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EXHIBIT 10.1
EXECUTION COPY
ISDA SCHEDULE
TO THE
MASTER AGREEMENT
DATED AS OF
FEBRUARY 23, 1998
BETWEEN : SOCIETE GENERALE, NEW YORK BRANCH ("PARTY A")
(whose Office is located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇)
AND : ARKANSAS BEST CORPORATION ("PARTY B")
(whose Office is located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ 72903)
PART 1
TERMINATION PROVISIONS
In this Agreement:
(a) "SPECIFIED ENTITY" does not apply.
(b) "SPECIFIED TRANSACTION" has the meaning specified in Section 14 of
this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Party
A and Party B.
"SPECIFIED INDEBTEDNESS" means any obligation (whether present or
future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money (other than, with respect to Party A,
indebtedness in respect of deposits received), including, without
limitation, reimbursement obligations in respect of letters of credit,
bankers' acceptances with third parties and capital leases.
"THRESHOLD AMOUNT" means US $ 20,000,000 for Party A and US
$20,000,000 for Party B, or its equivalent in any other currency;
provided, however, that the "Threshold Amount" shall mean zero (0)
with respect to any Specified Indebtedness of Party B owed to Party A.
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will
apply to Party A and Party B.
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(e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not
apply to Party A or Party B; provided, however, that where there is an
Event of Default under Section 5(a)(vii)(1), (3), (4), (5), (6), or,
to the extent analogous thereto, (8), and the Defaulting Party is
governed by a system of law that does not permit termination to take
place after the occurrence of such Event of Default, then the
Automatic Early Termination provisions of Section 6(a) will apply.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of
this Agreement:
(i) Loss will apply;
(ii) The Second Method will apply.
For purposes hereof, Loss in respect of each Transaction will be based
on the present value of cash flows representing the differential
between the Fixed Amounts for such Transaction and the fixed amounts
computed at the fixed rate prevailing in the market at the time of
such determination, for the period from the day on which such
determination is made until the original Termination Date for such
Transaction.
(g) "TERMINATION CURRENCY" means the currency selected by the
Non-defaulting Party or the Non-affected Party, or in circumstances
where there are two Affected Parties, agreed by Party A and Party B,
and failing such agreement the Termination Currency shall be United
States Dollars. However, the Termination Currency selected by the
Non-defaulting Party or the Non-affected Party (i) shall be one of the
currencies in which payments in respect of the Terminated Transactions
are required to be made, and (ii) shall be freely transferable into
all other currencies in which payments are to be made in respect of
any Terminated Transaction.
(h) "ADDITIONAL TERMINATION EVENT" provision of Section 5(b) will apply.
The following shall be an Additional Termination Event: Party B shall
notify Party A that it wishes to terminate a Transaction (in whole or
in part) on a Business Day to occur no sooner than two Business Days
after the day on which such notice is given. With respect to such
Additional Termination Event, Party B shall be the only Affected Party
and the Transaction being terminated (in whole or in part) shall be
the only Affected Transaction.
PART 2
TAX REPRESENTATIONS
(a) PAYER REPRESENTATION. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will make the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction, to make any deduction or withholding for or on account
of any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other
party under this Agreement. In making this representation, it may
rely on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement;
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(ii) the satisfaction of the agreement contained in Section 4(a)(i)
or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement;
and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d) of this Agreement,
provided that it shall not be a breach of this representation
where reliance is placed on clause (ii) and the other party
does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial
position.
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make no representations unless
otherwise provided in the relevant Confirmation.
PART 3
AGREEMENT TO DELIVER DOCUMENT
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO FORM/DOCUMENT/
DELIVER DOCUMENT CERTIFICATE
Party A and Party B No documents.
(b) Other documents to be delivered are:
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY SECTION 3(d)
DELIVER DOCUMENT CERTIFICATE DELIVERED REPRESENTATION
Party A The current authorized Upon execution of this Yes
signature book of Party A Agreement and
specifying the names and thereafter upon the
authority, and containing the reasonable request of
specimen signatures of the the other party.
persons authorized to execute
this Agreement and each
Confirmation on its behalf.
