Document:

FIRST AMENDMENT/CONSENT TO SECOND LIEN CREDIT AGMT

 

Exhibit 4.6

TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.

FIRST AMENDMENT TO

SECOND LIEN CREDIT AGREEMENT

           This FIRST AMENDMENT, dated as of July 1, 2004 (this “First Amendment”),
is entered into by and among TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC., a
Delaware corporation (the “Company”), the Loan Parties, the Lenders party
hereto, and CREDIT SUISSE FIRST BOSTON (“CSFB”), as administrative agent for
the Lenders (in such capacity, the “Administrative Agent”), as a joint lead
arranger (in such capacity, a “Joint Lead Arranger”), and as collateral agent
(in such capacity, the “Collateral Agent”), and is made with reference to that
certain Second Lien Credit Agreement dated as of March 16, 2004 (the “Credit
Agreement”) and entered into by and among Company, the Lenders party thereto,
Lehman Brothers Inc., as joint bookrunner and joint lead arranger, Lehman
Commercial Paper Inc., as co-syndication agent, Wachovia Capital Markets, LLC,
as joint bookrunner, joint lead arranger, and co-syndication agent and CSFB, as
administrative agent, joint bookrunner, joint lead arranger, and collateral
agent. Capitalized terms used herein not otherwise defined herein or otherwise
amended hereby shall have the meanings ascribed thereto in the Credit
Agreement.

RECITALS:

           WHEREAS, the Company desires to issue common stock in a public offering
providing Equity Proceeds (such proceed, including proceeds received from the
exercise of any “green shoe”, the “IPO Proceeds”) to the Company of not less
than $100,000,000 (the “IPO”);

           WHEREAS, the Company intends to utilize the IPO Proceeds, together with
the proceeds of a Debt Issuance (as defined below) consummated substantially
concurrently therewith, to (i) redeem Exchange Notes and to pay accrued and
unpaid interest thereon and the related redemption premium (the redemption of
Exchange Notes and payment of accrued and unpaid interest and redemption
premium together, the “Redemption”); (ii) redeem the Company’s Series E
Preferred Stock and pay accrued and unpaid dividends and the redemption premium
required in connection with such redemption; and (iii) pay a fee (the
“Termination Fee”); in an aggregate amount not to exceed $3,500,000 to certain
holders of capital stock of the Company (or their affiliates or designees) in
connection with the termination of the Amended and Restated Monitoring Services
Agreement dated as of May 17, 2004 among the Company and the Transportation
Investment Partners, L.L.C., Caravelle Investment Fund, L.L.C., Albion Alliance
Mezzanine Fund, L.P., Albion Alliance Mezzanine Fund II, L.P. and Trimaran Fund
Management, L.L.C. and Albion Alliance LLC (collectively, the “Monitors”);

           WHEREAS, the Company intends to exchange all of its Series A Preferred
Stock, its Series C Preferred Stock and its Series D Preferred Stock for shares
of common stock of the Company;

           WHEREAS, the Company desires to amend the Credit Agreement to permit
additional borrowings as set forth in Section 2.9 of the Credit Agreement (as
amended by this First Amendment) (each such issuance, a “Debt Issuance”);

 

 

           WHEREAS, in connection with the amendments to the Credit Agreement and the
transactions contemplated thereby, the Company desires to make certain
amendments to the First Lien Credit Agreement;

           WHEREAS, Company has requested certain amendments to the Credit Agreement
to (i) permit the Company to apply a portion of the IPO Proceeds towards the
Redemption, (ii) permit the Company to exchange its Series A Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock for share of common stock
of the Company and (iii) permit additional conduct as described in this First
Amendment; and

           NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

SECTION 1. AMENDMENTS TO CREDIT AGREEMENT

     A. Amendment to Section 1: Definitions.

           (i) Section 1.1 of the Credit Agreement is hereby amended by adding the
following definitions in proper alphabetical order:

     “Amended and Restated Monitoring Agreement” means that amended and
restated monitoring services agreement dated as of May 17, 2004 by and
among Transportation Investment Partners, L.L.C., Caravelle Investment
Fund, L.L.C., Albion Alliance Mezzanine Fund, L.P., Albion Alliance
Mezzanine Fund II, L.P., Trimaran Fund Management, L.L.C., Albion
Alliance, LLC and the Company (collectively, the “Monitors”).

     “First Amendment Effective Date” means the date on which the
conditions set forth in Section 3 of the First Amendment are satisfied or
waived.

     “Increased Amount Date” has the meaning assigned to that term in
Section 2.9.

     “IPO” means the issuance by the Company of common stock in a public
offering providing Equity Proceeds to the Company of not less than
$100,000,000.

     “Joinder Agreement” means an agreement substantially in the form of
Exhibit XV.

     “New Term Loan Commitments” has the meaning assigned to that term in
Section 2.9.

     “New Term Loan Exposure” means, with respect to any Lender, as of
any date of determination, the outstanding principal amount of the New
Term Loans of such Lender.

     “New Term Loan Lender” has the meaning assigned to that term in
Section 2.9.

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     “New Term Loan Maturity Date” means the date that New Term Loans of
a Series shall become due and payable in full hereunder, as specified in
the applicable Joinder Agreement, including by acceleration or otherwise.

     “New Term Loans” has the meaning assigned to that term in Section
2.9.

           (ii) Section 1.1 of the Credit Agreement is hereby amended by substituting
the following new definitions for the definitions contained therein:

     “Commitments” means the commitments of one or more Lenders to make
Term Loans as set forth in subsection 2.1A. and after the First Amendment
Effective Date, the commitments of the Lenders to make New Term Loans set
forth in Section 2.9.

     “Consolidated EBITDA” means, for any period, Consolidated Net Income
for such period plus, to the extent deducted in computing such
Consolidated Net Income, the sum of, without duplication, (a) income tax
expense, (b) interest expense, amortization or write-off of debt discount
and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c)
depreciation and amortization expense, (d) costs and expenses incurred in
connection with the Transaction, (e) deferred directors’ fees, (f)
management bonuses related to the Preferred Stock paid in connection with
the Transaction, (g) fees paid to accountants and tax advisors in
connection with any tax refund received by the Company and the re-audit
of the Company’s 2001 audited financial statements, in an aggregate
amount not to exceed $1,000,000, (h) any non-cash charges or non-cash
losses (including, without limitation, resulting from the issuance of
stock options or restricted stock), (i) up to $3,500,000 related to the
severance payments made to the person who was the Chief Executive Officer
of the Company immediately prior to the IPO, (j) up to $3,500,000 in cash
expenses related to the termination of the Amended and Restated
Monitoring Services Agreement, (k) amounts up to $700,000 paid or accrued
during such period under the Amended and Restated Monitoring Agreement
and predecessor agreements, (l) compensation expense up to $926,000
related to the current Chief Executive Officer of the Company, and (m)
expenses related to the IPO and minus, to the extent added in computing
such Consolidated Net Income, (i) any interest income and (ii) any
non-cash gains, all as determined on a consolidated basis with respect to
the Company and its Subsidiaries in accordance with GAAP. Notwithstanding
the foregoing, for purposes of determining compliance with the relevant
provisions of subsection 7.6, “Consolidated EBITDA” shall be determined
on a Pro Forma Basis.

     “Lender” and “Lenders” means the Persons identified as “Lenders” and
listed on the signature pages of this Agreement and any other Person that
becomes a party hereto pursuant to an Assignment Agreement or a Joinder
Agreement, together with their successors and permitted assigns pursuant
to subsection 10.1.

     “Series” has the meaning assigned to that term in Section 2.9.

     “Term Loan Commitment” means the commitment of a Lender to make a
Term Loan pursuant to subsection 2.1A in an amount set forth on Schedule
2.1A, and after the

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First Amendment Effective Date, the commitment of each New Term Loan
Lender to make a New Term Loan pursuant to Section 2.9.

     “Term Loan Exposure” means, with respect to any Lender, as of any
date of determination, the outstanding principal amount of the Term Loans
of that Lender, and after the First Amendment Effective Date, the
outstanding amount of the New Term Loans of any Lender.

     “Term Loans” means the loans outstanding or made by the Lenders
pursuant to subsection 2.1A and after the First Amendment Effective Date,
the loans outstanding or made by New Term Loan Lenders pursuant to
Section 2.9.

