assets to the extent deducted in computing Consolidated Operating Income, plus (vi) other non-cash charges (in an aggregate amount not in excess of $15,000,000 during any fiscal year of the Performance Guarantor) in accordance with Agreement Accounting Principles to the extent deducted in computing Consolidated Operating Income, minus (x) the total interest income of the Performance Guarantor and its Subsidiaries to the extent included in computing Consolidated Operating Income minus (y) the total tax benefit reported by the 66 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement Performance Guarantor and its Subsidiaries to the extent included in computing Consolidated Operating Income. "CONSOLIDATED EQUITY" shall mean as of the date of any determination thereof, the total stockholders' equity of the Performance Guarantor and its Subsidiaries on a consolidated basis, all as determined in accordance with Agreement Accounting Principles. "CONSOLIDATED OPERATING INCOME" shall mean, with reference to any period, the net operating income (or loss) of the Parent and its Subsidiaries for such period (taken as a cumulative whole on a consolidated basis) including without limitation all restructuring expenses for such period (exclusive of "other income/expenses" as reflected in the Parent's consolidated statement of income of the Parent and its Subsidiaries for such period and related to non-operating and non-recurring income and expenses), as determined in accordance with Agreement Accounting Principles, after eliminating all offsetting debits and credits between the Performance Guarantor and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Performance Guarantor and its Subsidiaries in accordance with Agreement Accounting Principles. "CONSOLIDATED TAX ADJUSTED EQUITY" shall mean, as of the date of any termination thereof, Consolidated Equity plus the cumulative federal, state and local income tax benefit reported by Performance Guarantor in accordance Agreement Accounting Principles. "CONSOLIDATED TOTAL ASSETS" shall mean as of the date of any determination thereof, total assets of the Performance Guarantor and its Subsidiaries determined on a consolidated basis in accordance with Agreement Accounting Principles. "CONTINGENT OBLIGATION," as applied to any Person, shall mean any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or 67 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof. In any computation of the Indebtedness or other liabilities of the obligor under any Contingent Obligation, the Indebtedness or other obligations that are the subject of such Contingent Obligation shall be assumed to be direct obligations of such obligor. "CONTROLLED GROUP" shall mean the group consisting of (i) any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Performance Guarantor; (ii) a partnership or other trade or business (whether or not incorporated) which is under common control (within the meaning of Section 414(c) of the Code) with the Performance Guarantor; and (iii) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Performance Guarantor, any corporation described in clause (i) above or any partnership or trade or business described in clause (ii) above. "CREDIT AGREEMENT" shall mean that certain Amended and Restated Credit Agreement dated as of April 11, 2002, among the Performance Guarantor, as borrower, the lenders party thereto and the Credit Facility Agent. "CREDIT FACILITY AGENT" shall mean Bank One, Indiana, N.A. in its capacity as administrative agent under the Credit Agreement, or its successor appointed pursuant to the Credit Agreement. "EQUITY INTEREST" shall mean all shares, options, warrants, member interests, general or limited partnership interests or other equivalents (regardless of how designated) of or in a corporation, limited liability company, partnership or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, 15 U.S.C. Sections 78a et seq., and any regulations promulgated thereunder). "ERISA" shall mean the Employee Retirement Income Security Act of 1974 and any regulations promulgated thereunder. "FINANCE CONTRACT" shall mean any chattel paper originated by the Performance Guarantor or any of its Subsidiaries pursuant to a bona fide sale in the ordinary course of business with a customer of any Subsidiary. "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect on the Closing Date. "GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising 68 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "INDEBTEDNESS" of any Person shall mean, without duplication, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services payment for which is deferred 90 days or more, but excluding obligations to trade creditors incurred in the ordinary course of business that are not overdue by more than 90 days unless being contested in good faith, (b) all reimbursement and other obligations with respect to letters of credit, bankers' acceptances and surety bonds, whether or not matured, (c) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (d) all Capitalized Lease Obligations, (e) all indebtedness referred to in clauses (a) through (d) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property or other assets (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness, (f) all Off-Balance Sheet Liabilities of such Person, (g) the aggregate Capital Investment, and (h) all Contingent Obligation of such Person with respect to liabilities of a type described in any of clauses (a) through (g) hereof. Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (h) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under Agreement Accounting Principles. In no event shall Indebtedness include Unfunded Liabilities of any Plan of the Performance Guarantor and its Subsidiaries, which amount, as of December 31, 2001, was zero. "INTEREST COVERAGE RATIO" shall mean, as of any date the same is to be determined, the ratio of (i) Consolidated EBITDA as of such date for (A) in the case of calculating Consolidated EBITDA for each relevant month in the Performance Guarantor's fiscal year ending on or about December 31, 2002, the cumulative period of months ending on and after April 30, 2002 and (B) in the case of calculating Consolidated EBITDA for each month 69 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement thereafter, the period of four consecutive fiscal quarters then ending to (ii) Interest Expense during the same applicable periods. "INTEREST EXPENSE" shall mean, for any period, the total interest expense of the Performance Guarantor and its consolidated Subsidiaries, whether paid or accrued (including the total interest expense under the Permitted Receivables Transfer), including interest expense not payable in cash (including amortization or write-off of debt discount and debt issuance costs and commissions and discounts and other fees and charges associated with Indebtedness, including the Obligations, all as determined in conformity with Agreement Accounting Principles. "LENDERS" shall mean the lending institutions from time to time parties to the Credit Agreement, and their respective successors and assigns. "LEVERAGE VALUATION RATIO" shall mean, as of any date the same is to be determined, the ratio of (i) the sum of the aggregate outstanding principal amount of the Obligations (excluding L/C Obligations, as defined in the Credit Agreement) and the Indebtedness under the Note Agreements to (ii) Consolidated Total Assets to the extent consisting of cash and Cash Equivalents, net inventory, net prepaid and other expenses and net property, plant and equipment as of such date, in all cases as determined in accordance with Agreement Accounting Principles. "LIEN" shall mean any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement). "LOAN DOCUMENT" shall mean the Note Agreements, the Senior Notes, the Credit Agreement, and all notes, security agreements, pledge agreements, mortgages and related collateral documents executed pursuant to any of the foregoing. "NOTE AGREEMENTS" shall mean, in the case of the holders of the Performance Guarantor's Series A Senior Notes, those certain separate and several Amended and Restated Note Purchase Agreements, each dated as of the Closing Date, between the Performance Guarantor and such holders, in the case of the holders of the Performance Guarantor's Series C through H Senior Notes, those certain separate and several Amended and Restated Note Purchase Agreement, dated as of the Closing Date, between the Performance Guarantor and such holders, and in the case of the holders of the Performance Guarantor's Series I Senior Notes, that certain Amended and Restated Note Purchase Agreement, dated as of the Closing Date, between the Performance Guarantor and such holders, in each case as amended from time to time. "NOTEHOLDER" shall mean each holder of a Senior Note pursuant to a Note Agreement, and its successors and assigns. 70 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement "OBLIGATIONS" shall mean all loans, advances, debts, liabilities, obligations, covenants and duties owing by the Performance Guarantor to the Credit Facility Agent, any Lender, any Affiliate of any of the foregoing or any Indemnitee (as defined in the Credit Agreement), of any kind or nature, present or future, arising under the Credit Agreement, the Senior Notes, or any other Loan Document, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term includes, without limitation, all interest, charges, expenses, fees, attorneys' fees and disbursements, paralegals' fees (in each case whether or not allowed), and any other sum chargeable to the Performance Guarantor under the Credit Agreement or any other Loan Document. "OFF-BALANCE SHEET LIABILITIES" of a Person shall mean (a) any repurchase obligation or liability of such Person or any of its Subsidiaries with respect to accounts or notes receivable sold by such Person or any of its Subsidiaries, (b) any liability of such Person or any of its Subsidiaries under any sale and leaseback transactions which do not create a liability on the consolidated balance sheet of such Person, (c) any liability of such person or any of its Subsidiaries under any so-called "synthetic" lease transaction, or (d) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheets of such Person and its Subsidiaries. "PBGC" shall mean the Pension Benefit Guaranty Corporation, or any successor thereto. "PERSON" shall mean any individual, sole proprietorship, partnership, joint venture, unincorporated organization, trust, association, corporation (including a business trust), limited liability company, institution, public benefit corporation, joint stock company, Governmental Authority or any other entity of whatever nature. "PERMITTED RECEIVABLES TRANSFER" shall mean (i) a sale or other transfer by either Wabash National, L.P. or NOAMTC, Inc., in their capacities as parties to the Sale Agreement, to WNC Receivables LLC, of Receivables (as defined in the Sale Agreement) and Collections (as defined in the Sale Agreement), in accordance with the terms of the Sale Agreement, and/or (ii) a sale by WNC Receivables LLC to purchasers of Purchaser Interests (as defined in the Purchase Agreement), in accordance with the terms of the Purchase Agreement. "PERFORMANCE GUARANTOR" shall mean the Wabash National Corporation, a Delaware corporation, in its capacity as guarantor under the Sale Agreement. "PIK NOTES" shall mean those certain promissory notes of the Performance Guarantor payable to the order of each Lender evidencing the aggregate deferral fees payable by the Performance Guarantor to such Lender. 71 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement "PLAN" shall mean an employee benefit plan defined in Section 3(3) of ERISA in respect of which the Performance Guarantor or any member of the Controlled Group is, or within the immediately preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA. "PURCHASE" shall have the meaning assigned to it in the Purchase Agreement. "PURCHASER" shall mean General Electric Capital Corporation, a Delaware corporation, its successors and assigns. "PURCHASE AGREEMENT" shall mean that certain Receivables Purchase and Servicing Agreement, dated as of April 11, 2002, by and among WNC Receivables, LLC, Wabash Financing, LLC, WNC Receivables Management Corp. and the Purchaser. "SALE AGREEMENT" shall mean that certain Receivables Sale and Contribution Agreement dated as of April 11, 2002, by and among Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P., and WNC Receivables, LLC.. "SENIOR NOTE" shall mean any of the Parent's 6.41% Series A Senior Secured Notes due March 30, 2004, Designated Rate Senior Secured Notes, Series C, due March 30, 2004, 7.31% Senior Secured Notes, Series D, due December 17, 2004, Designated Rate Senior Secured Notes, Series E, due March 13, 2005, 7.47% Senior Secured Notes, Series F, due December 17, 2006, 7.53% Senior Secured Notes, Series G, due December 30, 2008, 7.55% Senior Secured Notes, Series H, due December 17, 2008, 8.04% Senior Secured Notes, Series I, due September 29, 2007, or the PIK Notes. "SINGLE EMPLOYER PLAN" shall mean a Plan maintained by the Performance Guarantor or any member of the Controlled Group for employees of the Performance Guarantor or any member of the Controlled Group. "SUBSIDIARY" shall mean, with respect to any Person, any corporation or other entity (a) of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person or (b) that is directly or indirectly controlled by such Person within the meaning of control under Section 15 of the Securities Act of 1933, 15 U.S.C. Sections 77a et seq., and any regulations promulgated thereunder. "UNFUNDED LIABILITIES" shall mean the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations. 72 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement FINANCIAL COVENANTS The Performance Guarantor shall, and shall cause each of its Subsidiaries to, comply with the following: (A) Minimum Consolidated Tax Adjusted Equity. If the Performance Guarantor shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Performance Guarantor shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below: Minimum Consolidated Tax Fiscal Quarter Ending Adjusted Equity --------------------- ------------------------ March 31, 2003 $ 99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 $ 96,504,000 (B) Minimum Consolidated Equity. If the Performance Guarantor shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Performance Guarantor shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below: Minimum Consolidated Fiscal Quarter Ending Equity --------------------- -------------------- March 31, 2003 $87,882,000 June 30, 2003 $90,461,000 September 30, 2003 $94,751,000 December 31, 2003 $84,077,000 (C) Maximum Leverage Valuation Ratio. The Performance Guarantor shall not permit, as of the last day of each of the fiscal quarters specified below, the Leverage Valuation Ratio to exceed the applicable "Maximum Leverage Valuation Ratio" specified below: Fiscal Quarter Ending Maximum Leverage Valuation Ratio 73 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement Minimum Leverage Fiscal Quarter Ending Valuation --------------------- ---------------- June 30, 2002 [0.95 to 1] September 30, 2002 [0.95 to 1] December 31, 2002 [0.95 to 1] March 31, 2003 [0.85 to 1] June 30, 2003 [0.80 to 1] September 30, 2003 [0.80 to 1] December 31, 2003 [0.75 to 1] (D) Minimum Consolidated EBITDA. (i) The Performance Guarantor shall, as of the last day of each of the fiscal quarters of the Performance Guarantor occurring in calendar year 2002, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such fiscal quarter, at an amount not less than $(20,000,000). (ii) The Performance Guarantor shall, as of the last day of the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending: Minimum Rolling 12 Month Month Ending Consolidated EBITDA ------------ ------------------- January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 2003 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000 74 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (E) Minimum Interest Coverage Ratio. The Performance Guarantor shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Performance Guarantor (commencing with the fiscal quarter ending on or about March 31, 2003), for the period of four consecutive fiscal quarters then ending, to be less than 1.25 to 1. (F) Maximum Capital Expenditures. The Performance Guarantor will not, and will not permit any Subsidiary to, expend for Capital Expenditures during any fiscal year of the Performance Guarantor and its Subsidiaries, in excess of $6,000,000 in the aggregate for the Performance Guarantor and its Subsidiaries. (G) Maximum Finance Contracts. The Performance Guarantor will not, and will not permit any Subsidiary to, enter into any new Finance Contract if and to the extent that the sum of such Finance Contract (a) when added to the aggregate amount of all Finance Contracts entered into by the Performance Guarantor or any of its Subsidiaries during the twelve (12) month period that commences on the Closing Date exceeds $5,000,000 or (b) when added to the aggregate amount of all Finance Contracts entered by the Performance Guarantor or any of its Subsidiaries during the twelve (12) month period that commences on the first (1st) anniversary of the Closing Date exceeds $5,000,000. 