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PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY SECTION 3(d)
DELIVER DOCUMENT CERTIFICATE DELIVERED REPRESENTATION
Party B Evidence satisfactory in form Upon execution of this Yes
and substance to Party A of Agreement and
the authority of the thereafter upon the
signatory of Party B to reasonable request of
execute this Agreement and the other party.
each Confirmation on its
behalf.
Party A and An opinion of counsel Upon execution of this No
Party B acceptable in form and Agreement.
substance to the other party.
Party A and A copy of its most Upon execution of this Yes
Party B recent annual report Agreement and
containing audited financial thereafter upon the
statements. reasonable request of
the other party.
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PART 4
MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:
ADDRESSES FOR NOTICES OR COMMUNICATIONS TO PARTY A:
WITH RESPECT TO TRANSACTIONS ENTERED INTO BY THE RATE AND DERIVATIVES
PRODUCTS GROUP:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Treasury Operations
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telex: ITT 428802 Answerback: SOCIEGEN
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
WITH RESPECT TO FX TRANSACTIONS ENTERED INTO BY THE FX DESK:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telex: ITT 428802 Answerback: SOCIEGEN
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
unless otherwise specified in the relevant Confirmation.
ADDRESS(ES) FOR NOTICES OR COMMUNICATIONS TO PARTY B:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:
- Party A appoints as its Process Agent:
SOCIETE GENERALE, New York, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ - Attention: General Counsel's Office.
- Party B appoints as its Process Agent: Not applicable.
(c) OFFICES. The provisions of Section 10(a) will apply to this
Agreement.
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(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this
Agreement:
- Party A is not a Multibranch Party.
- Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
None.
(g) CREDIT SUPPORT PROVIDER.
Credit Support Provider means in relation to Party A: None.
Credit Support Provider means in relation to Party B: None.
(h) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
CHOICE OF LAW DOCTRINE.
WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE THE RIGHT TO TRIAL BY
JURY IN ANY JUDICIAL PROCEEDINGS TO WHICH THEY ARE BOTH PARTIES
INVOLVING ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT.
(i) "NET PAYMENTS". Section 2(c)(ii) of this Agreement will apply.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
PART 5
OTHER PROVISIONS
(a) MODIFICATIONS TO THE AGREEMENT
(i) SECTION 1(b) - INCONSISTENCY - is amended to add the following
at the end thereof:
"In the event of any inconsistency between the provisions of
this Agreement and any of the definitional booklets published
by ISDA from time to time (as amended by this Agreement), this
Agreement shall prevail."
(ii) SECTION 3(a) - BASIC REPRESENTATIONS - is amended to add the
following new subsections:
(vi) NO RELIANCE. It has, in connection with the
negotiation, execution and delivery of this Agreement
and any Transaction (i) the knowledge and
sophistication to independently appraise and
understand the financial and legal terms and
conditions of each Transaction and to assume the
economic consequences and risks thereof and has, in
fact, done so as a result of arm's
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length dealings with the other party; (ii) to the
extent necessary, consulted with its own independent
financial, legal or other advisors and has made its
own investment, hedging and trading decisions in
connection with any Transaction based upon its own
judgment and the advice of such advisors and not upon
any view expressed by the other party; (iii) not
relied upon any representations (whether written or
oral) of the other party, other than the
representations expressly set forth hereunder and in
any Credit Support Document and is not in any
fiduciary relationship with the other party; (iv) not
obtained from the other party (directly or indirectly
through any other person) any advice, counsel or
assurances as to the expected or projected success,
profitability, performance, results or benefits of
any Transaction; and (v) determined to its
satisfaction whether or not the rates, prices or
amounts and other economic terms of any Transaction
and the indicative quotations (if any) provided by
the other party reflect those in the relevant market
for similar transactions.
(vii) ELIGIBLE SWAP PARTICIPANT. It is an "eligible swap
participant" as such term is defined in Section
35.1(b)(2) of 17 CFR Part 35.