B. Amendment to Section 2: Amounts and Terms of Commitments and
Loans.

           (i) Section 2.4 of the Credit Agreement is hereby amended by substituting
the following for the text immediately prior to the table in subsection
2.4B(ii):

     “(ii) Term Loan Call Protection. In the event that the Term
Loans are prepaid or repaid in whole or in part for any reason
prior to the second anniversary of the Closing Date (other than
with respect to any prepayment made in connection with the IPO
Proceeds), the Company shall pay to Lenders having Term Loan
Exposure a prepayment premium on the amount so prepaid or repaid
as follows:”

           (ii) Section 2.4 of the Credit Agreement is hereby amended by substituting
a “,” for the “or” immediately prior to clause (y) of the proviso at the
conclusion of subsection 2.4B(iii)(c), and inserting the following clause (z)
before the “.”:

“or (z) to the extent such Equity Proceeds are used to redeem
outstanding Exchange Notes and to pay any required redemption
premium, accrued but unpaid interest thereon and other associated
costs and expenses in connection therewith”

           (iii) Section 2 of the Credit Agreement is hereby amended by adding the
following new Section 2.9:

     “The Company may by written notice to the Administrative
Agent elect to request the establishment of one or more new term
loan commitments (the “New Term Loan Commitments”). Such notice
shall specify (A) the date (each, an “Increased Amount Date”) on
which the Company proposes that the New Term Loan Commitments
shall be effective, which shall be a date not less than seven (7)
Business Days after the date on which such notice is delivered to
the Administrative Agent and (B) the identity of each Lender or
other Person that is an Eligible Assignee (each, a “New Term Loan
Lender”) to whom the Company proposes any portion of such New Term
Loan Commitments be allocated and the amounts of such allocations;
provided that any Lender approached to provide all or a portion of
the New Term Loan Commitments may elect or decline, in its sole
discretion, to provide a New Term Loan Commitment. Such New Term
Loan Commitments shall become effective as of such Increased
Amount Date; provided

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that (1) no Default or Event of Default shall exist on such
Increased Amount Date before or after giving effect to the
applicable New Term Loan Commitments; (2) both before and after
giving effect to the making of any New Term Loans, each of the
conditions set forth in Section 4.1 A, B, I, R, S, U and V shall
be satisfied as of the Increased Amount Date; (3) since the date
of the last audited financial statements delivered by the Company
to the Administrative Agent, there shall not have occurred any
event, change, or condition that has had, or could reasonably be
expected to have, a material adverse effect on the business,
assets, operations, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, taken as a whole;
(4) the Company and its Subsidiaries shall be in pro forma
compliance (after giving effect to such New Term Loan Commitments)
with the covenant set forth in Section 7.6 as of the last day of
the most recently ended Fiscal Quarter for which financial
statements have been delivered in accordance with Section 6.1; (5)
the New Term Loan Commitments shall be effected pursuant to one or
more Joinder Agreements executed and delivered by the Company, the
Administrative Agent and each New Term Loan Lender, and each of
which shall be recorded in the Register and shall be subject to
the requirements set forth in Section 2.7E(v); and (6) 100% of the
proceeds of any New Term Loans shall be used on the date of any
borrowing, to the extent the Company is not required to use such
proceeds to prepay the obligations under the First Lien Credit
Agreement, to redeem outstanding Exchange Notes and pay any
redemption premium and accrued but unpaid interest required and
fees and expenses incurred, in each case, in connection with such
redemption. Any New Term Loans made on an Increased Amount Date
shall be designated, a separate series (a “Series”) of New Term
Loans for all purposes of this Agreement.

     On any Increased Amount Date on which any New Term Loan
Commitments of any Series are effective, subject to the
satisfaction of the foregoing terms and conditions, (i) each New
Term Loan Lender of any Series shall make a Loan to Company (a
“New Term Loan”) in an amount equal to its New Term Loan
Commitment of such Series (less the amount of any fees payable
and/or expenses reimbursable, in each case, in connection with
making such New Term Loan), and (ii) each New Term Loan Lender of
any Series shall become a Lender hereunder with respect to the New
Term Loan Commitment of such Series and the New Term Loans of such
Series made pursuant thereto.

     The Administrative Agent shall notify Lenders promptly upon
receipt of Company’s notice of each Increased Amount Date and in
respect thereof the Series of New Term Loan Commitments and the
New Term Loan Lenders of such Series, as applicable.

     The terms and provisions of the New Term Loans and New Term
Loan Commitments of any Series shall be, except as otherwise set
forth herein or in the Joinder Agreement, identical to the Term
Loans. In any event (i) the weighted average life to maturity of
all New Term Loans of any Series shall be no shorter than the
weighted average life to maturity of the Term Loans, (ii) the
applicable New Term Loan Maturity Date of each Series shall be no
shorter than the final

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maturity of the Term Loans and (iii) the rate of interest
applicable to the New Term Loans of each Series shall be
determined by Company and the applicable new Lenders and shall be
set forth in each applicable Joinder Agreement; provided however
that the interest rate applicable to the New Term Loans shall not
be greater than the interest rate payable with respect to Term
Loans unless the interest rate with respect to the Term Loan is
increased so as to equal the interest rate applicable to the New
Term Loans. Each Joinder Agreement may, without the consent of any
other Lenders, effect such amendments to this Agreement and the
other Credit Documents as may be necessary or appropriate, in the
opinion of the Administrative Agent, to effect the provision of
this Section 2.9.”

C. Amendments to Section 4: Conditions Precedent.

           (i) Section 4.1 of the Credit Agreement is hereby amended by deleting the
last sentence of subsection 4.1U and substituting the following sentence:

“Each Lender, by delivering its signature page to this Agreement
or a Joinder Agreement and funding its Term Loans on the Closing
Date or by the funding of any New Term Loans, as the case may be,
shall be deemed to have acknowledged receipt of, and consented to
and approved, each Credit Document and each other document
required to be approved by any Agent, Requisite Lenders or
Lenders, as applicable on the Closing Date or as of the date of
funding of such New Term Loans.”

D. Amendment to Section 7: Negative Covenants.

           (i) Section 7.5 is hereby amended by adding the following to the
conclusion of subsection 7.5(iv):

“Notwithstanding anything to the contrary in subsection 7.5(iv),
in the event that the Company receives Equity Proceeds from the
IPO in an aggregate amount not less than $100,000,000, the Company
may pay to the Monitors a one-time fee in an aggregate of
$3,500,000; provided that the Amended and Restated Monitoring
Agreement shall be terminated in connection with the payment of
such fee and the Company shall be prohibited from making any
further Restricted Payments pursuant to subsection 7.5(iv).”

           (ii) Section 7.5 is hereby further amended by deleting the “and” at the
conclusion of subsection 7.5(v), substituting “;” for the “.” at the conclusion
of subsection 7.5(vi) and adding the following subsections 7.5(vii) and (viii):

     “(vii) Exchange Notes and to pay any required redemption
premium, accrued but unpaid interest thereon and other associated
costs and expenses to the extent funded solely with Equity
Proceeds and proceeds from Indebtedness incurred pursuant to
Section 2.9; and

     (viii) to exchange Series A Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock, including accrued
and unpaid dividends thereon and

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the payment of a redemption premium as required by the terms
thereof, for shares of common stock of the Company.”

           (iii) Section 7.6 is hereby amended by replacing the table at the
conclusion of Section 7.6 with the following table:

	 	 	 	 	 
	Fiscal Quarter
	 	Ratio

	June 30, 2004
	 	 	7.65:1.0	 
	September 30, 2004
	 	 	6.70:1.0	 
	December 31, 2004
	 	 	6.50:1.0	 
	March 31, 2005
	 	 	6.50:1.0	 
	June 30, 2005
	 	 	6.00:1.0	 
	September 30, 2005
	 	 	6.00:1.0	 
	December 31, 2005
	 	 	6.00:1.0	 
	March 31, 2006
	 	 	6.00:1.0	 
	June 30, 2006
	 	 	6.00:1.0	 
	September 30, 2006
	 	 	6.00:1.0	 
	December 31, 2006 and the last day of each Fiscal
Quarter ending thereafter
	 	 	6.00:1.0	 

     E. Section 7.13B(i) is hereby amended by inserting the following prior to
the period at the end of the sentence:

“or preferred stock for which the Company has no obligation,
contingent or otherwise, to make cash dividends upon, purchase,
redeem, retire or otherwise acquire for value prior to six months
after the Term Loan Maturity Date”

SECTION 2. CONDITIONS PRECEDENT TO EFFECTIVENESS

           The effectiveness of the amendments set forth at Section 1 hereof is
subject to the satisfaction, or waiver, of the following conditions on or
before the date hereof (the “First Amendment Effective Date”):

     (a) the Company, the Credit Support Parties and Requisite Lenders
shall have indicated their consent by the execution and delivery of the
signature pages hereof to the Administrative Agent;

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     (b) the Company shall have paid to each Lender executing this First
Amendment on or prior to June 29, 2004 an amendment fee equal to 0.375%
of the aggregate of such Lender’s outstanding Loans and Commitments;

     (c) the Company shall have paid all other fees and other amounts due
and payable by it under the Credit Agreement, including, to the extent
invoiced, reimbursement or other payment of all out-of-pocket expenses
required to be reimbursed or paid by the Company hereunder or under any
other Loan Document;

     (d) all conditions precedent to effectiveness of the First Lien
First Amendment shall have been satisfied or waived in accordance with
the terms thereof; and

     (e) the IPO shall have been consummated.

SECTION 3. REPRESENTATIONS AND WARRANTIES

           A. Corporate Power and Authority. Each Loan Party has all requisite
corporate or partnership or limited liability company (as applicable) power and
authority to enter into this First Amendment and to perform its obligations
under the Credit Agreement and the other Loan Documents.