75 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement ANNEX 4.04(O) ADDITIONAL NEGATIVE COVENANTS (A) Indebtedness. Neither the Performance Guarantor nor any of its Subsidiaries shall directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except that (a) Buyer may incur Indebtedness incurred in connection with the Purchase Agreement and (b) the Performance Guarantor and its Subsidiaries other than the Buyer may incur, assume or otherwise become or remain directly or indirectly liable for the following: (i) the Obligations; (ii) Permitted Existing Indebtedness; (iii) Indebtedness arising from intercompany loans from the Performance Guarantor or any Subsidiary (other than the Buyer and Independent Member) to any Subsidiary (other than the Buyer and Independent Member) so long as the intercompany loans from the Performance Guarantor or any Domestic Subsidiary (other than the Buyer and Independent Member) to a Foreign Subsidiary shall not exceed an aggregate of $5,000,000 during the term of the Credit Agreement; (iv) Indebtedness with respect to surety, appeal and performance bonds obtained by the Performance Guarantor or any of its Subsidiaries other than the Buyer in the ordinary course of business; (v) Indebtedness constituting Contingent Obligations permitted by Clause E below; (vi) unsecured Indebtedness and other liabilities incurred in the ordinary course of business and consistent with past practice, but not incurred through the borrowing of money or the obtaining of credit (other than customary trade terms); (vii) Indebtedness evidenced by the Note Agreements, Senior Notes and Related Notes; and (viii) other unsecured Indebtedness in an aggregate principal amount not exceeding $3,000,000 at any time outstanding. (B) Sales of Assets. Except in connection with the SunTrust Sale and Leaseback and any of the assets, properties or transactions identified in Schedule 4.04(o)(B), neither the Performance Guarantor nor any of its Subsidiaries shall sell, assign, transfer, lease, convey or otherwise dispose of any property, whether now owned or hereafter acquired, or any income or profits therefrom, or enter into any agreement to do so, except that the Performance Guarantor and its Subsidiaries other than the Buyer may engage in the following transactions: 76 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (i) sales of inventory in the ordinary course of business; (ii) the disposition of obsolete equipment in the ordinary course of business; (iii) sales and other transfers of Transferred Receivables pursuant to this Agreement; (iv) sales, assignments, transfers, leases, conveyances or other dispositions of other assets (but not including assets of Apex Trailer Leasing & Rentals, L.P.) if such transaction (a) is for not less than fair market value, and (b) when combined with all such other sales, assignments, transfers, conveyances or other dispositions during the then current fiscal year represents the disposition of assets with a fair market value of not greater than $5,000,000; and (v) transfers of assets by the Performance Guarantor or any Subsidiary to any Subsidiary other than Buyer so long as (i) in the case of a transferee which is a Domestic Subsidiary, the security interests granted pursuant to the Collateral Documents in the events so transferred shall remain in full force and effect and perfected and (ii) transfers of assets by the Performance Guarantor or any Domestic Subsidiary to any Foreign Subsidiary shall not exceed an aggregate of $1,000,000 during the term of this Agreement. (C) Liens. Neither the Performance Guarantor nor any of its Subsidiaries other than Buyer shall directly or indirectly create, incur, assume or permit to exist any Lien on or with respect to any of their respective property or assets except that they may create, incur or suffer to exist the following Liens : (i) Permitted Existing Liens; (ii) Customary Permitted Liens; (iii) purchase money Liens (including the interest of a lessor under a Capitalized Lease and Liens to which any property is subject at the time of the acquisition thereof by the Performance Guarantor or one of its Subsidiaries) securing permitted purchase money Indebtedness; provided that such Liens shall not apply to any property of the Performance Guarantor or its Subsidiaries other than that purchased or subject to such Capitalized Lease; (iv) Liens arising in connection with sales and other transfers of Transferred Receivables pursuant to this Agreement; (v) Environmental Liens securing liabilities, claims, costs or damages not exceeding $5,000,000 in the aggregate; (vi) Liens securing the Credit Facility and the Senior Notes on assets other than the Transferred Receivables and their Collections; and 77 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (vii) Liens granted by a Foreign Subsidiary on Property located in Canada to the extent securing Indebtedness permitted by Clause (A)(ii). In addition, neither the Performance Guarantor nor any or its Subsidiaries shall, after the date hereof, become a party to any agreement, note, indenture or other instrument (other than the Intercreditor and Collateral Agency Agreement), or take any other action, which would prohibit the creation of a Lien on any of its properties or other assets in favor of the Collateral Agent for the benefit of itself and the Secured Parties as collateral for the Secured Obligations; provided that any agreement, note, indenture or other instrument in connection with permitted purchase money Indebtedness (including Capitalized Lease Obligations) may prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of itself and the Lenders on the items of property obtained with the proceeds of such permitted purchase money Indebtedness; and provided further that this Agreement and the Purchase Agreement may prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of itself and the Lenders on the assets of Buyer and on the Transferred Receivables. (D) Investments. Neither the Performance Guarantor nor any of its Subsidiaries shall directly or indirectly make or own any Investment except that the Performance Guarantor and its Subsidiaries other than the Buyer may make the following Investments: (i) Investments in Cash Equivalents; (ii) Permitted Existing Investments; (iii) Investments received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (iv) Investments consisting of deposit accounts maintained by the Performance Guarantor or any of its Subsidiaries in connection with their cash management systems; (v) Investments with respect to Indebtedness permitted pursuant to Clause (A)(iii); (vi) Existing Investments in any Subsidiaries; (vii) Investments consisting of minority interests and joint ventures and loans or advances to such entities, provided that at the time any such Investment is made the amount of all Investments under this clause (vii) (including such new Investment, and including all Permitted Existing Investments that are of the type covered by this clause (vii)) does not exceed $5,000,000 at such time; (viii) Investments in Buyer pursuant to this Agreement; and (ix) Investments in connection with Permitted Acquisitions. 78 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (E) Contingent Obligations. Neither the Performance Guarantor nor any of its Subsidiaries shall directly or indirectly create or become or be liable with respect to any Contingent Obligation, except: (i) recourse obligations resulting from endorsement of negotiable instruments for collection in the ordinary course of business; (ii) Permitted Existing Contingent Obligations and any extensions, renewals or replacements thereof, provided that any such extension, renewal or replacement is not greater than the Indebtedness under, and shall be on terms no less favorable to the Performance Guarantor or such Subsidiary than the terms of, the Permitted Existing Contingent Obligation being extended, renewed or replaced; (iii) obligations, warranties and indemnities, not relating to Indebtedness of any Person, which have been or are undertaken or made in the ordinary course of business and consistent with past practices and not for the benefit of or in favor of an Affiliate of the Performance Guarantor or such Subsidiary; (iv) Contingent Obligations of the Performance Guarantor or any of its Subsidiaries (other than Buyer) with respect to any Indebtedness permitted by this Agreement; and (v) Contingent Obligations with respect to surety, appeal and performance bonds obtained by the Performance Guarantor or any Subsidiary in the ordinary course of business. (F) Acquisitions. Neither the Performance Guarantor nor any of its Subsidiaries shall make any Acquisition other than a Permitted Acquisition. (G) Transactions with Shareholders or Affiliates. Neither the Performance Guarantor nor any of its Subsidiaries shall directly or indirectly enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder or holders of any Equity Interests of the Performance Guarantor, or with any Affiliate of the Performance Guarantor which is not its Subsidiary, on terms that are less favorable to the Performance Guarantor or its Subsidiaries, as applicable, than those that might be obtained in an arm's length transaction at the time from Persons who are not such a holder or Affiliate. (H) Restriction on Fundamental Changes. Neither the Performance Guarantor nor any of its Subsidiaries shall enter into any merger or consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell, transfer or otherwise dispose of, in one transaction or series of transactions, all or substantially all of the Performance Guarantor's or any such Subsidiary's business or property, whether now or hereafter acquired, except transactions permitted under Clause (B) and except that any Subsidiary of the Performance Guarantor (other than Seller and Independent Member) may merge with or liquidate into the Performance Guarantor or any other Subsidiary of the Performance Guarantor (other than Seller and Independent Member), provided that the surviving entity expressly assumes any liabilities, if any, of either of such Subsidiaries with respect to the Obligations pursuant to an assumption agreement reasonably satisfactory to the Collateral Agent and provided further that the consolidated net worth of the surviving corporation is not less than the consolidated net worth of the Subsidiary with any liability with respect to the Obligations immediately prior to such merger. 79 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (I) Margin Regulations. Neither the Performance Guarantor nor any of its Subsidiaries shall use all or any portion of the proceeds of any credit extended under the Credit Facility or the Senior Notes to purchase or carry Margin Stock. (J) ERISA. The Performance Guarantor shall not: (i) engage, or permit any of its Subsidiaries to engage, in any prohibited transaction described in Sections 406 of ERISA or 4975 of the Code for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the DOL; (ii) permit to exist any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of the Internal Revenue Code), with respect to any Benefit Plan, whether or not waived; (iii) fail, or permit any Controlled Group member to fail, to pay timely required contributions or annual installments due with respect to any waived funding deficiency to any Benefit Plan; (iv) terminate, or permit any Controlled Group member to terminate, any Benefit Plan which would result in any liability of the Performance Guarantor or any Controlled Group member under Title IV of ERISA; (K) Fiscal Year. Neither the Performance Guarantor nor any of its consolidated Subsidiaries shall change its fiscal year for accounting or tax purposes from a period consisting of the 12-month period ending on December 31 of each calendar year. (L) Prepayment of Other Indebtedness. Neither the Performance Guarantor nor any of its Subsidiaries shall make any optional prepayment, redemption, repurchase or defeasance of any Indebtedness of the Performance Guarantor or any such Subsidiary which would, in accordance with Agreement Accounting Principles, constitute long-term Indebtedness, other than the Obligations, any intercompany Indebtedness permitted by Clause (A)(iii), and other Indebtedness described on Schedule 4.04(o)(L) hereto. (M) Limitations on Restrictive Agreements. Neither the Performance Guarantor nor any of its Subsidiaries (other than Buyer) shall enter into, or suffer to exist, any agreement (other than the Note Agreements) with any Person which, directly or indirectly, prohibits or limits the ability of any Subsidiary to (i) pay dividends or make other distributions to the Performance Guarantor or prepay any Indebtedness owed to Performance Guarantor or (ii) transfer any of its properties or assets to the Performance Guarantor (other than with respect to assets subject to Liens permitted by Clause (C) above). (N) Leases. Except in connection with the SunTrust Sale and Leaseback, the Fleet Lease Transaction and the National City Lease Transaction, create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any obligation 80 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement as lessee for the rental or hire of any real or personal property, except: (i) leases existing on the date of this Agreement and any extensions or renewals thereof, but no increase in the amount payable thereunder; and (ii) leases (other than Capitalized Leases or leases constituting Off-Balance Sheet Liabilities) which do not in the aggregate require the Performance Guarantor and its Subsidiaries on a consolidated basis to make payments (including taxes, insurance, maintenance and similar expenses which the Performance Guarantor or any Subsidiary is required to pay under the terms of any lease) any time during the Credit Agreement in excess of $3,500,000. (O) Restricted Payments. Neither the Performance Guarantor nor any of its Subsidiaries shall declare or make any Restricted Payment; provided that (a) the foregoing shall not operate to restrict, prohibit or prevent (1) lease payments made by the Performance Guarantor or any Subsidiary in accordance with the terms and conditions of the Fleet Lease Transaction and the National City Lease Transaction, (2) the payment of proceeds arising from, and upon, the disposition of Property subject to and in accordance with the terms and conditions of the Fleet Lease Transaction and the National City Lease Transaction and (3) distributions to the Originators in connection with the sale or other transfer of Transferred Receivables pursuant to this Agreement and (b) the Performance Guarantor may, commencing with the March 15, 2003 scheduled dividend, resume (but not catch up any method payments) making the regularly scheduled 6% dividends on the Fruehauf Preferred Stock on a quarterly basis in an amount per quarter not to exceed 6% of the Stated Value Per Share (as defined in the Fruehauf Preferred Stock) so long as (i) no Unmatured Default or Default (as defined in the Credit Agreement) shall have occurred and be continuing hereunder, (ii) no Unmatured Default or Default would have occurred under the financial covenants forth in clause (1), (2) and (3) below if such financial covenants had been in full force and effect from the Closing Date to the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock and (iii) the Performance Guarantor has appointed a full-time permanent chief executive officer as of the date of declaration of such proposed Restricted Payment on the Fruehauf Preferred Stock. For purpose of this subsection (O), on and prior to the date of the declaration of any proposed Restricted Payment on the Fruehauf Preferred Stock pursuant to this subsection (O), the Performance Guarantor shall have, and shall have caused each of its Subsidiaries to have, complied with the following financial covenants set forth in clauses (1), (2), (3) and (4) below: (1) (A) If the Performance Guarantor shall have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Performance Guarantor shall, as of the last day of such fiscal quarter, maintain Consolidated Tax Adjusted Equity at an amount not less than the applicable "Minimum Consolidated Tax Adjusted Equity" specified below: Minimum Consolidated Fiscal Quarter Ending Tax Adjusted Equity --------------------- -------------------- June 30, 2002 $106,376,000 September 30, 2002 $113,535,000 December 31, 2002 $107,267,000 March 31, 2003 $ 99,064,000 June 30, 2003 $100,681,000 September 30, 2003 $103,283,000 December 31, 2003 $ 96,504,000 81 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (B) If the Performance Guarantor shall not have reported a cumulative tax benefit as of the last day of any fiscal quarter specified below, the Performance Guarantor shall, as of the last day of such fiscal quarter, maintain Consolidated Equity at an amount not less than the applicable "Minimum Consolidated Equity" specified below: Minimum Consolidated Fiscal Quarter Ending Equity --------------------- -------------------- June 30, 2002 $101,492,000 September 30, 2002 $110,961,000 December 31, 2002 $100,966,000 March 31, 2003 $ 87,882,000 June 30, 2003 $ 90,461,000 September 30, 2003 $ 94,751,000 December 31, 2003 $ 84,077,000 (2) (A) The Performance Guarantor shall not permit the Interest Coverage Ratio as of the last day of each of the calendar months specified below, for the cumulative period commencing on April, 2002 and ending on the last day of such calendar month, to be less than the applicable "Minimum Interest Coverage Ratio" specified below: Minimum Interest Fiscal Quarter Ending Coverage Ratio --------------------- ---------------- June 30, 2002 1.50 to 1 September 30, 2002 1.50 to 1 December 31, 2002 1.25 to 1 (B) The Performance Guarantor shall not permit the Interest Coverage Ratio as of the last day of each fiscal quarter of the Performance Guarantor specified below, for the period of four consecutive fiscal quarters then ending, to be less than the applicable "Minimum Interest Coverage Ratio" specified below: Minimum Interest Fiscal Quarter Ending Coverage Ratio --------------------- ---------------- March 31, 2003 1.25 to 1 June 30, 2003 1.25 to 1 September 30, 2003 1.25 to 1 December 31, 2003 1.25 to 1 82 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (3) The Performance Guarantor shall, as of the last day of each of the calendar months specified below, maintain Consolidated EBITDA for the cumulative period commencing on April 1, 2002 and ending on the last day of such calendar month, at an amount not less than the applicable "Minimum Cumulative Consolidated EBITDA" specified below: Minimum Cumulative Month Month Ending Consolidated EBITDA ------------ ------------------------ April 30, 2002 $ 3,841,000 Mary 31, 2002 $ 8,389,000 June 30, 2002 $14,722,000 July 31, 2002 $22,084,000 August 31, 2002 $28,732,000 September 30, 2002 $33,110,000 October 31, 2002 $36,753,000 November 30, 2002 $37,818,000 December 31, 2002 $37,856,000 (4) The Performance Guarantor shall, as of the last day of each the calendar months specified below, maintain Consolidated EBITDA at an amount not less than the applicable "Minimum Rolling 12 Month Consolidated EBITDA" specified below for the period of 12 consecutive calendar months then ending: Minimum Rolling 12 Month Month Ending Consolidated EBITDA ------------ ------------------------ January 31, 2003 $36,135,000 February 28, 2003 $36,620,000 March 31, 20023 $39,301,000 April 30, 2003 $40,541,000 May 31, 2003 $41,276,000 June 30, 2003 $42,192,000 July 31, 2003 $42,877,000 August 31, 2003 $43,422,000 September 30, 2003 $43,784,000 October 31, 2003 $43,941,000 November 30, 2003 $43,828,000 December 31, 2003 $43,539,000 January 31, 2004 $42,539,000 83 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement (P) Hedging Obligations. Enter into any interest rate, commodity or foreign currency exchange, swap, collar, cap or similar agreements evidencing Hedging Obligations, other than interest rate, foreign currency or commodity exchange, swap, collar, cap or similar agreements entered into by the Performance Guarantor pursuant to which the Performance Guarantor has hedged its actual or forecasted interest rate, foreign currency or commodity exposure. Such permitted hedging agreements entered into by the Performance Guarantor and any Lender or any affiliate of any Lender to hedge floating interest rate risk in an aggregate notional amount not to exceed at any time an amount equal to the outstanding balance of the Term Loans (as defined in the Credit Agreement) and the principal Indebtedness under the Note Agreements at such time are sometimes referred to herein as "Interest Rate Agreements". (Q) Sales and Leasebacks. Neither the Performance Guarantor nor any of its Subsidiaries shall become liable, directly, by assumption or by Contingent Obligation, with respect to any lease, whether an operating lease or a Capitalized Lease, of any Property (whether real or personal or mixed) (i) which it or one of its Subsidiaries sold or transferred or is to sell or transfer to any other Person, or (ii) which it or one of its Subsidiaries intends to use for substantially the same purposes as any other Property which has been or is to be sold or transferred by it or one of its Subsidiaries to any other Person in connection with such lease, unless (a) in either case the sale involved is not prohibited under Clause (B) and the lease involved is not prohibited under Clause A above or (b) such sale and leaseback transaction is the SunTrust Sale and Leaseback. The parties hereto acknowledge and agree that (1) the foregoing shall not operate to restrict, prohibit or prevent the Fleet Lease Transaction and the National City Lease Transaction and (2) the Borrower and its Subsidiaries are permitted to dispose of Property pursuant to the SunTrust Sale and Leaseback and the Collateral Agent is authorized to release its Liens on such Property in connection with such disposition. (R) Issuance of Disqualified and Preferred Stock. Neither the Performance Guarantor nor any of its Subsidiaries shall issue any Disqualified Stock. The Performance Guarantor shall not issue any new shares of preferred stock and shall not permit any Subsidiary to issue any shares of preferred stock. (S) Corporate Documents. Neither the Performance Guarantor nor any of its Subsidiaries shall amend, modify or otherwise change any of the terms or provisions in any of their respective constituent documents as in effect on the date hereof in any manner materially adverse to the ability of the Performance Guarantor or any of its Subsidiaries to perform their respective obligations under the Related Documents to which they are parties. (T) Other Indebtedness. The Performance Guarantor shall not amend, modify or supplement, or permit any Subsidiary to amend, modify or supplement (or consent to any amendment, modification or supplement of), any document, agreement or instrument evidencing the Note Agreements, the Senior Notes, the Related Notes, the National City Lease Transaction, the Fleet Lease Transaction, transfer of Transferred Receivables pursuant to this Agreement or Subordinated Indebtedness (or any replacements, substitutions or renewals thereof) or pursuant 84 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement to which any such Indebtedness is issued where such amendment, modification or supplement provides for the following or which has any of the following effects: (i) increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest; (ii) shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions; (iii) shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness; (iv) increases the rate of interest accruing on such Indebtedness; (v) provides for the payment of additional fees or increases existing fees; (vi) amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Performance Guarantor or a Subsidiary of the Performance Guarantor from taking certain actions) in a manner which is more onerous or more restrictive to the Performance Guarantor (or any Subsidiary of the Performance Guarantor) or which is otherwise materially adverse to the Performance Guarantor and/or the Lenders or, in the case of adding covenants, which places additional restrictions on the Performance Guarantor (or a Subsidiary of the Performance Guarantor) or which requires the Performance Guarantor or any such Subsidiary to comply with more restrictive covenants than the covenants set forth herein or which requires the Performance Guarantor to better its financial performance from that set forth in the financial covenants set forth herein; (vii) amends, modifies or adds any covenant in a manner which, when taken as a whole, is materially adverse to the Performance Guarantor and/or the Lenders; (viii) amends, modifies or supplements any subordination provisions thereof; or (ix) amends or modifies the limitations on transfer provided therein. (U) No Changes to Standard Warranty. The Performance Guarantor shall not, and shall cause its Subsidiaries to not, make any material changes to the Warranty Policies of the Performance Guarantor and its Subsidiaries in effect on the date of this Agreement. (V) Prohibition Against Trade-In-Value Guaranties. The Performance Guarantor shall not, and shall cause its Subsidiaries to not, make any guarantee of trade-in values of trailers beyond six months in duration. 85 Wabash National Corporation, NOAMTC, Inc., Wabash National, L.P. and WNC Receivables, LLC Receivables Sale and Contribution Agreement EX-10.30 14 c68906a1ex10-30.txt ANNEX X TO RECEIVABLES SALE & CONTRIBUTION AGMT Exhibit 10.30 ANNEX X to RECEIVABLES SALE AND CONTRIBUTION AGREEMENT and RECEIVABLES PURCHASE AND SERVICING AGREEMENT, each dated as of April 11, 2002, Definitions and Interpretation Wabash National Corporation et al. and WNC Receivables, LLC Annex X SECTION 1. Definitions and Conventions. Capitalized terms used in the Sale Agreement and the Purchase Agreement shall have (unless otherwise provided elsewhere therein) the following respective meanings: "ACCOUNTS" shall mean the Collection Account and the Lockbox Accounts, collectively. "ACCOUNTING CHANGES" shall mean, with respect to any Person, (a) changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion of the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or any successor thereto or any agency with similar functions); (b) changes in accounting principles concurred in by such Person's certified public accountants; (c) purchase accounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and the application of the accounting principles set forth in FASB 109, including the establishment of reserves pursuant thereto and any subsequent reversal (in whole or in part) of such reserves; and (d) the reversal of any reserves established as a result of purchase accounting adjustments. "ACCUMULATED FUNDING DEFICIENCY" shall mean an "accumulated funding deficiency" as defined in Section 412 of the Code and Section 302 of ERISA, whether or not waived. "ACCRUED SERVICING FEE" shall mean, as of any date of determination within a Settlement Period, the sum of the Servicing Fees calculated for each day from and including the first day of the Settlement Period through and including such date. "ACCRUED UNUSED FACILITY FEE" shall mean, as of any date of determination within a Settlement Period, the sum of the Unused Facility Fees calculated for each day from and including the first day of the Settlement Period through and including such date. "ACQUISITION" shall mean any transaction, or any series of related transactions, consummated on or after the Closing Date, by which the Parent or any of its Subsidiaries (a) acquires any going business or all or substantially all of the assets of any firm, corporation or division thereof which constitutes a going business, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage of voting power) of the outstanding partnership interests of a partnership or a majority (by percentage or voting power) of the outstanding ownership interests of a limited liability company. "ACQUISITION PURCHASE PRICE" shall mean the total consideration and other amounts payable in connection with any Acquisition, including, without limitation, any portion of the consideration payable in cash, the value of any capital stock or other Equity Interests of the Parent or any Subsidiary (other than the Seller or the Independent Member) issued as 2 Wabash National Corporation et al. and WNC Receivables, LLC Annex X consideration for such Acquisition, all Indebtedness and other monetary liabilities incurred or assumed in connection with such Acquisition and all transaction costs and expenses incurred in connection with such Acquisition. "ADDITIONAL AMOUNTS" shall mean any amounts payable to any Affected Party under Sections 2.09 or 2.10 of the Purchase Agreement. "ADDITIONAL COSTS" shall have the meaning assigned to it in Section 2.09(b) of the Purchase Agreement. "ADMINISTRATIVE AGENT" shall mean the Agent, in its capacity as the Agent for the Purchasers under the Purchase Agent. "ADVERSE CLAIM" shall mean any claim of ownership or any Lien, other than any ownership interest or Lien created under the Sale Agreement or the Purchase Agreement. "AFFECTED PARTY" shall mean each of the following Persons: the Purchasers, the Agent, the Depositary and each Affiliate of the foregoing Persons. "AFFILIATE" shall mean, with respect to any Person, (a) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five percent (5%) or more of the Equity Interests having ordinary voting power in the election of directors of such Person, (b) each Person that controls, is controlled by or is under common control with such Person, or (c) each of such Person's officers, directors, joint venturers and partners. For the purposes of this definition, "control" of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise. "AGENT" shall have the meaning set forth in the Preamble of the Purchase Agreement. "AGGREGATE INTEREST EXPENSE" shall mean, with respect to the Parent and its consolidated Subsidiaries for any fiscal period, interest expense (whether cash or non-cash) of such Person determined in accordance with GAAP for the relevant period ended on such date, including interest expense with respect to any Funded Indebtedness of such Person and interest expense for the relevant period that has been capitalized on the balance sheet of such Person. "AGGREGATE INTEREST COVERAGE RATIO" shall mean, as of any date the same is to be determined, the ratio of (i) Consolidated EBITDA as of such date for (A) in the case of calculating Consolidated EBITDA for each relevant month in the Parent's fiscal year ending on or about December 31, 2002, the cumulative period of months ending on and after April 30, 2002 and (B) in the case of calculating Consolidated EBITDA for each month thereafter, the period of four consecutive fiscal quarters then ending to (ii) Aggregate Interest Expense during the same applicable periods. 3 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "AGREEMENT ACCOUNTING PRINCIPLES" shall mean generally accepted accounting principles as in effect from time to time in the United States, applied in a manner consistent with those used in preparing the financial statements referred to in Section 4.01(f) of the Sale Agreement. "ANCILLARY SERVICES AND LEASE AGREEMENT" shall mean that certain Ancillary Services and Lease Agreement dated as of April 11, 2002 between Parent and the Seller. "APPENDICES" shall mean, with respect to any Related Document, all exhibits, schedules, annexes and other attachments thereto, or expressly identified thereto. "ASSIGNMENT AGREEMENT" shall have the meaning assigned to it in Section 14.02(a) of the Purchase Agreement. "AUTHORIZED OFFICER" shall mean, with respect to any corporation or limited liability company, as the case may be, the Chief Executive Officer, Chief Financial Officer, Treasurer, Chairman or Vice-Chairman of the Board, the President, any Vice President, the Secretary, the Treasurer, any Assistant Secretary, any Assistant Treasurer and each other officer of such corporation or limited liability company specifically authorized in resolutions of the Board of Directors or Board of Managers of such corporation or limited liability company, as the case may be, to sign agreements, instruments or other documents on behalf of such corporation in connection with the transactions contemplated by the Sale Agreement, the Purchase Agreement and the other Related Documents. "AVAILABILITY" shall mean, as of any date of determination, the amount equal to the lesser of: (a) the Available Accounts Receivables minus (i) Availability Block and minus (ii) accrued Servicing Fee for the Settlement Period in which the date of determination falls, and (b) the Maximum Purchase Limit. "AVAILABILITY BLOCK" shall mean (a) for the period from and after the date hereof through and including June 15, 2002, the greater of (i) 25% of the aggregate amount of Available Accounts Receivables (but in no event greater than $15,000,000) or (ii) $7,500,000, and (b) at all times thereafter, $15,000,000; PROVIDED, HOWEVER, that if the Availability Block is less than $15,000,000 on June 15, 2002, then the Availability Block between June 16, 2002 and June 30, 2002 shall mean the actual Availability Block in effect on June 15, 2002 plus $250,000 per diem thereafter until the earlier to occur of 4 Wabash National Corporation et al. and WNC Receivables, LLC Annex X (i) June 30, 2002 (when it shall be $15,000,000), or (ii) the day on which the sum of such actual Availability Block plus such $250,000 increments is not less than $15,000,000. "AVAILABLE ACCOUNTS RECEIVABLES" shall mean the Investment Base multiplied by the Purchase Discount Rate. "BANKRUPTCY CODE" shall mean the provisions of title 11 of the United States Code, 11 U.S.C. ss.ss. 101 et seq. "BENEFIT PLAN" shall mean a defined benefit plan as defined in Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which the Parent or any other member of the Controlled Group is, or within the immediately preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA. "BILLED AMOUNT" shall mean, with respect to any Receivable, the amount billed on the Billing Date to the Obligor thereunder. "BILLING DATE" shall mean, with respect to any Receivable, the date on which the invoice with respect thereto was generated and billed to the Obligor. "BREAKAGE COSTS" shall have the meaning assigned to it in Section 2.10 of the Purchase Agreement. "BRINGDOWN CERTIFICATE" shall have the meaning assigned to it in Section 5.02 of the Purchase Agreement. "BUSINESS DAY" shall mean any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in any of the States of Illinois, Indiana or New York. "BUYER" shall mean Seller in its capacity as the purchaser under the Sale Agreement. "BUYER INDEMNIFIED PERSON" shall have the meaning assigned to it in Section 5.01 of the Sale Agreement. "CAPITAL INVESTMENT" shall mean, as of any date of determination, the amount equal to (a) the aggregate deposits made by the Purchaser to the Collection Account pursuant to Section 2.04(b)(i) of the Purchase Agreement on or before such date, minus (b) the aggregate amounts disbursed to the Purchaser in reduction of Capital Investment pursuant to Section 6.03 of the Purchase Agreement on or before such date. 5 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "CAPITAL INVESTMENT AVAILABLE" shall mean, as of any date of determination, the amount, if any, by which Availability exceeds Capital Investment, in each case as of the end of the immediately preceding day. "CAPITALIZED LEASE" shall mean, with respect to any Person, any lease of any property (whether real, personal or mixed) by such Person as lessee that, in accordance with Agreement Accounting Principles, would be required to be classified and accounted for as a capital lease on a balance sheet of such Person. "CAPITALIZED LEASE OBLIGATION" shall mean, with respect to any Capitalized Lease of any Person, the amount of the obligation of the lessee thereunder that, in accordance with Agreement Accounting Principles, would appear on a balance sheet of such lessee in respect of such Capitalized Lease. "CASH EQUIVALENTS" shall mean (i) marketable direct obligations issued or unconditionally guaranteed by the government of the United States; (ii) domestic and Eurodollar certificates of deposit and time deposits, bankers' acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, or its branches or agencies and having capital and surplus in an aggregate amount not less than $500,000,000 (fully protected against currency fluctuations for any such deposits with a term of more than ten (10) days); (iii) shares of money market, mutual or similar funds having net assets in excess of $500,000,000 maturing or being due or payable in full not more than one hundred eighty (180) days after the Parent's acquisition thereof and the investments of which are limited to investment grade securities (i.e., securities rated at least Baa by Moody's Investors Service, Inc. or at least BBB by Standard & Poor's Ratings Group) and (iv) commercial paper of United States banks and bank holding companies and their subsidiaries and United States finance, commercial, industrial or utility companies which, at the time of acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better) by Moody's Investors Service, Inc.; provided that the maturities of such Cash Equivalents shall not exceed 365 days. "CHANGE OF CONTROL" shall mean any event, transaction or occurrence as a result of which (a) any person or group of persons (within the meaning of the Securities Exchange Act of 1934, as amended) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities Exchange Commission under the Securities Exchange Act of 1934, as amended) of 20% or more of the issued and outstanding shares of capital stock of the Parent having the right to vote for the election of directors of the respective entity under ordinary circumstances; (b) during any twelve (12) consecutive calendar months ending after the Closing Date, individuals who at the beginning of such twelve-month period constituted the board of directors of the Parent (together with any new directors whose election by such board or whose nomination for election by the shareholders of the Parent was approved by a vote of a majority of the directors still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) shall cease for any reason to constitute a majority of the board of directors of the Parent then in office; (c) the Parent shall cease to own and control, directly or indirectly, all of the economic and voting rights associated 6 Wabash National Corporation et al. and WNC Receivables, LLC Annex X with all of the outstanding Equity Interests of the other Originators, of the Independent Member or of the Seller; or (d) the Parent has sold, transferred, conveyed, assigned or otherwise disposed of all or substantially all of the assets of the Parent. "CLOSING DATE" shall mean April 12, 2002. "CODE" shall mean the Internal Revenue Code of 1986 and any regulations promulgated thereunder. "COLLATERAL AGENT" shall mean Bank One, NA, in its capacity as collateral agent for the Lenders and the Noteholders pursuant to the Intercreditor and Collateral Agency Agreement, or any successor collateral agent appointed pursuant to the terms thereof. "COLLATERAL DOCUMENTS" shall mean that certain security agreement dated as of the Closing Date, executed by the Parent and each of Parent's Domestic Subsidiaries (other than Seller and Independent Member) in existence on the Closing Date in favor of the Collateral Agent for the benefit of the Secured Parties (as such term is defined in the Intercreditor and Collateral Agency Agreement), the pledge agreements from time to time executed by Parent or its Domestic Subsidiaries in favor of the Collateral Agent for the benefit of the Secured Parties, the mortgages and deeds of trust from time to time executed by the Parent or any of the Domestic Subsidiaries, and all other security agreements, pledges, powers of attorney, assignments, financing statements, vehicle titles and all other instruments and documents delivered to the Collateral Agent pursuant to the Credit Agreement, together with all agreements, instruments and documents referred to therein or contemplated thereby. "COLLECTION ACCOUNT" shall mean Bankers Trust Company, New York, New York, ABA No. 021001033, Account No. 50232854, Account Name: GECC/CAF Depository, Reference: Wabash National CFC4337, established by the Agent pursuant to the requirements set forth in Section 6.01(b) of the Purchase Agreement. "COLLECTIONS" shall mean, with respect to any Receivable, all cash collections and other proceeds of such Receivable (including late charges, fees and interest arising thereon, and all recoveries with respect thereto that have been written off as uncollectible) BUT EXCLUDING, HOWEVER, such collections, other proceeds and any purchase price paid to the Originators by the Buyer with respect to and as consideration for the sale of the Transferred Receivables by any of the Originators to the Buyer. "COMMITMENT" shall mean, with respect to each Purchaser, its commitment to purchase its Pro Rata Share of the Purchaser Interest under the Purchase Agreement in the amount set forth opposite its name on the signature pages of the Purchase Agreement or any Assignment Agreement executed pursuant thereto. "COMMITMENT REDUCTION NOTICE" shall have the meaning assigned to it in Section 2.02(a) of the Purchase Agreement. "COMMITMENT TERMINATION NOTICE" shall have the meaning assigned to it in Section 2.02(b) of the Purchase Agreement. 7 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "CONCENTRATION DISCOUNT AMOUNT" shall mean, with respect to any Obligor, and as of any date of determination after giving effect to all Eligible Receivables to be transferred on such date, the amount by which the Outstanding Balance of Eligible Receivables owing by such Obligor exceeds the product of (a) the Outstanding Balance of all Eligible Receivables on such date, and (b) 10% or such other percentage (a "SPECIAL CONCENTRATION LIMIT") for such Obligor designated by the Agent in its reasonable credit judgment; provided that in the case of an Obligor and any Affiliate of such Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliate are one Obligor; and provided, further, that the Agent may, upon not less than five (5) Business Days' notice to Seller, cancel any Special Concentration Limit, and provided, further, that the Special Concentration Limit for the largest Obligor and its Affiliates shall be limited to 22.5% of the Outstanding Balance of all Eligible Receivables and the Special Concentration Limit for the second largest Obligor and its Affiliates shall be limited to 15.0% of the Outstanding Balance of all Eligible Receivables. "CONSOLIDATED EBITDA" shall mean, for any period, on a consolidated basis for the Parent and its Subsidiaries, the sum of the amounts for such period, without duplication of (i) Consolidated Operating Income, plus (ii) charges against income for foreign taxes and U.S. income taxes to the extent deducted in computing Consolidated Operating Income, plus (iii) Interest Expense to the extent deducted in computing Consolidated Operating Income, plus (iv) depreciation expense to the extent deducted in computing Consolidated Operating Income, plus (v) amortization expense, including, without limitation, amortization of goodwill and other intangible assets to the extent deducted in computing Consolidated Operating Income, plus (vi) other non-cash charges (in an aggregate amount not in excess of $15,000,000 during any fiscal year of the Parent in accordance with Agreement Accounting Principles to the extent deducted in computing Consolidated Operating Income, minus (x) the total interest income of the Parent and its Subsidiaries to the extent included in computing Consolidated Operating Income minus (y) the total tax benefit reported by the Parent and its Subsidiaries to the extent included in computing Consolidated Operating Income. "CONSOLIDATED EQUITY" shall mean as of the date of any determination thereof, the total stockholders' equity of the Parent and its Subsidiaries on a consolidated basis, all as determined in accordance with Agreement Accounting Principles. "CONSOLIDATED OPERATING INCOME" shall mean, with reference to any period, the net operating income (or loss) of the Parent and its Subsidiaries for such period (taken as a cumulative whole on a consolidated basis) including without limitation all restructuring expenses for such period (exclusive of "other income/expenses" as reflected in the Parent's consolidated statement of income of the Parent and its Subsidiaries for such period and related to non-operating and non-recurring income and expenses), as determined in accordance with Agreement Accounting Principles, after eliminating all offsetting debits and credits between the Performance Guarantor and its Subsidiaries and all other items required to be eliminated in the 8 Wabash National Corporation et al. and WNC Receivables, LLC Annex X course of the preparation of consolidated financial statements of the Performance Guarantor and its Subsidiaries in accordance with Agreement Accounting Principles. "CONSOLIDATED TAX ADJUSTED EQUITY" shall mean, as of the date of any termination thereof, Consolidated Equity plus the cumulative federal, state and local income tax benefit reported by Parent in accordance Agreement Accounting Principles. "CONTAMINANT" shall mean any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any constituent of any such substance or waste, and includes but is not limited to these terms as defined in Environmental Laws. "CONTINGENT OBLIGATION," as applied to any Person, shall mean any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or (d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof. In any computation of the Indebtedness or other liabilities of the Obligor under any Contingent Obligation, the Indebtedness or other obligations that are the subject of such Contingent Obligation shall be assumed to be direct obligations of such Obligor. "CONTRACT" shall mean any agreement (including any invoice) pursuant to, or under which, an Obligor shall be obligated to make payments with respect to any Receivable. "CONTRIBUTED RECEIVABLES" shall have the meaning assigned to it in Section 2.01(d) of the Sale Agreement. "CONTROLLED GROUP" shall mean the group consisting of (i) any corporation which is a member of the same controlled group of corporations (within the meaning of 9 Wabash National Corporation et al. and WNC Receivables, LLC Annex X Section 414(b) of the Code) as the Parent; (ii) a partnership or other trade or business (whether or not incorporated) which is under common control (within the meaning of Section 414(c) of the Code) with the Parent; and (iii) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Parent, any corporation described in clause (i) above or any partnership or trade or business described in clause (ii) above. "CREDIT AND COLLECTION POLICIES" shall mean the credit, collection, customer relations and service policies of the Originators in effect on the Closing Date, as the same may from time to time be amended, restated, supplemented or otherwise modified with the written consent of the Agent. "CREDIT AGREEMENT" shall mean that certain Amended and Restated Credit Agreement dated as of April 11, 2002, among the Parent, as borrower, the lenders party thereto and the Credit Facility Agent. "CREDIT FACILITY" shall mean the Credit Agreement and the other loan documents executed in connection therewith, together with such amendments, restatements, supplements or modifications thereto or any refinancings, replacements or refundings thereof as may be agreed to by the Purchaser and the Agent. "CREDIT FACILITY AGENT" shall mean Bank One, Indiana, N.A. in its capacity as administrative agent under the Credit Agreement, or its successor appointed pursuant to the Credit Agreement. "CUSTOMARY PERMITTED LIENS" shall mean: (a) Liens (other than Environmental Liens and Liens in favor of the IRS or the PBGC) with respect to the payment of taxes, assessments or governmental charges in all cases which are not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with Agreement Accounting Principles; (b) statutory Liens of landlords and Liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other similar Liens imposed by law created in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with Agreement Accounting Principles; (c) Liens (other than Environmental Liens and Liens in favor of the IRS or the PBGC) incurred or deposits made in the ordinary course of business in connection with worker's compensation, unemployment insurance or other types of social security benefits or to secure the performance of bids, tenders, sales, contracts (other than for the repayment of borrowed money), surety, appeal and performance bonds; provided that (A) all such Liens do not in the aggregate materially detract from the value of assets or property of the Parent and its Subsidiaries taken as a whole or materially impair the use thereof in the operation of their businesses taken as a whole, 10 Wabash National Corporation et al. and WNC Receivables, LLC Annex X and (B) all Liens securing bonds to stay judgments or in connection with appeals that do not secure at any time an aggregate amount exceeding $5,000,000; (d) Liens arising with respect to zoning restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other similar charges or encumbrances on the use of real property which do not interfere in any material respect with the ordinary conduct of the business of the Parent or any of its Subsidiaries; (e) Liens of attachment or judgment with respect to judgments, writs or warrants of attachment, or similar process against the Parent or any of its Subsidiaries which do not constitute a Default (as such term is defined in the Credit Agreement) under the Credit Agreement; (f) Liens arising from leases, subleases or licenses granted to others which do not interfere in any material respect with the business of the Parent or any of its Subsidiaries; and (g) any interest or title of the lessor in the property subject to any operating lease entered into by the Parent or any of its Subsidiaries in the ordinary course of business. "DAILY DEFAULT MARGIN" shall mean, for any day on which a Termination Event has occurred and is continuing, two percent (2.0%) divided by 360. "DAILY INVESTMENT BASE CERTIFICATE" shall have the meaning assigned to it in Section 2.03(a)(i) of the Purchase Agreement. "DAILY MARGIN" shall mean, for any day, the Per Annum Daily Margin on such day divided by 360. "DAILY YIELD" shall mean, for any day, the aggregate of the following for each portion of the Capital Investment: the product of (a) the portion of the Capital Investment outstanding on such day at a given Daily Yield Rate, multiplied by (b) the sum of (i) such Daily Yield Rate, plus (ii) the applicable Daily Margin on such day for such Daily Yield Rate, plus (iii) if a Termination Event has occurred and is continuing, the Daily Default Margin. "DAILY YIELD RATE" shall mean, for any day during a Settlement Period, (a) the LIBOR Rate or Index Rate, as applicable, on such day, divided by (b) 360. "DEFAULTED RECEIVABLE" shall mean any Receivable (a) with respect to which any payment, or part thereof, remains unpaid for more than 60 days from its Maturity Date or 90 days from its invoice date, (b) with respect to which the Obligor thereunder has taken any action, or suffered any event to occur, of the type described in Sections 9.01(c) or 9.01(d) of the Purchase Agreement or (c) that otherwise is determined to be uncollectible and is written off in accordance with the Credit and Collection Policies. "DEPOSITARY" shall mean Banker's Trust Company, in its capacity as the depositary for GECC. 11 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "DILUTION FACTORS" shall mean, with respect to any Receivable, any credits, rebates, freight charges, cash discounts, volume discounts, cooperative advertising expenses, royalty payments, warranties, cost of parts required to be maintained by agreement (whether express or implied), warehouse and other allowances, disputes, setoffs, chargebacks, defective returns, other returned or repossessed goods, inventory transfers, allowances for early payments and trade-ins and other similar allowances that are reflected on the books of each Originator and made or coordinated with the usual practices of the Originator thereof; provided, that any allowances or adjustments in accordance with the Credit and Collection Policies made on account of the insolvency of the Obligor thereunder or such Obligor's inability to pay shall not constitute a Dilution Factor. "DILUTION RATIO" shall mean, as of any date of determination, the ratio (expressed as a percentage) of: (a) the sum of (i) the aggregate Dilution Factors during the twelve consecutive Settlement Periods most recently ended on or prior to the date of determination (exclusive of any Dilution Factors arising from trade-ins during such twelve Settlement Periods), plus, without duplication (ii) the aggregate warranty claims paid in cash or credit during such twelve Settlement Periods, to (b) the aggregate Billed Amount of all Transferred Receivables originated during such twelve Settlement Periods net of the amount of any trade-ins in cash or credit during such twelve Settlement Periods. "DILUTION RESERVE RATIO" shall mean, on any date of determination, the sum of (a) the product of (i) two multiplied by (ii) the Dilution Ratio, plus (b) 5%. "DISQUALIFIED STOCK" shall mean any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the earlier of (a) March 30, 2004 and (b) the date of termination of the Revolving Loan Commitments (as such term is defined in the Credit Agreement). "DOL" shall mean the United States Department of Labor and any Person succeeding to the functions thereof. "DOLLARS" or "$" shall mean lawful currency of the United States of America. "DOMESTIC SUBSIDIARY" shall mean a Subsidiary organized under the laws of a jurisdiction located in the United States of America. 12 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "DYNAMIC PURCHASE DISCOUNT RATE" shall mean, as of any date of determination, the rate equal to (a) 100% minus (b) the Dilution Reserve Ratio. "ELECTION NOTICE" shall have the meaning assigned to it in Section 2.01(d) of the Sale Agreement. "ELIGIBLE RECEIVABLE" shall mean, as of any date of determination, a Transferred Receivable: (a) that is not a liability of an Obligor (i) organized under the laws of any jurisdiction outside of the United States of America and Canada (including the District of Columbia but otherwise excluding its territories and possessions), (ii) having its principal place of business outside of the United States of America (including the District of Columbia but otherwise excluding its territories and possessions), (iii) that is an Affiliate of the Seller or the applicable Originator, (iv) that is a government or a governmental subdivision or agency, or (v) that is a natural person; (b) that is only denominated and payable in Dollars in the United States of America; (c) that is not and will not be subject to any right of rescission, set-off (including, without limitation, set-offs against Receivables by reason of any customer deposit, any guaranty of value of trade-ins or any Contingent Obligation), recoupment, counterclaim, dispute or defense, whether arising out of transactions concerning the Contract therefor or otherwise, that has not been waived in writing in a manner satisfactory to the Agent or, in the case of set-offs, by execution of a waiver of offset letter in the form of Schedule ER-C to this Annex X to the Sale Agreement and the Purchase Agreement; PROVIDED, HOWEVER, that if such right of rescission, set-off, recoupment, counterclaim, dispute or defense affects only a portion of the Outstanding Balance of such Receivable, then such Receivable may be deemed an Eligible Receivable to the extent of the portion of such Outstanding Balance which is not so affected; and PROVIDED FURTHER that if such right of set-off arises from the applicable Originator's agreement to accept a trailer as a trade-in which has not yet been delivered to such Originator, such right of set-off shall not render the applicable Receivable ineligible at any time prior to May 12, 2002 so long as the aggregate Outstanding Balance of all such Receivables does not exceed $5,000,000; (d) that is not a Defaulted Receivable or an Unapproved Receivable; (e) which is not the liability of an Obligor as to which more than 50% of the aggregate Outstanding Balance of all Receivables owing from such Obligor are Defaulted Receivables; (f) that, does not represent "billed but not yet shipped," "bill and hold" or "progress-billed" goods or merchandise, unperformed services, consigned goods or "sale or return" goods and does not arise from a transaction for which any additional performance by the Originator thereof, or acceptance by or other act of the Obligor thereunder, remains to be 13 Wabash National Corporation et al. and WNC Receivables, LLC Annex X performed as a condition to any payments on such Receivable; PROVIDED, HOWEVER, for purposes of this clause, "billed but not yet shipped" and "bill and hold" shall not include Transferred Receivables arising from the sale of goods where the underlying Contract clearly states (in the opinion of the Agent) that title thereto has passed to the Obligor so long as (i) such goods have not been on the applicable Originator's premises more than 45 days after the Billing Date therefor, and (ii) the aggregate Outstanding Balance of all such Transferred Receivables which are included as Eligible Receivables does not exceed 3% of the aggregate Outstanding Balance of all Transferred Receivables (it being understood that only the amount in excess of such 3% shall be ineligible); (g) as to which the representations and warranties of Sections 4.01(x)(ii)-(iv) of the Sale Agreement are true and correct in all respects as of the Transfer Date therefor and has been transferred to the Seller pursuant to the Sale Agreement in a transaction constituting a true sale or other outright conveyance and contribution; (h) that is not the liability of an Obligor that has any claim of a material nature against or affecting the Originator thereof or the property of such Originator; (i) that is a true and correct statement of a bona fide indebtedness incurred in the amount of the Billed Amount of such Receivable for merchandise or goods sold to or services rendered and accepted by the Obligor thereunder and the Billing Date of which is not later than 10 days after merchandise or goods are sold or service rendered; (j) that was originated by the Originator in the ordinary course of business in accordance with and satisfies all applicable requirements of the Credit and Collection Policies, except to the extent that the failure to satisfy such requirements could not reasonably be expected to have a material adverse effect on the collectibility or enforceability of such Receivable; (k) that represents the genuine, legal, valid and binding obligation of the Obligor thereunder enforceable by the holder thereof in accordance with its terms; (l) that is entitled to be paid pursuant to the terms of the Contract therefor, has not been paid in full or been compromised, adjusted, extended, satisfied, subordinated, rescinded or modified, and is not subject to compromise, adjustment, extension, satisfaction, subordination, rescission, or modification by the Originator thereof (except for adjustments to the Outstanding Balance thereof to reflect Dilution Factors made in accordance with the Credit and Collection Policy); (m) with respect to which the Originator thereof has submitted all necessary documentation for payment to the Obligor thereunder and such Originator has fulfilled all of its other obligations in respect thereof; (n) the stated term of which, if any, is not greater than 30 days after its Billing Date unless the Obligor is Swift Transportation, Yellow Freight System, Schneider National and Wick, in which case, the stated term of which may be 45 days after its Billing Date; 14 Wabash National Corporation et al. and WNC Receivables, LLC Annex X (o) that was created in compliance with and otherwise does not contravene any laws, rules or regulations applicable thereto (including laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no party to the Contract therefor is in violation of any such law, rule or regulation, in each case except to the extent that such noncompliance or contravention could not reasonably be expected to have a material adverse effect on the collectibility, enforceability, value or payment terms of such Receivable; (p) with respect to which no proceedings or investigations are pending or threatened before any Governmental Authority (i) asserting the invalidity of such Receivable or the Contract therefor, (ii) asserting the bankruptcy or insolvency of the Obligor thereunder, (iii) seeking payment of such Receivable or payment and performance of such Contract or (iv) seeking any determination or ruling that might materially and adversely affect the validity or enforceability of such Receivable or such Contract; (q) with respect to which the Obligor thereunder is not: (i) bankrupt or insolvent, (ii) unable to make payment of its obligations when due, (iii) a debtor in a voluntary or involuntary bankruptcy proceeding, or (iv) the subject of a comparable receivership or insolvency proceeding; (r) that is an "account" (and is not evidenced by a promissory note or other instrument and does not constitute chattel paper) within the meaning of the UCC of the jurisdictions in which each of the Originators, the Parent and the Seller are organized; (s) that is payable solely and directly to an Originator and not to any other Person (including any shipper of the merchandise or goods that gave rise to such Receivable), except to the extent that payment thereof may be made to the Collection Account or otherwise as directed pursuant to Article VI of the Purchase Agreement; (t) with respect to which all material consents, licenses, approvals or authorizations of, or registrations with, any Governmental Authority required to be obtained, effected or given in connection with the creation of such Receivable or the Contract therefor have been duly obtained, effected or given and are in full force and effect; (u) that is created through the provision of merchandise, goods or services by the Originator thereof in the ordinary course of its business in a current transaction; (v) that complies with such other criteria and requirements as the Agent may from time to time, in its reasonable credit judgment, specify to the Seller or the Originator thereof upon not less than three Business Days' prior written notice; (w) that is not the liability of an Obligor that is receiving or, under the terms of the Credit and Collection Policies, should receive merchandise, goods or services on a "cash on delivery" basis; 15 Wabash National Corporation et al. and WNC Receivables, LLC Annex X (x) that does not constitute a rebilled amount arising from a deduction taken by an Obligor with respect to a previously arising Receivable or the balance owed on a Receivable with respect to which one or more partial payments have been made; (y) with respect to which no check, draft or other item of payment has previously been received which was returned unpaid or otherwise dishonored; (z) no portion of which constitutes sales tax or excise tax or commission; and (aa) that is not subject to any Lien, right, claim, security interest or other interest of any other Person, other than Liens in favor of the Purchaser. (bb) that is paid to a Retail Deposit Account which after May 15, 2002 is subject to a Lockbox Account Agreement. "ENVIRONMENTAL LAWS" shall mean all applicable federal, state, local and foreign laws, statutes, ordinances, codes, rules, standards and regulations, now or hereafter in effect, and in each case as amended or supplemented from time to time, and any applicable judicial or administrative interpretation thereof, including any applicable judicial or administrative order, consent decree, order or judgment, imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the environment and natural resources (including ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws include, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.ss.ss.9601 et seq.); the Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C.ss.ss.5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.ss.ss.136 et seq.); the Solid Waste Disposal Act (42 U.S.C.ss.ss.6901 et seq.); the Toxic Substance Control Act (15 U.S.C.ss.ss.2601 et seq.); the Clean Air Act (42 U.S.C.ss.ss.7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.ss.ss.1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.ss.ss.651 et seq.); the Safe Drinking Water Act (42 U.S.C.ss.ss.300(f) et seq.); and the Resource Conservation and Recovery Act of 1976, 42 U.S.C.ss.ss. 6901 et seq., each as from time to time amended, and any and all regulations promulgated thereunder, and all analogous state, local and foreign counterparts or equivalents and any transfer of ownership notification or approval statutes. "ENVIRONMENTAL LIEN" shall mean a lien in favor of any Governmental Authority for (a) any liability under Environmental Law, or (b) damages arising from, or costs incurred by such Governmental Authority in response to a release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including the movement of Contaminants through or in the air, soil, surface water or groundwater (a "RELEASE") or threatened Release of a Contaminant into the environment. "ENVIRONMENTAL PERMITS" shall mean all permits, licenses, authorizations, certificates, approvals, registrations or other written documents required by any Governmental Authority under any Environmental Laws. 16 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "EQUIPMENT" shall mean all "equipment," as such term is defined in the Uniform Commercial Code, as amended, now owned or hereafter acquired by any member of the Parent Group, wherever located and, in any event, including all such member's machinery and equipment, including processing equipment, conveyors, machine tools, data processing and computer equipment, including embedded software and peripheral equipment and all engineering, processing and manufacturing equipment, office machinery, furniture, materials handling equipment, tools, attachments, accessories, automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other equipment of every kind and nature, trade fixtures and fixtures not forming a part of real property, together with all additions and accessions thereto, replacements therefor, all parts therefor, all substitutes for any of the foregoing, fuel therefor, and all manuals, drawings, instructions, warranties and rights with respect thereto, and all products and proceeds thereof and condemnation awards and insurance proceeds with respect thereto. "EQUITY INTEREST" shall mean all shares, options, warrants, member interests, general or limited partnership interests or other equivalents (regardless of how designated) of or in a corporation, limited liability company, partnership or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act). "EQUITY HOLDERS" shall mean, with respect to any Person, each holder of Equity Interests of such Person. "ERISA" shall mean the Employee Retirement Income Security Act of 1974 and any regulations promulgated thereunder. "ERISA AFFILIATE" shall mean, with respect to any Originator, any trade or business (whether or not incorporated) that, together with such Originator, are treated as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of the Code. "ERISA EVENT" shall mean, with respect to any Originator or any ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a Title IV Plan; (b) the withdrawal of any Originator or ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a "substantial employer," as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any Originator or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to terminate a Title IV Plan or the treatment of a plan amendment as a termination under Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Originator or ERISA Affiliate to make when due required contributions to a Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days; (g) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the termination of a Multiemployer Plan under Section 17 Wabash National Corporation et al. and WNC Receivables, LLC Annex X 4041A of ERISA or the reorganization or insolvency of a Multiemployer Plan under Section 4241 of ERISA; (i) the loss of a Qualified Plan's qualification or tax exempt status; or (j) the termination of a Plan described in Section 4064 of ERISA. "ESOP" shall mean a Plan that is intended to satisfy the requirements of Section 4975(e)(7) of the Code. "EVENT OF SERVICER TERMINATION" shall have the meaning assigned to it in Section 9.02 of the Purchase Agreement. "EXTENDED TERM RESERVE" shall mean a reserve established, dollar for dollar, against the amount by which (a) the aggregate Outstanding Balance of Transferred Receivables having stated terms of 45 days after the Billing Date of one or more of Swift Transportation, Yellow Freight System, Schneider National and Wick as Obligors thereunder exceeds (b) 40% of the aggregate Outstanding Balance of all Transferred Receivables. "FACILITY TERMINATION DATE" shall mean the earliest of (a) the date so designated pursuant to Section 9.01 of the Purchase Agreement, (b) the Final Purchase Date, and (c) the date of termination of the Maximum Purchase Limit specified in a notice from Seller to the Purchaser delivered pursuant to and in accordance with Section 2.02(b) of the Purchase Agreement. "FAIR LABOR STANDARDS ACT" shall mean the provisions of the Fair Labor Standards Act, 29 U.S.C. ss.ss. 201 et seq. "FEDERAL FUNDS RATE" shall mean, for any day, a floating rate equal to the weighted average of the rates on overnight federal funds transactions among members of the Federal Reserve System, as determined by the Agent. "FEDERAL RESERVE BOARD" shall mean the Board of Governors of the Federal Reserve System. "FEE LETTER" shall mean that certain letter agreement dated April 11, 2002, among the Seller, the Agent and GECC. "FINAL PURCHASE DATE" shall mean April 15, 2004. "FINANCE CONTRACT" shall mean any chattel paper originated by the Parent or any of its Subsidiaries pursuant to a bona fide sale in the ordinary course of business with a customer of any Subsidiary. "FINANCIAL STATEMENTS" shall mean, consolidated and consolidating income statements, statements of cash flows and balance sheets of the Parent delivered in accordance with Section of the Sale Agreement and of the Seller delivered in accordance with Section 5.02 of the Purchase Agreement. 18 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "FLEET LEASE TRANSACTION" shall mean (i) the lease transaction among Wabash Statutory Trust - 2000 as lessor and Apex Trailer Leasing & Rentals, L.P. as lessee under that certain Amended and Restated Equipment Lease, dated as of March 30, 2001, as amended, restated, supplemented or otherwise modified from time to time and all other investments and documents related thereto and (ii) the lease transaction among Fleet Capital Corporation (as successor to BancBoston Leasing, Inc.) as lessor and Apex Trailer Leasing & Rentals, L.P. as lessee under that certain Master Lease Agreement dated as of September 5, 1997, as amended, restated, supplemented or otherwise modified from time to time and all other instruments and documents related thereto. "FOREIGN SUBSIDIARY" shall mean a Subsidiary which is not a Domestic Subsidiary. "FRUEHAUF PREFERRED STOCK" shall mean the Series A 6% Cumulative Convertible Exchangeable Preferred Stock of the Parent. "FUNDED INDEBTEDNESS" shall mean, with respect to any Person, without duplication, all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or similar evidences of Indebtedness and that by its terms matures more than one year from, or is directly or indirectly renewable or extendible at such Person's option under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year from the date of creation thereof, and specifically including Capitalized Lease Obligations, current maturities of long-term debt, revolving credit and short-term debt extendible beyond one year at the option of the debtor. "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect on the Closing Date. "GECC" shall mean General Electric Capital Corporation, a Delaware corporation, and its successors and assigns. "GENERAL TRIAL BALANCE" shall mean, with respect to any Originator and as of any date of determination, such Originator's accounts receivable trial balance (whether in the form of a computer printout, magnetic tape or diskette) as of such date, listing Obligors and the Receivables owing by such Obligors as of such date together with the aged Outstanding Balances of such Receivables, in form and substance satisfactory to the Seller and the Purchasers. "GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "GUARANTEED INDEBTEDNESS" shall mean, as to any Person, any obligation of such Person guaranteeing any indebtedness, lease, dividend, or other obligation ("primary obligation") of any other Person (the "primary obligor") in any manner, including any obligation or 19 Wabash National Corporation et al. and WNC Receivables, LLC Annex X arrangement of such Person to (a) purchase or repurchase any such primary obligation, (b) advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the primary obligor, (c) purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (d) indemnify the owner of such primary obligation against loss in respect thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed to be the amount equal to the lesser at such time of (x) the stated or determinable amount of the primary obligation in respect of which such Guaranteed Indebtedness is incurred and (y) the maximum amount for which such Person may be liable pursuant to the terms of the instrument embodying such Guaranteed Indebtedness; or, if not stated or determinable, the maximum reasonably anticipated liability (assuming full performance) in respect thereof. "GUARANTEED OBLIGATIONS" shall mean, collectively: (a) all covenants, agreements, terms, conditions and indemnities to be performed and observed by either or both of the Originators under and pursuant to the Sale Agreement and each other document executed and delivered by either or both of them pursuant to the Sale Agreement, including, without limitation, the due and punctual payment of all sums which are or may become due and owing by either of the Originators under the Sale Agreement, whether for fees, expenses (including counsel fees), indemnified amounts or otherwise, whether upon any termination or for any other reason and (b) all obligations of Wabash Financing, LLC, as Servicer under the Purchase Agreement, or which arise pursuant to the Purchase Agreement as a result of its termination as Servicer. "HEDGING OBLIGATIONS" of a Person shall mean any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, commodity prices, exchange rates or forward rates applicable to such party's assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any of the foregoing. "INCIPIENT SERVICER TERMINATION EVENT" shall mean any event that, with the passage of time or notice or both, would, unless cured or waived, become an Event of Servicer Termination. "INCIPIENT TERMINATION EVENT" shall mean any event that, with the passage of time or notice or both, would, unless cured or waived, become a Termination Event. "INDEBTEDNESS" of any Person shall mean, without duplication, 20 Wabash National Corporation et al. and WNC Receivables, LLC Annex X (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services payment for which is deferred 90 days or more, but excluding obligations to trade creditors incurred in the ordinary course of business that are not overdue by more than 90 days unless being contested in good faith, (b) all reimbursement and other obligations with respect to letters of credit, bankers' acceptances and surety bonds, whether or not matured, (c) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (d) all Capitalized Lease Obligations, (e) all indebtedness referred to in clauses (a) through (d) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property or other assets (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness, (f) all Off-Balance Sheet Liabilities of such Person, (g) the aggregate Capital Investment, and (h) all Contingent Obligation of such Person with respect to liabilities of a type described in any of clauses (a) through (g) hereof. Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (h) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under Agreement Accounting Principles. In no event shall Indebtedness include Unfunded Liabilities of any Plan of the Parent and its Subsidiaries, which amount, as of December 31, 2001, was zero. "INDEMNIFIED AMOUNTS" shall mean, with respect to any Person, any and all suits, actions, proceedings, claims, damages, losses, liabilities and expenses (including attorneys' fees and disbursements and other costs of investigation or defense, including those incurred upon any appeal). "INDEMNIFIED PERSON" shall have the meaning assigned to it in Section 12.01(a) of the Purchase Agreement. "INDEMNIFIED TAXES" shall have the meaning assigned to it in Section 2.08(b) of the Purchase Agreement. 21 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "INDEPENDENT MEMBER" shall mean WNC Receivables Management Corp., a Delaware corporation. "INDEX RATE" shall mean, for any day, a floating rate equal to the higher of (i) the rate publicly quoted from time to time by The Wall Street Journal as the "base rate on corporate loans at large U.S. money center commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of the type described, the highest per annum rate of interest published by the Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled "Selected Interest Rates" as the Bank prime loan rate or its equivalent), and (ii) the Federal Funds Rate plus fifty (50) basis points per annum. Each change in any interest rate provided for in the Purchase Agreement based upon the Index Rate shall take effect at the time of such change in the Index Rate. "INTENDED CHARACTERIZATION" shall mean, for income tax purposes, the characterization of the acquisition by the Purchasers of Purchaser Interests under the Purchase Agreement as a loan or loans by the Purchasers to the Seller secured by the Receivables and the Collections. "INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT" shall mean that certain Intercreditor and Collateral Agency Agreement dated as of the Closing Date by and among the Lenders, the Noteholders, the Collateral Agent and the Credit Facility Agent. "INTERCREDITOR AGREEMENT" shall mean that certain Intercreditor Agreement dated as of the Closing Date, among the Agent, the Collateral Agent, Originators and Seller. "INVESTMENT" shall mean, with respect to any Person, (i) any purchase or other acquisition by that Person of any Indebtedness, Equity Interest or other securities, or of a beneficial interest in any Indebtedness, Equity Interest or other securities, issued by any other Person, (ii) any purchase by that Person of all or substantially all of the assets of a business conducted by another Person, and (iii) any loan, advance (other than deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts receivable, advances to employees and similar items made or incurred in the ordinary course of business) or capital contribution by that Person to any other Person, including all Indebtedness to such Person arising from a sale of property by such Person other than in the ordinary course of its business. "INVESTMENT BASE" shall mean, as of any date of determination, the amount equal to the Outstanding Balance of Eligible Receivables minus the Reserves with respect thereto, in each case as disclosed in the most recently submitted Investment Base Certificate or as otherwise determined by the Purchaser or the Agent based on Seller Collateral information available to any of them, including any information obtained from any audit or from any other reports with respect to the Seller Collateral, which determination shall be final, binding and conclusive on all parties to the Purchase Agreement (absent manifest error). "INVESTMENT BASE CERTIFICATE" shall mean a Daily Investment Base Certificate or a Weekly Investment Base Certificate, as the case may be. 22 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "INVESTMENT COMPANY ACT" shall mean the provisions of the Investment Company Act of 1940, 15 U.S.C.ss.ss. 80a et seq., and any regulations promulgated thereunder. "INVESTMENT REPORTS" shall mean, collectively, the Investment Base Certificates, the Monthly Reports and each of the reports with respect to the Transferred Receivables and the Seller Collateral referred to in Annex 7.08 of the Purchase Agreement. "IRS" shall mean the Internal Revenue Service. "LENDERS" shall mean the lenders from time to time party to the Credit Agreement. "LIBOR BUSINESS DAY" shall mean a Business Day on which banks in the City of London are generally open for interbank or foreign exchange transactions. "LIBOR PERIOD" shall mean, with respect to any LIBOR Tranche, each period commencing on a LIBOR Business Day selected by Seller pursuant to the Purchase Agreement and ending one, two or three months thereafter, as selected by Seller's irrevocable notice to Agent as set forth in the Purchase Agreement; provided that the foregoing provision relating to LIBOR Periods is subject to the following: (a) if any LIBOR Period would otherwise end on a day that is not a LIBOR Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR Business Day unless the result of such extension would be to carry such LIBOR Period into another calendar month in which event such LIBOR Period shall end on the immediately preceding LIBOR Business Day; (b) any LIBOR Period that would otherwise extend beyond the Facility Termination Date shall end 2 LIBOR Business Days prior to such date; (c) any LIBOR Period that begins on the last LIBOR Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such LIBOR Period) shall end on the last LIBOR Business Day of a calendar month; (d) Seller shall select LIBOR Periods so as not to require a payment or prepayment of any LIBOR Tranche during a LIBOR Period for such LIBOR Tranche; and (e) Seller shall select LIBOR Periods so that there shall be no more than 5 separate LIBOR Tranches in existence at any one time. "LIBOR RATE" shall mean for each LIBOR Period, a rate of interest determined by the Agent equal to: 23 Wabash National Corporation et al. and WNC Receivables, LLC Annex X (a) the offered rate for deposits in United States Dollars for the applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m. (London time), on the second full LIBOR Business Day next preceding the first day of such LIBOR Period (unless such date is not a Business Day, in which event the next succeeding Business Day will be used); divided by (b) a number equal to 1.0 minus the aggregate (but without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect on the day that is 2 LIBOR Business Days prior to the beginning of such LIBOR Period (including basic, supplemental, marginal and emergency reserves under any regulations of the Federal Reserve Board or other Governmental Authority having jurisdiction with respect thereto, as now and from time to time in effect) for Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board that are required to be maintained by a member bank of the Federal Reserve System. If such interest rates shall cease to be available from Telerate News Service, the LIBOR Rate shall be determined from such financial reporting service or other information as shall be mutually acceptable to Agent and Seller. "LIBOR TRANCHE" shall mean each portion of the Capital Investment (if any) that is accruing Daily Yield at a LIBOR Rate for a LIBOR Period. "LIEN" shall mean any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction). "LITIGATION" shall mean, with respect to any Person, any action, claim, lawsuit, demand, investigation or proceeding pending or threatened against such Person before any court, board, commission, agency or instrumentality of any federal, state, local or foreign government or of any agency or subdivision thereof or before any arbitrator or panel of arbitrators. "LOAN DOCUMENT" shall mean the Intercreditor and Collateral Agency Agreement, the Note Agreements, the Senior Notes, the Credit Agreement, the NatCity Lease and all notes, security agreements, guaranties, pledge agreements, mortgages and related collateral documents executed pursuant to any of the foregoing. "LOCKBOX" shall have the meaning assigned to it in Section 6.01(a)(ii) of the Purchase Agreement. "LOCKBOX ACCOUNT" shall mean each lockbox account or blocked account (including blocked accounts consisting of deposit accounts and concentration accounts) listed on 24 Wabash National Corporation et al. and WNC Receivables, LLC Annex X Scheule 4.01(r) to the Purchase Agreement as amended from time to time established in the name of the Seller and held at a Lockbox Account Bank, together with any other segregated deposit account established by the Seller for the deposit of Collections pursuant to and in accordance with Section 6.01(a) of the Purchase Agreement. "LOCKBOX ACCOUNT AGREEMENT" shall mean any agreement among one or both Originators, the Seller, the Agent, and a Lockbox Account Bank with respect to a Lockbox and/or Lockbox Account that provides, among other things, that (a) all items of payment deposited in such Lockbox and Lockbox Account are held by such Lockbox Account Bank as custodian for GECC, as Agent, (b) the Lockbox Account Bank has no rights of setoff or recoupment or any other claim against such Lockbox Account other than for payment of its service fees and other charges directly related to the administration of such Account and for returned checks or other items of payment and (c) such Lockbox Account Bank agrees to forward all Collections received in such Lockbox Account to the Collection Account within one Business Day of receipt of available funds, and is otherwise in form and substance acceptable to the Agent. "LOCKBOX ACCOUNT BANK" shall mean any bank or other financial institution at which one or more Lockbox Accounts are maintained. "MARGIN STOCK" shall have the meaning set forth in Regulation U promulgated by the Board of Governors of the Federal Reserve System, as from time to time in effect. "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the business, assets, liabilities, operations, prospects or financial or other condition of (i) any Originator or the Originators considered as a whole, (ii) the Seller or (iii) the Servicer and its Subsidiaries considered as a whole, (b) the ability of any Originator, the Seller or the Servicer to perform any of its obligations under the Related Documents in accordance with the terms thereof, (c) the validity or enforceability of any Related Document or the rights and remedies of the Seller, the Purchaser or the Agent under any Related Document, (d) the federal income tax attributes of the sale, contribution or pledge of the Transferred Receivables pursuant to any Related Document or (e) the Transferred Receivables, the Contracts therefor, the Originator Collateral, the Seller Collateral or the ownership interests or Liens of the Seller or the Purchaser or the Agent thereon or the priority of such interests or Liens. "MATURITY DATE" shall mean, with respect to any Receivable, the due date for payment therefor specified in the Contract therefor, or, if no date is so specified, 30 days from the Billing Date. "MAXIMUM PURCHASE LIMIT" shall mean (i) $110,000,000 as such amount may be reduced in accordance with Section 2.02(a) of the Purchase Agreement, minus (ii) Availability Block. "MONTHLY REPORT" shall mean a report in substantially the form of Exhibit 2.03(a)(iii) to the Purchase Agreement. 25 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA with respect to which any Originator or ERISA Affiliate is making, is obligated to make, or has made or been obligated to make, contributions on behalf of participants who are or were employed by any of them. "NATCITY LEASE" shall mean that certain Master Equipment Lease Agreement No. 07008, dated as of December 30, 1996, between Apex Trailer Leasing & Rentals, L.P., a Delaware limited partnership (a successor to Wabash National Finance Corporation, an Indiana corporation) and National City Leasing Corporation. "NATCITY LEASE OBLIGATION" shall have the meaning assigned to it in the Intercreditor and Collateral Agency Agreement. "NATIONAL CITY LEASE TRANSACTION" shall mean the lease transaction among National City Leasing Corporation as lessor and Apex Trailer Leasing & Rentals, L.P. (as successor to Wabash National Finance Corporation) as lessee under that certain Master Equipment Lease Agreement No. 07008 as of December 30, 1996, as amended, restated, supplemented or otherwise modified from time to time. "NET WORTH PERCENTAGE" shall mean a fraction (expressed as a percentage) (a) the numerator of which equals the excess of assets over liabilities, in each case determined in accordance with GAAP consistently applied and (b) the denominator of which equals the Outstanding Balance of Transferred Receivables. "NOTE AGREEMENTS" shall mean, in the case of the holders of the Parent's Series A Senior Notes, those certain separate and several Amended and Restated Note Purchase Agreements, each dated as of the Closing Date, between the Parent and such holders, in the case of the holders of the Parent's Series C through H Senior Notes, those certain separate and several Amended and Restated Note Purchase Agreement, dated as of the Closing Date, between the Parent and such holders, and in the case of the holders of the Parent's Series I Senior Notes, that certain Amended and Restated Note Purchase Agreement, dated as of the Closing Date, between the Parent and such holders, in each case as amended from time to time. "NOTEHOLDER" shall mean each holder of a Senior Note pursuant to a Note Agreement, and its successors and assigns. "OBLIGATIONS" shall mean all loans, advances, debts, liabilities, obligations, covenants and duties owing by the Parent to the Credit Facility Agent, any Lender, any Affiliate of any of the foregoing or any Indemnitee (as such term is defined in the Credit Agreement), of any kind or nature, present or future, arising under the Credit Agreement, the Senior Notes, or any other Loan Document, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term includes, without limitation, all interest, 26 Wabash National Corporation et al. and WNC Receivables, LLC Annex X charges, expenses, fees, attorneys' fees and disbursements, paralegals' fees (in each case whether or not allowed), and any other sum chargeable to the Parent under the Credit Agreement or any other Loan Document. "OBLIGOR" shall mean, with respect to any Receivable, the Person primarily obligated to make payments in respect thereof. "OFF-BALANCE SHEET LIABILITIES" of a Person shall mean (a) any repurchase obligation or liability of such Person or any of its Subsidiaries with respect to accounts or notes receivable sold by such Person or any of its Subsidiaries, (b) any liability of such Person or any of its Subsidiaries under any sale and leaseback transactions which do not create a liability on the consolidated balance sheet of such Person, (c) any liability of such person or any of its Subsidiaries under any so-called "synthetic" lease transaction, or (d) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheets of such Person and its Subsidiaries. "OFFICER'S CERTIFICATE" shall mean, with respect to any Person, a certificate signed by an Authorized Officer of such Person. "ORGANIC DOCUMENT" shall mean, relative to any Person, its certificate of incorporation, its by-laws, its partnership agreement, its memorandum and articles of association, its certificate of formation or articles of organization and limited liability company agreement and/or operating agreement, share designations or similar organization documents and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized Equity Interest. "ORIGINATOR" shall mean each of NOAMTC, Inc., a Delaware corporation, and Wabash National, L.P., a Delaware limited partnership, and its successors. "ORIGINATOR COLLATERAL" shall have the meaning assigned to it in Section 7.01 of the Sale Agreement. "OUTSTANDING BALANCE" shall mean, with respect to any Receivable and as of any date of determination, the amount (which amount shall not be less than zero) equal to (a) the Billed Amount thereof, minus (b) all Collections received from the Obligor thereunder, minus (c) all discounts to or any other modifications that reduce such Billed Amount; provided, that if the Agent or the Servicer makes a determination that all payments by such Obligor with respect to such Billed Amount have been made, the Outstanding Balance shall be zero. "PARENT" shall mean Wabash National Corporation, a Delaware corporation. "PARENT GROUP" shall mean the Parent and each of its Affiliates (other than the Seller). 27 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "PBGC" shall mean the Pension Benefit Guaranty Corporation. "PENSION PLAN" shall mean a Plan described in Section 3(2) of ERISA. "PER ANNUM DAILY MARGIN" shall mean: (a) at all times prior to the date on which the Parent files its 10-K for the year ended December 31, 2002: (i) with respect to Capital Investment (A) at the LIBOR Rate, 3.50%, and (B) at the Index Rate, 2.00%, and (ii) with respect to Unused Facility Fees. 0.50%; and (b) at all times from and after the date on which the Parent files its 10-K for the year ended December 31, 2002, the applicable per annum percentage set forth opposite the then applicable range of the Aggregate Interest Coverage Ratio:
- -------------------------------------------------------------------------------- PER ANNUM DAILY MARGIN ------------------------------------------------------- AGGREGATE INTEREST INVESTMENT AT INVESTMENT AT UNUSED COVERAGE RATIO THE LIBOR RATE THE INDEX RATE FACILITY FEE - -------------------------------------------------------------------------------- > 2.0 : 1.0 3.25% 1.75% 0.375% - -------------------------------------------------------------------------------- < OR = 2.0 : 1.0 BUT > 1.5 : 1.0 3.50% 2.00% 0.50% - -------------------------------------------------------------------------------- < OR = 1.5 : 1.0 3.75% 2.25% 0.625% - --------------------------------------------------------------------------------
"PERFORMANCE GUARANTOR" shall mean the Parent in its capacity as guarantor under the Performance Undertaking. "PERFORMANCE UNDERTAKING" shall mean the provisions of Article VIII of the Sale Agreement. "PERMITTED ACQUISITION" shall mean any Acquisition made by the Parent or any of its Subsidiaries provided that: (a) as of the date of such Acquisition, no Default (as defined in the Credit Agreement) or Unmatured Default shall have occurred and be continuing or would result from such Acquisition or from the incurrence of any Indebtedness in connection with such Acquisition; (b) prior to the date of such Acquisition, such Acquisition shall have been approved 28 Wabash National Corporation et al. and WNC Receivables, LLC Annex X by the board of directors and, if applicable, the shareholders of the Person whose stock or assets are being acquired in connection with such Acquisition and no claim or challenge has been asserted or threatened by any shareholder or director of such Person which could reasonably be expected to have a material adverse effect on such Acquisition or a Material Adverse Effect (as defined in the Credit Agreement); (c) as of the date of any such Acquisition, all approvals required in connection with such Acquisition shall have been obtained; (d) the Acquisition Purchase Price paid or payable to the Parent and its Subsidiaries for all Permitted Acquisitions during any fiscal year of the Parent shall not exceed $2,500,000. Anything in the foregoing to the contrary, in no event shall Permitted Acquisition include any Acquisition by Seller or by Independent Member. "PERMITTED EXISTING CONTINGENT OBLIGATIONS" shall have the meaning assigned to it in Schedule 2 of this Annex X to the Sale Agreement and the Purchase Agreement. "PERMITTED EXISTING INDEBTEDNESS" shall have the meaning assigned to it in Schedule 2 of this Annex X to the Sale Agreement and the Purchase Agreement. "PERMITTED EXISTING INVESTMENTS" shall have the meaning assigned to it in Schedule 2 of this Annex X to the Sale Agreement and the Purchase Agreement. "PERMITTED EXISTING LIENS" shall have the meaning assigned to it in Schedule 2 of this Annex X to the Sale Agreement and the Purchase Agreement. "PERMITTED INVESTMENTS" shall mean any of the following: (a) obligations of, or guaranteed as to the full and timely payment of principal and interest by, the federal government of the United States or obligations of any agency or instrumentality thereof if such obligations are backed by the full faith and credit of the federal government of the United States, in each case with maturities of not more than 90 days from the date acquired; (b) repurchase agreements on obligations of the type specified in clause (a) of this definition; (c) federal funds, certificates of deposit, time deposits and bankers' acceptances of any depository institution or trust company incorporated under the federal laws of the United States or any state, in each case with original maturities of not more than 90 days or, in the case of bankers' acceptances, original maturities of not more than 365 days; (d) commercial paper of any corporation incorporated under the laws of the United States of America or any state thereof with original maturities of not more than 30 days; (e) securities of money market funds. "PERMITTED ORIGINATOR ENCUMBRANCES" shall mean the following encumbrances: (a) Liens for taxes or assessments or other governmental charges not yet due and 29 Wabash National Corporation et al. and WNC Receivables, LLC Annex X payable (other than with respect to environmental matters); (b) pledges or deposits securing obligations under workmen's compensation, unemployment insurance, social security or public liability laws or similar legislation (excluding Liens under ERISA); (c) pledges or deposits securing bids, tenders, contracts (other than contracts for the payment of money) or leases to which any Originator, the Seller or the Servicer is a party as lessee made in the ordinary course of business; (d) deposits securing statutory obligations of any Originator, the Seller or the Servicer; (e) inchoate and unperfected workers', mechanics', suppliers' or similar Liens arising in the ordinary course of business; (f) carriers', warehousemen's or other similar possessory Liens arising in the ordinary course of business and securing liabilities in an outstanding aggregate amount not in excess of $500,000 at any one time; (g) deposits securing, or in lieu of, surety, appeal or customs bonds in proceedings to which any Originator, the Seller or the Servicer is a party; (h) any attachment or judgment Lien not constituting a Termination Event under Section 9.01(f) of the Purchase Agreement; (i) Liens existing on the Closing Date and listed on Schedule 4.04(b) of the Sale Agreement; (j) Liens expressly permitted under Section 4.04(b) of the Sale Agreement (except that such Liens shall not be deemed "Permitted Originator Encumbrances" until such Liens have satisfied the criteria set forth in such section), (l) Liens securing Indebtedness which is incurred to extend, refinance, renew, replace, defease or refund Indebtedness which has been secured by a Lien permitted under the Sale Agreement and is permitted to be extended, refinanced, renewed, replaced, defeased or refunded under the Sale Agreement but only to the extent that such Lien is limited to the same collateral as that covered by the prior Lien, (m) Liens securing the obligations arising under the Credit Facility and Senior Notes so long as such Liens do not encumber Originator Collateral or Seller Collateral, and (n) presently existing or hereinafter created Liens in favor of the Buyer, the Seller, the Purchaser or the Agent. "PERMITTED SELLER ENCUMBRANCES" shall mean the following encumbrances: (a) Liens for taxes or assessments or other governmental charges not yet due and payable (other than with respect to environmental matters); (b) deposits securing statutory obligations of the Seller; and (c) presently existing or hereinafter created Liens in favor of the Purchaser or the Agent. "PERMITTED INDEPENDENT MEMBER ENCUMBRANCES" shall mean the following encumbrances: (a) Liens for taxes or assessments or other governmental charges not yet due and payable (other than with respect to environmental matters); (b) deposits securing statutory obligations of the Independent Member; and (c) presently existing or hereinafter created Liens in favor of the Collateral Agent on the Independent Member's Equity Interest in the Seller. "PERSON" shall mean any individual, sole proprietorship, partnership, joint venture, unincorporated organization, trust, association, corporation (including a business trust), limited liability company, institution, public benefit corporation, joint stock company, Governmental Authority or any other entity of whatever nature. "PIK NOTES" shall mean those certain promissory notes of the Parent payable to the order of each Lender evidencing the aggregate deferral fees payable by the Parent to such Lender. 30 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "PLAN" shall mean, at any time, an "employee benefit plan," as defined in Section 3(3) of ERISA, that any Originator or ERISA Affiliate maintains, contributes to or has an obligation to contribute to on behalf of participants who are or were employed by any Originator or ERISA Affiliate. "PROJECTIONS" shall mean Parent Group's forecasted consolidated and consolidating: (a) balance sheets; (b) income statements; (c) cash flow statements; and (d) capitalization statements, all prepared on a Subsidiary-by-Subsidiary or division-by-division basis, if applicable, and otherwise consistent with the historical Financial Statements of Parent, together with appropriate supporting details and a statement of underlying assumptions. "PROPERTY" of a Person shall mean any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. "PRO RATA SHARE" shall mean, with respect to each Purchaser, the ratio which its Commitment bears to the aggregate of all Purchaser's Commitments (or, if no Commitments are outstanding, the ratio which its Capital Investment bears to the aggregate Capital Investment). "PURCHASE" shall have the meaning assigned to it in Section 2.01 of the Purchase Agreement. "PURCHASE AGREEMENT" shall mean that certain Receivables Purchase and Servicing Agreement dated as of April 11, 2002, among the Seller, the Independent Member, the Purchasers, the Servicer and the Agent. "PURCHASE ASSIGNMENT" shall mean that certain Purchase Assignment dated as of the Closing Date by and between the Seller and the Applicable Purchaser in the form attached as Exhibit 2.04(a) to the Purchase Agreement. "PURCHASE DATE" shall mean each day on which a Purchase is made. "PURCHASE DISCOUNT RATE" shall mean, as of any date of determination, a rate equal to the lesser of (a) the Dynamic Purchase Discount Rate and (b) the Purchase Discount Rate Cap. "PURCHASE DISCOUNT RATE CAP" shall mean a rate equal to eighty-five percent (85%); provided that the Purchase Discount Rate Cap may be changed at any time as determined by the Agent in its reasonable credit judgment exercised in good faith. "PURCHASE EXCESS" shall mean, as of any date of determination, the extent to which the Capital Investment exceeds the Availability, in each case as disclosed in the most recently submitted Investment Base Certificate or as otherwise determined by the Purchaser or the Agent based on Seller Collateral information available to any of them, including any information obtained from any audit or from any other reports with respect to the Seller 31 Wabash National Corporation et al. and WNC Receivables, LLC Annex X Collateral, which determination shall be final, binding and conclusive on all parties to the Purchase Agreement (absent manifest error). "PURCHASE REQUEST" shall have the meaning assigned to it in Section 2.03(b) of the Purchase Agreement. "PURCHASER" shall mean GECC, its successors and assigns. "PURCHASER INTEREST" shall mean a 100% ownership interest of the Purchaser in the Transferred Receivables which are purchased under the Purchase Agreement. "QUALIFIED PLAN" shall mean a Pension Plan that is intended to be tax-qualified under Section 401(a) of the Code. "RATIOS" shall mean, collectively, the Dilution Ratio and the Dilution Reserve Ratio. "RECEIVABLE" shall mean, with respect to any Obligor: (a) indebtedness of such Obligor (whether constituting an account, general intangible or otherwise) arising from the sale of merchandise, goods or services by an Originator to such Obligor, including the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto, but specifically excluding any chattel paper arising from the lease of any such merchandise or goods or the financing of the purchase price of, any such merchandise, goods or services; (b) all Liens and property subject thereto from time to time securing or purporting to secure any such indebtedness of such Obligor (including, without limitation, all Returned Goods); (c) all guaranties, indemnities and warranties, insurance policies, financing statements and other agreements or arrangements of whatever character from time to time supporting or securing payment of any such indebtedness; (d) all Collections with respect to any of the foregoing; (e) all Records with respect to any of the foregoing; and (f) all proceeds with respect to the foregoing. "RECORDS" shall mean all Contracts and other documents, books, records and other information (including computer programs, tapes, disks, data processing software and related property and rights) prepared and maintained by any Originator, the Servicer, any Sub-Servicer or the Seller with respect to the Receivables and the Obligors thereunder, the Originator Collateral and the Seller Collateral. 32 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "REGULATORY CHANGE" shall mean any change after the Closing Date in any federal, state or foreign law or regulation (including Regulation D of the Federal Reserve Board) or the adoption or making after such date of any interpretation, directive or request under any federal, state or foreign law or regulation (whether or not having the force of law) by any Governmental Authority charged with the interpretation or administration thereof that, in each case, is applicable to any Affected Party. "REJECTED AMOUNT" shall have the meaning assigned to it in Section 4.05 of the Sale Agreement. "RELATED DOCUMENTS" shall mean each Lockbox Account Agreement, the Fee Letter, the Intercreditor Agreement, the Sale Agreement (including, without limitation, the Performance Undertaking contained therein), the Purchase Agreement, the Purchase Assignment and all other agreements, instruments, documents and certificates identified in the Schedule of Documents and including all other pledges, powers of attorney, consents, assignments, contracts, notices, and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Person, or any employee of any Person, and delivered in connection with either Sale Agreement, the Purchase Agreement or the transactions contemplated thereby. Any reference in either Sale Agreement, the Purchase Agreement or any other Related Document to a Related Document shall include all Appendices thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to such Related Document as the same may be in effect at any and all times such reference becomes operative. "REPAYMENT NOTICE" shall have the meaning assigned to it in Section 2.03(c) of the Purchase Agreement. "RELATED NOTES" shall mean the PIK Notes under and as defined in the Note Agreements. "REQUIRED PURCHASERS" shall mean those Purchasers whose Commitments represent at least 66-2/3% of the aggregate of all Commitments (or if no Commitments are outstanding, those Purchasers whose Invested Capital represents 66-2/3% of the aggregate Invested Capital of all Purchasers). "RESERVES" shall mean the sum of (a) the aggregate Concentration Discount Amount for all Obligors of Transferred Receivables plus (b) the Extended Term Reserve plus (c) in the event Agent does not receive one or more of landlord waivers as required in accordance with Section 5.06(b) of the Purchase Agreement, Agent shall establish reserves in such amounts as Agent shall determine in its sole discretion until such landlord waivers are received, and plus (d) such other reserves as the Agent may establish from time to time in its reasonable credit judgment. "RETAIL DEPOSIT ACCOUNTS" shall mean each of the following deposit accounts: 33 Wabash National Corporation et al. and WNC Receivables, LLC Annex X
Bank Name Account Number --------- -------------- (a) Bank of America 144614518 (b) South Trust Bank 66-965-992 (c) Bank of America 686765264 (d) Merchants & Manufacturers 2300064637 (e) National City Bank 825827133 (f) Chase Bank of Texas 07000915041 (g) Wells Fargo Bank 1018170833 (h) Bankers Trust 05 791 6 (i) Standard Federal Bank 6840 84772 4 (j) Bank of America 4772196882 (k) Fifth Third Bank 7690052811 (l) Bank of America 24589-14502 (m) Chase Bank of Texas 31500921734 (n) Heritage Bank 59700572310 (o) Bank of America 2458914502 (p) Union Planters Bank 0020140967 (q) Bank of America 1596480625 (r) Suntrust Bank 7020482449 (s) Bank One 21420864 (t) National City Bank 239898027 (u) Wells Fargo Bank 4419-701024 (v) Salem Bank and Trust 1847940212
34 Wabash National Corporation et al. and WNC Receivables, LLC Annex X
Bank Name Account Number --------- -------------- (w) Wells Fargo Bank 0439 814161 (x) South Trust Bank 84-006-542 (y) South Trust Bank 84-006-542 (z) Fidelity Deposit and Security Co. 11454730-14 (aa) Wells Fargo Bank 0224 635649 (bb) AMSouth Bank 6100052456 (cc) Wells Fargo Bank 0419-456553 (dd) Bank of America 3750965405 (ee) Wells Fargo Bank 3884015676 (ff) Bank of America 3750965395
"RESTRICTED PAYMENT" shall mean, with respect to any member of the Parent Group (a) the declaration or payment of any dividend or the incurrence of any liability to make any other payment or distribution of cash or other property or assets in respect of Equity Interests; (b) any payment on account of the purchase, redemption, defeasance, sinking fund or other retirement of such member's Equity Interests or any other payment or distribution made in respect thereof, either directly or indirectly; (c) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire Equity Interests of such member now or hereafter outstanding; (e) any payment of a claim for the rescission of the purchase or sale of, or for material damages arising from the purchase or sale of, any shares of such member's Equity Interests or of a claim for reimbursement, indemnification or contribution arising out of or related to any such claim for damages or rescission; (f) any payment, loan, contribution, or other transfer of funds or other property to any Equity Holder of such member other than payment of compensation in the ordinary course of business to Equity Holders who are employees of such member; and (g) any payment of management fees (or other fees of a similar nature) by such member to any Equity Holder of such member or its Affiliates. "RETIREE WELFARE PLAN" shall mean, at any time, a Welfare Plan that provides for continuing coverage or benefits for any participant or any beneficiary of a participant after such participant's termination of employment, other than continuation coverage provided pursuant to Section 4980B of the Code and at the sole expense of the participant or the beneficiary of the participant. 35 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "RETURNED GOODS" shall mean all right, title and interest of the Originators, the Buyer, the Seller, the Purchasers and/or the Agent, as applicable, in and to returned, repossessed, reclaimed, traded-in or foreclosed upon trailers, goods and/or merchandise, the sale of which gave rise to a Transferred Receivable. "REVOLVING PERIOD" shall mean the period from and including the Closing Date through and including the day immediately preceding the Facility Termination Date. "SALE" shall mean with respect to a sale of Receivables under the Sale Agreement, a sale of Receivables by the Originator to the Seller in accordance with the terms of the Sale Agreement. "SALE AGREEMENT" shall mean that certain Receivables Sale and Contribution Agreement dated as of April 11, 2002, among the Originators, as sellers, the Performance Guarantor, and the Seller, as buyer thereunder. "SALE PRICE" shall mean, with respect to any Sale of Sold Receivables, the price calculated by the Seller and approved from time to time by the Agent equal to: (a) the Outstanding Balance of such Sold Receivable, minus (b) the expected costs to be incurred by the Seller in financing the purchase of such Sold Receivables until the Outstanding Balance of such Sold Receivables is paid in full, minus (c) the portion of such Sold Receivables that are reasonably expected by such Originator to become Defaulted Receivables, minus (d) the portion of such Sold Receivables that are reasonably expected by such Originator to be reduced by means other than the receipt of Collections thereon or pursuant to clause (c) above, minus (e) amounts expected to be paid to the Servicer with respect to the servicing, administration and collection of such Sold Receivables; provided, that such calculations shall be determined based on the historical experience of (y) such Originator, with respect to the calculations required in each of clauses (c) and (d) above, and (z) the Seller, with respect to the calculations required in clauses (b) and (e) above. "SCHEDULE OF DOCUMENTS" shall mean the schedule, including all appendices, exhibits or schedules thereto, listing certain documents and information to be delivered in connection with the Sale Agreement, the Purchase Agreement and the other Related Documents and the transactions contemplated thereunder, substantially in the form attached as Annex Y to the Purchase Agreement and the Sale Agreement. 36 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "SECURED OBLIGATIONS" shall have the meaning assigned to it in the Intercreditor and Collateral Agency Agreement. "SECURED PARTIES" shall have the meaning assigned to it in the Intercreditor and Collateral Agency Agreement. "SECURITIES ACT" shall mean the provisions of the Securities Act of 1933, 15 U.S.C. Sections 77a et seq., and any regulations promulgated thereunder. "SECURITIES EXCHANGE ACT" shall mean the provisions of the Securities Exchange Act of 1934, 15 U.S.C. Sections 78a et seq., and any regulations promulgated thereunder. "SELLER" shall mean WNC Receivables, LLC, a Delaware limited liability company, in its capacity as seller under the Purchase Agreement. "SELLER ACCOUNT" shall mean a deposit account maintained in the name of the Seller at a commercial bank in the United States of America, as designated by the Seller from time to time. "SELLER ACCOUNT COLLATERAL" shall have the meaning assigned to it in Section 8.01(c) of the Purchase Agreement. "SELLER ASSIGNED AGREEMENTS" shall have the meaning assigned to it in Section 8.01(b) of the Purchase Agreement. "SELLER COLLATERAL" shall have the meaning assigned to it in Section 8.01 of the Purchase Agreement. "SELLER PARTIES" shall have the meaning assigned to it in the recitals of the Purchase Agreement. "SELLER SECURED OBLIGATIONS" shall mean all loans, advances, debts, liabilities, indemnities and obligations for the performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is then required or contingent, or such amounts are liquidated or determinable) owing by the Seller to any Affected Party under the Purchase Agreement and any document or instrument delivered pursuant thereto, and all amendments, extensions or renewals thereof, and all covenants and duties regarding such amounts, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, arising thereunder, including Capital Investment, Daily Yield, Unused Facility Fees, amounts in reduction of Purchase Excess, Successor Servicing Fees and Expenses, Additional Amounts and Indemnified Amounts. This term includes all principal, interest (including all interest that accrues after the commencement of any case or proceeding by or against the Seller in bankruptcy, whether or not allowed in such case or proceeding), fees, charges, expenses, attorneys' fees and any other sum chargeable to the Seller thereunder, whether now existing or hereafter arising, voluntary or involuntary, whether or not jointly owed 37 Wabash National Corporation et al. and WNC Receivables, LLC Annex X with others, direct or indirect, absolute or contingent, liquidated or unliquidated, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations that are paid to the extent all or any portion of such payment is avoided or recovered directly or indirectly from any Purchaser or the Agent or any transferee of the Purchaser or the Agent as a preference, fraudulent transfer or otherwise. "SENIOR NOTE" shall mean any of the Parent's 6.41% Series A Senior Secured Notes due March 30, 2004, Designated Rate Senior Secured Notes, Series C, due March 30, 2004, 7.31% Senior Secured Notes, Series D, due December 17, 2004, Designated Rate Senior Secured Notes, Series E, due March 13, 2005, 7.47% Senior Secured Notes, Series F, due December 17, 2006, 7.53% Senior Secured Notes, Series G, due December 30, 2008, 7.55% Senior Secured Notes, Series H, due December 17, 2008, 8.04% Senior Secured Notes, Series I, due September 29, 2007, or the PIK Notes. "SERVICER" shall mean Wabash Financing, LLC, in its capacity as the Servicer under the Purchase Agreement, or any other Person designated as a Successor Servicer. "SERVICER TERMINATION NOTICE" shall mean any notice by the Agent to the Servicer that (a) an Event of Servicer Termination has occurred and (b) the Servicer's appointment under the Purchase Agreement has been terminated. "SERVICING FEE" shall mean, for any day within a Settlement Period, the amount equal to (a)(i) the Servicing Fee Rate divided by (ii) 360, multiplied by (b) the Transferred Receivables on such day. "SERVICING FEE RATE" shall mean 1.00%. "SERVICING RECORDS" shall mean all documents, books, Records and other information (including computer programs, tapes, disks, data processing software and related property and rights) prepared and maintained by the Servicer with respect to the Transferred Receivables and the Obligors thereunder. "SERVICING SOFTWARE" shall mean the data processing software used by the Originators, Servicer and/or Seller for the purpose of servicing, monitoring, and retaining data regarding the Transferred Receivables and the Obligors thereunder. "SETTLEMENT DATE" shall mean the tenth Business Day following the end of each Settlement Period. "SETTLEMENT PERIOD" shall mean (a) solely for purposes of determining the Ratios, (i) with respect to all Settlement Periods other than the final Settlement Period, each calendar month, whether occurring before or after the Closing Date, and (ii) with respect to the final Settlement Period, the period ending on the Termination Date and beginning with the first day of the calendar month in which the Termination Date occurs, and (b) for all other purposes, (i) with respect to the initial Settlement Period, the period from and including the Closing Date through 38 Wabash National Corporation et al. and WNC Receivables, LLC Annex X and including the last day of the calendar month in which the Closing Date occurs, (ii) with respect to the final Settlement Period, the period ending on the Termination Date and beginning with the first day of the calendar month in which the Termination Date occurs, and (iii) with respect to all other Settlement Periods, each calendar month. "SOLD RECEIVABLE" shall have the meaning assigned to it in Section 2.01(b) of the Sale Agreement. "SOLVENT" shall mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person; (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its Indebtedness as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur Indebtedness or liabilities beyond such Person's ability to pay as such Indebtedness and liabilities mature; and (d) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person's property would constitute an unreasonably small capital. The amount of contingent liabilities (such as Litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that can reasonably be expected to become an actual or matured liability. "ST. LOUIS REAL ESTATE" shall mean the real property commonly known as 12813 Flushing Meadows Drive, St. Louis, MO 63131. "SUBORDINATED INDEBTEDNESS" shall mean, for any period, on a consolidated basis for the Parent and its Subsidiaries, the sum of Indebtedness of such Persons the payment of which is subordinated to the payment of the Secured Obligations to the written satisfaction of the Credit Facility Agent. "SUB-SERVICER" shall mean any Person with whom the Servicer enters into a Sub-Servicing Agreement. "SUB-SERVICING AGREEMENT" shall mean any written contract entered into between the Servicer and any Sub-Servicer pursuant to and in accordance with Section 7.01 of the Purchase Agreement relating to the servicing, administration or collection of the Transferred Receivables. "SUBSIDIARY" shall mean, with respect to any Person, any corporation or other entity (a) of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person or (b) that is directly or indirectly controlled by such Person within the meaning of control under Section 15 of the Securities Act. "SUCCESSOR SERVICER" shall have the meaning assigned to it in Section 11.02 of the Purchase Agreement. 39 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "SUCCESSOR SERVICING FEES AND EXPENSES" shall mean the fees and expenses payable to the Successor Servicer as agreed to by the Seller, the Purchaser and the Agent. "SUNTRUST SALE LEASEBACK" shall mean that certain sale and leaseback of certain real property owned by the Parent and/or certain of its Domestic Subsidiaries to be effected pursuant to that certain engagement letter agreement, dated February 1, 2002, between the Parent and SunTrust Robinson Humphrey. "TANGIBLE ASSETS" shall mean as of the date of any determination thereof, with respect to any Person, total assets of such Person in accordance with Agreement Accounting Principles, but excluding therefrom goodwill, patents, patent applications, permits, trademarks, trade names, copyrights, licenses, franchises, experimental expense, organizational expense, unamortized debt discount and expense, the excess of cost of shares acquired over book value of related assets and such other assets as are properly classified as "intangible assets" in accordance with Agreement Accounting Principles. "TERMINATION DATE" shall mean the date on which (a) Capital Investment has been permanently reduced to zero, (b) all other Seller Secured Obligations under the Purchase Agreement and the other Related Documents have been indefeasibly repaid in full and completely discharged and (c) the Maximum Purchase Limit has been irrevocably terminated in accordance with the provisions of Section 2.02(b) of the Purchase Agreement. "TERMINATION EVENT" shall have the meaning assigned to it in Section 9.01 of the Purchase Agreement. "TITLE IV PLAN" shall mean a Pension Plan (other than a Multiemployer Plan) that is covered by Title IV of ERISA and that any Originator or ERISA Affiliate maintains, contributes to or has an obligation to contribute to on behalf of participants who are or were employed by any of them. "TRANSFER" shall mean any Sale or capital contribution of Transferred Receivables to the Seller pursuant to the terms of the Sale Agreement. "TRANSFER DATE" shall have the meaning assigned to it in Section 2.01(a) of the Sale Agreement. "TRANSFERRED RECEIVABLE" shall mean any Sold Receivable or Contributed Receivable; provided, that any Receivable repurchased by an Originator thereof pursuant to Section 4.05 of the Sale Agreement shall not be deemed to be a Transferred Receivable from and after the date of such repurchase unless such Receivable has subsequently been repurchased by or contributed to the Seller. "UCC" shall mean, with respect to any jurisdiction, the Uniform Commercial Code as the same may, from time to time, be enacted and in effect in such jurisdiction. 40 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "UNAPPROVED RECEIVABLE" shall mean any Receivable (a) with respect to which the Obligor thereunder is not an Obligor on any Transferred Receivable and whose customer relationship with an Originator arises as a result of the acquisition by such Originator of another Person, (b) that was originated in accordance with standards established by another Person acquired by an Originator, in each case, solely with respect to any such acquisitions that have not been approved in writing by the Agent and then only for the period prior to any such approval, or (c) with respect to which the Obligor thereunder is not creditworthy, as determined by the Agent in its reasonable credit judgment. "UNDERFUNDED PLAN" shall mean any Plan that has an Underfunding. "UNDERFUNDING" shall mean, with respect to any Plan, the excess, if any, of (a) the present value of all benefits under the Plan (based on the assumptions used to fund the Plan pursuant to Section 412 of the Code) as of the most recent valuation date over (b) the fair market value of the assets of such Plan as of such valuation date. "UNFUNDED LIABILITY" shall mean, at any time, the aggregate amount, if any, of the sum of (a) the amount by which the present value of all accrued benefits under each Title IV Plan exceeds the fair market value of all assets of such Title IV Plan allocable to such benefits in accordance with Title IV of ERISA, all determined as of the most recent valuation date for each such Title IV Plan using the actuarial assumptions for funding purposes in effect under such Title IV Plan, and (b) for a period of five years following a transaction that might reasonably be expected to be covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that could be avoided by any Originator or any ERISA Affiliate as a result of such transaction. "UNDERFUNDING" shall mean, with respect to any Plan, the excess, if any, of (a) the present value of all benefits under the Plan (based on the assumptions used to fund the Plan pursuant to Section 412 of the Code) as of the most recent valuation date over (b) the fair market value of the assets of such Plan as of such valuation date. "UNITED STATES" shall mean the United States of America (including the District of Columbia but otherwise excluding its territories and possessions). "UNMATURED DEFAULT" shall mean an event which, but for the lapse of time or the giving of notice, or both, would constitute a Default (as defined in the Credit Agreement). "UNUSED FACILITY FEE" shall mean, on any date of determination, a fee equal to the product of (a) the applicable Per Annum Daily Margin for Unused Facility Fees multiplied by (b) the excess (if any) of the amount set forth in clause (i) of Maximum Purchase Limit over the aggregate Capital Investment. "WARRANTY POLICY" shall mean the warranty policies substantially in the form of Schedule 4.01(s) to the Sale Agreement. 41 Wabash National Corporation et al. and WNC Receivables, LLC Annex X "WEEKLY INVESTMENT BASE CERTIFICATE" shall have the meaning assigned to it in Section 2.03(a)(ii) of the Purchase Agreement. "WELFARE PLAN" shall mean a Plan described in Section 3(1) of ERISA. SECTION 2. Other Terms and Rules of Construction. (a) Accounting Terms. Unless otherwise specifically provided therein, any accounting term used in any Related Document shall have the meaning customarily given such term in accordance with Agreement Accounting Principles, and all financial computations thereunder shall be computed in accordance with Agreement Accounting Principles consistently applied. That certain items or computations are explicitly modified by the phrase "in accordance with Agreement Accounting Principles" shall in no way be construed to limit the foregoing. (b) Other Terms. All other undefined terms contained in any of the Related Documents shall, unless the context indicates otherwise, have the meanings provided for by the UCC as in effect in the State of Illinois from time to time to the extent the same are used or defined therein. (c) Rules of Construction. Unless otherwise specified, references in any Related Document or any of the Appendices thereto to a Section, subsection or clause refer to such Section, subsection or clause as contained in such Related Document. The words "herein," "hereof" and "hereunder" and other words of similar import used in any Related Document refer to such Related Document as a whole, including all annexes, exhibits and schedules, as the same may from time to time be amended, restated, modified or supplemented, and not to any particular section, subsection or clause contained in such Related Document or any such annex, exhibit or schedule. Any reference to or definition of any document, instrument or agreement shall, unless expressly noted otherwise, include the same as amended, restated, supplemented or otherwise modified from time to time. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and neuter genders. The words "including," "includes" and "include" shall be deemed to be followed by the words "without limitation"; the word "or" is not exclusive; references to Persons include their respective successors and assigns (to the extent and only to the extent permitted by the Related Documents) or, in the case of Governmental Authorities, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations shall include any amendments of the same and any successor statutes and regulations. (d) Rules of Construction for Determination of Ratios. The Ratios as of the last day of the Settlement Period immediately preceding the Closing Date shall be established by the Agent on or prior to the Closing Date and the underlying calculations for periods immediately preceding the Closing Date to be used in future calculations of the Ratios shall be established by the Agent on or prior to the Closing Date in accordance with Schedule 1 attached to this Annex X. For purposes of calculating the Ratios, (i) averages shall be computed by rounding to the third decimal place and (ii) the Settlement Period in which the date of determination thereof 42 Wabash National Corporation et al. and WNC Receivables, LLC Annex X occurs shall not be included in the computation thereof and the first Settlement Period immediately preceding such date of determination shall be deemed to be the Settlement Period immediately preceding the Settlement Period in which such date of determination occurs. 43 Wabash National Corporation et al. and WNC Receivables, LLC Annex X SCHEDULE 1 COMPUTATION OF RATIOS 44 Wabash National Corporation et al. and WNC Receivables, LLC Annex X SCHEDULE 2 PERMITTED EXISTING CONTINGENT OBLIGATIONS 45 Wabash National Corporation et al. and WNC Receivables, LLC Annex X SCHEDULE 3 PERMITTED EXISTING INDEBTEDNESS 46 Wabash National Corporation et al. and WNC Receivables, LLC Annex X SCHEDULE 4 PERMITTED EXISTING INVESTMENTS 47 Wabash National Corporation et al. and WNC Receivables, LLC Annex X SCHEDULE 5 PERMITTED EXISTING LIENS 48 Wabash National Corporation et al. and WNC Receivables, LLC Annex X SCHEDULE ER-C FORM OF WAIVER OF OFFSET LETTER [WABASH NATIONAL LOGO] VIA TELECOPY Addressee: Mr. Bill Riley Customer: Swift Leasing Co., Inc. Address: 2200 S. 75th Ave. Phoenix, AZ 85043 Dear Bill: On April 12, we closed on the restructuring of our senior indebtedness, including our working capital facilities. One of the lenders participating in this financing, General Electric Capital Corporation (together with its affiliates, "GECC"), will finance the accounts receivable that we and our affiliates ("Wabash") generate in connection with our new trailer sales. As part of that financing, GECC has asked us to request that our customers acknowledge and agree that they will not assert a right of offset or recoupment ("Offset") against Wabash or GECC solely as such Offset might exist with respect to Wabash's obligations to accept or pay for any used trailers in connection with the purchase of new trailers from Wabash. I would appreciate it if you sign this letter acknowledging your agreement to not assert against Wabash or GECC any Offset with respect to any account receivable owed by you (or any of your affiliates) to Wabash and that GECC will rely on your agreement in extending financing to us. If you could sign this letter and return it to me by telecopy as soon as possible it would be greatly appreciated. My telecopy number is 765-772-2600. Thank you in advance for your cooperation and prompt attention to this matter. Best regards, Mark Holden Senior V.P.-CFO Acknowledged and agreed to: Swift Leasing, Co., Inc By: ------------------------------------ Title: --------------------------------- 49 Wabash National Corporation et al. and WNC Receivables, LLC Annex X EX-21 15 c68906a1ex21.txt LIST OF SIGNIFICANT SUBSIDIARIES EXHIBIT 21 SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK
NAME OF STATE/COUNTRY OF % OF SHARES SUBSIDIARY INCORPORATION OWNED BY THE COMPANY (*) ---------- ------------- ------------------------ Wabash International, Inc. (Foreign Sales Corp.) U.S. Virgin Islands 100% Wabash National GmbH Germany 100% NOAMTC, Inc. Delaware 100% WNC Cloud Merger Sub, Inc. Arkansas 100% Cloud Oak Flooring Arkansas 100% Company, Inc. Wabash Funding Corp. Missouri 100% Wabash National L.P. Delaware 100% Apex Trailer Leasing & Rentals, L.P. Delaware 100% Wabash National Services L.P. Delaware 100% WTSI Technology Corp. Delaware 100% Wabash Technology Corp. Delaware 100% Wabash Financing LLC Delaware 100% Wabash Funding Manager Corp. Delaware 100% Wabash Funding LLC Delaware 100% RoadRailer Bimodal Ltd. United Kingdom 100% RoadRailer Mercosul, Ltda Brazil 50% Wabash do Brazil Brazil 100% RoadRailer Technology Development Company, China 81% Ltd. National Trailer Funding LLC Delaware 100% Continental Transit Corp Indiana 100% Europaische Trailerzug Germany 100% Beteiligungsgessellschaft mbH (ETZ) Bayerische Trailerzug Germany 99.89% Beteiligungsgessellschaft mbH (BTZ) FTSI Canada, Ltd. Canada 100%
* Includes both direct and indirect ownership by the parent, Wabash National Corporation EX-23.1 16 c68906a1ex23-1.txt CONSENT OF ARTHUR ANDERSEN LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the Company's previously filed Registration Statement File Nos. 33-49256, 33-65988, 33-90826, 333-29309 and 333-54714. ARTHUR ANDERSEN LLP Indianapolis, Indiana, April 12, 2002. EX-99.01 17 c68906a1ex99-01.txt REPRESENTATION LETTER EXHIBIT 99.01 Wabash National Corporation 1000 Sagamore Parkway South Lafayette, IN 47905 April 10, 2002 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Wabash National Corporation Commission File No. 1-10883 Ladies and Gentlemen: This letter is intended to fulfill the requirements of Temporary Note 3T to Article 3 of Regulation S-X under the Securities Exchange Act of 1934, and is being filed with the Securities and Exchange Commission as Exhibit 99.01 to the Wabash National Corporation's (the "Company") Annual Report on Form 10-K for the fiscal year ended December 31, 2001 (the "Form 10- K"). . Arthur Andersen LLP ("Andersen") has issued after March 14, 2002 its audit report on the Company's consolidated financial statements included in the Form 10-K. In a letter dated March 29, 2002, Andersen represented to the Company that the audit was subject to Andersen's quality control system for the U.S. accounting and auditing practice to provide reasonable assurance that the engagement was conducted in compliance with professional standards and that there was appropriate continuity of Andersen personnel working on audits, availability of national office consultation and availability of personnel at foreign affiliates of Andersen to conduct the relevant portions of the audit. Regards, Mark R. Holden Senior VP - Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----