(iii) SECTION 5(a)(vi) - CROSS DEFAULT - is amended to add the
following proviso at the end thereof:
"provided, however, that notwithstanding the foregoing, an
Event of Default shall not occur if: (aa) the event or
condition referred to in (1) or the failure to pay referred to
in (2) is caused by an error or omission of an administrative
or operational nature; and (bb) (A) funds were available to
such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party, as the case may be,
to enable it to make the relevant payment when due and (B)
such relevant payment is made within three Local Business Days
after notice of such failure is given to such party, any
Credit Support Provider of such party or any applicable
Specified Entity of such party, as the case may be;"
(iv) SECTION 6 - EARLY TERMINATION - is amended to add the
following Section 6(f):
"SET OFF: Any amount (the "Early Termination Amount")
payable to one party (the "Payee") by the other party (the
"Payer") under Section 6(e), in circumstances where there is a
Defaulting Party or one Affected Party in the case where a
Termination Event under Section 5(b)(iv) has occurred, will,
at the option of the party ("X") other than the Defaulting
Party or the Affected Party (and without prior notice to the
Defaulting Party or the Affected Party), be reduced by its
set-off against any amount(s) (the "Other Agreement Amount")
payable (whether at such time or in the future or upon the
occurrence of a contingency) by the Payee to the Payer
(irrespective of the currency, place of payment or booking
office of the obligation) under any other agreement(s) between
the Payee and the Payer or instrument(s) or undertaking(s)
issued or executed by one party to, or in favor of, the other
party (and the Other Agreement Amount will be discharged
promptly and in all respects to the extent it is so set-off).
X will give notice to the other party of any set-off effected
under this Section 6(f).
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For this purpose, either the Early Termination Amount or the
Other Agreement Amount (or the relevant portion of such
amounts) may be converted by X into the currency in which the
other is denominated at the rate of exchange at which such
party would be able, acting in a reasonable manner and in good
faith, to purchase the relevant amount of such currency.
If an obligation is unascertained, X may in good faith
estimate that obligation and set-off in respect of the
estimate, subject to the relevant party accounting to the
other when the obligation is ascertained.
Nothing in this Section 6(f) shall be effective to create a
charge or other security interest. This Section 6(f) shall be
without prejudice and in addition to any right of set-off,
combination of accounts, lien or other right to which any
party is at any time otherwise entitled (whether by operation
of law, contract or otherwise)."
(b) CONFIRMATIONS FOR FX TRANSACTIONS
(i) The Confirmation for each FX Transaction shall be
substantially in the form of either (a) Exhibit I to the 1992
Definitions or (b) in such other form as the parties may
agree.
(ii) If an FX Transaction is confirmed by means of an electronic
messaging system that the parties have elected to use to
confirm such FX Transaction (a) such confirmation will
constitute a "Confirmation" as referred to in this Agreement
even where not so specified in the Confirmation, (b) such
Confirmation will supplement, form part of, and be subject to
this Agreement and all provisions in this Agreement will
govern the Confirmation and (c) the definitions and provisions
contained in the 1992 Definitions will be incorporated into
the Confirmation.
(c) OTHER PROVISIONS
(i) TELEPHONE RECORDING. Each party may tape record any telephone
conversation between the parties and each party agrees that
any such tape recording shall be admissible as evidence in any
court or other legal proceeding for the purpose of
establishing any matters pertinent to such Transaction. Upon
the execution and delivery of a written Confirmation, such
Confirmation shall supersede and replace such tape recording.
(ii) SEVERABILITY. If any term, provision, covenant, or condition
of this Agreement, or the application thereof to any party or
circumstance, shall be held to be illegal, invalid or
unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof
shall continue in full force and effect as if the Agreement
had been executed with the illegal, invalid or unenforceable
portion eliminated, so long as the Agreement as so modified
continues to express, without material change, the original
intentions of the parties as to the subject matter of this
Agreement and the deletion of such portion of this Agreement
will not substantially impair the respective benefits or
expectations of the parties of this Agreement. It shall in
particular be understood that this Severability clause shall
not affect the "single agreement" concept of provision 1(c) of
the Agreement.
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(iii) PARI PASSU. Party B agrees that at all times its obligations
under any unsecured Transaction shall rank at least pari passu
in right of payment and security with all of Party B's
unsecured and unsubordinated Specified Indebtedness other than
Specified Indebtedness preferred by law. In addition, in the
event Party B has pledged, or at any time hereafter does
pledge, collateral as security for any of its outstanding
Specified Indebtedness, then Party B's obligations to Party A
under any Transaction shall be secured on a pari passu basis
with such Specified Indebtedness.