           B. Authorization of Agreements. The execution and delivery of this First
Amendment and the performance of its obligations under the Credit Agreement and
the other Loan Documents have been duly authorized by all necessary corporate
or partnership or limited liability company (as applicable) action on the part
of each Loan Party.

           C. No Conflict. The execution and delivery by each Loan Party of this
First Amendment and the performance by each Loan Party of its obligations under
the Credit Agreement and the other Loan Documents do not (i) violate (A) any
provision of any law, statute, rule or regulation, or of the certificate or
articles of incorporation or partnership agreement, other constitutive
documents or by-laws of each Loan Party or any of its Subsidiaries except to
the extent such violation would not reasonably be expected to have a Material
Adverse Effect, (B) any applicable order of any court or any rule, regulation
or order of any Governmental Authority except to the extent such violation
would not reasonably be expected to have a Material Adverse Effect or (C) any
provision of any indenture, certificate of designation for preferred stock,
agreement or other instrument to which each Loan Party or any of its
Subsidiaries is a party or by which any of them or any of their property is or
may be bound except to the extent such violation would not reasonably be
expected to have a Material Adverse Effect, (ii) be in conflict with, result in
a breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, certificate of designation for preferred
stock, agreement or other instrument, where any such conflict, violation,
breach or default referred to in clause (i) or (ii) of this Section 3C,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect, (iii) result in or require the creation or imposition
of any Lien upon any of the properties or assets of any Loan Party (other than
any Liens created under any of the Loan Documents in favor of Collateral Agent
on behalf of Lenders and the Liens securing obligations under the First Lien
Credit Agreement that constitute Permitted Liens), or (iv) require any approval
of stockholders or partners or any approval or consent of any Person under any
Contractual Obligation of

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            any Loan Party, except for such approvals or consents which will be
obtained on or before the First Amendment Effective Date and except where the
failure to obtain such approvals and consents would not reasonably be expected
to have a Material Adverse Effect.

           D. Governmental Consents. No action, consent or approval of, registration
or filing with or any other action by any Governmental Authority is required in
connection with the execution and delivery by each Loan Party of this First
Amendment and the performance by each Loan Party of its obligations under the
Credit Agreement and the other Loan Documents, except for such actions,
consents, approvals and filings the failure to obtain or make which would not
reasonably be expected to result in a Material Adverse Effect or which have
been obtained or made and are in full force and effect.

           E. Binding Obligation. This First Amendment and Consent has been duly
executed and delivered by each Loan Party and is the legally valid and binding
obligation of each Loan Party enforceable against such Loan Party in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditors’ rights generally and except as enforceability may be limited by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

           F. Incorporation of Representations and Warranties From Credit Agreement.
The representations and warranties contained in Section 5 of the Credit
Agreement are true and correct in all material respects on and as of the First
Amendment Effective Date to the same extent as though made on and as of that
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true and correct in all
material respects on and as of such earlier date.

           G. Absence of Default. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this First
Amendment that would constitute an Event of Default or a Default.

SECTION 4. ACKNOWLEDGMENT AND CONSENT

           Certain Subsidiaries of Company have (i) guaranteed the Obligations and
(ii) created Liens in favor of Lenders on certain Collateral to secure its
obligations under the Credit Agreement and the Collateral Documents subject to
the terms and provisions of the Credit Agreement. The Subsidiaries of Company
who has guaranteed the Obligations together with the Company are collectively
referred to herein as the “Credit Support Parties”, and the Credit Agreement
and the Collateral Documents are collectively referred to herein as the “Credit
Support Documents”.

           Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this First Amendment and
consents to the amendment of the Credit Agreement and consents effected
pursuant to this First Amendment and Consent. Each Credit Support Party hereby
confirms that each Credit Support Document to which it is a party or otherwise
bound and all Collateral encumbered thereby will continue to guarantee or
secure, as the case may be, in accordance with the Credit Support Documents the
payment and

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            performance of all “Obligations” under each of the Credit Support
Documents, as the case may be (in each case as such terms are defined in the
applicable Credit Support Document), including without limitation the payment
and performance of all such “Obligations” under each of the Credit Support
Documents, as the case may be, in respect of the Obligations of the Company now
or hereafter existing under or in respect of the Credit Agreement and hereby
pledges and assigns to the Collateral Agent, and grants to the Collateral Agent
a continuing lien on and security interest in and to all Collateral as
collateral security for the prompt payment and performance in full when due of
the “Obligations” under each of the Credit Support Documents to which it is a
party (whether at stated maturity, by acceleration or otherwise).

           Each Credit Support Party acknowledges and agrees that any of the Credit
Support Documents to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder shall be valid
and enforceable and shall not be impaired or limited by the execution or
effectiveness of this First Amendment and Consent. Each Credit Support Party
represents and warrants that all representations and warranties contained in
the Credit Agreement, this First Amendment and Consent and the Credit Support
Documents to which it is a party or otherwise bound are true and correct in all
material respects on and as of the First Amendment Effective Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true and correct in all material respects on and as of such
earlier date.

           Each Credit Support Party acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this First Amendment and Consent,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this First Amendment and (ii) nothing in the Credit
Agreement, this First Amendment and Consent or any other Loan Document shall be
deemed to require the consent of such Credit Support Party to any future
amendments to the Credit Agreement.

SECTION 5. MISCELLANEOUS

           A. Binding Effect. This First Amendment shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders. No
Loan Party’s rights or obligations hereunder or any interest therein may be
assigned or delegated by any Loan Party without the prior written consent of
all Lenders.

           B. Severability. In case any provision in or obligation hereunder shall
be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

           C. Reference to Credit Agreement. On and after the First Amendment
Effective Date, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein” or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the “Credit
Agreement”, “thereunder”, “thereof” or words
of like im-

10

 

            port referring to the Credit Agreement shall mean and be a reference to
the Credit Agreement as amended by this First Amendment.

           D. Effect on Credit Agreement. Except as specifically amended in Section
1 of this First Amendment, the Credit Agreement and the other Loan Documents
shall remain in full force and effect and are hereby ratified and confirmed.

           E. Execution. The execution, delivery and performance of this First
Amendment and Consent shall not, except as expressly provided herein,
constitute a waiver of any provision of, or operate as a waiver of any right,
power or remedy of any Agent or Lender under, the Credit Agreement or any of
the other Loan Documents.

           F. Headings. Section headings herein are included herein for convenience
of reference only and shall not constitute a part hereof for any other purpose
or be given any substantive effect.

           G. APPLICABLE LAW. THIS FIRST AMENDMENT AND CONSENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

           H. Counterparts. This First Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. As set forth herein, this First Amendment and Consent shall
become effective upon the execution of a counterpart hereof by each of the
parties hereto and receipt by the Company and the Administrative Agent of
written or telephonic notification of such execution and authorization of
delivery thereof.

[The remainder of this page is intentionally left blank.]

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           IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

	 	 	 	 	 	 	 
	 	 	TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Donald C. Mueller
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Donald C. Mueller
	

	 	 	 	Title:
	 	Vice President, Treasurer and
Chief Financial Officer

	 	 	 
	 

	 	The Guarantor Subsidiaries:
	

	 	Bostrom Holdings, Inc.
	

	 	JAII Management Company
	

	 	Imperial Group Holding Corp. -1
	

	 	Imperial Group Holding Corp. -2
	

	 	Truck Components, Inc.
	

	 	Gunite Corporation
	

	 	Gunite EMI Corporation
	

	 	Brillion Iron Works, Inc.
	

	 	Fabco Automotive Corporation
	

	 	Bostrom Seating, Inc.
	

	 	Bostrom Specialty Seating, Inc.
	

	 	Imperial Group, L.P.
by Imperial Group Holdings Corp.-1,
its General Partner

	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Kenneth M. Tallering
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Kenneth M. Tallering
	

	 	 	 	Title:
	 	Secretary

 

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	CREDIT SUISSE FIRST BOSTON,

through its Cayman Islands Branch, as

Joint Lead Arranger, Administrative

Agent, Collateral Agent
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Robert Hetu
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Robert Hetu
	

	 	 	 	Title:
	 	Director
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Vanessa Gomez
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Vanessa Gomez
	

	 	 	 	Title:
	 	Associate

 

 

	 	 	 	 	 	 	 
	

	 	 	 	By:
	 	David L. Babson & Company Inc.
	 
	 	 	 	 	 	 
	 	 	 	 	as Collateral Manager on behalf of the
investment funds under its management as
listed below.
	 
	 	 	 	 	 	 
	

	 	 	 	•
	 	APEX (IDM) CDO I, Ltd.
	

	 	 	 	•
	 	BABSON CLO LTD. 2003-I

	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Russell Morrison
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Russell Morrison
	

	 	 	 	Title:
	 	Managing Director

	 	 	 	 	 
	 
	 	 	 	 
	 	 	PERSEUS CDO I, LIMITED
	 
	 	 	 	 
	

	 	By:
	 	David L. Babson & Company Inc.
under delegated authority from
Massachusetts Mutual Life Insurance
Company as Portfolio Manager

	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Russell Morrison
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Russell Morrison
	

	 	 	 	Title:
	 	Managing Director

 

 

	 	 	 	 	 
	 	 	APEX (Trimaran) CDO I, LTD.
	 
	 	 	 	 
	

	 	By:
	 	Trimaran Advisors, L.L.C.,
as a Lender

	 	 	 	 	 	 	 
	 	 	By:	 	/s/ David M. Millison
	 	 	 	 	
 
	

	 	 	 	Name:
	 	David M. Millison
	

	 	 	 	Title:
	 	Managing Director

 

 

	 	 	 	 	 	 	 
	 	 	MERRILL LYNCH PCG, INC.,
as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Fariborz Ehsani
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Fariborz Ehsani
	

	 	 	 	Title:
	 	President

 

 

	 	 	 	 	 	 	 
	 	 	CREDIT OPPORTUNITIES FUNDING, INC.,
as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Diana M. Himes
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Diana M. Himes
	

	 	 	 	Title:
	 	Assistant Vice President

 

 

	 	 	 	 	 	 	 
	 	 	SPECIAL VALUE BOND FUND II, LLC,  
as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	SVIM/MSM II, LLC
	 	 	Its:	 	Managing Member
	 
	 	 	 	 	 	 
	 	 	By:	 	Tennenbaum & Co., LLC
	 	 	Its:	 	Managing Member
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Howard Levkowitz
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Howard Levkowitz
	

	 	 	 	Title:
	 	Managing Partner

 

 

	 	 	 	 	 	 	 
	 	 	SPECIAL VALUE ABSOLUTE RETURN FUND, LLC,

as a Lender	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	SVAR/MM, LLC	 	 
	

	 	Its:
	 	Managing Member	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	Tennenbaum Capital Partners, LLC	 	 
	

	 	Its:
	 	Managing Member	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	Tennenbaum & Co., LLC	 	 
	

	 	Its:
	 	Managing Member	 	 

	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Howard Levkowitz
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Howard Levkowitz
	

	 	 	 	Title:
	 	Managing Partner

 

 

	 	 	 	 	 
	 	 	J.B. FUQUA FAMILY CHARITABLE LEAD ANNUITY
TRUST-2000, as a Lender
	 
	 	 	 	 
	

	 	By:
	 	Tennenbaum Capital Partners, LLC
	

	 	Its:
	 	Investment Manager

	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Howard Levkowitz
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Howard Levkowitz
	

	 	 	 	Title:
	 	Managing Partner

 

 

	 	 	 	 	 	 	 
	 	 	CARLYLE HIGH YIELD PARTNERS II, LTD.,
as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Linda Pace
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Linda Pace
	

	 	 	 	Title:
	 	Managing Director

 

 

	 	 	 	 	 	 	 
	 	 	CARLYLE HIGH YIELD PARTNERS III, LTD.,
as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Linda Pace
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Linda Pace
	

	 	 	 	Title:
	 	Managing Director

 

 

	 	 	 	 	 	 	 
	 	 	CARLYLE LOAN OPPORTUNITY FUND,

as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Linda Pace
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Linda Pace
	

	 	 	 	Title:
	 	Managing Director

 

 

	 	 	 	 	 	 	 
	 	 	CARLYLE HIGH YIELD PARTNERS, L.P.,
as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Linda Pace
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Linda Pace
	

	 	 	 	Title:
	 	Managing Director

 

 

	 	 	 	 	 	 	 
	 	 	CARLYLE HIGH YIELD PARTNERS IV, LTD.,
as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Linda Pace
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Linda Pace
	

	 	 	 	Title:
	 	Managing Director

 

 

	 	 	 	 	 
	 	 	CHATHAM ASSET HIGH YIELD MASTER FUND, LTD.,
as a Lender
	 
	 	 	 	 
	

	 	By:
	 	Chatham Asset Management, LLC
	

	 	Its:
	 	Investment Advisor

	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Anthony Melchiorre
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Anthony Melchiorre
	

	 	 	 	Title:
	 	Managing Member

 

 

	 	 	 	 	 	 	 
	 	 	ORYX CLO, LTD.
	 
	 	 	 	 	 	 
	 	 	By:	 	ING Capital Advisors LLC,

as Collateral Manager, as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Philip C. Robbins
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Philip C. Robbins
	

	 	 	 	Title:
	 	Director

	 	 	 	 	 	 	 
	 	 	NEMEAN CLO, LTD.
	 
	 	 	 	 	 	 
	 	 	By:	 	ING Capital Advisors LLC,

as Investment Manager, as a Lender
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Philip C. Robbins
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Philip C. Robbins
	

	 	 	 	Title:
	 	DirectorFORM OF EMPLOYMENT AGREEMENT

 

Exhibit 10.1

Employment Agreement for [Executive]

     THIS EMPLOYMENT AGREEMENT made effective as of the [     ] day of
[            ], 2004 (the “Effective Date”), between Transportation
Technologies Industries, Inc., a Delaware corporation (the “Company”), and
[Executive] (the “Executive”);

WITNESSETH THAT:

     WHEREAS, the Company, through its wholly-owned subsidiaries, is engaged in
the business of manufacturing equipment for the transportation industry,
including wheel-end components and air suspension and static seating for medium
and heavy-duty trucks, body and chassis components for heavy duty trucks, and
complex iron castings for a variety of industries including trucking,
automotive, agricultural, construction and industrial machinery (such business
hereinafter referred to as the “Business”); and

     WHEREAS, the Executive, as a result of training, expertise and personal
application over the years, has acquired and will continue to acquire
considerable and unique expertise and knowledge that are of substantial value
to the Company in the conduct, management and operation of the Business, and
the Company considers it essential to the best interests of its shareholders to
foster the continuous employment of key management personnel; and

     WHEREAS, the Executive currently serves as [title] [and a Director of the
Company], and the Company desires to continue the employment and service of the
Executive as [title] [and, at all times the Executive is the [title] of the
Company, a Director of the Company], and is willing to provide the Executive
with certain benefits in the event of the termination of the Executive’s
employment with the Company; and

     WHEREAS, the Board of Directors of the Company (the “Board”) has
determined that appropriate steps should be taken to reinforce and encourage
the continued attention and dedication of members of the Company’s management,
including the Executive, to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from the possibility of a
Change in Control (as defined below); and

     WHEREAS, the Company and the Executive entered into an Employment
Agreement dated July 1, 1999, as amended March 9, 2000 (the “Prior Employment
Agreement”), and the Company and the Executive desire to continue the
employment relationship by entering into this Employment Agreement;

     NOW THEREFORE, in consideration of the continued employment of the
Executive by the Company and the benefits to be derived by the Executive
hereunder, and of the Executive’s agreement to continued employment by the
Company as provided herein, the parties mutually agree as follows:

     1. Employment; Prior Employment Agreement.

          (a) The parties hereto agree, effective as of the date hereof, to
terminate the Prior Employment Agreement, and agree that, following termination
of the Prior Employment Agreement,

 

 

there shall be no liability on the part of either party hereto with
respect to the Prior Employment Agreement.

          (b) The Company hereby agrees to continue to employ the Executive, and the
Executive hereby agrees to continue to serve the Company, on the terms and
conditions set forth herein.

     2. Term. The employment of the Executive by the Company pursuant to this
Agreement will continue as of the date hereof (the “Effective Date”) and shall
expire on the third anniversary of the Effective Date (the “Term”), unless
extended as set forth below or otherwise terminated pursuant to the provisions
of this Agreement; provided, however, that on the second anniversary of the
Effective Date and on each anniversary thereafter, the Term shall automatically
be extended for one year unless, not later than 90 days prior to such
anniversary, the Executive or the Company shall have given notice in writing to
the other that he or it does not wish to extend the Term; and provided further,
that if a Change in Control shall have occurred during the Term, this Agreement
shall continue in effect and the Term shall be extended until at least the
later of the second anniversary of such Change in Control or, if such Change in
Control shall be caused by the consummation of a merger or consolidation
described in Section 6(d)(iii)(C) hereof, the second anniversary of the
consummation of such merger or consolidation.

     3. Position and Duties. The Executive shall serve as [title] [and, at all
times that the Executive is the Chief Executive Officer of the Company, a
Director of the Company], and shall have such responsibilities, duties and
authority as are customarily associated with such offices, including but not
limited to, those he may have as of the Effective Date. [The Company shall use
its commercially reasonable effects to take all actions necessary to nominate
the Executive as a Director of the Company if the Executive’s term as a
Director of the Company shall expire at a time that the Executive is the
[title] of the Company during the Term]. The Executive shall devote all of his
normal and regular business time and attention to the performance of his duties
in such capacities except as otherwise set forth herein. The Executive may
devote reasonable time to supervision of personal investments and professional,
charitable, educational, religious and similar types of activities, speaking
engagements and membership on other boards of directors, so long as, taken as a
whole, such activities do not interfere with the performance of his duties
hereunder and do not conflict with Section 10 of this Agreement; provided that
the Executive may not serve on the board of directors of another company (other
than the Company, TMB portfolio companies and any company on whose board the
Executive serves as of the Effective Date) without the Board’s written consent.
The Executive shall be entitled to keep any amounts paid to him in connection
with such activities (e.g., director fees and honoraria).1

     4. Place of Performance. In connection with the Executive’s employment by
the Company, the Executive shall be based at the offices of the Company in
Chicago, Illinois, except for required travel on the Company’s business to the
extent consistent with Company practices prior to the Effective Date. The
Company shall pay all expenses related to such office facilities to the extent
used by, and devoted to the operations of, the Company and its subsidiaries (or
comparable office facilities selected by the Executive and approved by the
Board), including, without limitation, rent, salaries, equipment, utilities and
other operating costs and expenses.

     5. Compensation and Related Matters. As compensation and consideration
for the performance by the Executive of the Executive’s duties,
responsibilities and covenants pursuant to this Agree-

	1	 	To be modified as agreed with certain executive.

- 2 -

 

ment, the Company will pay the Executive and the Executive agrees to
accept in full payment for such performance the amounts and benefits set forth
below.

          (a) Salary. During the Term of the Executive’s employment hereunder, the
Company shall pay to the Executive an annual base salary at a rate of
$[            ] (as adjusted in accordance with the provisions hereof, the “Base
Salary”) commencing on the first day of the calendar year of the Effective Date
or such higher rate as may from time to time be determined by the Board, such
salary to be paid in substantially equal installments no less frequently than
monthly. The Board, or such committee of the Board as is responsible for
setting the compensation of senior executive officers, shall review the
Executive’s performance and Base Salary annually in January of each year, and
determine whether to adjust the Executive’s Base Salary on a prospective basis.
Such adjusted annual salary shall then become the Executive’s “Base Salary”
for purposes of this Agreement. The Executive’s Base Salary shall not be
reduced.

          Compensation of the Executive by salary payments shall not be deemed
exclusive and shall not prevent the Executive from participating in any other
compensation or benefit plan of the Company or any of the Company’s
subsidiaries or affiliates. The Base Salary shall not in any way limit or
reduce any other obligation of the Company hereunder or under any other
compensation or benefit plan or agreement under which the Executive is entitled
to receive payments or other benefits from the Company or any of the Company’s
subsidiaries or affiliates, and no other compensation, benefit or payment
hereunder or under any other compensation or benefit plan or agreement under
which the Executive is entitled to receive payments or other benefits from the
Company shall in any way limit or reduce the obligation of the Company to pay
the Base Salary hereunder.

          (b) Bonus. During the Term of the Executive’s employment hereunder, the
Executive shall participate, in a manner consistent with the Executive’s title,
position and responsibilities, in all management incentive plans made generally
available to executives of the Company in comparable positions (together, the
“Bonus Plans”) at a targeted bonus level, expressed as a percentage of the Base
Salary, of (i) 65% for 2004 and (ii) 100% for fiscal years thereafter so long
as approved by the Board (the “Target”). The Executive agrees that the actual
award of any cash bonus pursuant to a Bonus Plan may, pursuant to the terms of
such plan, be subject to the achievement of certain financial goals by the
Company and/or certain personal performance goals established for the Executive
with respect to any period for which a cash bonus may be paid pursuant to a
Bonus Plan (in each case such goals having been established by the Board or a
committee thereof no later than the last day of the first month of the fiscal
year) and shall be paid to the Executive after the fiscal year end following
determination by the Board or a committee thereof of the Company’s achievement
of any applicable financial goals or of any personal performance goals
established for the Executive (but in any event not later than 120 days after
the end of such fiscal year). If the Executive’s employment terminates for any
reason other than a termination by the Executive without Good Reason before the
end of the second quarter of a fiscal year or a termination by the Company for
Cause before the end of a fiscal year, the Company shall pay to the Executive
at the time provided in the preceding sentence a lump sum amount, in cash,
equal to the difference between (1) a pro rata portion to the Date of
Termination of any annual bonus award to the Executive for the uncompleted
fiscal year, calculated by multiplying the applicable bonus, if any, that the
Executive would have earned for that fiscal year based on the Company’s
achievement of any applicable financial goals or of any personal performance
goals established for the Executive by a fraction the numerator of which is the
number of days the Executive was employed during such fiscal year and the
denominator of which is 365, and (2) the amount of any annual bonus award the
Company has already paid to the Executive for the uncompleted fiscal year. If
the Executive terminates his employment without Good Reason before the end of
the second quarter of a fiscal year or the Company terminates the Executive’s
employment for Cause before the end of a fiscal year, the Executive will not be
entitled to receive any bonus for that fiscal year.

- 3 -

 

          (c) Expenses. During the Term of the Executive’s employment hereunder,
the Executive shall be entitled to receive prompt reimbursement for all
reasonable travel and entertainment expenses or other out-of-pocket business
expenses incurred by the Executive during the Term in fulfilling the
Executive’s duties and responsibilities hereunder, including all expenses of
travel and living while away from home on business or at the request of and in
the service of the Company, provided that such expenses are incurred and
accounted for in accordance with the policies and procedures established by the
Company.

          (d) [Retiree Medical Benefits. Following the Executive’s Date of
Termination for any reason other than a termination by the Executive prior to
the third anniversary of the Effective Date other than for Good Reason or a
termination by the Company for Cause (but including, without limitation, for
any reason specified in clause (a) or (b) or (d) of Section 6), the Company
shall (at the Company’s sole expense and without any contribution by the
Executive, the Executive’s Spouse and/or the Executive’s dependents) provide
the Executive, the Executive’s Spouse (as defined in this Section 5(d)) and the
Executive’s dependents with medical and dental insurance benefits substantially
similar to those benefits “provided” to them immediately prior to the Date of
Termination or, if more favorable to the Executive, those “provided” to them on
the Effective Date, from the Date of Termination until the later of the death
of the Executive or the death of the Executive’s Spouse. In determining which
benefits were “provided” at the applicable date, the Executive shall be deemed
to have elected the most comprehensive benefits and coverage available to the
Executive at that date (whether or not actually elected). Such benefits shall
also include, without limitation, an unrestricted right for the Executive, the
Executive’s Spouse and the Executive’s dependents to select their own care
providers. The Company shall provide such post-termination benefits under its
medical and dental plans, to the extent that the Executive’s continued
participation is possible under the general terms and provisions of such plans.
To the extent that such participation is not possible, the Company shall
arrange to otherwise provide the Executive with such post-termination benefits.
Also, to the extent that the Executive is, at any time, entitled to insurance
under the Medicare program or its equivalent, the insurance under this Section
5(d) shall be only supplementary or secondary to the extent allowed by law.
For purposes of this Section 5(d), the “Executive’s Spouse” shall refer to the
Executive’s spouse immediately prior to the termination of the Executive’s
employment with the Company. This is a vested benefit that will be provided
following the Executive’s employment termination for any reason other than
termination by the Company for Cause or a termination by the Executive prior to
the third anniversary of the Effective Date other than for Good Reason (but
including, without limitation, for any reason specified in clause (a) or (b) or
(d) of Section 6) and will survive the termination of this Agreement.]2

          (e) Other Benefits and Perquisites. During the Term of the Executive’s
employment hereunder:

     (i) the Executive shall be entitled to participate in or receive
benefits under any employee retirement or welfare benefit plan or
arrangement made available by the Company at any time during his
employment hereunder to its executive employees (collectively, the
“Benefit Plans”), including without limitation each qualified or
non-qualified retirement, thrift or profit sharing plan, life insurance
and accident plan, supplemental pension and life insurance, medical

	2	 	Paragraph to be applicable to Chief Executive Officer only.

- 4 -

 

and dental insurance plans, and disability plan, subject to and on a
basis consistent with the terms, conditions and overall administration of
such plans and arrangements; and

     (ii) the Company shall reimburse the Executive for reasonable
expenses of an automobile chosen by the Executive, in an amount of up to
[                    ] dollars ($            ]) per
month as well as automobile insurance, parking and maintenance, according
to the Company’s policies and upon the Executive’s presentation of
appropriate documentation. The Executive shall also be entitled to all
other perquisites the Company gives to its executive employees.

     Nothing paid to the Executive under any plan, arrangement or perquisite
currently in effect or made available in the future shall be deemed to be in
lieu of the Base Salary. Any payments or benefits payable to the Executive
under this Section 5 in respect of any year during which the Executive is
employed by the Company for less than the entire year shall, unless otherwise
provided in the applicable plan or arrangement, be prorated in accordance with
the number of days in such year during which he is so employed.

          (f) Vacations. During his employment hereunder, the Executive shall be
entitled to paid vacation in each calendar year, determined in accordance with
the Company’s vacation policy. The Executive shall also be entitled to all paid
holidays and personal days given by the Company to its executive employees.

          (g) Equity Compensation. The Executive shall be entitled to participate
in and receive awards under any equity compensation plan or arrangement made
available by the Company to its executive employees at any time during his
employment hereunder.

     6. Termination. The Executive’s employment hereunder may be terminated
under the following circumstances:

          (a) Death. The Executive’s employment hereunder shall terminate upon his
death.

          (b) Disability. If, in the written opinion of a qualified physician
selected by the Company, the Executive shall become unable to perform his
duties hereunder due to physical or mental illness that continues for one year,
the Company may terminate the Executive’s employment hereunder.

          (c) Cause. The Company may terminate the Executive’s employment hereunder
for Cause. The Company shall have “Cause” to terminate the Executive’s
employment hereunder upon:

     (i) the willful and continuous neglect or refusal to perform the
Executive’s duties or responsibilities, or the willful taking of actions
(or willful failures to take actions) that materially impair the
Executive’s ability to perform his duties or responsibilities that in
each case continues after being communicated in writing to the Executive
(other than any such failure resulting from the Executive’s incapacity
due to physical or mental illness or any such actual or anticipated
failure after the issuance of a Notice of Termination (as defined in
subsection (e) hereof ); or

     (ii) any act by the Executive that constitutes gross negligence or
willful misconduct in the performance of his duties hereunder, or the
conviction of the Executive for any felony, in each case which is
materially and manifestly injurious to the Company and which is brought
to the attention of the Executive in writing not more than thirty days
from the date of its discovery by the Company or the Board.

- 5 -

 

     For purposes of this subsection (c), no act, or failure to act, on the
Executive’s part shall be considered “willful”, unless done, or omitted to be
done, by him not in good faith or without reasonable belief that his action or
omission was in the best interest of the Company. Any act, or failure to act,
based upon the direction or instruction of the Board pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for the Company
shall be presumed to be done, or omitted to be done, in good faith and in the
best interests of the Company absent knowledge by the Executive to the contrary.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause without (1) written notice to the Executive specifying in
detail the specific reasons for the Company’s intention to terminate for Cause,
(2) an opportunity for the Executive, together with his counsel, to be heard
before the Board, (3) with respect to actions or inaction specified in
paragraph (i) above, a reasonable opportunity for the Executive to cure the
action or inaction specified by the Company, and (4) delivery to the Executive
of a Notice of Termination, as defined in subsection (e) hereof.

          (d) Good Reason.

          (i) The Executive may terminate his employment hereunder for Good Reason.

          (ii) “Good Reason” shall mean, without the Executive’s express written
consent, the occurrence of any of the following circumstances unless such
circumstances are fully corrected prior to the Date of Termination (as defined
in subsection (f) of this Section 6) specified in the Notice of Termination
given in respect thereof: (A) a material change in the Executive’s position,
duties, responsibilities (including reporting responsibilities) or authority
(except during periods when the Executive is unable to perform all or
substantially all of the Executive’s duties and/or responsibilities on account
of the Executive’s illness (either physical or mental) or other incapacity),
which, in the Executive’s reasonable judgment, represent an adverse change, (B)
a reduction in either the Executive’s annual rate of Base Salary or level of
participation in any Bonus Plans for which he is eligible under Section 5(b)
hereof, (C) failure to provide facilities or services that are suitable as
determined by the Board to the Executive’s position and adequate for the
performance of the Executive’s duties and responsibilities, including the
failure to maintain the Chicago office (or comparable office facilities so long
as the Executive does not have to relocate outside the city of Chicago,
Illinois), without the prior written consent of the Executive, (D) any
purported termination by the Company of the Executive’s employment that is not
effected pursuant to a Notice of Termination satisfying the requirements of
subsection (e) of this Section 6 (and for purposes of this Agreement no such
purported termination shall be effective), or (E) failure of any successor (by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to become liable for the performance
of this Agreement by assumption pursuant to Section 12 of this Agreement or by
operation of law or otherwise. The Executive’s right to terminate employment
pursuant to this subsection shall not be affected by the Executive’s incapacity
due to physical or mental illness.

          (iii) A “Change in Control” shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:

     (A) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from
the Company or its affiliates) representing 20% or more of the combined
voting power of the Company’s then outstanding securities; or

     (B) during any period of two consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board and any new director (other
than a director designated by a Person who has entered into an agreement
with the Company to effect a transaction described in clause (A), (B) or
(C) of this

- 6 -

 

paragraph) whose election by the Board or nomination for election by
the Company’s stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors, at
the beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a majority
thereof; or

     (C) the consummation of a merger or consolidation of the Company
with any other corporation, other than (i) merger or consolidation that
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, at least 75% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person acquires more than 50% of the
combined voting power of the Company’s then outstanding securities; or

     (D) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all the Company’s assets.

Notwithstanding the foregoing, a Change in Control shall not include (i) the
initial public offering of capital stock of the Company and any associated
changes to the composition of the Board, and (ii) any changes to the
composition of the Board mandated by applicable law, rule or regulation
(including by the rules of any self-regulating entity).

          (iv) “Beneficial Owner” shall have the meaning given in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

          (v) “Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used herein; however, a Person shall not include
(i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any of its
subsidiaries, (iii) an underwriter temporarily holding securities pursuant to
an offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

          (e) Notice of Termination. Any termination of the Executive’s employment
by the Company or by the Executive (other than a termination pursuant to
subsection (a) hereof) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 13. A “Notice of
Termination” shall mean a notice that shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provision so indicated.

          (f) “Date of Termination” shall mean (i) if the Executive’s employment is
terminated pursuant to subsection (a) above, the date of his death, (ii) if the
Executive’s employment is terminated pursuant to subsection (b) above, thirty
days after Notice of Termination is given (provided that the Executive shall
not have returned to the full-time performance of the Executive’s duties during
such thirty-day period), (iii) if the Executive’s employment is terminated
pursuant to subsection (c) or (d) above, the date specified in the Notice of
Termination that, in the case of a termination for Cause shall be the date such
Notice of Termination is given (or such later date as provided therein), and in
the case of a termination for Good Reason shall not be less than twenty (20)
nor more than thirty (30) days from the

- 7 -

 

date such Notice of Termination is given, or (iv) if the Executive
terminates his employment and fails to provide written notice to the Company of
such termination, the date of such termination; provided, however, that if
within fifteen (15) days after any Notice of Termination is given or, if later,
prior to the Date of Termination (as determined without regard to this
proviso), the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, then the Date of
Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding arbitration
award or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); and provided,
further, that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the foregoing, if the dispute is resolved in favor of the
Company, the Date of Termination shall not he deemed to have been extended for
purposes of this Agreement. If the Date of Termination is extended by a notice
of dispute, the rights and the obligations of the parties upon a final
determination shall be governed by the terms of this Agreement, regardless of
whether the Agreement otherwise remains in effect on the date of such final
determination. Notwithstanding the pendency of any such dispute, the Company
will continue to pay to the Executive his full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
Base Salary) and continue the Executive as a participant in all compensation,
benefit and insurance plans and perquisites in which the Executive was
participating when the notice giving rise to the dispute was given and the
Executive shall, at the Company’s request, continue to perform his obligations
hereunder to the extent practicable, in each case, until the dispute is finally
resolved in accordance with this subsection.

          If the Company elects not to have the Executive continue to perform his
obligations hereunder during the pendency of such dispute, and the Company
prevails in such dispute, then the Executive shall promptly return to the
Company any monies (or the value of any benefits) received with respect to
service performed by him after the originally stated Date of Termination to
which the Executive would not have been otherwise entitled.

     7. Compensation Upon Termination, Death or During Disability.

          (a) The following payments will be made upon the Executive’s termination
of employment for any reason: (i) earned but unpaid Base Salary through the
Date of Termination; (ii) any annual incentive plan bonus, or other form of
incentive compensation, for which the performance measurement period has ended,
but which is unpaid at the time of termination; (iii) any accrued but unpaid
vacation; (iv) the pro rata portion of the Executive’s bonus owed pursuant to
Section 5(b), if any; (v) unreimbursed business expenses owed pursuant to
Section 5(c); and (vi) any amounts payable under any of the Company’s Benefit
Plans in accordance with the terms of those plans. All amounts under clauses
(i), (ii), (iii) and (v) shall be paid in a lump sum within 30 days of the
Executive’s Date of Termination; all amounts under clause (iv) shall be paid in
a lump sum as provided in Section 5(b).

          (b) During any period that the Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, the
Executive shall continue to receive his full Base Salary and other benefits at
the rate then in effect for such period (offset by any payments to the
Executive received pursuant to Company-paid disability benefit plans maintained
by the Company) until his employment is terminated pursuant to Section 6(b)
hereof, and upon such termination, the Company shall pay the amounts specified
in Section[s] [5(d) (but only in the circumstances provided therein) and] 7(a),
and the Company shall, thereafter, have no further obligations to the Executive
or to his legal representative or estate or his or its successors and assigns
under this Agreement.

- 8 -

 

          (c) If the Executive’s employment is terminated by his death, the Company
shall pay to the Executive’s legal representative (A) any death benefits
provided under any Benefit Plan in accordance with their terms and (B) the
amounts specified in paragraph 7(a), [and (C) benefits to which the Executive
is entitled under Section 5(d),] and the Company shall, thereafter, have no
further obligations to the Executive or to his legal representative or estate
or his or its successors and assigns under this Agreement.

          (d) If the Executive’s employment is terminated by the Company for Cause
or by the Executive for other than Good Reason, the Company shall pay the
Executive his Base Salary pro rata through the Date of Termination at the rate
in effect at the time Notice of Termination is given, the amounts specified in
Section[s] [5(d) (but only in the circumstances provided therein) and] 7(a),
and the Company shall, thereafter, have no further obligations to the Executive
or to his legal representative or estate or his or its successors and assigns
under this Agreement.

          (e) Subject to Section 8 hereof, if (A) in breach of this Agreement, the
Company shall terminate the Executive’s employment (it being understood that a
purported termination pursuant to Section 6(b) hereof or Section 6(c) hereof
which is disputed and finally determined not to have been proper shall be a
termination by the Company in breach of this Agreement) or (B) the Executive
shall terminate his employment for Good Reason, then the Company shall provide
the following payments and benefits (collectively, the “Severance Payments”):

     (i) the Company shall pay the Executive the amounts specified in
paragraph 7(a); and

     (ii) in lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination, the Company shall pay as
liquidated damages to the Executive on the Date of Termination, a lump
sum amount equal to the product of (x) the number two, multiplied by (y)
the sum of:

     (A) the Executive’s Base Salary in effect as of the date
Notice of Termination is given and

     (B) the greatest of (i) the Executive’s guaranteed annual
bonus (if any) with respect to the fiscal year in which the Date of
Termination occurs, (ii) the Target annual bonus that may become
payable to the Executive with respect to the fiscal year in which
the Date of Termination occurs, (iii) the bonus payments made to
the Executive with respect to the fiscal year immediately prior to
the fiscal year in which the Date of Termination occurs, and (iv)
the average of the bonus payments made to the Executive with
respect to the three fiscal years immediately prior to the fiscal
year in which the Date of Termination occurs (or such shorter
period as the Executive has been employed by the Company); and

     (iii) the Company shall at its own cost continue the participation
of the Executive for a period of three years, in all medical, life and
other “employee welfare benefit plans” as that term is defined in Section
3(1) of the Employee Retirement Income Security Act of 1974, as amended
(including, without limitation, the supplemental life insurance program
in place at the time of execution of this Agreement) in which the
Executive was entitled to participate immediately prior to the Date of
Termination so long as the Executive’s continued participation is
permitted under the terms and provisions of such plans and programs as in
effect on the date of such Termination. In the event that the
Executive’s participation in any such plan or program is barred, the Com-

- 9 -

 

pany shall arrange to provide the Executive with benefits
substantially similar to those that the Executive would otherwise have
been entitled to receive under such plans and programs from which his
continued participation is barred; and

     (iv) the Company shall, at its own cost, continue to provide the
Executive for a period of three years with the perquisites and
reimbursements the Company gave or provided to the Executive, pursuant to
Section 5[(e)][(d)] of this Agreement, immediately prior to the Date of
Termination; and

     (v) the Company shall pay to the Executive (upon presentation of
appropriate invoices and other documentation) an amount equal to the
amount of all legal fees and expenses incurred by the Executive in
contesting, arbitrating or disputing any such termination or in seeking
to obtain or enforce any right or benefit provided by this Agreement;
provided that, such claim has been brought in good faith by the Executive
and if the Executive shall not be successful, the Executive shall return
50% of the legal fees and expenses previously reimbursed to the Executive
by the Company; and

     (vi) if the Company shall fulfill its obligations to the Executive
pursuant to this Section 7(e) then the Company shall, thereafter, have no
further obligations to the Executive or to his legal representative or
estate or his or its successors and assigns under this Agreement.

          (f) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 7 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 7 be reduced by any compensation earned by the Executive as the result
of employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by the Executive to the Company, or otherwise.

          (g) The obligations of the Company to make payments and provide benefits
under this Section 7 shall survive the termination of this Agreement.

     8. Additional Payments for Adherence to Restrictive Covenants Following
Termination. In addition to the compensation, payments and benefits payable
and provided under Section 7, upon any termination of the Executive’s
employment entitling him to benefits under Section 7(e), in exchange for the
Executive’s adherence to the restrictive covenants provided in Section 10, the
Company shall pay to the Executive on the Date of Termination, a lump sum
amount equal to the sum of: (a) the Executive’s Base Salary in effect as of the
date Notice of Termination is given and (b) the greatest of (i) the Executive’s
guaranteed annual bonus (if any) with respect to the fiscal year in which the
Date of Termination occurs, (ii) the Target annual bonus that may become
payable to the Executive with respect to the fiscal year in which the Date of
Termination occurs, (iii) the bonus payments made to the Executive with respect
to the fiscal year immediately prior to the fiscal year in which the Date of
Termination occurs, and (iv) the average of the bonus payments made to the
Executive with respect to the three fiscal years immediately prior to the
fiscal year in which the Date of Termination occurs (or such shorter period as
the Executive has been employed by the Company).

          The Executive shall not be required to mitigate the amount of any payment
provided for in this Section 8 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 8 be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Company, or otherwise. The
Company’s obligations to make payments under this Section 8 shall survive the
termination of this Agreement.

- 10 -

 

     9. Treatment of Parachute Payments.

          (a) Notwithstanding any other provisions of this Agreement, and except as
set forth below, in the event that any payment or benefit received or to be
received by the Executive in connection with a Change in Control or the
termination of the Executive’s employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Company,
any Person whose actions result in a Change in Control or any Person affiliated
with the Company or such Person) (all such payments and benefits, including the
Severance Payments, being hereinafter called “Total Payments”) is determined to
be an “excess parachute payment” pursuant to Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), or any successor or substitute
provision of the Code, with the effect that Executive is liable for the payment
of the excise tax described in Code Section 4999 or any successor or substitute
provision of the Code (the “Excise Tax”), then, after taking into account any
reduction in the Total Payments provided by reason of Code Section 280G in such
other plan, arrangement or agreement, the cash payments provided in Section
7(e)(ii) of this Agreement shall first be reduced, and the noncash payments and
benefits shall thereafter be reduced, to the extent necessary so that no
portion of the Total Payments is subject to the Excise Tax; provided, however,
that Executive may elect (at any time prior to the payment of any Total Payment
under this Agreement) to have the noncash payments and benefits reduced (or
eliminated) prior to any reduction of the cash payments under this Agreement.
Notwithstanding the foregoing, payments or benefits under this Agreement will
not be reduced unless: (i) the net amount of the Total Payments, as so reduced
(and after subtracting the net amount of federal, state and local income taxes
on such reduced Total Payments) is greater than (ii) the difference of (A) the
net amount of such Total Payments, without reduction (but after subtracting the
net amount of federal, state and local income taxes on such Total Payments),
minus (B) the amount of Excise Tax to which the Executive would be subject in
respect of such unreduced Total Payments.

          (b) All determinations required to be made under this Section 9, and the
assumptions to be utilized in arriving at such determination, shall be made by
the certified public accounting firm used for auditing purposes by the Company
immediately prior to the Date of Termination or, if the parties determine that
the certified public accounting firm used for auditing purposes by the Company
immediately prior to the Date of Termination cannot make such determination
because of legal restrictions, the parties shall agree on a different certified
public accounting firm (such certified public accounting firm is hereinafter
referred to as the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Company and the Executive not later than 5 days prior
to the Date of Termination. The Company shall pay all fees and expenses of the
Accounting Firm. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive, except as provided in paragraph (c) below.

          (c) As a result of the uncertainty in the application of Code Sections
280G and 4999 at the time of the initial determination by the Accounting Firm
hereunder, it is possible that the Internal Revenue Service (the “IRS”) or
other agency will claim that an Excise Tax, or a greater Excise Tax, is due.
If the Executive is required to make a payment of any such Excise Tax, the
Company will promptly pay the Executive an additional amount equal to the
amount, or greater amount, of Excise Tax the Executive is required to pay (plus
a gross up payment for any income taxes, interest, penalties or additional
Excise Tax payable by Executive with respect to such Excise Tax or additional
payment), as determined by the Accounting Firm. The Executive will notify the
Company in writing of any claim by the IRS or other agency that, if successful,
would require payment by the Company of the additional payments under this
paragraph. The Executive and the Company shall each reasonably cooperate with
the other in connection with any administrative or judicial proceedings
concerning the existence or amount of liability for Excise Tax with respect to
the Total Payments. The Company shall pay all fees and expenses of the
Executive relating to a claim by the IRS or other agency.

- 11 -

 

     10. Restrictive Covenants.

          (a) Covenant Not to Compete. The Executive acknowledges that, as a key
management employee, the Executive will be involved, on a high level, in the
development, implementation and management of the Company’s strategies and
plans, including those that involve the Company’s finances, research,
marketing, planning, operations, industrial relations and acquisitions, and
that he will have access to Confidential Information, as defined in Section 11.
By virtue of the Executive’s unique and sensitive position and special
background, employment of the Executive by a competitor of the Company
represents a serious competitive danger to the Company, and the use of the
Executive’s talent and knowledge and information about the Company’s business,
strategies and plans can and would constitute a valuable competitive advantage
over the Company. In view of the foregoing, the Executive covenants and agrees
that at all times during the Executive’s employment by the Company and, if the
Executive’s employment is terminated (i) by the Company in breach of this
Agreement, (ii) pursuant to an event constituting Good Reason or (iii) under
any other circumstances, then, for a period of two years in the case of clauses
(i) and (ii) of this sentence, and for a period of one year in the case of
clause (iii) of this sentence after the Date of Termination (such period,
together with the period of the Executive’s employment by the Company, the
“Non-Compete Period”), the Executive will not engage or be engaged, in any
capacity, directly or indirectly, including but not limited to, as an employee,
agent, consultant, manager, executive, owner or stockholder (except as a
passive investor holding less than a 5% equity interest in any enterprise) in
any business entity anywhere in North America that is engaged in direct
competition with any business of the Company on the Date of Termination that
had revenues of ten percent (10%) or more of the Company’s consolidated
revenues for the four most recently completed fiscal quarters (a business
meeting this requirement shall be referred to as a “Competitor”).

          If any court of competent jurisdiction determines that the covenant not to
compete contained in this Section 10, or any part hereof, is unenforceable,
such court shall have the power to reduce the duration or scope of such
provision, or make any other changes, provided that such changes are as close
to the terms hereof as possible and, in its reduced form, such provision shall
then be enforceable.

          (b) Non-Solicitation of Employees. The Executive agrees that, during the
Non-Compete Period, he shall not, without the prior written consent of the
Company, solicit any current employee of the Company or any of its
subsidiaries, or any individual who becomes an employee at or before the Date
of Termination, to leave such employment and join or become affiliated with any
business that is, during the Non-Compete Period, a Competitor.

          (c) Non-Disparagement. The Executive agrees that, during the Non-Compete
Period, he shall not make any statements, in writing or otherwise, that
disparage the reputation or character of the Company or any of its affiliates,
subsidiaries or divisions or any of their respective directors, officers,
employees or shareholders at any time for any reason whatsoever, except that
nothing in this Section 10(c) shall prevent the Executive from giving truthful
testimony in any litigation or any administrative or arbitration proceeding
either between the Executive and the Company or in connection with which the
Executive is required by law to give testimony. The Company agrees that,
during the Non-Compete Period, it shall not make any statements, in writing or
otherwise, that disparage the reputation or character of the Executive at any
time for any reason whatsoever, except that nothing in this Section 10(c) shall
prevent representatives of the Company from giving truthful testimony in any
litigation or any administrative or arbitration proceeding either between the
Company and the Executive or in connection with which any representative of the
Company is required by law to give testimony.

          (d) Survival of Non-Compete, Non-Solicitation and Non-Disparagement Terms.
The provisions set forth in this Section 10 shall survive termination of this
Agreement.

- 12 -

 

     11. Confidentiality. The Executive recognizes that he will have access to
confidential information, trade secrets, proprietary methods and other data
that are the property of and integral to the operations and success of Company
and otherwise affecting or relating to the Company (“Confidential Information”)
and therefore agrees to be bound by the provisions of this Section 11, which
both the Company and the Executive agree and acknowledge to be reasonable and
to be necessary to the Company. “Confidential Information” shall include, but
not be limited to, information regarding customers, customer lists, costs,
prices, earnings, products, services, machines, equipment, manufacturing
procedures, operations, potential acquisitions, new location plans, prospective
and executed contracts and other business arrangements. In recognition of this
fact, the Executive agrees that the Executive will not disclose any
Confidential Information (except (i) information that becomes publicly
available without violation of this Agreement, (ii) information that the
Executive did not know and should not have known was disclosed to the Executive
in violation of any other person’s confidentiality obligation and (iii)
disclosure required in connection with any legal process (after giving the
Company the reasonable advance opportunity to dispute such requirement)) to any
person, firm, corporation, association or other entity, for any reason or
purpose whatsoever, nor shall the Executive make use of any such information
for the benefit of any person, firm, corporation or other entity except the
Company. The Executive’s obligation to keep all of such information
confidential shall be in effect during and for a period of two years after the
Date of Termination; provided, however, that the Executive will keep
confidential and will not disclose any trade secret or similar information
protected under law as intangible property (subject to the same exceptions set
forth in the parenthetical clause above) for so long as such protection under
law is extended.

     12. Binding Agreement; Successors. This Agreement and all rights of the
Executive hereunder shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive’s devisee,
legatee, or other designee or, if there be no such designee, to the Executive’s
estate. This Agreement shall be binding upon, and inure to the benefit of, any
successors or assigns of the Company. This Agreement is not intended to confer
upon any person other than the parties hereto (and the Executive’s Spouse and
dependents) any rights or remedies, except as specifically provided in this
Section 12. The Company will, by agreement in form and substance reasonably
satisfactory to the Executive, require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the successor to become liable for the performance
of this Agreement by assumption or by operation of law or otherwise shall
constitute “Good Reason” under Section 6(d). As used in this Agreement,
“Company” shall mean the Company as defined herein and any successor to all or
substantially all of its business and/or assets that assumes and agrees to
perform this Agreement by operation of law or otherwise.

     13. Notice. Notices, demands and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered, if delivered personally, or (unless otherwise specified) mailed
by United States certified or registered mail, return receipt requested,
postage prepaid, and when received if delivered otherwise, addressed as
follows:

          If to the Executive:

[Executive]

[Address]

[Address]

- 13 -

 

          With a copy to:

Winston & Strawn LLP

35 West Wacker Drive

Chicago, Illinois 60601

Attn: Robert F. Wall, Esq.

          If to the Company:

Transportation Technologies Industries, Inc.

980 North Michigan Avenue

Suite 1000

Chicago, Illinois 60611

Attn: Secretary

          With a copy to:

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

Attn: Roger Meltzer, Esq.

or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

     14. Indemnification. Following the Executive’s Date of Termination, the
Company will: (i) indemnify and hold harmless the Executive for all costs,
liability and expenses (including reasonable attorneys’ fees) for all acts and
omissions of the Executive that relate to the Executive’s employment with the
Company, to the maximum extent permitted by law; and (ii) continue the
Executive’s coverage under the directors’ and officers’ liability coverage
maintained by the Company, as in effect from time to time, to the same extent
as other current or former senior executive officers and directors of the
Company.

     15. General Provisions. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party that are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware without regard
to its conflicts of law principles.

     16. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

     17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

- 14 -

 

     18. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and canceled.

     19. Irreparable Harm. The Executive acknowledges that: (i) the
Executive’s compliance with this Agreement is necessary to preserve and protect
the proprietary rights, Confidential Information and the goodwill of the
Company and its subsidiaries as going concerns; (ii) any failure by the
Executive to comply with the provisions of this Agreement will result in
irreparable and continuing injury for which there will be no adequate remedy at
law; and (iii) in the event that the Executive should fail to comply with the
terms and conditions of this Agreement, the Company shall be entitled, in
addition to such other relief as may be proper, to all types of equitable
relief (including, but not limited to, the issuance of an injunction and/or
temporary restraining order) as may be necessary to cause the Executive to
comply with this Agreement, to restore to the Company its property, and to make
the Company whole.

     20. Consent to Jurisdiction and Forum; Legal Fees and Costs. The Company
and the Executive hereby expressly and irrevocably agree that any action,
whether at law or in equity, arising out of or based upon this Agreement or the
Executive’s employment by the Company shall only be brought in a federal or
state court located in Chicago, Illinois. The Executive hereby irrevocably
consents to personal jurisdiction in such court and to accept service of
process in accordance with the provisions of such court. The Company shall be
responsible for its own legal fees and expenses incurred in connection with the
preparation and negotiation of this Agreement and for the reasonable legal fees
and expenses incurred by the Executive incurred in connection with the
preparation and negotiation of this Agreement. Except as provided in Section
7(e)(v), in connection with any dispute arising out of or based upon this
Agreement or the Executive’s employment by the Company, each party shall be
responsible for its or his own legal fees and expenses and all court costs
shall be shared equally by the Company and the Executive unless the court
apportions such legal fees or court costs in a different manner.

     21. Withholding. All payments made to the Executive pursuant to this
Agreement shall be subject to applicable withholding taxes, if any, and any
amount so withheld shall be deemed to have been paid to the Executive for
purposes of amounts due to the Executive under this Agreement.

- 15 -

 

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.

	 	 	 	 	 	 	 
	 	 	TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	 
	[Executive]

	 	By:	 	 	 	 
	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Title:	 	 
	

	 	 	 	 	 	
 

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