CONSENTAND AMENDMENT NO. 1 TOTHIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

EX-10.1 2 v186077_ex10-1.htm Unassociated Document

EXHIBIT 10.1

CONSENT AND AMENDMENT NO. 1

TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS CONSENT AND AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT ("Amendment") is dated as of May 19, 2010 and is by and among the parties identified as Lenders on the signature pages hereto ("Lenders") and Bank of America, N.A., as Agent ("Agent"), for Lenders, on the one hand, and Wabash National Corporation, a Delaware corporation, Wabash National, L.P., a Delaware limited partnership, Wabash Wood Products, Inc. (f/k/a WNC Cloud Merger Sub, Inc.), an Arkansas corporation, FTSI Distribution Company, L.P., a Delaware limited partnership, and Transcraft Corporation, a Delaware corporation (collectively, "Borrowers") on the other hand. Capitalized terms used herein but not otherwise defined herein shall have the respective meanings assigned to such terms in the Loan Agreement referred to herein below.

WITNESSETH:

WHEREAS, Agent, Lenders and Borrowers are parties to a Third Amended and Restated Loan and Security Agreement, dated as of July 17, 2009 (as the same has been and may be amended, or modified from time to time, the "Loan Agreement"), pursuant to which Lenders have agreed to make certain loans and other financial accommodations to or for the account of Borrowers;

WHEREAS, Borrowers have informed Agent and each Lender that on or before May 31, 2010, (a) Wabash desires to issue new shares of common stock for cash consideration of at least $75,000,000, pursuant to the terms set forth in the Form S-3 filed on April 30, 2010 by Wabash with the Securities and Exchange Commission, as amended or supplemented from time to time and (b) Wabash desires to redeem all of the Series E-G Preferred Stock (including payment of accrued dividends and early redemption premium payable pursuant to the Preferred Investment Documents (but with respect to the early redemption premium as if the redemption occurred between the first and second anniversary of the issuance of the Series E-G Preferred Stock)) in an amount not to exceed $48,000,000 payable with the proceeds of the equity issuance set forth in clause (a) above and to file certificates of termination terminating the Series E-G Preferred Stock (collectively, the "Recapitalization Transactions");

WHEREAS, in absence of the prior written consent of Agent and Lenders, the Recapitalization Transactions would cause certain Events of Default under Section 10.1.3 of the Loan Agreement due to certain violations of Sections 3.3.4, 8.2.7 and 8.2.15 of the Loan Agreement;

WHEREAS, Borrowers have requested that Agent and Lenders (i) consent to the Recapitalization Transactions and (ii) amend the Loan Agreement in certain respects; and

WHEREAS, Agent and Lenders have agreed to (i) consent to the Recapitalization Transactions and (ii) amend the Loan Agreement in certain respects on the terms and subject to the conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the respective parties hereto hereby agree as follows:

1. Consent. Subject to the satisfaction of the conditions set forth in Section 4 below, and in reliance on the representations set forth in Section 5 below, Agent and Lenders hereby consent to the Recapitalization Transactions; provided that no less than $23,000,000 (plus an amount equal to the net cash proceeds in excess of $75,000,000 received by Borrowers in connection the equity issuance contemplated by the Recapitalization Transactions) of the cash proceeds obtained by Wabash in connection with the consummation of the Recapitalization Transactions shall be used to repay outstanding principal of the Revolving Credit Loans (but shall not permanently reduce the Revolving Loan Commitments). The foregoing is a limited consent and, other than as expressly set forth herein, shall not constitute a consent or waiver of any other Event of Default or Default that is now in existence or that may hereafter occur, or any rights or remedies that may be available to Agent or Lenders under the Loan Agreement, the other Loan Documents or applicable law with respect thereto, all of which rights and remedies are hereby specifically reserved.

2. Amendments. Subject to the satisfaction of the conditions set forth in Section 4 below, and in reliance upon the representations and warranties set forth in Section 5 below, the Loan Agreement is hereby amended as follows:

(a) Section 2.10 of the Loan Agreement is hereby amended by amending and restating the third sentence of such section, as follows:

At Borrowers' joint and several expense, as requested by Agent or Majority Lenders in their reasonable credit judgment, Agent shall (a) obtain one (1) desk top appraisal of the Inventory and the Trailer Inventory of the Companies conducted by a third party appraiser reasonably acceptable to Agent in any calendar year, which appraisals shall include an assessment of the net orderly liquidation percentage of each category or type of Inventory and Trailer Inventory, (b) obtain one (1) appraisal of the Inventory and the Trailer Inventory of the Companies from a third party appraiser reasonably acceptable to Agent in any calendar year, which appraisals shall include an assessment of the net orderly liquidation percentage of each category or type of Inventory and Trailer Inventory and (c) obtain one (1) appraisal of the fixed assets of the Companies from a third party appraiser reasonably acceptable to Agent in any calendar year; provided that if an Event of Default has occurred and is continuing, Agent may obtain such additional appraisals and appraisals in its reasonable discretion.

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(b) Section 3.3.1 of the Loan Agreement is hereby amended by amending and restating the final sentence of such section, as follows:

In addition, if the Collateral subject to such sale, loss, damage, destruction or condemnation consists of (a) Eligible Accounts, Eligible Inventory or Eligible Trailer Inventory, at all times such prepayment shall be specifically applied against any limits or sublimits contained in the Borrowing Base that are predicated on such Collateral and (b) Real Property, Equipment or other fixed assets, such proceeds that (i) exceed $1,000,000 in the aggregate in any calendar year shall reduce dollar for dollar the amount of the Maximum Fixed Asset Amount in an amount equal to such excess or (ii) total at least $500,000 with respect to any individual sale, loss, damage, destruction or condemnation shall reduce dollar for dollar the Maximum Fixed Asset Amount in an amount equal to such sale, loss, damage, destruction or condemnation; provided, however, that notwithstanding anything to the contrary set forth herein no reduction in the amount of the Maximum Fixed Asset Amount shall occur in connection with the sale of Real Property located at 3379 Owingsville Road, Mt. Sterling, KY.

(d) A new Section 8.3 is hereby added to the Loan Agreement as follows:

8.3 Specific Financial Covenants.

During the Term, and thereafter for so long as there are any Obligations outstanding, each Borrower covenants that it shall comply with all of the financial covenants set forth in Exhibit 8.3 hereto. If GAAP changes from the basis used in preparing the audited financial statements delivered to Agent by Borrowers on or before any applicable testing date, Borrowers will provide Agent with certificates demonstrating compliance with such financial covenants and will include, at the election of Borrowers or upon the request of Agent, calculations setting forth the adjustments necessary to demonstrate how Borrowers are also in compliance with such financial covenants based upon GAAP as in effect prior to such change in GAAP. At any time that Borrowers are subject to the financial covenants set forth in Exhibit 8.3 hereto, no Borrower shall (a) adjust deductions from EBITDA from any period subject to such financial covenants to any period not subject to such financial covenants or (b) adjust additions to EBITDA from any period not subject to such financial covenants to any period subject to such financial covenants.

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(e) A new Section 9.2.3 is hereby added to the Loan Agreement as follows:

9.2.3 Financial Covenants. With respect to any request for any Loan, any Letter of Credit or any LC Guaranty that would cause Availability to be or remain less than the Availability thresholds set forth on Exhibit 8.3, Borrowers shall be in compliance with each of the financial covenants set forth on Exhibit 8.3 as of the last day of the most recent calendar month for which financial statements have been delivered to Agent pursuant to paragraph (ii) of subsection 8.1.3.

(f) Section 12.8 of the Loan Agreement is hereby amended by deleting "Hogan & Hartson LLP" through "Facsimile No.: (410) 539-6981" and inserting in lieu thereof the following:

Hogan Lovells US LLP

100 International Drive, Suite 2000

Baltimore, Maryland 21202

Attention: Michael J. Silver, Esq.

Facsimile No.: ###-###-####

(g) Appendix A to the Loan Agreement is hereby amended by amending the definition of "Permitted Acquisition" therein by (i) deleting the reference to "and" at the end of clause (h) of such definition, (ii) deleting "." at the end of clause (i) of such definition and inserting "; and" in lieu thereof and (iii) adding the following new clause (j) to such definition, as follows:

(j) after giving effect to the proposed acquisition, Borrowers are in compliance with each of the financial covenants set forth in Section 8.3 on a pro forma, but unadjusted, basis through the termination of the Agreement.

(h) Appendix A to the Loan Agreement is hereby amended by amending and restating the following definitions therein:

Borrowing Base - as at any date of determination thereof, an amount equal to the lesser of:

(i) the Revolving Credit Maximum Amount; or

(ii) an amount equal to the sum of

(a)

85% of the net amount of Eligible Accounts outstanding at such date; plus

(b)

the least of (i) 85% of the net orderly liquidation percentage of Eligible Inventory at such date and (ii) the sum of (A) 85% of the net orderly liquidation value of Eligible Trailer Inventory at such date, plus (B) 70% of the value of Eligible Inventory consisting of raw materials or parts at such date, plus (C) 50% of the value of Eligible Inventory consisting of work-in-process at such date; plus

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(c)

the Maximum Fixed Asset Amount.

For purposes hereof, (1) the net amount of Eligible Accounts at any time shall be the face amount of such Eligible Accounts less any and all returns, rebates, discounts (which may, at Agent's option, be calculated on shortest terms), credits, allowances or excise taxes of any nature at any time issued, owing, claimed by Account Debtors, granted, outstanding or payable in connection with such Accounts at such time, (2) the amount of Eligible Inventory and Eligible Trailer Inventory shall each be determined on a first-in, first-out, lower of cost or market basis in accordance with GAAP, net of intercompany charges, (3) the net orderly liquidation percentage of Eligible Inventory shall be determined by a third party appraiser reasonably acceptable to Agent and shall be as reflected in the most recent appraisal delivered to Agent under the Agreement, and (4) the net orderly liquidation value of Eligible Trailer Inventory shall be determined by a third party appraiser reasonably acceptable to Agent and shall be reflected in the most recent appraisal delivered to Agent under the Agreement.

Maximum Fixed Asset Amount – means an amount equal to $17,800,000, which number shall be reduced (i) by $400,000 on each of July 1, 2010 and October 1, 2010, (ii) by $750,000 on each of January 1, 2011, April 1, 2011, July 1, 2011 and October 1, 2011 and (iii) by $1,000,000 on each of January 1, 2012, April 1, 2012 and July 1, 2012.

Preferred Investment Documents – means collectively, (i) the Securities Purchase Agreement dated as of the date hereof by and between Wabash and Lincolnshire as may be amended from time to time; (ii) the Investor Rights Agreement dated as of the Closing Date by and between Wabash and Lincolnshire as may be amended from time to time; and (iii) the Warrant to Purchase Shares of Common Stock dated as of the Closing Date by and between Wabash and Lincolnshire as may be amended from time to time and as may be transferred in whole or in part from time to time in accordance with its terms.

(i) Appendix A to the Loan Agreement is hereby amended by deleting the definition of "Series E-G Preferred Stock" in its entirety.

(j) Exhibit 8.1.3 to the Loan Agreement is hereby amended and restated in their entirety as set forth on Exhibit 8.1.3 hereof.

(k) A new Exhibit 8.3 is hereby added to the Loan Agreement as set forth on Exhibit 8.3 hereof.

3. Scope of Amendment. Subject to the satisfaction of the conditions set forth in Section 4 below and in reliance upon the representations and warranties of Borrowers set forth in Section 5 below, this Amendment shall have the effect of amending the Loan Agreement as appropriate to express the agreements contained herein. In all other respects, the Loan Agreement and the other Loan Documents shall remain in full force and effect in accordance with their respective terms.

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4. Conditions to Effectiveness. The effectiveness of this Amendment and the amendments contained herein are subject to the satisfaction of the following conditions precedent or concurrent:

(a) Agent shall have received a copy of this Amendment executed by Borrowers and Lenders, together with the Consent and Reaffirmation attached hereto;

(b) Agent shall have received for the pro rata benefit of each Lender party hereto, an amendment fee in the aggregate amount of $250,000; and

5. Representations and Warranties. To induce Agent and Lenders to execute and deliver this Amendment, Borrowers hereby represent and warrant to Agent and Lenders that, after giving effect to this Amendment:

(a) All representations and warranties contained in the Loan Agreement and the other Loan Documents are true and correct in all material respects (or true and correct in all respects with respect to representation and warranties expressly qualified by materiality or Material Adverse Effect) on and as of the date of this Amendment, in each case as if then made, other than representations and warranties that expressly relate solely to an earlier date (in which case such representations and warranties remain true and accurate on and as of such earlier date);

(b) No Default or Event of Default has occurred which is continuing (after giving effect to this Amendment);

(c) This Amendment, and the Loan Agreement, as amended hereby, constitute legal, valid and binding obligations of Borrowers and are enforceable against Borrowers in accordance with their respective terms; and

(d) The execution and delivery by Borrowers of this Amendment does not require the consent or approval of any Person, except such consents and approvals as have been obtained.

6. Release. As a material part of the consideration for Agent and Lenders entering into this Amendment and in order to induce Lenders to extend credit pursuant to the Loan Agreement, on the date hereof each Borrower and each Guarantor executing a Consent and Reaffirmation attached hereto, hereby releases and forever discharges Agent and each Lender and Agent's and each Lender's directors, officers, employees, agents, attorneys, affiliates, subsidiaries, successors and assigns from any and all liabilities, obligations, actions, contracts, claims, causes of action, damages, demands, costs and expenses whatsoever (collectively "Claims"), of every kind and nature, however evidenced or created, whether known or unknown, arising prior to or on the date of this Amendment including, but not limited to, any Claims involving the extension of credit under the Loan Agreement or administration of the Loan Documents, as each may be amended, the indebtedness incurred by any Borrower or any Guarantor or any other transactions evidenced by this Amendment, the Loan Agreement or the other Loan Documents.

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7. Governing Law. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

8. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

9. Counterparts. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Any such counterpart which may be delivered by facsimile transmission shall be deemed the equivalent of an originally signed counterpart and shall be fully admissible in any enforcement proceedings regarding this Amendment.

[Signature pages to follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the date first set forth above.

BANK OF AMERICA, N.A.,
as Agent and as a Lender

By:	/s/Jason Riley
Name:	Jason Riley
Title:	Senior Vice President