SOCIETE GENERALE, ARKANSAS BEST CORPORATION
NEW YORK BRANCH (PARTY B)
(PARTY A)
By: By:
--------------------------------- --------------------------------
Name: Name:
------------------------------- ------------------------------
Title: Title:
----------------------------- -----------------------------
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February 26, 1998
Rate Swap Transaction From: ▇▇▇▇▇ ▇▇▇▇▇/Treasury Ops.
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
Arkansas Best Corporation
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: SG ▇▇▇ # ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
REVISED MARCH 4, 1998
Dear Sirs:
The purpose of this letter agreement is to set forth the terms and
conditions of the Transaction entered into between Societe Generale, New York
Branch ("Party A") and Arkansas Best Corporation ("Party B") on the Trade Date
specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions
(the "Definitions") published by the International Swap and Derivatives
Association, Inc. are incorporated by reference into this Confirmation. For
these purposes, all references in the Definitions to a "Swap Transaction" shall
be deemed to apply to the Transaction referred to herein. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern.
This Confirmation evidences a complete and binding agreement between
Party A and Party B as to the terms of the Transaction to which this
Confirmation relates. In addition, Party A and Party B agree to use their best
efforts promptly to negotiate, execute and deliver a Master Agreement
(Multicurrency -- Cross Border) in the form published by ISDA, with such
modifications as Party A and Party B shall in good faith agree.
1. Upon the execution by Party A and Party B of such a Master
Agreement (the "Agreement"), this Confirmation will supplement, form part of,
and be subject to the Agreement. All provisions contained or incorporated by
reference in the Agreement will govern this Confirmation except as expressly
modified below. Prior to execution of the Agreement, the provisions of the
Master Agreement (Multicurrency -- Cross Border) shall be incorporated by
reference herein and shall form a part of this Confirmation. In
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the event of any inconsistency between those provisions and this Confirmation,
this Confirmation will govern. Party A shall prepare and provide Party B with
a draft of the Schedule to the Agreement.
2. The terms of the particular Transaction to which this
Confirmation relates - which is a rate swap - are as follows:
Notional Amount: USD 110,000,000.00
Trade Date: February 23, 1998
Effective Date: April 1, 1998
Termination Date: April 1, 2005, subject to adjustment in accordance with the Modified Following Business
Day Convention
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer
Payment Dates: Every 1st of Each Month, commencing May 1, 1998, up to and including
the Termination Date
Fixed Rate: 5.845 %
Fixed Rate Day
Count Fraction: Actual/360
Floating Amounts:
Floating Rate Payer: Party A
Floating Rate Payer
Payment Dates: Every 1st of Each Month, commencing May 1, 1998, up to and including
the Termination Date
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Floating Rate for initial
Calculation Period: To be determined two London Banking Day prior to the Effective Date
using the Floating Rate Option
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for Floating
Rate Determination: London
Business Days for Payment
Dates: London and New York
Business Day Convention: Modified Following
Calculation Agent: Party A
3. Account Details
Payments to Party A: Federal Reserve Bank of New York
ABA # ▇▇▇▇▇▇▇▇▇
F/O Societe Generale, New York
Payments to Party B: PLEASE PROVIDE
4. The Office of Party A for this Transaction is New York.
The Office of Party B for this Transaction is Arkansas.
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5. Non-Reliance:
Each party represents that (i) it is not relying upon any advice
(whether written or oral) of the other party to this Transaction, other than
the representations expressly set forth in the Agreement or this Confirmation;
(ii) it has made its own decisions in entering into this Transaction based upon
advice from such professional advisors as it has deemed necessary; and (iii) it
understands the terms, conditions and risks of this Transaction and is willing
to assume (financially and otherwise) those risks.
Please confirm that the foregoing correctly sets forth the terms of
our agreement by executing one copy of this Confirmation and returning it to
us.
Yours sincerely,
SOCIETE GENERALE,
NEW YORK BRANCH
By:
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Treasurer
Confirmed as of the
date first written above: By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Arkansas Best Corporation, Title: First V.P.
Arkansas
By:
------------------------
Name:
Title: