Exhibit 10.1
RECEIVABLES SALE AND CONTRIBUTION AGREEMENT
Dated as of April 27, 2001
by and between
CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE
as the ORIGINATOR,
CONSOLIDATED FREIGHTWAYS FUNDING LLC
as BUYER
INDEX OF APPENDICES
Exhibit 2.01(a) Form of Receivables Assignment
Schedule 4.01(b) Executive Offices; Collateral Locations;
Corporate Names
Schedule 4.01(d) Litigation
Schedule 4.01 (f) Defaults
Schedule 4.01(h) Ventures, Subsidiaries and Affiliates;
Outstanding Stock
Schedule 4.01(i) Tax Matters
Schedule 4.01(j) Intellectual Property
Schedule 4.01(m) ERISA
Schedule 4.01(t) Deposit and Disbursement Accounts
Schedule 4.02(g) Trade Names
Annex 4.02(h) Reporting Requirements
Annex 4.02(p) Financial Covenants
Annex X Definitions
Annex Y Schedule of Documents
THIS RECEIVABLES SALE AND CONTRIBUTION AGREEMENT (as
amended, supplemented or otherwise modified and in effect from
time to time, this "Agreement") is entered into as of April 27,
2001, by and among CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE, a Delaware corporation (the "Originator"), and
CONSOLIDATED FREIGHTWAYS FUNDING LLC, a Delaware limited
liability company (the "Buyer").
RECITALS
A. The Originator owns all of the outstanding Stock
of the Buyer.
B. Buyer has been formed for the sole purpose of
purchasing, or otherwise acquiring by capital contribution, all
Receivables originated by the Originator.
D. The Originator intends to sell, and Buyer intends
to purchase, such Receivables, from time to time, as described
herein.
E. In addition, the Originator may, from time to
time, contribute capital to Buyer in the form of Contributed
Receivables or cash.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and
the mutual covenants hereinafter contained, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to them
in Annex X.
Section 1.02. Rules of Construction. For purposes of this
Agreement, the rules of construction set forth in Annex X shall
govern. All Appendices hereto, or expressly identified to this
Agreement, are incorporated herein by reference and, taken
together with this Agreement, shall constitute but a single
agreement.
ARTICLE II
TRANSFERS OF RECEIVABLES
Section 2.01. Agreement to Transfer.
(a) Receivables Transfers. Subject to the terms and conditions
hereof, the Originator agrees to sell and absolutely assign and
transfer (without representation , warranty or recourse, except
to the extent specifically provided Sections 4.01, 4.04 and 5.01
hereof) or contribute to Buyer on the Closing Date and on each
Business Day thereafter (each such date, a "Transfer Date") all
right, title and interest (legal or equitable) in and to all
Receivables owned by it on each such Transfer Date (other than
Receivables previously transferred to Buyer and repurchased by
the Originator pursuant to Section 4.04 hereof), and Buyer agrees
to purchase or acquire as a capital contribution all such
Receivables on each such Transfer Date. Each such Transfer shall
be evidenced by a certificate of assignment substantially in the
form of Exhibit 2.01(a) (each, a "Receivables Assignment," and
collectively, the "Receivables Assignments"), and the Originator
and Buyer shall execute and deliver a Receivables Assignment on
or before the Closing Date.
(b) Determination of Sold Receivables. On and as of each
Transfer Date, all Receivables owned by the Originator and not
previously acquired by Buyer shall be identified for sale to
Buyer such that the Sale Price to be paid by Buyer therefor does
not exceed the amount of cash available to Buyer for the payment
thereof (each such Receivable identified for sale, individually,
a "Sold Receivable" and, collectively, the "Sold Receivables").
Any Receivable as to which full Sale Price cannot be paid by
virtue of the preceding sentence shall be deemed a Contributed
Receivable, subject to Originator's right to deliver an Election
Notice pursuant to Section 2.01(d). The Sold Receivables will be
identified by reference to the General Trial Balance of the
Originator.
(c) Payment of Purchase Price. In consideration for each Sale
of Sold Receivables hereunder, Buyer shall pay to the Originator
on the Transfer Date therefor the Sale Price therefor in Dollars
in immediately available funds. All such payments by Buyer under
this Section 2.01(c) shall be effected by means of a wire
transfer on the day when due to such account or accounts as the
Originator may designate.
(d) Determination of Contributed Receivables. To the extent
that, on and as of any Transfer Date, Receivables owned by the
Originator which do not constitute Transferred Receivables have
not been identified as Sold Receivables pursuant to Section
2.01(b) then the Originator shall, unless it has delivered an
Election Notice (as defined below) to Buyer, contribute such
Receivables to Buyer as a capital contribution (each such
contributed Receivable, individually, a "Contributed Receivable,"
and collectively, the "Contributed Receivables"). If the
Originator elects not to contribute Receivables to Buyer on any
Transfer Date, or if any Receivables eligible for sale and owned
by the Originator are not sold on any Transfer Date, the
Originator shall deliver to Buyer not later than 5:00 p.m. (New
York time) on the Business Day immediately preceding such
Transfer Date a notice of election thereof substantially in the
form of Exhibit 2.01(d) (each such notice, an "Election Notice").
(e) Ownership of Transferred Receivables. On and after each
Transfer Date and after giving effect to the Transfers to be made
on each such date, Buyer shall own all right, title and interest
(whether legal or equitable), in and to the Transferred
Receivables and the Originator shall not take any action
inconsistent with such ownership nor shall the Originator claim
any ownership interest in such Transferred Receivables, except as
contemplated by Section 4.04.
(f) Reconstruction of General Trial Balance. If at any time the
Originator fails to generate its General Trial Balance, Buyer
shall have the right to reconstruct such General Trial Balance so
that a determination of the Sold Receivables can be made pursuant
to Section 2.01(b). The Originator agrees to cooperate with such
reconstruction, including by delivery to Buyer, upon Buyer's
request, of copies of all Contracts and Records.
(g) Servicing of Receivables. So long as no Event of Servicer
Termination shall have occurred and be continuing and no
Successor Servicer has assumed the responsibilities and
obligations of the Servicer pursuant to Section 7.02 of the
Servicing Agreement, the Servicer (other than a Successor
Servicer) shall (i) conduct the servicing, administration and
collection of the Transferred Receivables and shall take, or
cause to be taken, all such actions as may be necessary or
advisable to service, administer and collect the Transferred
Receivables, all in accordance with (A) the terms of the
Servicing Agreement, (B) customary and prudent servicing
procedures for trade receivables of a similar type and (C) all
applicable laws, rules and regulations, and (ii) hold all
Contracts and other documents and incidents relating to the
Transferred Receivables in trust for the benefit of Buyer, as the
owner thereof, and for the sole purpose of facilitating the
servicing of the Transferred Receivables in accordance with the
terms of the Servicing Agreement.
Section 2.02. Grant of Security Interest. The parties
hereto intend that each Transfer shall constitute an absolute
assignment, purchase and sale or capital contribution, as
applicable, of Transferred Receivables and not a loan. The
parties hereto further intend that each Transfer (including
without limitation each Transfer of a Contributed Receivable)
shall constitute a "sale of accounts" (as defined in Section 9-
102 of the UCC) to the extent such Transferred Receivable
constitutes an "account" (as defined in Section 9-106 of the
UCC). Notwithstanding the foregoing, to the extent that any
court may nevertheless determine that any such Transfer
constitutes a loan rather than a sale transaction, and in
addition to and not in derogation of any rights now or hereafter
acquired by Buyer under Section 2.01 hereof, and subject to the
terms and conditions of the Agreement, the parties hereto intend
that this Agreement shall constitute a security agreement under
applicable law and that the Originator shall be deemed to have
granted, and the Originator does hereby grant, effective on the
Initial Funding Date as provided below, to the Buyer a continuing
security interest in all of the Originator's right, title and
interest in, to and under the Receivables whether now owned or
hereafter acquired by the Originator (whether constituting
Transferred Receivables or otherwise) to secure the obligations
of the Originator to the Buyer hereunder (including, if and to
the extent that any Transfer is recharacterized as a transfer for
security, the repayment of a loan deemed to have been made by the
Buyer in the amount of the Sale Price with respect thereto and
which secures the Buyer's right to receive all Collections of the
Transferred Receivables as otherwise contemplated under this
Agreement). Notwithstanding anything herein to the contrary, the
grant of the foregoing security interest shall be effective
automatically (without notice or any other action) on (but not
prior to) the Initial Funding Date and shall remain effective
until the Termination Date.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Conditions to Initial Transfer. The initial
Transfer hereunder shall be subject to satisfaction of each of
the following conditions precedent (any one or more of which may
be waived in writing by each of the Buyer and the Administrative
Agent):
(a) Sale and Contribution Agreement; Other Documents. This
Agreement or counterparts hereof shall have been duly executed
by, and delivered to, the Originator and Buyer, and Buyer shall
have received such documents, instruments, agreements and legal
opinions as Buyer shall request in connection with the
transactions contemplated by this Agreement and all those
identified in the Schedule of Documents, each in form and
substance satisfactory to Buyer.
(b) Governmental Approvals. Buyer shall have received
(i) satisfactory evidence that each of the Originator and the
Parent has obtained all required consents and approvals of all
Persons, including all requisite Governmental Authorities, to the
execution, delivery and performance of this Agreement and the
other Related Documents and the consummation of the transactions
contemplated hereby and thereby or (ii) an Officer's Certificate
from the Originator in form and substance satisfactory to Buyer
affirming that no such consents or approvals are required.
(c) Compliance with Laws. The Originator shall be in compliance
with all applicable foreign, federal, state and local laws and
regulations, including those specifically referenced in Section
4.02(f).
(d) Funding Agreement Conditions. Each of those conditions
precedent set forth in Sections 3.01 and 3.02 of the Funding
Agreement shall have been satisfied or waived in writing as
provided therein.
(e) Other Documents, Etc. The Originator shall have taken such
other action, including delivery of approvals, consents,
opinions, documents and instruments to Buyer as Buyer may
request.
The Buyer and the Administrative Agent will confirm in
writing to the Originator on the Closing Date whether or not each
of the conditions set forth above in this Section 3.01 has been
satisfied or waived.
Section 3.02. Conditions to all Transfers. Each Transfer
hereunder (including the initial Transfer) shall be subject to
satisfaction of the following further conditions precedent as of
the Transfer Date therefor:
(a) the representations and warranties of each of the Originator
and the Parent contained herein or in any other Related Document
shall be true and correct in all material respects as of such
Transfer Date, both before and after giving effect to such
Transfer and to the application of the Sale Price therefor,
except to the extent that any such representation or warranty
expressly relates to an earlier date and except for changes
therein expressly permitted by this Agreement; and
(b) no Incipient Termination Event or Termination Event shall
have occurred and be continuing or would result after giving
effect to such Transfer or the application of the Sale Price
therefor.
The acceptance by the Originator of the Sale Price for
any Sold Receivables on any Transfer Date shall be deemed to
constitute, as of any such Transfer Date, a representation and
warranty by the Originator that the conditions in this Section
3.02 have been satisfied. Upon any such acceptance, all right,
title and interest, legal and equitable, in and to the
Transferred Receivables sold or contributed on such Transfer Date
shall be vested absolutely in Buyer, whether or not such
conditions were in fact so satisfied.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.01. Representations and Warranties of the
Originator. To induce Buyer to purchase the Sold Receivables and
to acquire the Contributed Receivables, the Originator makes the
following representations and warranties to Buyer, each and all
of which shall survive the execution and delivery of this
Agreement.
(a) Existence; Compliance with Law. The Originator and each of
its Subsidiaries (other than the Buyer) (i) is a corporation duly
formed, validly existing and in good standing under the laws of
its jurisdiction of formation; (ii) is duly qualified to conduct
business and is in good standing in each other jurisdiction where
its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so
qualified is not reasonably likely to result in a Material
Adverse Effect; (iii) has the requisite corporate power and
authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the
property it operates under lease, and to conduct its business, in
each case, as now, heretofore and proposed to be conducted;
(iv) has all licenses, permits, consents or approvals from or by,
and has made all filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct, except where
the failure to obtain such licenses, permits, consents or
approvals is not reasonably likely to result in a Material
Adverse Effect; (v) is in compliance with its charter and bylaws;
and (vi) subject to specific representations set forth herein
regarding ERISA, Environmental Laws, tax laws and other laws, is
in compliance with all applicable provisions of law, except where
the failure to comply, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
(b) Executive Offices; Collateral Locations; Corporate or Other
Names; FEIN. As of the Closing Date, the current location of the
Originator's chief executive offices, principal places of
business, and the locations of all corporate books and records of
the Originator concerning the Receivables are set forth in
Schedule 4.01(b) and except as set forth in Schedule 4.01(b),
none of such locations have changed within the past 12 months.
During the five years prior to the Closing Date, except as set
forth in Schedule 4.01(b), the Originator has not been known as
or used any corporate, company, partnership, fictitious or trade
name. In addition, Schedule 4.01(b) lists the federal employer
identification number of the Originator.
(c) Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by the Originator of this
Agreement and each other Related Documents to which it is a party
and the creation and perfection of all Transfers and Liens
provided for herein and therein: (i) are within the Originator's
corporate, company or partnership power, as applicable; (ii) have
been duly authorized by all necessary or proper corporate and
shareholder action; (iii) do not contravene any provision of the
Originator's charter, bylaws, operating agreement or other
constitutive documents; (iv) do not violate any law or
regulation, or any order or decree of any court or Governmental
Authority; (v) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or
permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other
instrument to which the Originator is a party or by which the
Originator or any of its property is bound; (vi) do not result in
the creation or imposition of any Adverse Claim upon any of the
property of the Originator; and (vii) do not require the consent
or approval of any Governmental Authority or any other Person,
except those which will have been duly obtained, made or complied
with prior to the Closing Date as provided in Section 3.01(b).
On or prior to the Closing Date, each of the Related Documents to
which the Originator is party thereto shall have been duly
executed and delivered by the Originator and each such Related
Document shall then constitute a legal, valid and binding
obligation of such Person enforceable against it in accordance
with its terms.
(d) No Litigation. No Litigation is now pending or, to the
knowledge of the Originator, threatened against any the
Originator that (i) challenges the Originator's right or power to
enter into or perform any of its obligations under the Related
Documents to which it is a party, or the validity or
enforceability of any Related Document or any action taken
thereunder, (ii) seeks to prevent the Transfer, Purchase,
contribution or pledge of any Receivable or the consummation of
any of the transactions contemplated under this Agreement or the
other Related Documents or (iii) has a reasonable risk of being
determined adversely to the Originator, and that, if so
determined, could reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 4.01(d), as of
the Closing Date there is no Litigation pending or, to the
knowledge of the Originator, threatened that seeks damages in
excess of $10,000,000 or injunctive relief (other than injunctive
relief relating to labor practices, which, together with all
other such injunctions, could not reasonably be expected to have
a Material Adverse Effect), or alleges criminal misconduct by,
the Originator.
(e) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Agreement and the other Related
Documents and (ii) the payment and accrual of all transaction
costs in connection with the foregoing, the Originator is and
will be Solvent.
(f) Material Adverse Effect. Between December 31, 2000 and the
Closing Date, (i) the Originator has not incurred any
obligations, contingent or non-contingent liabilities,
liabilities for charges, long-term leases or unusual forward or
long-term commitments that, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (ii) no
contract, lease or other agreement or instrument has been entered
into by the Originator or has become binding upon the assets of
any member of the Originator and no law or regulation applicable
to the Originator has been adopted that, in any case, has had or
could reasonably be expected to have a Material Adverse Effect,
(iii) except for the defaults, if any, under the Existing Credit
Agreement and the Participation Agreement, in each case as
disclosed on Schedule 4.01(f), the Originator is not in default
under any loan agreement, indenture, note or bond evidencing any
obligations of the Originator, and (iv) the Originator is not in
default and no third party is in default under any material
contract, lease or other agreement or instrument to which such
Person is a party that alone or in the aggregate could reasonably
be expected to have a Material Adverse Effect. Between December
31, 2000, and the Closing Date no event has occurred that alone
or together with other events could reasonably be expected to
have a Material Adverse Effect.
(g) Ownership of Receivables; Liens. Prior to the applicable
Transfer Date relating thereto, the Originator owns each
Receivable originated by it free and clear of any Adverse Claim
(other than Permitted Encumbrances) and, from and after each
Transfer Date, Buyer will acquire valid and properly perfected
title to and the sole record and beneficial ownership interest in
each Transferred Receivable purchased or otherwise acquired on
such date, free and clear of any Adverse Claim or restrictions on
transferability. As of the Closing Date, none of the properties
and assets of the Originator are subject to any Adverse Claims
other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to the Originator that may
result in any Adverse Claims (including Adverse Claims arising
under Environmental Laws) other than Permitted Encumbrances. The
Originator has received all assignments, bills of sale and other
documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect the
Originator's right, title and interest in and to the Receivables
originated by it and its other properties and assets.
(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock.
Except as set forth in Schedule 4.01(h), the Originator does not
have any Subsidiaries, is not engaged in any joint venture or
partnership with any other Person under which the Originator is
liable for any debts or liabilities of such Person, and as of the
Closing Date is not an Affiliate of any other Person. All of the
issued and outstanding Stock of the Originator is owned by the
Parent and all of the issued and outstanding stock of the Buyer
is owned by the Originator. The Originator will provide the
Buyer and the Administrative Agent written notice, promptly upon
its learning thereof, of each person who becomes an Affiliate of
the Originator after the Closing Date.
(i) Taxes. All material tax returns, reports and statements,
including information returns, required by any Governmental
Authority to be filed by the Originator have been filed with the
appropriate Governmental Authority and all charges have been paid
prior to the date on which any fine, penalty, interest or late
charge may be added thereto for nonpayment thereof (or any such
fine, penalty, interest, late charge or loss has been paid),
excluding charges or other amounts being contested in accordance
with Section 4.02(l). Proper and accurate amounts have been
withheld by the Originator from its respective employees for all
periods in full and complete compliance with all applicable
federal, state, local and foreign laws and such withholdings have
been timely paid to the respective Governmental Authorities,
except for such amounts that in the aggregate for the Originator,
the Parent and the other domestic Subsidiaries of the Parent
combined would not at any time exceed $1,000,000. Schedule
4.01(i) sets forth as of the Closing Date (i) those taxable years
for which the Originator's or such Affiliates' tax returns are
currently being audited by the IRS or any other applicable
Governmental Authority and (ii) any assessments or threatened
assessments in connection with such audit or otherwise currently
outstanding. Except as described on Schedule 4.01(i), the
Originator has not executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending,
or having the effect of extending, the period for assessment or
collection of any charges. Except as described on Schedule
4.01(i), the Originator and such Affiliates are not liable for
any charges: (A) under any written agreement (including any tax
sharing agreements) or (B) to the best of the Originator's
knowledge, as a transferee. As of the Closing Date, the
Originator has not agreed to or been requested to make any
adjustment under IRC Section 481(a), by reason of a change in
accounting method or otherwise, that would have a Material
Adverse Effect.
(j) Intellectual Property. As of the Closing Date, the
Originator and each of its Subsidiaries owns or has rights to use
all intellectual property necessary to continue to conduct its
business as now or heretofore conducted by it or proposed to be
conducted by it. The Originator and each of its Subsidiaries
conducts its business and affairs without infringement of or
interference with any intellectual property of any other Person.
Except as set forth in Schedule 4.01(j), as of the Closing Date,
the Originator is not aware of any infringement or claim of
infringement by others of any intellectual property of the
Originator or any of the Subsidiaries.
(k) Full Disclosure. All information pertaining to the
Originator contained in this Agreement, any of the other Related
Documents, or any written statement pertaining to the Originator
furnished by or on behalf of the Originator to Buyer, any Lender
or the Administrative Agent pursuant to the terms of this
Agreement or any of the other Related Documents is true and
accurate in every material respect, and none of this Agreement,
any of the other Related Documents, or any written statement
furnished by or on behalf of the Originator to Buyer any Lender
or the Administrative Agent pursuant to the terms of this
Agreement or any of the other Related Documents, is misleading as
a result of the failure to include therein a material fact.
(l) Notices to Obligors. The Originator has directed all
Obligors of Transferred Receivables originated by it to remit all
payments with respect to such Receivables for deposit in a
Lockbox or Lockbox Account.
(m) ERISA.
(i) Schedule 4.01(m) lists all Plans and separately identifies
all Title IV Plans, Multiemployer Plans, ESOPs, and Retiree
Welfare Plans, other than any Plans maintained by a labor union.
Except with respect to Multiemployer Plans and Plans maintained
by a labor union, each Qualified Plan has been determined by the
IRS to qualify under Section 401 of the IRC or has been submitted
for such a determination, and the trusts created thereunder have
been determined to be exempt from tax under the provisions of
Section 501 of the IRC, and nothing has occurred which would
cause the loss of such qualification or tax-exempt status. Each
Plan is in compliance in all material respects with the
applicable provisions of ERISA and the IRC, including the filing
of reports required under the IRC or ERISA and neither the
Originator nor ERISA Affiliate has failed to make any
contribution or pay any amount due as required by either Section
412 of the IRC or Section 302 of ERISA or the terms of any such
Plan, except for any such failures which individually or in the
aggregate, together with the aggregate amount of any liability of
the type described in Section 4.01(m)(ii) and the aggregate
amount of any liability of the type described in the last
sentence of this Section 4.01(m)(i), could not reasonably be
expected to result in a liability of the Originator, the Parent
or the other domestic Subsidiaries of the Parent individually or
in the aggregate of $10,000,000 or more. Neither the Originator
nor any ERISA Affiliate has engaged in a prohibited transaction,
as defined in Section 4975 of the IRC, in connection with any
Plan, which would subject the Originator to a tax on prohibited
transactions imposed by Section 4975 of the IRC, except for such
prohibited transactions, which individually or in the aggregate,
together with the aggregate amount of any liability of the type
described in Section 4.01(m)(ii) and in the immediately preceding
sentence, could not reasonably be expected to result in a
liability of the Originator, the Parent or the other domestic
Subsidiaries of the Parent individually or in the aggregate of
$10,000,000 or more.
(ii) Except as set forth in Schedule 4.01(m): (A) no Title IV
Plan has any Unfunded Pension Liability; (B) no ERISA Event or
event described in Section 4062(e) of ERISA with respect to any
Title IV Plan has occurred or is reasonably expected to occur;
(C) there are no pending or, to the knowledge of the Originator,
threatened claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted
against any Plan or any Person as fiduciary or sponsor of any
Plan; (D) neither the Originator nor any ERISA Affiliate has
incurred or reasonably expects to incur any liability as a result
of a complete or partial withdrawal from a Multiemployer Plan;
(E) within the last five years no Title IV Plan with Unfunded
Pension Liabilities has been transferred outside of the
"controlled group" (within the meaning of Section 4001(a)(14) of
ERISA) of the Originator or ERISA Affiliate; and (F) no liability
under any Title IV Plan has been satisfied with the purchase of a
contract from an insurance company that is not rated AAA by S&P
or an equivalent rating by another nationally recognized rating
agency, except for any such liability under this Section
4.01(m)(ii) which individually or in the aggregate, together with
the aggregate amount of any liability of the type described in
the penultimate sentence and the last sentence of Section
4.01(m)(i), could not reasonably be expected to result in a
liability of the Originator, the Parent and the other domestic
Subsidiaries of the Parent individually or in the aggregate of
$10,000,000 or more.
(n) Brokers. No broker or finder acting on behalf of the
Originator was employed or utilized in connection with this
Agreement or the other Related Documents or the transactions
contemplated hereby or thereby and the Originator does not have
any obligation to any Person in respect of any finder's or
brokerage fees in connection therewith.
(o) Margin Regulations. Notwithstanding the parties' express
intent that each Transfer shall constitute an absolute
assignment, purchase and sale or capital contribution, as
applicable, of Transferred Receivables and not a loan, and to the
extent that any court may nevertheless determine that any such
Transfer constitutes a loan rather than a sale transaction, and
in addition to but not in derogation of any rights now or
hereafter acquired by Buyer under Section 2.01 hereof, the
following provisions shall apply: The Originator is not engaged,
nor will it engage, principally or as one of its important
activities, in the business of extending credit for the purpose
of "purchasing" or "carrying" any "margin security" as such terms
are defined in Regulation U of the Federal Reserve Board as now
and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). The Originator does not
own any Margin Stock with a value, in the aggregate, in excess of
one percent (1%) of such Credit Party's gross assets, and no
portion of the proceeds of the Sale Price for any Sale hereunder
will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock, for the purpose of
reducing or retiring any Debt that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that
might cause any portion of such proceeds to be considered a
"purpose credit" within the meaning of Regulations T, U or X of
the Federal Reserve Board. The Originator will not take or
permit to be taken any action that might cause any Related
Document to violate Regulation T, U or X of the Federal Reserve
Board.
(p) Nonapplicability of Bulk Sales Laws. No Transfer of
Receivables requires compliance with any bulk sales act or
similar law.
(q) Securities Act and Investment Company Act Exemptions. Each
purchase of Transferred Receivables under this Agreement
constitutes (i) a "current transaction" within the meaning of
Section 3(a)(3) of the Securities Act and (ii) a purchase or
other acquisition of notes, drafts, acceptances, open accounts
receivable or other obligations representing part or all of the
sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act.
(r) Government Regulation. Notwithstanding the parties' express
intent that each Transfer shall constitute an absolute
assignment, purchase and sale or capital contribution, as
applicable, of Transferred Receivables and not a loan, and to the
extent that any court may nevertheless determine that any such
Transfer constitutes a loan rather than a sale transaction, and
in addition to but not in derogation of any rights now or
hereafter acquired by Buyer under Section 2.01 hereof, the
following provisions shall apply: The Originator is not subject
to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 1935, as
amended, the Federal Power Act, as amended, or any other federal
or state statute that restricts or limits its ability to incur
Debt or to perform its obligations hereunder or under the other
Related Documents. The purchase or acquisition of the
Transferred Receivables by Buyer hereunder, the application of
the Sale Price for the foregoing and the consummation of the
transactions contemplated by this Agreement and the other Related
Documents will not violate any provision of any such statute or
any rule, regulation or order issued by the Securities and
Exchange Commission.
(s) [Intentionally Omitted].
(t) Deposit and Disbursement Accounts. Schedule 4.01(t) lists
all banks and other financial institutions at which the
Originator maintains any deposit accounts established for the
receipt of collections on accounts receivable as of the Closing
Date, including any Lockbox Accounts, and such schedule
correctly identifies the name, address and telephone number of
each depository, the name in which the account is held, a
description of the purpose of the account, and the complete
account number therefor, in each case as of the Closing Date.
The Originator shall furnish to the Buyer and to the
Administrative Agent on or prior to the Initial Funding Date an
updated Schedule 4.01(t), which schedule shall be in form and
substance satisfactory to the Administrative Agent and the
Lenders.
(u) Representations and Warranties in Other Related Documents.
Each of the representations and warranties of the Originator
contained in the Related Documents (other than this Agreement) is
true and correct in all material respects as of the date made or
deemed made and the Originator hereby makes each such
representation and warranty to, and for the benefit of, the
Lenders and the Administrative Agent as if the same were set
forth in full herein.
(v) Receivables. With respect to each Transferred Receivable
designated as an Eligible Receivable in any Eligible Receivables
Report (as defined in Section 4.02(i) below), as to such
Transferred Receivable, the Originator represents and warrants
that as of the Transfer Date for such Transferred Receivable:
(i) such Receivable satisfies the criteria for an Eligible
Receivable;
(ii) prior to its Transfer to Buyer such Receivable was owned by
the Originator thereof free and clear of any Adverse Claim (other
than Permitted Encumbrances), and the Originator had the full
right, power and authority to sell, contribute, assign, transfer
and pledge its interest therein as contemplated under this
Agreement and the other Related Documents and, upon such
Transfer, Buyer will acquire valid and properly perfected title
to and the sole record and beneficial ownership interest in such
Receivable, free and clear of any Adverse Claim and, following
such Transfer, such Receivable will not be subject to any Adverse
Claim as a result of any action or inaction on the part of the
Originator;
(iii) the Transfer of each such Receivable pursuant to this
Agreement and the Receivables Assignment executed by the
Originator constitutes, as applicable, a valid sale,
contribution, transfer, assignment, setover and conveyance to
Buyer of all right, title and interest of the Originator in and
to such Receivable; and
(iv) the Originator has no knowledge of any fact (including any
defaults by the Obligor thereunder on any other Receivable) that
would reasonably cause it or should have reasonably caused it to
believe that it is reasonably likely that any payments on such
Receivable will not be paid in full when due.
The representations and warranties described in this
Section 4.01 shall survive the Transfer of the Transferred
Receivables to Buyer, any subsequent assignment of the
Transferred Receivables by Buyer, and the termination of this
Agreement and the other Related Documents and shall continue
until the indefeasible payment in full of all Transferred
Receivables.
Section 4.02. Affirmative Covenants of the Originator. The
Originator covenants and agrees that, unless otherwise consented
to by Buyer and the Administrative Agent, from and after the
Closing Date and until the Termination Date:
(a) Offices and Records. The Originator shall to maintain its
principal place of business and chief executive office and the
office at which it keeps its Records at the location specified in
Schedule 4.01(b) or, upon 30 days' prior written notice to Buyer
and the Administrative Agent, at such other location in a
jurisdiction where all action requested by Buyer, any Lender or
the Administrative Agent pursuant to Section 8.13 shall have been
taken with respect to the Transferred Receivables. The
Originator shall at its own cost and expense, for not less than
three years from the date on which each Transferred Receivable
was originated, or for such longer period as may be required by
law, maintain adequate Records with respect to such Transferred
Receivable, including records of all payments received, credits
granted and merchandise returned with respect thereto.
(b) Access. The Originator shall during normal business hours
(subject to Originator's reasonable and customary safety,
security and confidentiality policies and regulations), from time
to time upon one Business Day's prior notice, but not more
frequently than once per calendar quarter (or with such greater
frequency during the existence of a Termination Event or
Incipient Termination Event under the Funding Agreement), as
Buyer, the Servicer or the Administrative Agent determines to be
appropriate: (i) provide Buyer, the Servicer or the
Administrative Agent and any of their respective officers,
employees and agents access to its properties (including
properties utilized in connection with the collection, processing
or servicing of the Transferred Receivables), facilities,
advisors and employees (including officers) and to the
Transferred Receivables, (ii) permit Buyer, the Servicer or the
Administrative Agent and any of their respective officers,
employees and agents, to inspect, audit and make extracts from
its books and records, including all Records, (iii) permit Buyer,
the Servicer or the Administrative Agent and their respective
officers, employees and agents, to inspect, review and evaluate
the Transferred Receivables, and (iv) permit Buyer, the Servicer
or the Administrative Agent and their respective officers,
employees and agents to discuss matters relating to the
Transferred Receivables or the Originator's performance under
this Agreement or the affairs, finances and accounts of the
Originator with any of their respective officers, directors,
employees, representatives or agents (in each case, with those
Persons having knowledge of such matters) and with its
independent certified public accountants. If an Incipient
Termination Event or a Termination Event shall have occurred and
be continuing, or the Administrative Agent, in good faith,
believes that an Incipient Termination Event or a Termination
Event is imminent or deems the Administrative Agent's or any
Lender's rights in the Borrower Collateral insecure, the
Originator shall provide such access at all times and without
advance notice and shall provide Buyer, the Servicer or the
Administrative Agent with access to its suppliers and customers.
The Originator shall make available to Buyer, the Servicer or the
Administrative Agent and their respective counsel, as quickly as
is possible under the circumstances, originals or copies of all
books and records, including Records, that Buyer, the Servicer or
the Administrative Agent may request. The Originator shall
deliver any document or instrument necessary for Buyer, the
Servicer or the Administrative Agent, as they may from time to
time request, to obtain records from any service bureau or other
Person that maintains records for the Originator, and shall
maintain duplicate records or supporting documentation on media,
including computer tapes and discs owned by the Originator.
(c) Communication with Accountants. The Originator authorizes
Buyer, the Servicer and the Administrative Agent to communicate
directly with its independent certified public accountants, and
authorizes and shall instruct those accountants and advisors to
disclose and make available to Buyer, the Servicer and the
Administrative Agent any and all financial statements and other
supporting financial documents, schedules and information
relating to the Originator (including copies of any issued
management letters) with respect to the business, financial
condition and other affairs of the Originator provided, however,
in the absence of an Incipient Termination Event or a Termination
Event, the Buyer, Servicer or Administrative Agent, as
applicable, shall give not less than (5) Business Days' notice to
the Originator prior to scheduling any meeting or other material
communication with such independent certified public accountants.
Such notice shall contain the date, time, location and other
pertinent logistical information regarding any such meeting or
other material communication , as well as an agenda for such
meeting or other material communication. The Originator agrees
to render to Buyer, the Servicer and the Administrative Agent at
the Originator's own cost and expense, such clerical and other
assistance as may be reasonably requested with regard to the
foregoing. If any Termination Event shall have occurred and be
continuing, the Originator shall, promptly upon request therefor,
assist Buyer in delivering to the Administrative Agent Records
reflecting activity through the close of business on the Business
Day immediately preceding the date of such request.
(d) Compliance With Credit and Collection Policies. The
Originator shall comply in all material respects with the Credit
and Collection Policies applicable to each Transferred Receivable
and the Contracts therefor, and with the terms of such
Receivables and Contracts.
(e) Assignment. The Originator agrees that, to the extent
permitted under the Funding Agreement, Buyer may assign all of
its right, title and interest in, to and under the Transferred
Receivables and this Agreement, including its right to exercise
the remedies set forth in Section 4.04. The Originator agrees
that, upon any such assignment, the assignee thereof may enforce
directly, without joinder of Buyer, all of the obligations of the
Originator hereunder, including any obligations of the Originator
set forth in Sections 4.02(o), 4.04, 5.01 and 8.14.
(f) Compliance with Agreements and Applicable Laws. The
Originator shall perform each of its obligations under this
Agreement and the other Related Documents and comply with all
federal, state and local laws and regulations applicable to it
and the Receivables, including those relating to truth in
lending, retail installment sales, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices, privacy, licensing, taxation, ERISA and labor matters
and Environmental Laws and Environmental Permits, except to the
extent that the failure to so comply, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(g) Maintenance of Existence and Conduct of Business. The
Originator shall: (i) do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence and its rights and franchises; (ii) continue
to conduct its business substantially as now conducted or as
otherwise permitted hereunder and in accordance with the terms of
its certificate or articles of incorporation, bylaws, operating
agreement or other constitutive document; (iii) at all times
maintain, preserve and protect all of its assets and properties
used or useful in the conduct of its business, including all
licenses, permits, charters and registrations, and keep the same
in good repair, working order and condition in all material
respects (taking into consideration ordinary wear and tear) and
from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto
consistent with industry practices; and (iv) transact business
only in such corporate, company, partnership and trade names as
are set forth in Schedule 4.02(g) or, upon 30 days' prior written
notice to Buyer, the Administrative Agent and each Rating Agency,
in such other corporate or trade names with respect to which all
action requested by Buyer, any Lender or the Administrative Agent
pursuant to Section 8.13 shall have been taken with respect to
the Transferred Receivables. The Originator shall not change its
jurisdiction of formation except upon 30 days' prior written
notice to Buyer and the Administrative Agent, and with respect to
which jurisdiction all action requested by Buyer, any Lender or
the Administrative Agent pursuant to Section 8.13 shall have been
taken with respect to the Transferred Receivables.
(h) Notice of Material Event. The Originator agrees that, from
and after the Closing Date and until the Termination Date, it
shall deliver or cause to be delivered the reports, notices and
other information required under Annex 4.02(h) attached hereto,
all at the times, to the Persons and in the manner set forth in
Annex 4.02(h) attached hereto.
(i) Eligible Receivables Reports. On or before the date that
the Buyer shall deliver a Borrowing Base Certificate pursuant to
the Funding Agreement, the Originator shall deliver a report
(each, an "Eligible Receivables Report") to the Buyer and the
Administrative Agent, specifying in form and substance
satisfactory to the Buyer and the Administrative Agent, the
extent to which Transferred Receivables transferred to the Buyer
since the previous such report satisfied the criteria of
"Eligible Receivables" as of the respective Transfer Dates in
respect of each such Receivable.
(j) Separate Identity.
(i) The Originator shall maintain corporate, company or limited
partnership, as applicable, records and books of account separate
from those of Buyer.
(ii) The financial statements of the Parent and its consolidated
Subsidiaries shall disclose the effects of the Originator's
transactions under this Agreement in accordance with GAAP and, in
addition, disclose that (A) Buyer's sole business consists of the
purchase or acceptance through capital contribution of the
Receivables from the Originator and the subsequent resale of such
Receivables to the Lender, (B) Buyer is a separate corporate
entity with its own separate creditors who will be entitled, upon
its liquidation, to be satisfied out of Buyer's assets prior to
any value in Buyer becoming available to Buyer's equity holders
and (C) the assets of Buyer are not available to pay creditors of
the Parent, the Originator or any other member of the Parent
Group.
(iii) The resolutions, agreements and other instruments
underlying the transactions described in this Agreement shall be
continuously maintained by the Originator as official records.
(iv) The Originator shall maintain an arm's-length relationship
with Buyer and shall not hold itself out as being liable for the
Debts of Buyer.
(v) The Originator shall keep its assets and its liabilities
wholly separate from those of Buyer.
(vi) The Originator shall conduct its business solely in its own
name through its duly Authorized Officers or agents and in a
manner designed not to mislead third parties as to the separate
identity of the Buyer.
(vii) The Originator shall not mislead third parties by
conducting or appearing to conduct business on behalf of Buyer or
expressly or impliedly representing or suggesting that the
Parent, the Originator or any Subsidiary included in the Parent
Group is liable or responsible for the Debts of Buyer or that the
assets of the Parent, the Originator or any Subsidiary included
in the Parent Group are available to pay the creditors of Buyer.
(viii) The Originator shall cause operating expenses and
liabilities of Buyer to be paid from Buyer's own funds.
(ix) The Originator shall at all times have stationery and other
business forms and a mailing address and telephone number
separate from those of Buyer.
(x) The Originator shall at all times limit its transactions
with Buyer only to those expressly permitted hereunder or under
any other Related Document.
(xi) The Originator shall comply with (and cause to be true and
correct) each of the facts and assumptions contained in the
opinion of Brobeck, Phlegler & Harrison LLP delivered pursuant to
the Schedule of Documents.
(k) ERISA. The Originator shall give Buyer and the
Administrative Agent prompt written notice of any event that
could result in the imposition of a Lien under Section 412 of the
IRC or Section 302 or 4068 of ERISA or the imposition of any
federal, state or local tax Lien on any of its Receivables.
(l) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 4.02(l)(ii), the Originator shall pay,
perform and discharge or cause to be paid, performed and
discharged when due all of its obligations and liabilities for
(x) all taxes, assessments and governmental charges upon its
income or properties (including, without limitation, all taxes
and charges with respect to social security and unemployment
withholding with respect to its employees) and (y) all lawful
claims for labor, materials, supplies and services (but in the
case of this clause (y), excluding current liabilities incurred
in the ordinary course of business).
(ii) The Originator may in good faith contest, by appropriate
proceedings, the validity or amount of any charges or claims
described in Section 4.02(l)(i); provided, that (A) adequate
reserves with respect to such contest are maintained on the books
of the Originator, in accordance with GAAP, (B) none of the
Transferred Receivables may become subject to a material risk of
forfeiture or loss as a result of such contest, (C) no Lien may
be imposed to secure payment of such charges that is superior to
any of the Liens securing the Originator's obligations hereunder
and such contest is maintained and prosecuted continuously and
with diligence and operates to suspend collection or enforcement
of such charges, (D) the Originator shall promptly pay or
discharge such contested charges or claims and all additional
charges, interest, penalties and expenses, if any, and shall
deliver to Buyer and the Administrative Agent evidence acceptable
to the Buyer and Administrative Agent of such compliance, payment
or discharge, if such contest is terminated or discontinued
adversely to the Originator or the conditions set forth in this
Section 4.02(l) are no longer met and, (E) the Administrative
Agent has not advised the Originator in writing that the
Administrative Agent reasonably believes that nonpayment or
nondischarge thereof could reasonably be expected to have or
result in a Material Adverse Effect.
(m) Deposit of Collections. The Originator shall deposit and
cause its Subsidiaries to deposit or cause to be deposited
promptly into a Lockbox Account, and in any event no later than
the first Business Day after receipt thereof, all Collections it
may receive in respect of Transferred Receivables.
(n) Accounting Changes. If any Accounting Changes occur and
such changes result in a change in the standards or terms used
herein, then the parties hereto agree to enter into negotiations
in order to amend such provisions so as to equitably reflect such
Accounting Changes with the desired result that the criteria for
evaluating the financial condition of such Persons and their
Subsidiaries shall be the same after such Accounting Changes as
if such Accounting Changes had not been made. If the parties
hereto agree upon the required amendments to this Agreement, then
after appropriate amendments have been executed and the
underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained herein shall, only
to the extent of such Accounting Change, refer to GAAP
consistently applied after giving effect to the implementation of
such Accounting Change. If such parties cannot agree upon the
required amendments within 30 days following the date of
implementation of any Accounting Change, then all financial
statements delivered and all standards and terms used herein
shall be prepared, delivered and used without regard to the
underlying Accounting Change.
(o) Adjustments to Sale Price. The Originator may not amend or
modify the terms of any Transferred Receivable. If the Billed
Amount of any Sold Receivable is reduced as a result of any
Credit Adjustments, and the amount of such reduction exceeds the
amount, if any, of Credit Adjustments taken into account in the
calculation of the Sale Price for such Transferred Receivable,
the Originator shall make a cash payment to Buyer on the earlier
of the due date hereunder of the next Borrowing Base Certificate
or the next Settlement Date (such date being herein called the
"Adjustment Date") in the amount of such excess by remitting such
amount to the Collection Account in accordance with the terms of
the Funding Agreement (which payment shall be deemed to be a
capital contribution by the Originator to Buyer, and the
aggregate amount of such excess Credit Adjustments so payable on
any particular Adjustment Date shall be reduced by the aggregate
amount of any Debit Adjustments made since the last Adjustment
Date). Except as expressly set forth in this Section 4.02(o), no
Sale Price will be subject to any adjustment.
(p) Financial Covenants. The Originator shall cause the Parent
to comply with the financial covenants set forth on Annex 4.02(p)
attached hereto.
Section 4.03. Negative Covenants of the Originator. The
Originator covenants and agrees that, without the prior written
consent of Buyer and the Administrative Agent, from and after the
Closing Date and until the Termination Date:
(a) Modifications of Receivables or Contracts. The Originator
shall not extend, amend, forgive, discharge, compromise, cancel
or otherwise modify the terms of any Transferred Receivable, or
amend, modify or waive any term or condition of any Contract
therefor in any respect that would purport to adversely affect
any Transferred Receivable or its collectibility; provided, that
the Originator acting as Servicer or Sub-Servicer may, in its
capacity as a Servicer or Sub-Servicer, take such of the
foregoing actions to the extent that they are expressly permitted
by the terms of the Servicing Agreement.
(b) Sale Characterization. The Originator shall not make
statements or disclosures or prepare any financial statements for
any purpose, including for federal income tax, reporting or
accounting purposes, that shall account for the transactions
contemplated by this Agreement in any manner other than (i) with
respect to the Sale of each Receivable originated by it, as a
true sale or absolute assignment of its full right, title and
ownership interest in such Receivable and (ii) with respect to
the Transfer of each Contributed Receivable under this Agreement,
as a contribution to the capital of Buyer.
(c) Actions Affecting Rights. The Originator shall not (i) take
any action, if such action may interfere with the enforcement of
any rights hereunder or under the other Related Documents,
including rights with respect to the Transferred Receivables;
(ii) waive or alter any rights with respect to the Transferred
Receivables (or any agreement or instrument relating thereto); or
(iii) fail to pay any tax, assessment, charge, fee or other
obligation of the Originator with respect to the Transferred
Receivables, or fail to defend any action, if such failure to pay
or defend may adversely affect the priority or enforceability of
the perfected title of Buyer to and the sole record and
beneficial ownership interest of Buyer in the Transferred
Receivables or, prior to their Transfer hereunder, the
Originator's right, title or interest therein.
(d) ERISA. The Originator shall not cause or permit to occur an
event which could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA.
(e) Change to Credit and Collection Policies. The Originator
shall comply with the Credit and Collection Policies, and no
change shall be made to, the Credit and Collection Policies
without the prior written consent of Buyer and the Administrative
Agent (other than any change required by any applicable law, rule
or regulation).
(f) Adverse Tax Consequences. Notwithstanding the parties'
express intent that each Transfer shall constitute an absolute
assignment, purchase and sale or capital contribution, as
applicable, of Transferred Receivables and not a loan, and to the
extent that any court may nevertheless determine that any such
Transfer constitutes a loan rather than a sale transaction, and
in addition to but not in derogation of any rights now or
hereafter acquired by Buyer under Section 2.01 hereof, the
following provisions shall apply: The Originator shall not take
or permit to be taken any action (other than with respect to
actions taken or to be taken solely by a Governmental Authority),
or fail or neglect to perform, keep or observe any of its
obligations hereunder or under the other Related Documents, that
would have the effect directly or indirectly of subjecting any
payment to Buyer, any Lender or holders of the Commercial Paper
who are residents of the United States of America to withholding
taxation.
(g) No Proceedings. From and after the Closing Date and until
the date one year plus one day following the date on which the
Commercial Paper with the latest maturity has been indefeasibly
paid in full in cash, the Originator shall not institute or cause
to be instituted against Buyer or Conduit Lender any proceeding
of the type referred to in Sections 9.01(c) and 9.01(d) of the
Funding Agreement.
(h) Commingling. The Originator shall not, and shall not permit
any Subsidiary to, knowingly deposit or permit the deposit of any
funds that do not constitute Collections of Transferred
Receivables into the Concentration Account or any Lockbox
Account, and the Originator shall establish and maintain
reasonable precautions to attempt to prevent any such funds from
being deposited in any such accounts. If such funds are
nonetheless deposited into the Concentration Account or a Lockbox
Account and the Originator so notifies the Administrative Agent,
the Administrative Agent shall promptly remit any such amounts as
directed by the Originator.
Section 4.04. Breach of Representations, Warranties or
Covenants. Upon discovery by the Originator or Buyer of any
breach of any representation, warranty or covenant described in
Sections 4.01, 4.02 or 4.03 (other than a representation,
warranty or covenant relating to the absence of Credit
Adjustments), which breach is reasonably likely to have a
material adverse effect on the value of a Transferred Receivable
or the interests of Buyer therein, the party discovering the same
shall give prompt written notice thereof to the other parties
hereto. The Originator may, at any time on any Business Day, or
shall, if requested by notice from Buyer, on the first Business
Day following receipt of such notice, either (a) repurchase such
Transferred Receivable from Buyer for cash, (b) transfer
ownership of a new Eligible Receivable or new Eligible
Receivables to Buyer on such Business Day, or (c) make a capital
contribution in cash to Buyer by remitting the amount (the
"Rejected Amount") of such capital contribution to the Collection
Account in accordance with the terms of the Funding Agreement, in
each case in an amount equal to the Billed Amount of such
Transferred Receivable (net of any reduction thereof for which
the Originator has made the payment required therefor under
Section 4.02(o)) minus the sum of (A) Collections received in
respect thereof and (B) the amount of any Credit Adjustment taken
into account in the calculation of the Sale Price therefor.
Notwithstanding the foregoing, if any Receivable is not paid in
full on account of any Credit Adjustments, the Originator's
repurchase obligation under this Section 4.04 with respect to
such Receivable shall be reduced by the amount of any such Credit
Adjustments taken into account in the calculation of the Sale
Price therefor. The Originator shall ensure that no Collections
or other proceeds with respect to a Transferred Receivable so
reconveyed to it are paid or deposited into any Lockbox Account.
ARTICLE V
INDEMNIFICATION
Section 5.01. Indemnification. Without limiting any other
rights which Buyer or any of its stockholders, officers,
directors, employees, agents or representatives (each, a "Buyer
Indemnified Person") may have hereunder, or under applicable law,
the Originator agrees to indemnify and hold harmless each Buyer
Indemnified Person as a result of (a) the failure of a Contract
to be originated in compliance with the requirements of law, (b)
any breach of any of its representations, warranties or covenants
contained herein, or (c) claims, actions, suits or judgments
asserted or imposed against it and arising out of the
transactions contemplated hereby or any of the other Related
Documents, including any tort claims and any fines or penalties
arising from any violation of the laws or regulations of the
United States or any state or local government or Governmental
Authority; provided that the foregoing indemnity shall in no way
be deemed to impose upon the Originator any obligation, other
than to the extent specifically set forth in this Article V, to
make any payment with respect to principal or interest on the
Advances or to reimburse Buyer for any payments on account of the
Advances. Notwithstanding the foregoing, (and with respect to
clause (ii) below, without prejudice to the rights that Buyer may
have pursuant to the other provisions of this Agreement or the
provisions of any other Related Documents), in no event shall any
Buyer Indemnified Person be awarded any Indemnified Amounts to
the extent (i) resulting from the gross negligence or willful
misconduct on the part of such Buyer Indemnified Person or a
breach of its obligations under a Related Document or (ii) the
same constitutes directly or indirectly recourse for
uncollectible or uncollected Transferred Receivables.
NO BUYER INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT OR ANY OTHER RELATED
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF
SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY
TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
ARTICLE VI
[RESERVED]
ARTICLE VII
[RESERVED]
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notices. Except as otherwise provided
herein, whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication
shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to
this Agreement, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing
and shall be deemed to have been validly served, given or
delivered (a) upon the earlier of actual receipt and three
Business Days after deposit in the United States Mail, registered
or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by telecopy or other
similar facsimile transmission (with such telecopy or facsimile
promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 8.01),
(c) one Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile
number set forth below in this Section 8.01 or to such other
address (or facsimile number) as may be substituted by notice
given as herein provided:
the Originator:
Consolidated Freightways Corporation of
Delaware
16400 SE CF Way
Vancouver, WA 98683
Attention: Chief Financial Officer
Buyer:
Consolidated Freightways Funding LLC
16400 SE CF Way
Vancouver, WA 98683
Attention: Chief Financial Officer
provided, that each such declaration or other communication shall
be deemed to have been validly delivered to the Administrative
Agent under this Agreement upon delivery to the Administrative
Agent in accordance with the terms of the Funding Agreement. The
giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Failure or delay
in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to any Person (other
than Buyer) designated in any written communication provided
hereunder to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval,
declaration or other communication. Notwithstanding the
foregoing, whenever it is provided herein that a notice is to be
given to any other party hereto by a specific time, such notice
shall only be effective if actually received by such party prior
to such time, and if such notice is received after such time or
on a day other than a Business Day, such notice shall only be
effective on the immediately succeeding Business Day.
Section 8.02. No Waiver; Remedies. Buyer's failure, at any
time or times, to require strict performance by the Originator of
any provision of this Agreement or any Receivables Assignment
shall not waive, affect or diminish any right of Buyer thereafter
to demand strict compliance and performance herewith or
therewith. Any suspension or waiver of any breach or default
hereunder shall not suspend, waive or affect any other breach or
default whether the same is prior or subsequent thereto and
whether the same or of a different type. None of the
undertakings, agreements, warranties, covenants and
representations of the Originator contained in this Agreement or
any Receivables Assignment, and no breach or default by the
Originator hereunder or thereunder, shall be deemed to have been
suspended or waived by Buyer unless such waiver or suspension is
by an instrument in writing signed by an officer of or other duly
authorized signatory of Buyer and directed to the Originator
specifying such suspension or waiver. Buyer's rights and
remedies under this Agreement shall be cumulative and
nonexclusive of any other rights and remedies that Buyer may have
under any other agreement, including the other Related Documents,
by operation of law or otherwise.
Section 8.03. Successors and Assigns. This Agreement shall
be binding upon and shall inure to the benefit of the Originator
and Buyer and their respective successors and permitted assigns,
except as otherwise provided herein. The Originator may not
assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder without the prior
express written consent of Buyer, the Lenders and the
Administrative Agent and unless the Rating Agency Condition shall
have been satisfied with respect to any such assignment. Any
such purported assignment, transfer, hypothecation or other
conveyance by the Originator without the prior express written
consent of Buyer, the Lenders and the Administrative Agent shall
be void. The Originator acknowledges that, to the extent
permitted under the Funding Agreement, Buyer may assign its
rights granted hereunder, including the benefit of any
indemnities under Article V, and upon such assignment, such
assignee shall have, to the extent of such assignment, all rights
of Buyer hereunder and, to the extent permitted under the Funding
Agreement, may in turn assign such rights. The Originator agrees
that, upon any such assignment, such assignee may enforce
directly, without joinder of Buyer, the rights set forth in this
Agreement. All such assignees, including parties to the Funding
Agreement in the case of any assignment to such parties, shall be
third party beneficiaries of, and shall be entitled to enforce
Buyer's rights and remedies under, this Agreement to the same
extent as if they were parties hereto. Without limiting the
generality of the foregoing, all notices to be provided to the
Buyer hereunder shall be delivered to both the Buyer and the
Administrative Agent under the Funding Agreement, and shall be
effective only upon such delivery to the Administrative Agent.
The terms and provisions of this Agreement are for the purpose of
defining the relative rights and obligations of the Originator
and Buyer with respect to the transactions contemplated hereby
and, except for the Lenders and the Administrative Agent, no
Person shall be a third party beneficiary of any of the terms and
provisions of this Agreement.
Section 8.04. Termination; Survival of Obligations.
(a) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms,
and shall remain in full force and effect until the Termination
Date.
(b) Except as otherwise expressly provided herein or in any
other Related Document, no termination or cancellation
(regardless of cause or procedure) of any commitment made by
Buyer under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Originator or the
rights of Buyer relating to any unpaid portion of any and all
recourse and indemnity obligations of the Originator to Buyer,
including those set forth in Sections 4.02(o), 4.04, 5.01 and
8.14, due or not due, liquidated, contingent or unliquidated or
any transaction or event occurring prior to such termination, or
any transaction or event, the performance of which is required
after the Facility Termination Date. Except as otherwise
expressly provided herein or in any other Related Document, all
undertakings, agreements, covenants, warranties and
representations of or binding upon the Originator, and all rights
of Buyer hereunder, all as contained in the Related Documents,
shall not terminate or expire, but rather shall survive any such
termination or cancellation and shall continue in full force and
effect until the Termination Date; provided, that the rights and
remedies pursuant to Sections 4.02(o), 4.04, the indemnification
and payment provisions of Article V, and the provisions of
Sections 4.03(g), 8.03, 8.12 and 8.14 shall be continuing and
shall survive any termination of this Agreement.
Section 8.05. Complete Agreement; Modification of
Agreement. This Agreement and the other Related Documents
constitute the complete agreement between the parties with
respect to the subject matter hereof and thereof, supersede all
prior agreements and understandings relating to the subject
matter hereof and thereof, and may not be modified, altered or
amended except as set forth in Section 8.06.
Section 8.06. Amendments and Waivers. No amendment,
modification, termination or waiver of any provision of this
Agreement or any of the other Related Documents, or any consent
to any departure by the Originator therefrom, shall in any event
be effective unless the same shall be in writing and signed by
each of the parties hereto and the Lenders and the Administrative
Agent. No consent or demand in any case shall, in itself,
entitle any party to any other consent or further notice or
demand in similar or other circumstances.
Section 8.07. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND EACH RELATED DOCUMENT (EXCEPT TO THE
EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE
CONTRARY) AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER
SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT
OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES), EXCEPT
TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR
PRIORITY OF THE INTERESTS OF THE BUYER IN THE RECEIVABLES OR
REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR
TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK
CITY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE BUYER FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON ANY
SECURITY FOR THE OBLIGATIONS OF THE ORIGINATOR ARISING HEREUNDER,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF BUYER.
EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE
OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
SUCH PARTY AT THE ADDRESS SET FORTH BENEATH ITS NAME ON THE
SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF
OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER
POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT
OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY RELATED DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 8.08. Counterparts. This Agreement may be executed
in any number of separate counterparts, each of which shall
collectively and separately constitute one agreement.
Section 8.09. Severability. Wherever possible, each
provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of
this Agreement.
Section 8.10. Section Titles, Etc. The section titles and
table of contents contained in this Agreement are provided for
ease of reference only and shall be without substantive meaning
or content of any kind whatsoever and are not a part of the
agreement between the parties hereto. Whenever any provision in
this Agreement refers to the knowledge (or an analogous phrase)
of the Originator, such words are intended to signify that one or
more of the Executive Officer's of the Originator has actual
knowledge or awareness of a particular fact or circumstance or
that one or more of the Executive Officer's of the Originator, if
they had exercised reasonable diligence, would have known or been
aware of such fact or circumstance.
Section 8.11. No Setoff. The Originator's obligations
under this Agreement shall not be affected by any right of
setoff, counterclaim, recoupment, defense or other right the
Originator might have against Buyer, any Lender or the
Administrative Agent, all of which rights are hereby expressly
waived by the Originator.
Section 8.12. Confidentiality.
(a) Except to the extent otherwise required by applicable law,
as required to be filed publicly with the Securities and Exchange
Commission, or unless each Affected Party shall otherwise consent
in writing, the Originator and Buyer agree to maintain the
confidentiality of this Agreement (and all drafts hereof and
documents ancillary hereto) in its communications with third
parties other than any Affected Party or any Buyer Indemnified
Person and otherwise and not to disclose, deliver or otherwise
make available to any third party (other than its directors,
officers, employees, accountants or counsel) the original or any
copy of all or any part of this Agreement (or any draft hereof
and documents ancillary hereto) except to an Affected Party or an
Buyer Indemnified Person.
(b) The Originator agrees that it shall not (and shall not
permit any of its Subsidiaries to) issue any news release or make
any public announcement pertaining to the transactions
contemplated by this Agreement and the Related Documents without
the prior written consent of Buyer and each of the Committed
Lender and the Conduit Lender (which consent shall not be
unreasonably withheld) unless such news release or public
announcement is required by law, in which case the Originator
shall consult with Buyer and each of the Committed Lender and the
Conduit Lender prior to the issuance of such news release or
public announcement. The Originator may, however, disclose the
general terms of the transactions contemplated by this Agreement
and the Related Documents to trade creditors, suppliers and other
similarly-situated Persons so long as such disclosure is not in
the form of a news release or public announcement.
(c) Except to the extent otherwise required by applicable law,
or in connection with any judicial or administrative proceedings,
as required to be filed publicly with the Securities Exchange
Commission, or unless the Originator otherwise consents in
writing, the Buyer agrees (i) to maintain the confidentiality of
(A) this Agreement (and all drafts hereof and documents ancillary
hereto) and (B) all other confidential proprietary information
with respect to the Originator and its Affiliates and each of
their respective businesses obtained by the Buyer in connection
with the structuring, negotiation and execution of the
transactions contemplated herein and in the other documents
ancillary hereto, in each case, in its communications with third
parties other than any Affected Party or the Originator and (ii)
not to disclose, deliver, or otherwise make available to any
third party (other than its directors, officers, employees,
accountants or counsel) the original or any copy of all or any
part of this Agreement (or any draft hereof and documents
ancillary hereto) except to an Affected Party or the Originator.
Section 8.13. Further Assurances.
(a) The Originator shall at its sole cost and expense, upon
request of Buyer, any Lender or the Administrative Agent,
promptly and duly execute and deliver any and all further
instruments and documents and take such further actions that may
be necessary or desirable or that Buyer, any Lender or the
Administrative Agent may request to carry out more effectively
the provisions and purposes of this Agreement or any other
Related Document or to obtain the full benefits of this Agreement
and of the rights and powers herein granted, including (i) using
its best efforts to secure all consents and approvals necessary
or appropriate for the assignment to or for the benefit of Buyer
of any Transferred Receivable, and (ii) filing any financing or
continuation statements under the UCC with respect to the
ownership interests or Liens granted hereunder or under any other
Related Document. The Originator hereby authorizes Buyer, each
Lender and the Administrative Agent to file any such financing or
continuation statements without the signature of the Originator
to the extent permitted by applicable law. A carbon,
photographic or other reproduction of this Agreement or of any
notice or financing statement covering the Transferred
Receivables, or any part thereof shall be sufficient as a notice
or financing statement where permitted by law. Notwithstanding
any other term or provision hereof to the contrary, the
Originator shall not be required to assemble or deliver to Buyer,
any Lender or the Administrative Agent originals or copies of
bills of lading or warehouse receipts, absent the occurrence of a
Termination Event or Incipient Termination Event and a written
request to such effect by the Buyer or the Administrative Agent.
(b) If the Originator fails to perform any agreement or
obligation under this Section 8.13, Buyer, any Lender or the
Administrative Agent may (but shall not be required to) itself
perform, or cause performance of, such agreement or obligation,
and the reasonable expenses of Buyer, such Lender or the
Administrative Agent incurred in connection therewith shall be
payable by the Originator upon demand of Buyer, such Lender or
the Administrative Agent.
Section 8.14. Fees and Expenses. In addition to its
indemnification obligations pursuant to Article V, the Originator
agrees to pay on demand all costs and expenses incurred by Buyer
in connection with the negotiation, preparation, execution and
delivery of this Agreement and the other Related Documents,
including the fees and out-of-pocket expenses of Buyer's counsel,
advisors, consultants and auditors retained in connection with
the transactions contemplated thereby and advice in connection
therewith, and the Originator agrees to pay all costs and
expenses, if any (including attorneys' fees and expenses but
excluding any costs of enforcement or collection of the
Transferred Receivables), in connection with the enforcement of
this Agreement and the other Related Documents.
IN WITNESS WHEREOF, the parties have caused this
Receivables Sale and Contribution Agreement to be executed by
their respective duly authorized representatives, as of the date
first above written.
CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE
By: /s/Robert E. Wrightson
Name: Robert E. Wrightson
Title:Executive Vice President and Chief
Financial Officer
CONSOLIDATED FREIGHTWAYS FUNDING LLC
By: /s/Kerry K. Morgan
Name: Kerry K. Morgan
Title:Vice President and Treasurer
EXHIBIT 2.01(a)
Form of
RECEIVABLES ASSIGNMENT
THIS RECEIVABLES ASSIGNMENT (the "Receivables
Assignment") is entered into as of April 27, 2001, by and between
CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE, a Delaware
corporation (the "Originator") and CONSOLIDATED FREIGHTWAYS
FUNDING LLC, a Delaware limited liability company ("Buyer").
1. We refer to that certain Receivables Sale and
Contribution Agreement (as amended, restated, supplemented or
otherwise modified from time to time, the "Sale and Contribution
Agreement") of even date herewith between the Originator and the
Buyer. All of the terms, covenants and conditions of the Sale
and Contribution Agreement are hereby made a part of this
Receivables Assignment and are deemed incorporated herein in
full. Unless otherwise defined herein, capitalized terms or
matters of construction defined or established in the Sale and
Contribution Agreement shall be applied herein as defined or
established therein.
2. For good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Originator
hereby sells, or sells or contributes, and absolutely assigns, to
Buyer, without recourse, except as provided in Sections 4.02(o)
and 4.04 of the Sale and Contribution Agreement, all of the
Originator's right, title and interest, legal or equitable, in,
to and under all of its Receivables (including all Collections,
Records and proceeds with respect thereto) existing as of the
Closing Date and as of each Transfer Date until the Facility
Termination Date (other than Receivables previously transferred
by the Originator to the Buyer and repurchased by the Originator
pursuant to Section 4.04 of the Sale and Contribution Agreement).
3. Subject to the terms and conditions of the Sale
and Contribution Agreement, the Originator hereby covenants and
agrees to sign, sell or contribute, as applicable, execute and
deliver, or cause to be signed, sold or contributed, executed and
delivered, and to do or make, or cause to be done or made, upon
request of Buyer and at the Originator's expense, any and all
agreements, instruments, papers, deeds, acts or things,
supplemental, confirmatory or otherwise, as may be reasonably
required by Buyer for the purpose of or in connection with
acquiring or more effectively vesting in Buyer or evidencing the
vesting in Buyer of the property, rights, title and interests of
the Originator sold or contributed hereunder or intended to be
sold or contributed hereunder.
4. Wherever possible, each provision of this
Receivables Assignment shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any
provision of this Receivables Assignment shall be prohibited by
or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the
remaining provisions of this Receivables Assignment.
5. THIS RECEIVABLES ASSIGNMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO THE PRINCIPLES
THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, the parties have caused this
Receivables Assignment to be executed by their respective
officers thereunto duly authorized, as of the day and year first
above written.
CONSOLIDATED FREIGHTWAYS CONSOLIDATED FREIGHTWAYS
CORPORATION OF DELAWARE FUNDING LLC
By: By:
Name: Name:
Title: Title:
ANNEX 4.02(h)
to
RECEIVABLES SALE AND CONTRIBUTION AGREEMENT
REPORTING REQUIREMENTS
The Originator shall furnish, or cause to be furnished,
to the Buyer, Lenders, the Administrative Agent, the Collateral
Agent and (in the case of paragraph (f) below only) the Rating
Agencies:
(a) Annual Audited Financials. As soon as available,
and in any event within 90 days after the end of each fiscal
year, (i) a copy of the audited consolidated financial statements
for such year for the Parent and its Subsidiaries, certified in
each case in a manner satisfactory to the Administrative Agent
and the Collateral Agent by Arthur Andersen LLP (or its
successor) or other nationally recognized independent public
accountants acceptable to the Administrative Agent and the
Collateral Agent, with such financial statements being prepared
in accordance with GAAP applied consistently throughout the
period involved (except as approved by such accountants and
disclosed therein), and (ii) a report from Arthur Andersen LLP
(or its successor) or other nationally recognized independent
public accountants reasonably acceptable to the Administrative
Agent and the Collateral Agent (upon which report the
Administrative Agent and the Collateral Agent shall be entitled
to rely) to the effect that such firm has caused this Agreement
to be reviewed and that in the course of their audit of the
Parent and its Subsidiaries no facts have come to their attention
to cause them to believe that any Termination Event or Incipient
Termination Event exists and in particular that they have no
knowledge of any failure on the part of the Parent to comply with
the financial covenants in this Agreement or any failure on the
part of the Borrower to comply with the Funding Agreement in the
preparation of the Monthly Reports (including the Borrowing Base
Certificates attached thereto) delivered during the previous
fiscal year, or if such is not the case, specifying any exception
and the nature thereof.
(b) Quarterly Financials. As soon as available, and
in any event within 45 days after the end of each fiscal quarter
(other than the last fiscal quarter of any fiscal year),
financial information regarding the Parent and its Subsidiaries,
certified by the Chief Financial Officer of the Parent,
consisting of consolidated (i) unaudited balance sheets as of the
close of such fiscal quarter and the related statements of income
and cash flows for that portion of the fiscal year ending as of
the close of such fiscal quarter and (ii) unaudited statements of
income and cash flows for such fiscal quarter, setting forth in
comparative form the figures for the corresponding period in the
prior year and the figures contained in the Projections for such
fiscal year, all prepared in accordance with GAAP. Such
financial information shall be accompanied by a listing of the
letter of credit requirements of the Parent and its Subsidiaries
as of the end of such quarter and the certification of the Chief
Financial Officer of the Parent that (A) such financial
information presents fairly in accordance with GAAP the financial
position and results of operations of the Parent and its
Subsidiaries, on a consolidated basis, as at the end of such
quarter and for the period then ended, subject to the absence of
footnotes (except as to the identity of the Borrower) ordinary
year-end audit adjustments and (B) any other information
presented is true, correct and complete in all material respects
and that there was no Incipient Termination Event or Termination
Event in existence as of such time or, if an Incipient
Termination Event or Termination Event shall have occurred and be
continuing, describing the nature thereof and all efforts
undertaken to cure such Incipient Termination Event or
Termination Event. In addition, the Originator shall furnish, or
cause to be furnished, to the Administrative Agent and the
Collateral Agent, within 45 days after the end of each fiscal
quarter, (y) a statement in reasonable detail (each, a
"Compliance Certificate") showing the calculations used in
determining compliance with each financial covenant set forth on
Annex 4.02(o) and (z) a management discussion and analysis that
includes a comparison to budget for the fiscal year to date as of
the end of such fiscal quarter and a comparison of performance
for the fiscal year to date as of the end of that fiscal quarter
to the corresponding period in the prior year.
(c) Monthly Financials. As soon as available, and in
any event within 30 days after the end of each fiscal month
(other than the last month of any fiscal quarter), financial
information regarding the Parent and its Subsidiaries, certified
by the Chief Financial Officer of the Parent, consisting of
consolidated (i) unaudited balance sheets as of the close of such
fiscal month and the related statements of income and cash flows
for that portion of the fiscal year ending as of the close of
such fiscal month and (ii) unaudited statements of income and
cash flows for such fiscal month, setting forth in comparative
form the figures for the corresponding period in the prior year
and the figures contained in the Projections for such fiscal
year, all prepared in accordance with GAAP. Such financial
information shall be accompanied by a listing of the letter of
credit requirements of the Parent and its Subsidiaries as of the
end of one month and the certification of the Chief Financial
Officer of the Parent that (A) such financial information
presents fairly in accordance with GAAP the financial position
and results of operations of the Parent and its Subsidiaries, on
a consolidated basis as at the end of such month and for the
period then ended, subject to the absence of footnotes and to
ordinary year-end audit adjustments and (B) any other information
presented is true, correct and complete in all material respects
and that there was no Incipient Termination Event or Termination
Event in existence as of such time or, if an Incipient
Termination Event or Termination Event shall have occurred and be
continuing, describing the nature thereof and all efforts
undertaken to cure such Incipient Termination Event or
Termination Event.
(d) Operating Plan. As soon as available, but not
later than the earlier of (i) 60 days after the end of each
fiscal year and (ii) three (3) Business Days after the Board of
Directors approval thereof, an annual operating plan for the
Parent and its Subsidiaries, approved by the Board of Directors
of the Parent, for the following year, which will (i) include a
statement of all of the material assumptions on which such plan
is based, (ii) include monthly balance sheets and a monthly
budget for the following year and (iii) integrate sales, gross
profits, operating expenses, operating profit, cash flow
projections, letter of credit requirement projections, and
Funding Availability projections, all prepared on the same basis
and in similar detail as that on which operating results are
reported (and in the case of cash flow projections, representing
management's good faith estimates of future financial performance
based on historical performance).
(e) Management Letters. Within five Business Days
after receipt thereof by the Parent, copies of all management
letters, exception reports or similar letters or reports received
by the Parent from its independent certified public accountants.
(f) Default Notices. As soon as practicable, and in
any event within five Business Days after an Authorized Officer
of the Parent or the Originator has actual knowledge of the
existence thereof, telephonic or telecopied notice of each of the
following events, in each case specifying the nature and
anticipated effect thereof and what action, if any, any
Originator, the Parent or other Domestic Subsidiaries proposes to
take with respect thereto, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day:
(i) any Incipient Termination Event or
Termination Event;
(ii) any Adverse Claim in excess of $10,000 made
or asserted against any of the Transferred Receivables of which
it becomes aware;
(iii) the commencement of a case or proceeding
by or against any member of the Parent Group seeking a decree or
order in respect of such Person (A) under the Bankruptcy Code or
any other applicable federal, state or foreign bankruptcy or
other similar law, (B) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar
official) for such Person or for any substantial part of its
assets, or (C) ordering the winding-up or liquidation of the
affairs of such Person;
(iv) the receipt of notice that (A) any member of
the Parent Group is being placed under regulatory supervision,
(B) any license, permit, charter, registration or approval
necessary for the conduct of such Person's business is to be, or
may be, suspended or revoked, or (C) any member of the Parent
Group is to cease and desist any practice, procedure or policy
employed by it in the conduct of its business if such cessation
may have a Material Adverse Effect;
(v) any other event, circumstance or condition
that has had or could reasonably be expected to have a Material
Adverse Effect.
(g) SEC Filings and Press Releases. Promptly upon
their becoming available, copies of: (i) all financial
statements, reports, notices and proxy statements made publicly
available by the Parent or the Originator to its security
holders; (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by the
Parent or the Originator with any securities exchange or with the
Securities and Exchange Commission or any governmental or private
regulatory authority; and (iii) all press releases and other
statements made available by the Parent or the Originator to the
public concerning material adverse changes or developments in the
business of any such Person.
(h) Litigation. Promptly upon learning thereof,
written notice of any Litigation commenced or threatened against
any member of the Parent Group or with respect to or in
connection with all or any portion of the Transferred Receivables
that (A) seeks damages or penalties in an uninsured amount in
excess of $10,000,000 in any one instance or $10,000,000 in the
aggregate, (B) seeks injunctive relief (other than injunctive
relief relating to labor practices which together with all other
such injunctions could not reasonably be expected to have a
Material Adverse Effect), (C) is asserted or instituted against
any Plan, its fiduciaries or its assets or against any member of
the Parent Group or ERISA Affiliate in connection with any Plan,
(D) alleges criminal misconduct by any member of the Parent
Group, or (E) could reasonably be expected, if determined
adversely, to have a Material Adverse Effect.
(i) Other Documents. Such other financial and other
information respecting the Transferred Receivables, the Contracts
therefor or the condition or operations, financial or otherwise,
of the Borrower or the Parent or any of its other Subsidiaries as
the Lender, the Buyer, the Administrative Agent or the Collateral
Agent shall, from time to time, request.
(j) Downgrading of Credit Rating. Promptly upon
learning of thereof, written notice of any downgrading of the
rating of the Debt of the Parent by S & P setting forth the Debt
affected and the nature of the change.
(k) Notice of Liens. As soon as practicable, and in
any event within five Business Days after any Authorized Officer
or Executive Officer of the Originator has actual knowledge of
the existence thereof, telephonic or telecopied notice of any
Lien on any of the Receivables of the Originator (including any
Transferred Receivables) as a result of any judgment rendered
against the Originator or the failure by the Originator to pay
when due any employee wages or any federal, state or local taxes.
ANNEX 4.02(p) TO RECEIVABLES SALE AND CONTRIBUTION AGREEMENT
FINANCIAL COVENANTS
(a) Minimum Fixed Charge Coverage Ratio. The Parent
and its Subsidiaries shall have on a consolidated basis, as of
the end of each fiscal quarter set forth below, a Fixed Charge
Coverage Ratio for the Rolling Period then ended of not less than
the following:
Fiscal Quarter Minimum Fixed Charge Coverage
Ratio
Fiscal Quarter ending June 1.25 to 1.00
30, 2001
Fiscal Quarter ending 1.30 to 1.00
September 30, 2001
Fiscal Quarter ending 1.70 to 1.00
December 31, 2001 and each
Fiscal Quarter thereafter
(b) Minimum Tangible Net Worth. Parent and its
Subsidiaries on a consolidated basis shall have a Tangible Net
Worth, as of the Closing Date and as of the end of each of the
second, third and fourth fiscal quarters of fiscal year 2001, of
not less than $195,000,000. Thereafter, Parent and its
Subsidiaries on a consolidated basis shall have, as of the end of
each fiscal year ending on or after December 31, 2001 (each such
fiscal year herein called the "Subject Fiscal Year") and as of
the end of the first three fiscal quarters of the immediately
succeeding fiscal year, a Tangible Net Worth of not less than the
sum of (i) the minimum Tangible Net Worth required hereunder for
the fiscal year which immediately preceded the Subject Fiscal
Year (or, where the Subject Fiscal Year is the fiscal year ending
December 31, 2001, the sum of $195,000,000) plus (ii) an amount
equal to fifty percent (50%) of the positive net income of the
Parent and its Subsidiaries on a consolidated basis for the
Subject Fiscal Year plus (iii) an amount equal to one hundred
percent (100%) of the amount of any equity raised by or capital
contributed to the Parent during the Subject Fiscal Year (in the
case of equity raised or capital contributed, net of the bona
fide, reasonable expenses, if any, relating to the raising of
such equity or such capital contribution and paid to Persons who
are not Affiliates of the Parent).
(c) Minimum EBITDA. Parent and its Subsidiaries shall
have on a consolidated basis for each fiscal quarter set forth
below an EBITDA for the Rolling Period then ended of not less
than the following:
Fiscal Quarter Minimum EBITDA
Fiscal Quarter ending June 30, $49,000,000
2001
Fiscal Quarter ending September $50,000,000
30, 2001
Fiscal Quarter ending December $60,000,000
31, 2001 and for each Fiscal
Quarter thereafter
(d) Maximum Capital Expenditures. Parent and its
Subsidiaries shall not make or incur any Capital Expenditures if,
after giving effect thereto, the aggregate amount of all Capital
Expenditures made or incurred by Parent and its Subsidiaries
during any period of four (4) consecutive fiscal quarters would
exceed $55,000,000.
Capitalized terms used in this Annex 4.02(o) and not
otherwise defined below shall have the respective meanings
ascribed to them in Annex X. As used in this Annex 4.02(o),
"Term Debt", "Vancouver Property", "Menlo Park Property",
"Restricted Payments", "Permitted Stock Repurchases" and
"Permitted Acquisitions" shall have the meanings ascribed to such
terms in the Standby Letter of Credit Agreement. The following
terms shall have the respective meanings set forth below:
"Capital Expenditures" shall mean, with respect to any
Person, all expenditures (by the expenditure of cash or the
incurrence of Debt) by such Person during any measuring period
for any fixed assets or improvements or for replacements,
substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under
GAAP, but excluding (i) Capital Expenditures of the Parent, the
Originator or any Subsidiary Guarantor financed by the incurrence
of Term Debt to the extent that such Term Debt is permitted to be
incurred under Section 6.3 of the Standby Letter of Credit
Agreement, provided that on or prior to the date of incurrence of
such Term Debt, the Parent has furnished to the Administrative
Agent a written statement of sources and uses of such Term Debt,
which statement describes with particularity the principal amount
of the Term Debt to be used for the proposed Capital Expenditure
and the fixed assets or improvements to be acquired, replaced,
substituted or added to in connection with such proposed Capital
Expenditure, (ii) the purchase of the Vancouver Property by the
Parent, provided that to the extent the purchase price of the
Vancouver Property exceeds $25,000,000, such excess shall be
included as a Capital Expenditure for purposes of determining
compliance with the Maximum Capital Expenditure covenant set
forth in paragraph (d) of this Annex 4.02(o), (iii) any Capital
Expenditures incurred by the Parent in connection with the
refinancing of the Participation Agreement, provided that to the
extent that such Capital Expenditures exceed $22,500,000, such
excess shall be included as a Capital Expenditure for purposes of
determining compliance with the Maximum Capital Expenditure
covenant set forth in paragraph (d) of this Annex 4.02(o), (iv)
any purchase by the Parent or any Subsidiary of fixed assets or
improvements to the extent that such purchase qualifies for like-
kind tax treatment under Section 1031 of the IRC, provided that
such exclusion from Capital Expenditures under this clause (iv)
shall be limited to an amount not to exceed the lesser of (x) the
cash proceeds received from the transfer of the property
relinquished in the like-kind exchange, assuming for purposes
hereof that the Parent or Subsidiary does not qualify for like-
kind tax treatment under Section 1031 of the IRC in connection
with such transfer and (y) the value of the fixed assets or
improvements purchased by the Parent in the subject transaction
which qualifies for like-kind tax treatment under Section 1031 of
the IRC, (v) any purchase by the Parent or any Subsidiary of
fixed assets or improvements with the proceeds received from the
sale of the Menlo Park Property, provided that on or prior to the
date of any such Capital Expenditures, the Parent has furnished
to the Administrative Agent a written statement of sources and
uses of the proceeds from the sale of the Menlo Park Property,
which statement describes with particularity the amount of the
proceeds from the sale of the Menlo Park Property to be used for
the proposed Capital Expenditure and the fixed assets or
improvements to be acquired, replaced, substituted or added to in
connection with such proposed Capital Expenditures, and (vi) such
other items as the Parent and the Administrative Agent may agree
in writing to exclude.
"EBITDA" shall mean, with respect to any Person for any
fiscal period, the amount equal to (a) consolidated net income of
such Person for such period, plus (b) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss
from extraordinary items for such period, (iv) depreciation and
amortization for such period, (v) amortized debt discount for
such period, (vi) the amount of any deduction to consolidated net
income as the result of any grant to any members of the
management of such Person of any Stock, and (vii) Lease Expenses,
in each case to the extent included in the calculation of
consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, minus (c) the sum
of (i) income tax credits, (ii) interest income, (iii) gain from
extraordinary items for such period, (iv) any aggregate net gain
(but not any aggregate net loss) during such period arising from
the sale, exchange or other disposition of capital assets by such
Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities), provided that
there shall be excluded from the amount of any aggregate net gain
under this clause (iv), in solely the fiscal quarter ending March
31, 2001, an amount equal to the lesser of (x) $19,200,000 and
(y) the actual gain recognized by the Parent and its Subsidiaries
from the sale of its Portland, Oregon administrative complex and
(v) any other non-cash gains that have been added in determining
consolidated net income (including LIFO adjustments), in each
case to the extent included in the calculation of consolidated
net income of such Person for such period in accordance with
GAAP, but without duplication. For purposes of this definition,
the following items shall be excluded in determining consolidated
net income of a Person: (A) the income (or deficit) of any other
Person accrued prior to the date it became a Subsidiary of, or
was merged or consolidated into, such Person or any of such
Person's Subsidiaries; (B) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an
ownership interest, except to the extent any such income has
actually been received by such Person in the form of cash
dividends or distributions; (C) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual
obligation or requirement of law applicable to such Subsidiary;
(D) any restoration to income of any contingency reserve, except
to the extent that provision for such reserve was made out of
income accrued during such period; (E) any write-up of any asset;
(F) any net gain from the collection of the proceeds of life
insurance policies; (G) any net gain arising from the acquisition
of any securities, or the extinguishment, under GAAP, of any
Debt, of such Person, (H) in the case of a successor to such
Person by consolidation or merger or as a transferee of its
assets, any earnings of such successor prior to such
consolidation, merger or transfer of assets, and (I) any deferred
credit representing the excess of equity in any Subsidiary of
such Person at the date of acquisition of such Subsidiary over
the cost to such Person of the investment in such Subsidiary.
"Fixed Charges" shall mean, with respect to any Person
for any fiscal period, the aggregate of, without duplication, (a)
all Interest Expense and Lease Expense paid or accrued during
such period, plus (b) all regularly scheduled payments of
principal with respect to Debt (including any lease payments by
any Person in respect of Capital Leases) due or made during such
period, plus (c) all Restricted Payments made during such period
(other than Permitted Stock Repurchases covered by Section
6.14(vii) of the Standby Letter of Credit Agreement), plus (d)
any cash payments made by such Person in connection with any
Permitted Acquisitions.
"Fixed Charge Coverage Ratio" shall mean, with respect
to any Person for any fiscal period, the ratio of (i) the sum of
(x) EBITDA for such period less (y) cash taxes made during such
period to (ii) Fixed Charges for such period.
"Interest Expense" shall mean, with respect to any
Person for any fiscal period, the sum of (a) interest expense
(whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date,
including (i) amortization of original issue discount on any Debt
and of all fees payable in connection with the incurrence of such
Debt (to the extent included in interest expense), (ii) the
interest portion of any deferred payment obligation, (iii) the
interest component of any Capital Lease Obligation plus (b) the
amount of any Letter of Credit Fee (as such term is defined in
the Standby Letter of Credit Agreement) paid during the relevant
period ended on such date, plus (c) the amount of any payments by
such Person, as lessee, under any sale-leaseback or synthetic
lease transaction.
"Lease Expenses" shall mean, with respect to any Person
for any fiscal period, the aggregate rental obligations of such
Person determined in accordance with GAAP that are payable in
respect of such period under operating leases of equipment having
an original non-cancelable term (as determined in accordance with
GAAP) in excess of twelve months (net of income from subleases
thereof, but including taxes, insurance, maintenance and similar
expenses that the lessee is obligated to pay under the terms of
such leases), whether or not such obligations are reflected as
liabilities or commitments on a consolidated balance sheet of
such Person or in the notes thereto, excluding, however, any such
obligations under Capital Leases.
"Net Worth" shall mean, with respect to any Person as
of any date of determination, (a) the book value of the assets of
such Person, minus (b) reserves applicable thereto, minus (c) all
of such Person's liabilities on a consolidated basis (including
accrued and deferred income taxes), all as determined in
accordance with GAAP.
"Rolling Period" shall mean, as of the end of any
fiscal quarter, the immediately preceding four (4) fiscal
quarters, including the fiscal quarter then ending.
"Tangible Net Worth" shall mean, with respect to any
Person at any date, the Net Worth of such Person at such date,
excluding, however, from the determination of the total assets at
such date, (a) all goodwill, capitalized organizational expenses,
capitalized research and development expenses, trademarks, trade
names, copyrights, patents, patent applications, licenses
(excluding software licenses) and rights in any thereof, and
other intangible items (other than software licenses), (b) all
unamortized debt discount and expense, (c) treasury Stock, and
(d) any write-up in the book value of any asset resulting from a
revaluation thereof.
Rules of Construction Concerning Financial Covenants. Unless
otherwise specifically provided therein, any accounting term used
in any Related Document shall have the meaning customarily given
such term in accordance with GAAP, and all financial computations
thereunder shall be computed in accordance with GAAP consistently
applied. That certain items or computations are explicitly
modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any Accounting Changes
occur and such changes result in a change in the calculation of
the financial covenants, standards or terms used in any Related
Document, then the parties thereto agree to enter into
negotiations in order to amend such provisions so as to equitably
reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of such Persons
and their Subsidiaries shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. If the
parties thereto agree upon the required amendments thereto, then
after appropriate amendments have been executed and the
underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained therein shall, only
to the extent of such Accounting Change, refer to GAAP
consistently applied after giving effect to the implementation of
such Accounting Change. If such parties cannot agree upon the
required amendments within 30 days following the date of
implementation of any Accounting Change, then all financial
statements delivered and all calculations of financial covenants
and other standards and terms in accordance with the Related
Documents shall be prepared, delivered and made without regard to
the underlying Accounting Change.
ARTICLE I DEFINITIONS AND INTERPRETATION 1
Section 1.01. Definitions 1
Section 1.02. Rules of Construction 1
ARTICLE II TRANSFERS OF RECEIVABLES 1
Section 2.01. Agreement to Transfer 1
Section 2.02. Grant of Security Interest 3
ARTICLE III CONDITIONS PRECEDENT 3
Section 3.01. Conditions to Initial Transfer 3
Section 3.02. Conditions to all Transfers 4
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS 5
Section 4.01. Representations and Warranties of the
Originator 5
Section 4.02. Affirmative Covenants of the Originator 11
Section 4.03. Negative Covenants of the Originator 16
Section 4.04. Breach of Representations, Warranties or
Covenants 18
ARTICLE V INDEMNIFICATION 18
Section 5.01. Indemnification 18
ARTICLE VI [RESERVED] 19
ARTICLE VII [RESERVED] 19
ARTICLE VIII MISCELLANEOUS 19
Section 8.01. Notices 19
Section 8.02. No Waiver; Remedies 20
Section 8.03. Successors and Assigns 21
Section 8.04. Termination; Survival of Obligations 21
Section 8.05. Complete Agreement; Modification of
Agreement 22
Section 8.06. Amendments and Waivers 22
Section 8.07. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL 22
Section 8.08. Counterparts 23
Section 8.09. Severability 23
Section 8.10. Section Titles, Etc 23
Section 8.11. No Setoff 24
Section 8.12. Confidentiality 24
Section 8.13. Further Assurances 25
Section 8.14. Fees and Expenses 25
ANNEX X
to
RECEIVABLES SALE AND CONTRIBUTION AGREEMENT,
SERVICING AGREEMENT
and
RECEIVABLES FUNDING AGREEMENT
each dated as of
April 27, 2001
Definitions and Interpretation
SECTION 1. Definitions and Conventions. Capitalized
terms used in the Sale and Contribution Agreement and the Funding
Agreement shall have (unless otherwise provided elsewhere
therein) the following respective meanings:
"Accession Agreement" shall mean an Accession Agreement
substantially in the form of Exhibit A to the Collateral Agent
Agreement.
"Account Agreement" shall mean that certain Account
Agreement dated on or about the Closing Date by and among a
financial institution satisfactory to the Administrative Agent,
the Borrower and the Administrative Agent, as amended, restated,
supplemented or otherwise modified from time to time, in form and
substance reasonably acceptable to the Administrative Agent.
"Accounting Changes" shall mean, with respect to any
Person, (a) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion of
the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants (or any successor
thereto or any agency with similar functions); (b) changes in
accounting principles concurred in by such Person's certified
public accountants; (c) purchase accounting adjustments under
A.P.B. 16 or 17 and EITF 88-16, and the application of the
accounting principles set forth in FASB 109, including the
establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (d) the
reversal of any reserves established as a result of purchase
accounting adjustments.
"Accounts" shall mean the Collection Account, the
Concentration Account, the Lockbox Accounts and the Retention
Account, collectively.
"Accrued Yield" shall mean, as of any date of
determination within a Settlement Period, the sum of the Daily
Yields for each day from and including the first day of the
Settlement Period through and including such date.
"Accrued Servicing Fee" shall mean, as of any date of
determination within a Settlement Period, the sum of the
Servicing Fees calculated for each day from and including the
first day of the Settlement Period through and including such
date.
"Accrued Unused Facility Fee" shall mean, as of any
date of determination within a Settlement Period, the sum of the
Unused Facility Fees calculated for each day from and including
the first day of the Settlement Period through and including such
date.
"Additional Amounts" shall mean any amounts payable to
any Affected Party under Sections 2.09 or 2.10 of the Funding
Agreement.
"Additional Costs" shall have the meaning assigned to
it in Section 2.09(b) of the Funding Agreement.
"Administrative Agent" shall have the meaning set forth
in the Preamble of the Funding Agreement and any successor
thereto.
"Administrative Services Agreement" shall mean that
certain Administrative Services Agreement dated as of March 7,
2000, between Redwood and the Operating Agent.
"Advance" shall have the meaning assigned to it in
Section 2.01 of the Funding Agreement.
"Advance Date" shall mean each day on which any Advance
is made.
"Advance Discount Rate" shall mean, as of any date of
determination, a rate equal to the lesser of (a) the Dynamic
Advance Discount Rate and (b) the Advance Discount Rate Cap.
"Advance Discount Rate Cap" shall mean a rate equal to
eighty-five percent (85%); provided, that the Advance Discount
Rate Cap shall be permanently reduced by the percent (the
"Percentage Reduction") by which the Dilution Trigger Ratio for
any given month exceeds the sum of (i) 5% plus (ii) the
Percentage Reduction, if any, in effect during the prior month.
Once the Advance Discount Rate Cap has been reduced during any
period, the reduced Advance Discount Rate Cap shall be the new
Advance Discount Rate Cap for purposes of this definition from
the date thereof until the earlier of (a) the Facility
Termination Date or (b) the next day in which the Advance
Discount Rate Cap is further reduced. Notwithstanding the
foregoing, the Advance Discount Rate Cap may be increased at any
time at the sole discretion of the Administrative Agent upon
satisfaction of the Rating Agency Condition with respect thereto.
"Adverse Claim" shall mean any claim of ownership or
any Lien, other than any ownership interest or Lien created under
the Sale and Contribution Agreement, the Funding Agreement or any
Lien created under the Collateral Agent Agreement.
"Affected Party" shall mean each of the following
Persons: the Conduit Lender, the Committed Lender, the Liquidity
Agent, each Liquidity Lender, the Administrative Agent, the
Operating Agent, the Letter of Credit Agent, each Letter of
Credit Provider, the Collateral Agent, the Depositary and each
Affiliate of the foregoing Persons.
"Affiliate" shall mean, with respect to any Person,
(a) each Person that, directly or indirectly, owns or controls,
whether beneficially, or as a trustee, guardian or other
fiduciary, ten percent (10%) or more of the Stock having ordinary
voting power in the election of directors of such Person,
(b) each Person that controls, is controlled by or is under
common control with such Person, or (c) each of such Person's
executive officers, directors, joint venturers and general
partners. For the purposes of this definition, "control" of a
Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by
contract or otherwise.
"Appendices" shall mean, with respect to any Related
Document, all exhibits, schedules, annexes and other attachments
thereto, or expressly identified thereto.
"Applicable Lender" shall mean (i) prior to the
occurrence of a Committed Lender Funding Event, the Conduit
Lender, and (ii) on and after the occurrence of a Committed
Lender Funding Event, the Committed Lender.
"Authorized Officer" shall mean, with respect to any
corporation, the Chairman or Vice-Chairman of the Board, the
President, any Vice President, the Secretary, the Treasurer, any
Assistant Secretary, any Assistant Treasurer and each other
officer of such corporation specifically authorized in
resolutions of the Board of Directors of such corporation to sign
agreements, instruments or other documents on behalf of such
corporation in connection with the transactions contemplated by
the Sale and Contribution Agreement, the Funding Agreement and
the other Related Documents.
"Availability" shall mean, as of any date of
determination, the amount equal to the lesser of: (a) (i) the
Borrowing Base multiplied by the Advance Discount Rate minus (ii)
the Discount Reserve, the Dilution Reserve and the Permitted
Encumbrance Reserve, and (b) the Maximum Facility Amount.
"Available LOC Percentage" shall mean twenty-five
percent (25%); provided, that the Available LOC Percentage may be
changed at any time by the Administrative Agent in its sole
discretion, exercised in good faith, and, in the case of a
decrease only, upon satisfaction of the Rating Agency Condition
with respect thereto.
"Bankruptcy Code" shall mean the provisions of title 11
of the United States Code, 11 U.S.C. 101 et seq.
"Billed Amount" shall mean, with respect to any
Transferred Receivable, the amount billed on the Billing Date by
the Originator to the Obligor thereunder.
"Billing Date" shall mean, with respect to any
Transferred Receivable, the date on which the freight bill (if
any) or invoice with respect thereto was generated.
"Borrower" shall mean Consolidated Freightways Funding
LLC, a Delaware limited liability company, in its capacity as
borrower under the Funding Agreement.
"Borrower Account" shall mean a deposit account
maintained in the name of the Borrower at a Borrower Blocked
Account Bank.
"Borrower Account Collateral" shall have the meaning
assigned to it in Section 8.01(c) of the Funding Agreement.
"Borrower Assigned Agreements" shall have the meaning
assigned to it in Section 8.01(b) of the Funding Agreement.
"Borrower Blocked Account Agreement" shall mean an
agreement among the Borrower, the Administrative Agent and a bank
or financial institution that provides, among other things, that
(a) all items of payment deposited in the Borrower Account are
held by the Borrower Blocked Account Bank as custodian for the
Administrative Agent, (b) the Borrower Blocked Account Bank has
no rights of setoff or recoupment or any other claim against the
Borrower Account, as the case may be, other than for payment of
its service fees and other charges directly related to the
administration of the Borrower Account and for returned checks or
other items of payment and (c) upon the giving of a Notice of
Direction (as defined in the Borrower Blocked Account Agreement)
by the Administrative Agent to such Borrower Blocked Account
Bank, such Borrower Blocked Account Bank agrees to forward all
amounts received in the Borrower Account to an account of the
Administrative Agent within one Business Day of receipt, and is
otherwise in form and substance acceptable to the Administrative
Agent, as amended, restated, supplemented or otherwise modified
from time to time.
"Borrower Blocked Account Bank" shall mean a bank or
depository institution acceptable to the Administrative Agent.
"Borrower Collateral" shall have the meaning assigned
to it in Section 8.01 of the Funding Agreement.
"Borrower Secured Obligations" shall mean all loans,
advances, debts, liabilities, indemnities and obligations for the
performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then
required or contingent, or such amounts are liquidated or
determinable) owing by the Borrower to any Affected Party under
the Funding Agreement and any other Related Documents, and all
amendments, extensions or renewals thereof, and all covenants and
duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note, agreement or other
instrument, arising thereunder, including Outstanding Principal
Amount, Daily Yield, Yield Shortfall, Unused Facility Fees,
Unused Facility Fee Shortfall, Margin, amounts in reduction of
Funding Excess, Successor Servicing Fees and Expenses, Additional
Amounts and Indemnified Amounts. This term includes all
principal, interest (including all interest that accrues after
the commencement of any case or proceeding by or against the
Borrower in bankruptcy, whether or not allowed in such case or
proceeding), fees, charges, expenses, attorneys' fees and any
other sum chargeable to the Borrower thereunder, whether now
existing or hereafter arising, voluntary or involuntary, whether
or not jointly owed with others, direct or indirect, absolute or
contingent, liquidated or unliquidated, and whether or not from
time to time decreased or extinguished and later increased,
created or incurred, and all or any portion of such obligations
that are paid to the extent all or any portion of such payment is
avoided or recovered directly or indirectly from any Lender or
the Administrative Agent or any transferee of the Lender or the
Administrative Agent as a preference, fraudulent transfer or
otherwise.
"Borrower's Share" shall mean the ratio of (a) the
Maximum Facility Amount to (b) the aggregate maximum purchase
limits or commitments under the Funding Agreement and all Other
Funding Agreements.
"Borrowing Base" shall mean, as of any date of
determination, the amount equal to the Outstanding Balance of
Eligible Receivables as disclosed in the Borrowing Base
Certificate most recently submitted by the Borrower minus the
Reserves with respect thereto.
"Borrowing Base Certificate" shall have the meaning
assigned to it in Section 2.03(a) of the Funding Agreement.
"Borrowing Request" shall have the meaning assigned to
it in Section 2.03 of the Funding Agreement.
"Breakage Costs" shall have the meaning assigned to it
in Section 2.10 of the Funding Agreement.
"Bringdown Certificate" shall mean an Officer's
Certificate substantially in the form of Exhibit 3.01(a)(i)(B) to
the Funding Agreement.
"Business Day" shall mean any day that is not a
Saturday, a Sunday or a day on which banks are required or
permitted to be closed in the State of New York or the State of
Washington (or, with respect to any determination of LIBOR only,
in London, England).
"Buyer" shall mean Consolidated Freightways Funding
LLC, a Delaware limited liability company, in its capacity as
purchaser under the Sale and Contribution Agreement.
"Buyer Indemnified Person" shall have the meaning
assigned to it in Section 5.01 of the Sale and Contribution
Agreement.
"Capital Lease" shall mean, with respect to any Person,
any lease of any property (whether real, personal or mixed) by
such Person as lessee that, in accordance with GAAP, would be
required to be classified and accounted for as a capital lease on
a balance sheet of such Person.
"Capital Lease Obligation" shall mean, with respect to
any Capital Lease of any Person, the amount of the obligation of
the lessee thereunder that, in accordance with GAAP, would appear
on a balance sheet of such lessee in respect of such Capital
Lease.
"CFF LOC Draw" shall have the meaning assigned to it in
the LAPA.
"CFRM" shall mean CF Risk Management Services, Ltd., a
Bermuda company.
"Change of Control" means any of the following: (a) any
person or group of persons (within the meaning of the Securities
Exchange Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended) of 25% or more of the issued and
outstanding shares of capital Stock of the Parent having the
right to vote for the election of directors of the Parent under
ordinary circumstances; (b) during any period of twelve
consecutive calendar months ending after the Closing Date,
individuals who at the beginning of such period constituted the
board of directors of the Parent (together with any new directors
whose election by the board of directors of the Parent or whose
nomination for election by the stockholders of the Parent was
approved by a vote of a majority of the directors then still in
office who either were directors at the beginning of such period
or whose elections or nomination for election was previously so
approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office; (c) the
Parent shall cease to own and control all of the economic and
voting rights associated with all of the outstanding capital
Stock of the Originator or the Originator shall cease to own and
control all of the economic and voting rights associated with all
of the outstanding capital Stock of the Borrower, or (d) the
Parent has sold, transferred, conveyed, assigned or otherwise
disposed of (i) all or substantially all of the assets of the
Originator or the Borrower, or (ii) all or substantially all of
the assets of the Parent in a transaction not expressly permitted
under Section 6.8 of the Standby Letter of Credit Agreement,
other than to a wholly-owned Subsidiary of the Parent.
"Closing Date" shall mean April 27, 2001.
"Collateral Agent" shall mean GE Capital, in its
capacity as collateral agent for the Conduit Lender and the
Conduit Lender Secured Parties pursuant to the Collateral Agent
Agreement and any successor thereto.
"Collateral Agent Agreement" shall mean that certain
Third Amended and Restated Collateral Agent and Security
Agreement dated as of March 7, 2000, among Redwood, the
Depositary and GE Capital, in its capacities as (a) the
Collateral Agent, (b) the Operating Agent, (c) the Liquidity
Agent and (d) the Letter of Credit Agent.
"Collection Account" shall mean (a) prior to the
earlier of the Redwood Transfer Date or the date of the Committed
Lender Funding Event, that certain segregated deposit account
established by the Conduit Lender and maintained with the
Depositary as designated by the Administrative Agent to the
Borrower in a written notice delivered on or after the Closing
Date, or such other account established in accordance with the
requirements set forth in Section 6.01(b) of the Funding
Agreement, and (b) following the Redwood Transfer Date, an
account established in accordance with Section 3.03(a) of the
LAPA.
"Collection Account Deficiency" shall mean, as of any
Settlement Date or Business Day (as applicable), the amount, if
any, by which the amount necessary to make the payments required
to be made on such date under Sections 6.04(a)(i), (ii) and (iii)
of the Funding Agreement exceeds (i) prior to the earlier of the
Redwood Transfer Date or the date of the Committed Lender Funding
Event, the amount on deposit in the Retention Account and (ii)
from and after the earlier of the Redwood Transfer Date, or the
date of the Committed Lender Funding Event, the amount
transferred on such date to the Administrative Agent pursuant to
Section 6.03(a) of the Funding Agreement.
"Collections" shall mean, with respect to any
Receivable, all cash collections and other proceeds of such
Receivable (including late charges, fees and interest arising
thereon, and all recoveries with respect thereto that have been
written off as uncollectible).
"Commercial Paper" shall mean those certain short-term
promissory notes issued by the Conduit Lender (or, with respect
to the Committed Lender, by GE Capital), from time to time in the
United States of America commercial paper market.
"Committed Lender" shall mean GE Capital, its
successors and assigns.
"Committed Lender Expiry Date" shall mean (i) April 26,
2002 (as such date shall be automatically extended for additional
periods not to exceed 364 days each until April 26, 2006, unless
a Termination Event or an Incipient Termination Event is in
existence at the time of any such extension).
"Committed Lender Funding Event" shall mean the
occurrence of a Redwood Termination Date, but only if both (i) no
Termination Event has occurred and is continuing, and (ii) the
Committed Lender Expiry Date has not occurred.
"Committed Lender Daily Yield" means, for any day, the
product of (i) the Committed Lender Daily Yield Rate for such
day, plus the Daily Margin on such day, plus, if a Termination
Event has occurred and is continuing, the Daily Default Margin,
multiplied by (ii) the Committed Lender's Outstanding Principal
Amount on such day.
"Committed Lender Daily Yield Rate" means, for any day
during a Settlement Period, (a) the weighted average Committed
Lender Yield Rates applicable to the Committed Lender's
Outstanding Principal Amount on such day, weighted by the portion
of the Outstanding Principal Amount bearing interest at each such
Committed Lender Yield Rate, divided by (b) 360.
"Committed Lender Yield Rate" means, with respect to
any day, (i) the Index Rate for such day, or (ii) at the option
of the Borrower exercised by fifteen (15) Business Days' prior
written notice to the Administrative Agent and the Lenders, LIBOR
for the Monthly LIBOR Period in which such day occurs.
"Commitment Reduction Notice" shall have the meaning
assigned to it in Section 2.02(a) of the Funding Agreement.
"Commitment Termination Notice" shall have the meaning
assigned to it in Section 2.02(b) of the Funding Agreement.
"Concentration Account" shall mean the segregated
deposit account established by Borrower pursuant to and in
accordance with Section 6.01(a) of the Funding Agreement.
"Concentration Account Agreement" shall mean any
agreement by and among the Concentration Account Bank, the
Servicer, the Borrower and the Administrative Agent, as amended,
restated, supplemented or otherwise modified from time to time,
in form and substance reasonably acceptable to the Administrative
Agent.
"Concentration Account Bank" shall mean any bank or
other financial institution at which the Concentration Account is
maintained.
"Concentration Percentage" shall mean, with respect to
an Obligor as of any date of determination, the amount (expressed
as a percentage) by which the Outstanding Balance of Eligible
Receivables owing by such Obligor exceeds the product of (i)
three percent (3.0%) multiplied by (ii) the Outstanding Balance
of all Eligible Receivables at such date of determination.
"Conditions Precedent Fulfillment Date" shall mean May
15, 2001.
"Conduit Lender" shall mean (i) prior to the occurrence
of a Refinancing Event, GE Capital, its successors and assigns,
and (ii) after the occurrence of a Refinancing Event, Redwood and
its successors and assigns.
"Conduit Lender Secured Parties" shall mean the
Collateral Agent, the CP Holders, the Depositary, the Liquidity
Agent, the Liquidity Lenders, the Letter of Credit Agent and the
Letter of Credit Providers.
"Consumer Receivable" shall mean any Eligible
Receivable that arises from the provision by the Originator of
services for a personal, family or household purpose.
"Consumer Receivable Reserve" shall mean, as of any
date of determination thereof and after giving effect to all
Eligible Receivables (if any) to be transferred on such date, a
reserve in an amount equal to the amount (if any) by which the
aggregate Outstanding Balance at such time of all Eligible
Receivables which consist of Consumer Receivables exceeds
$1,000,000.
"Contract" shall mean any written agreement (including
any invoice) pursuant to, or under which, an Obligor shall be
obligated to make payments with respect to any Receivable.
"Contributed Receivables" shall have the meaning
assigned to it in Section 2.01(d) of the Sale and Contribution
Agreement.
"CP Holder" shall mean any Person that holds record or
beneficial ownership of Commercial Paper.
"Credit Adjustments" shall mean, with respect to any
Transferred Receivable, any net credits, rebates, cash discounts,
volume discounts, cooperative advertising expenses, customer
refunds, disputes, setoffs, chargebacks, allowances for early
payments and other similar allowances that are reflected on the
books of the Originator and made in accordance with the usual
practices of the Originator and the Credit and Collections
Policy; provided, that (a) any allowances or adjustments in
accordance with the Credit and Collection Policies made on
account of the actual or impending insolvency of the Obligor
thereunder or the Obligor's inability to pay shall not constitute
a Credit Adjustment and (b) a Permitted Setoff Right shall not
constitute a Credit Adjustment.
"Credit and Collection Policies" shall mean the credit,
collection, customer relations and service policies of the
Originator in effect on the Closing Date a copy of which is
attached as Exhibit A to the Funding Agreement, as the same may
from time to time be amended, restated, supplemented or otherwise
modified with the written consent of the Administrative Agent or
as otherwise expressly permitted by the Sale and Contribution
Agreement.
"Daily Default Margin" shall mean, for any day on which
a Termination Event has occurred and is continuing, two percent
(2.0%) divided by 360.
"Daily Margin" shall mean, for any day, the Per Annum
Daily Margin on such day divided by 360.
"Daily Yield" means, for any day, (a) the Redwood Daily
Yield for such day, or (b) the Committed Lender Daily Yield for
such day, as the case may be.
"Daily Yield Rate" shall mean the Redwood Daily Yield
Rate or the Committed Lender Daily Yield Rate, as the case may
be.
"Dealer" shall mean any dealer party to a Dealer
Agreement.
"Dealer Agreement" shall mean any dealer agreement
entered into by Redwood for the distribution of Commercial Paper.
"Debit Adjustments" shall mean, with respect to any
Transferred Receivable, any increase in the Billed Amount of such
Transferred Receivable, by virtue of the correction of any
billing error or by virtue of additional amounts billed on a pre-
existing invoice due to the provision of ancillary services, that
is made in accordance with the usual practices of the Originator
and the Credit and Collection Policies.
"Debit Adjustment Lag" shall mean, with respect to all
Debit Adjustments made in any Settlement Period, the lesser of
(i) 30 days or (ii) the average delay (expressed in number of
days) between the respective Billing Dates of the related
Transferred Receivables and the respective dates of such Debit
Adjustments.
"Debt" of any Person shall mean without duplication (a)
all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services payment for which
is deferred six (6) months or more, but excluding obligations to
trade creditors incurred in the ordinary course of business that
are not overdue by more than six (6) months unless being
contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit or bankers'
acceptances whether or not matured, or with respect to surety
bonds on which a claim has been paid, (c) all obligations
evidenced by notes, bonds, debentures or similar instruments
issued or executed by such Person, (d) all indebtedness created
or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or creditor under
such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease
Obligations, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all
obligations of such Person under any foreign exchange contract,
currency swap agreement, interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to
alter the risks of that Person arising from fluctuations in
currency values or interest rates, in each case whether
contingent or matured, (h) all Debt referred to above secured by
(or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in
property or other assets (including accounts and contract rights)
owned by such Person, even though such Person has not assumed or
become liable for the payment of such Debt, and (i) the Borrower
Secured Obligations.
"Defaulted Receivable" shall mean any Transferred
Receivable (a) with respect to which any payment, or part
thereof, remains unpaid for more than 120 days from its Billing
Date, (b) with respect to which the Obligor thereunder has taken
any action, or suffered any event to occur, of the type described
in Sections 9.01(c) or 9.01(d) of the Funding Agreement or (c)
that otherwise is determined to be uncollectible (other than due
solely to Credit Adjustments) and is written off in accordance
with the Credit and Collection Policies.
"Default Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) of:
(a) the sum of the respective Outstanding Balances of
all Transferred Receivables with respect to which any payment, or
part thereof, remains unpaid for more than 120 days from its
Billing Date, as of the last day of the three Settlement Periods
immediately preceding such date
to
(b) the sum of the respective Outstanding Balances of
all Transferred Receivables as of the last day of the three
Settlement Periods immediately preceding such date.
"Delinquency Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) of:
(a) the average of the respective Outstanding Balances
of all Transferred Receivables which remain unpaid for more than
91 days but less than 120 days from their respective Billing Date
as of the last day of the three Settlement Periods immediately
preceding such date
to
(b) the sum of the respective Outstanding Balances of
all Transferred Receivables as of the last day of the three
Settlement Periods immediately preceding such date.
"Depositary" shall mean Deutsche Bank, or any other
Person designated as the successor Depositary pursuant to and in
accordance with the terms of the Depositary Agreement, in its
capacity as issuing and paying agent or trustee in connection
with the issuance of Commercial Paper.
"Depositary Agreement" shall mean that certain
Depositary Agreement dated March 15, 1994, by and between Redwood
and the Depositary and consented to by the Liquidity Agent.
"Dilution Factors" shall mean, with respect to any
Settlement Period, an amount calculated in accordance with the
following formula:
CA - [(DAL30) X DA]
Where:
CA = the total Credit Adjustments made in such
Settlement Period
DA = the total Debit Adjustments made in such
Settlement Period
DAL = the number of days in the Debit Adjustment Lag
for such Settlement Period.
"Dilution Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) of:
(a) the aggregate Dilution Factors during the
Settlement Period immediately preceding such date
to
(b) the aggregate Billed Amount of all Transferred
Receivables originated during the third Settlement Period
immediately preceding such date.
"Dilution Reserve" means, on any date of determination,
an amount calculated in accordance with the following formula:
Borrowing Base x [(OMDR x 2.00) + .05 - (1.00 - ADR)]
Where:
OMDR = The One Month Dilution Ratio as of such date of
determination
ADR = The Advance Discount Rate (expressed as a
decimal) as of such date of determination.
Notwithstanding the foregoing, the Dilution Reserve shall be
deemed to be zero if at any time the above calculation results in
a negative number.
"Dilution Reserve Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) calculated
in accordance with the following formula:
[(ADR x 2.00) + [(HDR - ADR) x HDR]] x DILHOR
ADR NRPB
where:
ADR = the average of the respective Dilution Ratios
as of the last day of the 12 Settlement
Periods immediately preceding such date.
HDR = the highest Dilution Ratio during the 12
Settlement Periods immediately preceding such
date.
DILHOR = the aggregate Billed Amount of Transferred
Receivables originated during the two
Settlement Periods immediately preceding such
date.
NRPB = the Outstanding Balance of Transferred
Receivables as of the last day of the first
Settlement Period immediately preceding such
date.
Notwithstanding the foregoing, the Dilution Reserve
Ratio shall be deemed to be 5% if at any time the above
calculation results in a percentage of less than 5%.
"Dilution Trigger Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage ) of:
(a) the sum of (i) the aggregate Dilution Factors
recognized by the Borrower during the last three Settlement
Periods immediately preceding such date plus (ii) the aggregate
amount of Transferred Receivables that were written off as
uncollectible by the Borrower during the last three Settlement
Periods immediately preceding such date
to
(b) the aggregate Billed Amount of all Transferred
Receivables originated during the third, fourth and fifth
Settlement Periods immediately preceding such date.
"Discount Reserve" means, at any time, an amount equal
to the product of (i) 1.5, (ii) the Index Rate plus 2.0%, (iii)
the outstanding Advances and (iv) a fraction, the numerator of
which is the higher of (a) 30 and (b) the most recent reported
Receivables Collection Turnover multiplied by 2, and the
denominator of which is 360.
"Dollars" or "$" shall mean lawful currency of the
United States of America.
"Dynamic Advance Discount Rate" shall mean, as of any
date of determination, the rate equal to (a) 100% minus (b) the
sum of (i) the Loss Reserve Ratio plus (ii) the Dilution Reserve
Ratio, plus (c) the Available LOC Percentage.
"Election Notice" shall have the meaning assigned to it
in Section 2.01(d) of the Sale and Contribution Agreement.
"Eligible Receivable" shall mean, as of any date of
determination, a Transferred Receivable:
(a) that is not a liability of an Excluded Obligor;
(b) that is not a liability of an Obligor (i) that is organized
under the laws of any jurisdiction outside of the United States
of America (including the District of Columbia and the
Commonwealth of Puerto Rico but otherwise excluding its
territories and possessions) or (ii) having its principal place
of business outside of the United States of America (including
the District of Columbia but otherwise excluding its territories
and possessions), except to the extent that such Receivable is
secured or payable by a letter of credit, bank guarantee, bond or
other similar instrument satisfactory to the Administrative
Agent;
(c) that is only denominated and payable in Dollars in the
United States of America;
(d) that is not subject to any right of rescission, setoff,
recoupment, counterclaim or defense (together, "Setoff Right"),
whether arising out of transactions concerning the Contract
therefor or otherwise, other than Receivables to the extent
subject only to Permitted Setoff Rights; provided, however, that
Receivables that would otherwise not be Eligible Receivables by
virtue of this clause (d) shall be ineligible only to the extent
of the applicable Setoff Right; and provided further that to the
extent that any such Setoff Right as to any Obligor does not
exceed at any time of determination $100,000, it shall be
disregarded for purposes of this clause (d);
(e) that is not a Defaulted Receivable or an Unapproved
Receivable;
(f) that does not represent "billed but not yet shipped" goods
or merchandise, consigned goods or "sale or return" goods;
(g) as to which the representations and warranties of Sections
4.01(v)(ii)-(iv) of the Sale and Contribution Agreement are true
and correct in all material respects as of the Transfer Date
therefor;
(h) that is not the liability of an Obligor that has any claim
of a material nature against or affecting the Originator thereof
or the property of such Originator (other than a Permitted Setoff
Right);
(i) that is a true and correct statement of a bona fide
indebtedness incurred in the amount of the Billed Amount of such
Receivable for merchandise sold to or services rendered and
accepted or to be accepted by the Obligor thereunder;
(j) that was originated in accordance with and satisfies in all
material respects all applicable requirements of the Credit and
Collection Policies;
(k) that represents the legal, valid and binding obligation of
the Obligor thereunder enforceable by the holder thereof in
accordance with its terms;
(l) that is entitled to be paid pursuant to the terms of the
Contract therefor, has not been paid in full (or as to which an
unidentified, unmatched or in-transit payment has been received
but has not yet reduced the respective Receivable to which it
relates) or been compromised, adjusted, extended, satisfied,
subordinated, rescinded or modified, and is not subject to
compromise, adjustment, extension, satisfaction, subordination,
rescission, or modification by the Originator thereof (except for
adjustments to the Outstanding Balance thereof to reflect Credit
Adjustments made in accordance with the Credit and Collection
Policy);
(m) with respect to which the Originator has generated a freight
bill or submitted an invoice to the Obligor together with all
other necessary documentation for payment to the Obligor
thereunder and such Originator has fulfilled (or is not in breach
of its obligation to fulfill) all of its other obligations in
respect thereof;
(n) the stated term of which, if any, is not greater than (i) 30
days after its Billing Date or (ii) solely in the case of any
Transferred Receivable owing from certain designated Obligors
identified in writing by the Originator and approved in writing
by the Administrative Agent in its sole discretion, 60 days from
its Billing Date, and, in any case, which is not cash-on-delivery
or "C.O.D.";
(o) that does not contravene in any material respect any laws,
rules or regulations applicable thereto (including laws, rules
and regulations relating to usury, consumer protection, truth in
lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with
respect to which no party to the Contract therefor is in
violation of any such law, rule or regulation that could have a
material adverse effect on the collectibility, value or payment
terms of such Transferred Receivable;
(p) with respect to which no proceedings or investigations are
pending or threatened before any Governmental Authority (i)
asserting the invalidity of such Receivable or the Contract
therefor, (ii) asserting the bankruptcy or insolvency of the
Obligor thereunder, (iii) seeking payment of such Receivable or
payment and performance of such Contract or (iv) seeking any
determination or ruling that might materially and adversely
affect the validity or enforceability of such Receivable or such
Contract;
(q) with respect to which the Obligor thereunder is not: (i)
bankrupt or insolvent, (ii) unable to make payment of its
obligations when due, (iii) a debtor in a voluntary or
involuntary bankruptcy proceeding, or (iv) the subject of a
comparable receivership or insolvency proceeding, except to the
extent that such Receivable is secured or payable by a letter of
credit, bank guarantee, bond or other similar instrument
satisfactory to the Administrative Agent;
(r) that is an "account" within the meaning of the UCC of the
jurisdictions in which the chief executive offices of the
Originator and the Borrower are located and the jurisdictions
under which they are organized, and that is not evidenced by
chattel paper, a promissory note or a negotiable instrument;
(s) that is payable solely and directly to the Originator and
not to any other Person, except to the extent that payment
thereof may be made to the Collection Account or otherwise as
directed pursuant to Article VI of the Funding Agreement;
(t) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations with, any
Governmental Authority required to be obtained, effected or given
in connection with the creation of such Receivable or the
Contract therefor to the extent necessary to avoid any defense to
payment by the Obligor have been duly obtained, effected or given
and are in full force and effect;
(u) that is created through the provision of merchandise, goods
or services by the Originator in the ordinary course of its
business in a current transaction;
(v) that complies with such other criteria and requirements as
the Administrative Agent may from time to time in its reasonable
credit judgment specify to the Borrower and the Originator
thereof by written notice.
(w) that is not the liability of an Obligor that, under the
terms of the Credit and Collection Policies, is receiving or
should receive merchandise, goods or services on a "cash on
delivery" basis;
(x) that does not constitute a rebilled amount arising from a
deduction taken by an Obligor with respect to a previously
arising Receivable which was the subject of a new Billing Date;
(y) that is not subject to any Lien, right, claim, security
interest or other interest of any other Person, other than
Permitted Encumbrances (but the Administrative Agent may, subject
to prior notice to the Borrower and the Originator, in the
exercise of its reasonable credit judgment establish a Permitted
Encumbrance Reserve with respect to each such Lien other than
Liens in favor of the Administrative Agent or Lenders);
(z) that does not represent the collection of sales, use or
other taxes or late fees, to that extent;
(aa) that does not represent the balance owed or a Receivable
with respect to which the Obligor has previously made a partial
payment;
(bb) that does not represent a Receivable on which a check, draft
or other item of payment was previously received that was
returned unpaid or otherwise dishonored;
(cc) that has not been assigned to CFRM; and
(dd) that does not constitute payment for any freight forwarding
services performed by the Originator.
"Eligible Receivables Report" shall have the meaning
given to such term in Section 4.02(i) of the Sale and
Contribution Agreement.
"Eligible Transferee" shall mean (a) GE Capital or any
Subsidiary of GE Capital, (b) any commercial finance company, (c)
any bank or other financial institution, or (d) any other Person
that is not engaged in the less-than-truckload motor carrier or
freight transportation business.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974 and any regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to any
Originator, any trade or business (whether or not incorporated)
that, together with such Originator, are treated as a single
employer within the meaning of Sections 414(b), (c), (m) or (o)
of the IRC.
"ERISA Event" shall mean, with respect to any
Originator or any ERISA Affiliate, (a) any event described in
Section 4043(c) of ERISA with respect to a Title IV Plan; (b) the
withdrawal of any Originator or ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which
it was a "substantial employer," as defined in Section 4001(a)(2)
of ERISA; (c) the complete or partial withdrawal of any
Originator or any ERISA Affiliate from any Multiemployer Plan;
(d) the filing of a notice of intent to terminate a Title IV Plan
or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(f) the failure by any Originator or ERISA Affiliate to make when
due required contributions to a Multiemployer Plan or Title IV
Plan unless such failure is cured within 30 days; (g) any other
event or condition that might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Title IV Plan or Multiemployer Plan or for the imposition of
liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA
or the reorganization or insolvency of a Multiemployer Plan under
Section 4241 of ERISA; or (i) the loss of a Qualified Plan's
qualification or tax exempt status.
"ESOP" shall mean a Plan that is intended to satisfy
the requirements of Section 4975(e)(7) of the IRC.
"Event of Servicer Termination" shall have the meaning
assigned to it in Section 6.01 of the Servicing Agreement.
"Excluded Obligor" shall mean any Obligor (a) that is
an Affiliate of the Originator or the Borrower, (b) that is a
Governmental Authority, (c) with respect to which 50% or more of
the aggregate Outstanding Balance of all Receivables owing by
such Obligor are Defaulted Receivables, or (d) with respect to
which the aggregate Outstanding Balance of all Receivables owing
by such Obligor exceeds any credit limit for such Obligor then
imposed by the Originator in accordance with the Credit and
Collection Policies, or (e) that is designated by the
Administrative Agent in its reasonable credit judgment as an
"Excluded Obligor" by written notice by the Administrative Agent
to the Originator and the Borrower given not less than one (1)
Business Day after the Administrative Agent has contacted or
attempted to contact representatives of the Parent or the
Originator by telephone or facsimile to discuss the
Administrative Agent's reasons for designating such Obligor as an
Excluded Obligor.
"Executive Officer" of any Person, means the chief
executive officer, president, chief financial officer, treasurer,
controller, general counsel or chief accounting officer of such
Person.
"Existing Credit Agreement" shall mean that certain
Credit Agreement dated as of October 12, 1999, by and among CF
Delaware, ABN Amro Bank N.V., as issuing bank and administrative
agent, and the lenders party thereto, as amended prior to the
Closing Date.
"Facility Termination Date" shall mean the earliest of
(a) the date so designated pursuant to Section 9.01 of the
Funding Agreement, (b) 90 days prior to the Final Advance Date,
(c) 90 days prior to the date of termination of the Maximum
Facility Amount specified in a notice from the Borrower to the
Lenders delivered pursuant to and in accordance with Section
2.02(b) of the Funding Agreement, (d) the Committed Lender Expiry
Date, (e) the Standby Letter of Credit Commitment Termination
Date and (f) the Conditions Precedent Fulfillment Date, if all of
the conditions precedent set forth in Section 3.01 to the Funding
Agreement and Section 3.01 to the Servicing Agreement have not
been satisfied in full or waived in writing by the Administrative
Agent and the Lenders on or prior to such date.
"Federal Funds Rate" shall mean, for any day, a
floating rate equal to the weighted average of the rates on
overnight federal funds transactions among members of the Federal
Reserve System, as determined by the Administrative Agent.
"Federal Reserve Board" shall mean the Board of
Governors of the Federal Reserve System.
"Fee Letter" shall mean that certain letter agreement
dated April 27, 2001, among the Borrower, Redwood and GE Capital.
"Final Advance Date" shall mean April 27, 2006.
"Funding Agreement" shall mean that certain Receivables
Funding Agreement dated as of April 27, 2001, among the Borrower,
the Conduit Lender, the Committed Lender and the Administrative
Agent.
"Funding Availability" shall mean, as of any date of
determination, the amount, if any, by which Availability exceeds
the Outstanding Principal Amount as of the end of the immediately
preceding day.
"Funding Excess" shall mean, as of any date of
determination, the extent to which the sum of the Outstanding
Principal Amount exceeds the Availability, in each case as
disclosed in the most recently submitted Borrowing Base
Certificate or as otherwise determined by the Administrative
Agent based on Borrower Collateral information available to it,
including any information obtained from any audit or from any
other reports with respect to the Borrower Collateral.
"GAAP" shall mean generally accepted accounting
principles in the United States of America as in effect on the
Closing Date, consistently applied as such term is further
defined in Section 2(a) of this Annex X.
"GE Capital" shall mean General Electric Capital
Corporation, a New York corporation, and its successors and
assigns.
"General Trial Balance" shall mean, with respect to the
Originator and as of any date of determination, the Originator's
accounts receivable trial balance (whether in the form of a
computer printout, magnetic tape or diskette) as of such date,
listing Obligors and the Receivables owing by such Obligors as of
such date together with the aged Outstanding Balances of such
Receivables, in form and substance satisfactory to the Borrower
and the Lenders.
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof, and
any agency, department or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guarantors" shall mean, collectively, the Parent and
each of the Subsidiary Guarantors.
"Guaranty Agreement" shall mean that certain Guaranty
Agreement dated as of April 27, 2001, by the Guarantors in favor
of the Buyer, the Administrative Agent and the Lenders.
"Incipient Servicer Termination Event" shall mean any
event that, with the passage of time or notice or both, would,
unless cured or waived, become an Event of Servicer Termination.
"Incipient Termination Event" shall mean any event
that, with the passage of time or notice or both, would, unless
cured or waived, become a Termination Event.
"Indemnified Amounts" shall mean, with respect to any
Person, any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses (including attorneys' fees and
disbursements and other costs of investigation or defense,
including those incurred upon any appeal).
"Indemnified Person" shall have the meaning assigned to
it in Section 12.01(a) of the Funding Agreement.
"Indemnified Taxes" shall have the meaning assigned to
it in Section 2.08(b) of the Funding Agreement.
"Index Rate" shall mean the latest rate for 30-day
dealer placed commercial paper (which for purposes hereof shall
mean high grade unsecured notes sold through dealers by major
corporations in multiples of $100,000), which normally is
published in the "Money Rates" section of The Wall Street Journal
(or if such rate ceases to be so published, as quoted from such
other generally available and recognizable independent source as
the Administrative Agent may reasonably select). Each change in
any interest rate provided for in the Funding Agreement based
upon the Index Rate shall take effect at the time of such change
in the Index Rate.
"Initial Funding Date" shall mean the date upon which
all of the conditions precedent set forth in Section 3.01 to the
Funding Agreement are satisfied in full or waived in writing by
the Administrative Agent and the Lenders.
"Intercreditor Agreement" shall mean that certain
Intercreditor Agreement dated as of April 27, 2001, among the
Borrower, the Servicer, the Originator, the Lenders, the Standby
L/C Creditor and GE Capital in various agent capacities.
"Interest Expense" shall mean, with respect to any
Person and any period, the interest expense of such Person,
determined on a consolidated basis for such period, including in
any event the interest portion or payments under Capital Lease
Obligations and interest expense for the relevant period that has
been capitalized on the balance sheet of such Person and yield or
other amounts due and payable (other than upfront fees) under any
accounts receivable securitization facility to which any such
Person is a party as seller or issuer.
"In Transit Reserve" shall mean, as at any date of
determination thereof, the aggregate Outstanding Balance as of
such date of all Eligible Receivables with respect to which (i)
any services remain to be performed by or on behalf of the
Originator as a condition to the payment thereof, or (ii)
acceptance by or any other act of the Obligor thereunder remains
to be performed as a condition to the payment thereof.
"Investment Company Act" shall mean the provisions of
the Investment Company Act of 1940, 15 U.S.C. 80a et seq.,
and any regulations promulgated thereunder.
"Investments" shall mean, with respect to any Borrower
Account Collateral, the certificates, instruments, investment
property or other investments in which amounts constituting such
collateral are invested from time to time.
"IRC" shall mean the Internal Revenue Code of 1986 and
any regulations promulgated thereunder.
"IRS" shall mean the Internal Revenue Service.
"LAPA" shall mean a Liquidity Loan and Asset Funding
Agreement entered into after the Closing Date by Redwood and GE
Capital, in its capacities as (a) the administrative agent for
the Conduit Lender and the Committed Lender, (b) the Collateral
Agent and Operating Agent for Redwood, (c) the initial Liquidity
Lender, (d) the Liquidity Agent, and (e) the Committed Lender, in
connection with the transactions contemplated by the Funding
Agreement, as amended, restated, supplemented or otherwise
modified from time to time.
"Lenders" shall mean the Conduit Lender and the
Committed Lender.
"Letter of Credit" shall mean that certain letter of
credit issued by the Letter of Credit Providers at the request of
Redwood in favor of the Collateral Agent pursuant to the Letter
of Credit Agreement.
"Letter of Credit Agent" shall mean GE Capital, in its
capacity as agent for the Letter of Credit Providers under the
Letter of Credit Agreement and any successor thereto.
"Letter of Credit Agreement" shall mean that certain
Third Amended and Restated Letter of Credit Reimbursement
Agreement dated as of March 7, 2000, among Redwood, the Letter of
Credit Agent, the Letter of Credit Providers and the Collateral
Agent.
"Letter of Credit Exposure Excess" shall have the
meaning given to such term in the Standby Letter of Credit
Agreement.
"Letter of Credit Providers" shall mean, initially,
GE Capital, in its capacity as issuer of the Letter of Credit
under the Letter of Credit Agreement, and thereafter its
successors and permitted assigns in such capacity.
"LIBOR" means, for any Monthly LIBOR Period, the per
annum rate for deposits in Dollars for a period of 30 days which
appears on Telerate Page 3750 as of 11:00 a.m., London time, two
(2) Business Days prior to the first day of such Monthly LIBOR
Period. If such rate does not appear on Telerate Page 3750 on
such day, the rate will be determined on the basis of the rates
at which deposits in United States dollars are offered by the
reference banks selected by the Administrative Agent at
approximately 11:00 a.m., London time, on such day to prime banks
in the London interbank market for a period of one month
commencing on that day. The Administrative Agent will request
the principal London office of each of the reference banks to
provide a quotation of its rate. If at least two such quotations
are provided, the rate for that day will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as
requested, the rate for that day will be the arithmetic mean of
the rates quoted by two or more major banks in New York City,
selected by the Administrative Agent, in its sole discretion at
approximately 11:00 a.m., New York City time, on that day for
loans in United States dollars to leading European banks for a
period of 90 days.
"LIBOR Election" shall mean any election by Borrower to
have the Redwood Daily Yield Rate or the Committed Lender Fixed
Rate computed based on LIBOR.
"Lien" shall mean, with respect to any asset, any
mortgage, deed to secure debt, deed of trust, lien, pledge,
charge, security title, security interest or other preferential
arrangement which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of
any kind in respect of such asset to secure or assure payment of
any indebtedness, obligation or liability, whether by consensual
agreement or by operation of statute or other law, or by any
agreement, contingent or otherwise, to provide any of the
foregoing. For purposes of this definition, a Person shall be
deemed to own subject to a Lien any asset which such Person has
acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Liquidity Agent" shall mean GE Capital, in its
capacity as agent for the Liquidity Lenders pursuant to the LAPA.
"Liquidity Lenders" shall mean, collectively, GE
Capital and any other provider of Liquidity Loans under the LAPA.
"Liquidity Loans" shall mean any and all borrowings by
Redwood under the LAPA.
"Litigation" shall mean, with respect to any Person,
any action, claim, lawsuit, demand, investigation or proceeding
pending or threatened against such Person before any court,
board, commission, agency or instrumentality of any federal,
state, local or foreign government or of any agency or
subdivision thereof or before any arbitrator or panel of
arbitrators.
"Lockbox" shall have the meaning assigned to it in
Section 6.01(a)(ii) of the Funding Agreement.
"Lockbox Account" shall mean any segregated deposit
account established by the Borrower for the deposit of
Collections pursuant to and in accordance with Section 6.01(a) of
the Funding Agreement. As used herein and in the Funding
Agreement, the term "Lockbox Account" shall be deemed to include
the depositary account that is the subject of the Account
Agreement.
"Lockbox Account Agreement" shall mean any agreement
among an Originator, the Borrower, the Administrative Agent, and
a Lockbox Account Bank with respect to a Lockbox and Lockbox
Account that provides, among other things, that (a) all items of
payment deposited in such Lockbox and Lockbox Account are held by
such Lockbox Account Bank as custodian for the Administrative
Agent, (b) such Lockbox Account Bank has no rights of setoff or
recoupment or any other claim against such Lockbox Account, as
the case may be, other than for payment of its service fees and
other charges directly related to the administration of such
Lockbox Account and for returned checks or other items of payment
and (c) such Lockbox Account Bank agrees to forward all
Collections received in such Lockbox Account to the Concentration
Account within one Business Day of receipt, and is otherwise in
form and substance reasonably acceptable to the Administrative
Agent. As used herein and in the Funding Agreement, the term
"Lockbox Account Agreement" shall be deemed to include the
Account Agreement.
"Lockbox Account Bank" shall mean any bank or other
financial institution at which one or more Lockbox Accounts are
maintained.
"Loss Reserve Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage) calculated
in accordance with the following formula:
2 x ARR x DEFHOR
NRPB
where:
ARR = the highest Three Month Aged Receivables
Ratio during the 12 Settlement Periods
immediately preceding such date.
DEFHOR = the aggregate Billed Amount of Transferred
Receivables originated during the four
Settlement Periods immediately preceding such
date.
NRPB = the Outstanding Balance of Transferred
Receivables as of the last day of the first
Settlement Period immediately preceding such
date.
"Margin" shall mean, for any day, the product of (i)
the Outstanding Principal Amount and (ii) the sum of the Daily
Margin plus Daily Default Margin, if any, for such day.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the business, assets, liabilities, operations,
prospects or financial or other condition of the relevant Person
or of (i) the Originator, (ii) the Borrower or (iii) the Parent,
the Originator and the Subsidiary Guarantors considered as a
whole, (b) the ability of the relevant Person, or of the
Originator, the Borrower, the Servicer, the Parent or any
Subsidiary Guarantor to perform any of its obligations under the
Related Documents in accordance with the terms thereof, (c) the
validity or enforceability of any Related Document or the rights
and remedies of the Borrower, the Lenders, the Administrative
Agent or the Collateral Agent under any Related Document, (d) the
federal income tax attributes of the sale, contribution or pledge
of the Transferred Receivables pursuant to any Related Document
or (e) the Transferred Receivables, the Contracts therefor, the
Borrower Collateral or the ownership interests or Liens of the
Borrower or the Lenders or the Administrative Agent thereon or
the priority of such interests or Liens.
"Maximum Facility Amount" shall mean $200,000,000, as
such amount may be reduced in accordance with Section 2.02(a) of
the Funding Agreement.
"Monthly LIBOR Periods" shall mean a period of one
month commencing on the effective date of a LIBOR Election and
ending on the same day of the immediately succeeding calendar
month and each succeeding period of one month (which shall
commence on the last day of the immediately preceding Monthly
LIBOR Period and shall end on the same day of the immediately
succeeding calendar month) thereafter so long as such LIBOR
Election is in effect; provided that (i) if a Monthly LIBOR
Period ends on a day that is not a Business Day, such period
shall end on the immediately succeeding Business Day (unless such
succeeding Business Day falls in a new calendar month and in the
case such succeeding period shall end on the immediately
preceding Business Day and (ii) if there is no numerically
corresponding day in the calendar month in which a Monthly LIBOR
Period is scheduled to end, such period shall end on the last
Business Day of such month.
"Monthly Report" shall have the meaning assigned to it
in paragraph (a) of Annex 5.02(a) to the Funding Agreement.
"Moody's" shall mean Moody's Investors Service, Inc. or
any successor thereto.
"Multiemployer Plan" shall mean a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA with respect to which
any Originator or ERISA Affiliate is making, is obligated to
make, or has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.
"Net Worth Percentage" shall mean a fraction (expressed
as a percentage) (a) the numerator of which equals the excess of
assets over liabilities, in each case determined in accordance
with GAAP consistently applied and (b) the denominator of which
equals the Outstanding Balance of Transferred Receivables.
"Obligor" shall mean, with respect to any Receivable,
the Person primarily obligated to make payments in respect
thereof.
"Officer's Certificate" shall mean, with respect to any
Person, a certificate signed by an Authorized Officer of such
Person.
"One Month Dilution Ratio" shall mean, as of any date
determination, the ratio (expressed as a percentage) of:
(a) The sum of (i) the aggregate Dilution Factors
recognized in respect of Transferred Receivables
during the Settlement Period immediately preceding
such date, plus (ii) the aggregate amount of
Transferred Receivables that were written off as
uncollectible during the Settlement Period
immediately preceding such date.
to
(b) the aggregate Billed Amount of all Transferred
Receivables originated during the third Settlement
Period preceding such date.
"Operating Agent" shall mean GE Capital, in its
capacity as operating agent for the Conduit Lender under the
Administrative Services Agreement and any successor thereto.
"Originator" shall mean Consolidated Freightways
Corporation of Delaware, a Delaware corporation, as the seller of
Receivables under the Sale and Contribution Agreement.
"Originator Blocked Account" means the Blocked Account
as such term is defined in the Standby L/C Guaranty.
"Other Funding Agreements" shall mean any agreements
entered into from time to time by the Conduit Lender for the
purchase or financing of receivables of the Borrower.
"Outstanding Balance" shall mean, with respect to any
Transferred Receivable and as of any date of determination, the
amount (which amount shall not be less than zero) equal to (a)
the Billed Amount thereof, minus (b) all Collections received
from the Obligor thereunder, minus (c) all discounts to or any
other modifications that reduce such Billed Amount, (including
without limitation Credit Adjustments), plus (d) all Debit
Adjustments with respect to such Transferred Receivable;
provided, that if the Administrative Agent or the Servicer makes
a determination that all payments by such Obligor with respect to
such Billed Amount have been made, the Outstanding Balance shall
be zero.
"Outstanding Principal Amount" shall mean, as of any
date of determination, the amount equal to (a) the aggregate
Advances made by the Lenders under the Funding Agreement on or
before such date, minus (b) the aggregate amounts disbursed to
any Lender in reduction of such Advances pursuant to Sections
6.02, 6.03, 6.04 or 6.05 of the Funding Agreement on or before
such date; provided, that references to the Outstanding Principal
Amount of any Lender shall mean an amount equal to (x) the
aggregate Advances made by such Lender to the Collection Account
pursuant to Section 2.04(a)(i) of the Funding Agreement on or
before such date, plus (b) in the case of the Committed Lender
only, any amounts advanced by the Committed Lender to the Conduit
Lender under the LAPA in respect of Outstanding Principal Amount
when purchasing the Redwood Interest (as defined in the LAPA)
minus (c) the aggregate amounts disbursed to such Lender in
reduction of Outstanding Principal Amount pursuant to Sections
6.02, 6.03, 6.04 or 6.05 of the Funding Agreement on or before
such date.
"Parent" shall mean Consolidated Freightways
Corporation, a Delaware corporation.
"Parent Group" shall mean the Parent and each of its
Subsidiaries other than the Borrower.
"Participation Agreement" shall mean the Participation
Agreement (as such term is defined in the Standby Letter of
Credit Agreement).
"PBGC" shall mean the Pension Benefit Guaranty
Corporation.
"Pension Plan" shall mean a Plan described in Section
3(2) of ERISA.
"Per Annum Daily Margin" shall mean a rate per annum
equal to (a) 0.75% with respect to the Conduit Lender's
Outstanding Principal Amount, and (b) 2.50% with respect to the
Committed Lender's Outstanding Principal Amount.
"Permitted Acquisitions" shall have the meaning
assigned to it in the Standby Letter of Credit Agreement.
"Permitted Encumbrance Reserve" shall mean any reserve
established by the Administrative Agent in its reasonable credit
judgment with respect to any Permitted Encumbrance that attaches
to any of the Borrower Collateral (other than any Lien in favor
of the Administrative Agent or the Lenders or any Lien in respect
of taxes not yet due and payable), and each such Reserve shall
not exceed the aggregate indebtedness or liability secured by
such Permitted Encumbrance.
"Permitted Encumbrances" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other
governmental charges not yet due and payable; (b) pledges or
deposits securing obligations under workmen's compensation,
unemployment insurance, social security or public liability laws
or similar legislation; (c) pledges or deposits securing bids,
tenders, contracts (other than contracts for the payment of
money) or leases to which any Originator, the Borrower or the
Servicer is a party as lessee made in the ordinary course of
business; (d) deposits securing statutory obligations of any
Originator, the Borrower or the Servicer; (e) inchoate and
unperfected workers', mechanics', suppliers' or similar Liens
arising in the ordinary course of business; (f) carriers',
warehousemen's or other similar possessory Liens arising in the
ordinary course of business; (g) deposits securing, or in lieu
of, surety, appeal or customs bonds in proceedings to which any
Originator, the Borrower or the Servicer is a party; (h) any
attachment or judgment Lien not constituting a Termination Event
under Section 9.01(f) of the Funding Agreement; (i) Liens
existing on the Closing Date and listed on Schedule 5.03(b) of
the Funding Agreement; (j) presently existing or hereinafter
created Liens in favor of the Buyer, the Borrower, the Lenders,
the Administrative Agent or the Collateral Agent; (k) Liens in
favor of the Standby L/C Creditor on any assets of the Originator
so long as such Liens are subject to the Intercreditor Agreement;
(l) bankers' lien on and set-off rights against deposit accounts,
and (m) any other Liens constituting Permitted Encumbrances (as
defined in the Standby Letter of Credit Agreement) provided that
such Liens do not attach to any assets of the Borrower.
"Permitted Investments" shall mean any of the
following:
(a) obligations of, or guaranteed as to the full and
timely payment of principal and interest by, the United States of
America or obligations of any agency or instrumentality thereof
if such obligations are backed by the full faith and credit of
the United States of America, in each case with maturities of not
more than 90 days from the date first acquired;
(b) repurchase agreements on obligations of the type
specified in clause (a) of this definition; provided, that the
short-term debt obligations of the party agreeing to repurchase
are rated at least A-1+ or the equivalent by S&P and P-1 or the
equivalent by Moody's as of the date first acquired;
(c) federal funds, certificates of deposit, time
deposits and bankers' acceptances of any depository institution
or trust company incorporated under the laws of the United States
of America or any state, in each case with maturities remaining
as of the date of acquisition of not more than 90 days or, in the
case of bankers' acceptances, original maturities of not more
than 365 days; provided, that the short-term obligations of such
depository institution or trust company are rated as of the date
of acquisition of at least A-1+ or the equivalent by S&P and P-1
or the equivalent by Moody's;
(d) commercial paper of any corporation incorporated
under the laws of the United States of America or any state
thereof with maturities remaining as of the date of acquisition
of not more than 30 days that on the date of acquisition are
rated as of the date of acquisition at least A-1+ or the
equivalent by S&P and P-1 or the equivalent by Moody's;
(e) securities of money market funds rated as of the
date of acquisition thereof at least Aam or the equivalent by S&P
and P-1 or the equivalent by Moody's; and
(f) such other investments with respect to which each
Rating Agency shall have confirmed in writing to the Lenders and
Collateral Agent that such investments shall not result in a
withdrawal or reduction of the then current rating by such Rating
Agency of the Commercial Paper.
"Permitted Setoff Rights" means, in respect of any
Receivable, any right of setoff, recoupment, or similar right (i)
as to which a no-offset agreement reasonably acceptable to the
Administrative Agent has been executed between the Originator and
the Obligor holding such right, (ii) that is prohibited to the
satisfaction of the Administrative Agent's counsel by contract,
tariff or law, (iii) representing an unmatured or contingent
right to future scheduled payments pursuant to a contract with
an Obligor that could not reasonably be expected to become due
within 30 days after the applicable date of determination, or
(iv) as to which the Administrative Agent in its reasonable
credit judgment determines that an appropriate Reserve has been
established therefor.
"Permitted Stock Repurchases" shall have the meaning
assigned to it in the Standby Letter of Credit Agreement.
"Person" shall mean any individual, sole
proprietorship, partnership, joint venture, unincorporated
organization, trust, association, corporation (including a
business trust), limited liability company, institution, public
benefit corporation, joint stock company, Governmental Authority
or any other entity of whatever nature.
"Plan" shall mean, at any time, an "employee benefit
plan," as defined in Section 3(3) of ERISA, that any Originator
or ERISA Affiliate maintains, contributes to or has an obligation
to contribute to on behalf of participants who are or were
employed by any Originator or ERISA Affiliate.
"Prime Rate" shall mean, for any day, a floating rate
equal to the higher of (i) the rate publicly quoted from time to
time by The Wall Street Journal as the "base rate on corporate
loans at large U.S. money center commercial banks" (or, if The
Wall Street Journal ceases quoting a base rate of the type
described, the highest per annum rate of interest published by
the Federal Reserve Board in Federal Reserve statistical release
H.15 (519) entitled "Selected Interest Rates" as the Bank prime
loan rate or its equivalent), and (ii) the Federal Funds Rate
plus fifty (50) basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Prime
Rate shall take effect at the time of such change in the Prime
Rate.
"Proceeds" shall mean, with respect to any property,
whatever is receivable or received when such property is sold,
collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes all rights
to payment, including returned premiums, with respect to any
insurance relating to such property, and also includes any
returned, reclaimed or repossessed goods.
"Program Documents" shall mean the Letter of Credit
Agreement, the LAPA, the Collateral Agent Agreement, the
Depositary Agreement, the Commercial Paper, the Administrative
Services Agreement, each Accession Agreement and the Dealer
Agreements.
"Projections" shall mean the Parent's forecasted
consolidated: (a) balance sheets; (b) profit and loss
statements; (c) cash flow statements; and (d) capitalization
statements, all prepared on a basis consistent with the
historical financial statements of the Parent, together with
appropriate supporting details and a statement of underlying
assumptions, which shall also include projected Availability and
letter of credit requirements.
"Qualified Plan" shall mean a Pension Plan that is
intended to be tax-qualified under Section 401(a) of the IRC.
"Rating Agency" shall mean Moody's or S&P.
"Rating Agency Condition" shall mean, with respect to
any action, that each Rating Agency has notified the Conduit
Lender and the Administrative Agent in writing that such action
will not result in a reduction or withdrawal of the rating of any
outstanding Commercial Paper.
"Ratios" shall mean, collectively, the Default Ratio,
the Dilution Trigger Ratio, the Dilution Ratio, the Dilution
Reserve Ratio, the Loss Reserve Ratio, the Receivables Collection
Turnover, the Delinquency Ratio, and the Three Month Aged
Receivables Ratio.
"Receivable" shall mean, with respect to any Obligor:
(a) indebtedness of such Obligor (whether constituting
an account, chattel paper, document, instrument or general
intangible) arising from the provision of merchandise, goods or
services to or for the benefit of such Obligor, including the
right to payment of any interest or finance charges and other
obligations of such Obligor with respect thereto;
(b) all Liens and property subject thereto from time
to time securing or purporting to secure any such indebtedness of
such Obligor;
(c) all guaranties, indemnities and warranties,
insurance policies, financing statements and other agreements or
arrangements of whatever character from time to time supporting
or securing payment of any such indebtedness;
(d) all Collections with respect to any of the
foregoing;
(e) all Records with respect to any of the foregoing;
and
(f) all Proceeds with respect to any of the foregoing.
"Receivables Assignment" shall have the meaning
assigned to such term in Section 2.01(a) of the Sale and
Contribution Agreement.
"Receivables Collection Turnover" shall mean, as of any
date of determination, the amount (expressed in days) equal to:
(a) a fraction, (i) the numerator of which is equal to
the average of the Outstanding Balances of Transferred
Receivables on the first day of the three Settlement Periods
immediately preceding such date and (ii) the denominator of which
is equal to aggregate Collections received during such three
Settlement Periods with respect to all Transferred Receivables,
multiplied by
(b) the number of days contained in such three
Settlement Periods.
"Records" shall mean all Contracts and other documents,
books, records and other information (including computer
programs, tapes, disks, data processing software and related
property and rights) prepared and maintained by the Originator,
the Servicer, any Sub-Servicer or the Borrower with respect to
the Receivables and the Obligors thereunder, the Transferred
Receivables and the Borrower Collateral.
"Redwood" shall mean Redwood Receivables Corporation, a
Delaware corporation.
"Redwood Daily Yield" shall mean, for any day, the
product of (a) the Redwood Daily Yield Rate for such day,
multiplied by (b) Redwood's Outstanding Principal Amount on such
day.
"Redwood Daily Yield Rate" shall mean, on any day, a
floating per annum rate equal to the sum of (a) the Daily Margin
on such day, plus (b) if a Termination Event has occurred and is
continuing, the Daily Default Margin, plus (c) the applicable
rate set forth below:
(i) to the extent the Conduit Lender's Advances
hereunder are being financed by the sale of Commercial
Paper, at the option of the Borrower exercised by written
notice to the Administrative Agent and the Lenders (which
shall be given not less than fifteen (15) Business Days
prior to the effective date of any rate under clause (A)
below and one (1) Business Day prior to effective date of
any rate under clause (B) below), either (A) the LIBOR for
the Monthly LIBOR Period in which such day occurs, or (B)(I)
the per annum rate equivalent to the weighted average of the
rates paid or payable by the Conduit Lender from time to
time as interest on or otherwise (by means of interest rate
hedges or otherwise) in respect of Commercial Paper that is
allocated, in whole or in part, to fund or maintain the
Conduit Lender's Outstanding Principal Amount during the
relevant Settlement Period, which rates shall reflect and
give effect to Dealer fees, commissions of placement agents
and other issuance costs in respect of such Commercial
Paper, divided by (II) 360 days; provided, however, that if
any component of such rate in this clause (B) is a discount
rate the rate used shall be the rate resulting from
converting such discount rate to an interest bearing
equivalent rate per annum (in the absence of an effective
notice from Borrower of the interest rate selected by it
under this paragraph (i), the rate provided in clause (B)
shall be deemed to have been selected by Borrower), and
(ii) to the extent the Conduit Lender's Advances
hereunder are not being financed by the sale of Commercial
Paper, the daily rate charged to the Conduit Lender for
borrowing such funds under the LAPA.
"Redwood Termination Date" shall mean the date elected
by Redwood or the Collateral Agent, by notice to the Borrower and
the Administrative Agent as the Redwood Termination Date;
provided, that on such date, one or more of the following events
shall have occurred and be continuing: (a) a CFF LOC Draw; (b)
the obligations of the Liquidity Lenders to make Liquidity Loans
under the LAPA shall have terminated and such Liquidity Lenders
shall not have otherwise been replaced; (c) an event of default
under the Collateral Agent Agreement or any other Program
Document shall have occurred; (d) the short term debt rating of a
Liquidity Lender shall have been downgraded by a Rating Agency
and such Liquidity Lender shall not have been replaced in
accordance with the terms of the LAPA within 30 days thereafter,
or (e) Redwood or the Collateral Agent shall have determined that
the funding of Transferred Receivables under the Funding
Agreement is impracticable for any reason whatsoever, including
as a result of (i) a drop in or withdrawal of any of the ratings
assigned to the Commercial Paper by any Rating Agency, (ii) the
imposition of Additional Amounts, (iii) restrictions on the
amount of Transferred Receivables Redwood may finance or (iv) the
inability of Redwood to issue Commercial Paper.
"Redwood Transfer Date" shall mean the date on which
Redwood transfers to the Liquidity Lenders pursuant to Section
3.01 of the LAPA all of the Redwood Interest (as defined in the
LAPA).
"Regulatory Change" shall mean any change after the
Closing Date in any federal, state or foreign law or regulation
(including Regulation D of the Federal Reserve Board) or the
adoption or making after such date of any interpretation,
directive or request under any federal, state or foreign law or
regulation (whether or not having the force of law) by any
Governmental Authority charged with the interpretation or
administration thereof that, in each case, is applicable to any
Affected Party.
"Rejected Amount" shall have the meaning assigned to it
in Section 4.04 of the Sale and Contribution Agreement.
"Related Documents" shall mean the Concentration
Account Agreement, each Lockbox Account Agreement, the Borrower
Blocked Account Agreement, the Sale and Contribution Agreement,
the Funding Agreement, the Servicing Agreement, the Receivables
Assignment, the Guaranty Agreement, the Intercreditor Agreement
and all other agreements, instruments, documents and certificates
identified in the Schedule of Documents and including all other
pledges, powers of attorney, consents, assignments, contracts,
notices, and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Person, or any employee
of any Person, and delivered in connection with Sale and
Contribution Agreement, the Funding Agreement or the transactions
contemplated thereby. Any reference in the Sale and Contribution
Agreement, the Funding Agreement or any other Related Document to
a Related Document shall include all Appendices thereto, and all
amendments, restatements, supplements or other modifications
thereto, and shall refer to such Related Document as the same may
be in effect at any and all times such reference becomes
operative; provided that the term "Related Document" as used
herein shall not include any "Letter of Credit Document" as such
term is defined in Annex A to the Standby Letter of Credit
Agreement or any of the Program Documents.
"Repayment Notice" shall have the meaning assigned to
it in Section 2.03(c) of the Funding Agreement.
"Reserves" shall mean (i) the aggregate Concentration
Percentage for all Obligors of Transferred Receivables, (ii) the
In Transit Reserve, (iii) the Consumer Receivable Reserve, and
(iv) such other reserves as the Administrative Agent may
establish from time to time in its sole discretion.
"Retained Servicing Fee" shall mean, as of any date of
determination within a Settlement Period, the sum of all amounts
transferred to or retained in the Retention Account (or, from and
after the earlier of the Redwood Transfer Date or the date of the
Committed Lender Funding Event, transferred to the Administration
Agent) with respect to the Servicing Fee from and including the
first day of such Settlement Period through and including such
date pursuant to Section 6.03(a)(ii) of the Funding Agreement.
"Retained Unused Facility Fee" shall mean, as of any
date of determination within a Settlement Period, the sum of all
amounts transferred to or retained in the Retention Account (or,
from and after the earlier of the Redwood Transfer Date or the
date of the Committed Lender Funding Event, transferred to the
Administration Agent) with respect to the Unused Facility Fee
from and including the first day of such Settlement Period
through and including such date in accordance with Section
6.03(a)(ii) of the Funding Agreement.
"Retained Yield" shall mean, as of any date of
determination within a Settlement Period, the sum of all amounts
transferred to or retained in the Retention Account (or, from and
after the earlier of the Redwood Transfer Date or the date of the
Committed Lender Funding Event, transferred to the Administration
Agent) with respect to Daily Yield from and including the first
day of such Settlement Period through and including such date
pursuant to Section 6.03(a)(ii) of the Funding Agreement.
"Retention Account" shall mean that certain segregated
deposit account established by the Administrative Agent and
maintained with the Depositary for the benefit of Redwood and
designated by the Administrative Agent to the Borrower in a
written notice delivered on or after the Closing Date.
"Retiree Welfare Plan" shall mean, at any time, a
Welfare Plan that provides for continuing coverage or benefits
for any participant or any beneficiary of a participant after
such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the
IRC and at the sole expense of the participant or the beneficiary
of the participant.
"Revolving Note" shall have the meaning assigned to
such term in Section 2.01(b) of the Funding Agreement.
"Revolving Period" shall mean the period from and
including the Closing Date through and including the day
immediately preceding the Facility Termination Date.
"S&P" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., or any successor
thereto.
"Sale" shall mean a sale of Receivables by the
Originator to the Borrower pursuant to Section 2.01 of the Sale
and Contribution Agreement.
"Sale and Contribution Agreement" shall mean that
certain Receivables Sale and Contribution Agreement dated as of
April 27, 2001, between the Originator and the Borrower, as the
Buyer thereunder.
"Sale Price" shall mean, with respect to any Sale of
Sold Receivables, the price calculated by the Borrower and
confirmed as to accuracy from time to time by the Administrative
Agent equal to:
(a) the Outstanding Balance of such Sold Receivables
as of the Transfer Date, minus
(b) the costs expected as of the Transfer Date by the
Borrower to be incurred in financing the purchase of such Sold
Receivables until the Outstanding Balance of such Sold
Receivables, as applicable, is paid in full, minus
(c) the portion of such Sold Receivables that is
expected by the Originator as of the Transfer Date to become
Defaulted Receivables, minus
(d) the portion of such Sold Receivables expected by
the Originator to be reduced by Dilution Factors (based on
assumptions reasonably satisfactory to the Administrative Agent),
minus
(e) amounts expected by the Borrower as of the
Transfer Date to be paid to the Servicer with respect to the
servicing, administration and collection of such Sold
Receivables;
provided, that such calculations shall be reasonably determined
based on the historical experience of (y) such Originator, with
respect to the calculations required in each of clauses (c) and
(d) above, and (z) the Borrower, with respect to the calculations
required in clauses (b) and (e) above.
"Schedule of Documents" shall mean the schedule,
including all appendices, exhibits or schedules thereto, listing
certain documents and information to be delivered in connection
with the Sale and Contribution Agreement, the Funding Agreement
and the other Related Documents and the transactions contemplated
thereunder, substantially in the form attached as Annex Y to the
Funding Agreement.
"Securities Act" shall mean the provisions of the
Securities Act of 1933, 15 U.S.C. Sections 77a et seq., and any
regulations promulgated thereunder.
"Securities Exchange Act" shall mean the provisions of
the Securities Exchange Act of 1934, 15 U.S.C. Sections 78a
et seq., and any regulations promulgated thereunder.
"Servicer" shall mean the Originator, in its capacity
as the Servicer under the Servicing Agreement, or any other
Person designated as a Successor Servicer.
"Servicer's Certificate" shall mean an Officer's
Certificate substantially in the form of Exhibit 3.01(a)(ii)(B)
to the Funding Agreement.
"Servicer Termination Notice" shall mean any notice by
the Administrative Agent to the Servicer that (a) an Event of
Servicer Termination has occurred and (b) the Servicer's
appointment under the Servicing Agreement has been terminated.
"Servicing Agreement" shall mean that certain Servicing
Agreement dated as of April 27, 2001, among the Borrower, the
Lenders, the Administrative Agent and the Servicer.
"Servicing Fee" shall mean, for any day within a
Settlement Period, the amount equal to (a) (i) the Servicing Fee
Rate divided by (ii) 360, multiplied by (b) the Outstanding
Principal Amount on such day.
"Servicing Fee Rate" shall mean 1.00%.
"Servicing Fee Shortfall" shall mean, as of any date of
determination within a Settlement Period, the amount, if any, by
which the Accrued Servicing Fee exceeds the Retained Servicing
Fee, in each case as of such date.
"Servicing Records" shall mean all documents, books,
Records and other information (including computer programs,
tapes, disks, data processing software and related property and
rights) prepared and maintained by the Servicer to the extent
relating to the Transferred Receivables and the Obligors
thereunder.
"Settlement Date" shall mean the tenth Business Day
following the end of each Settlement Period.
"Settlement Period" shall mean (a) solely for purposes
of determining the Ratios, (i) with respect to all Settlement
Periods other than the final Settlement Period, each calendar
month, whether occurring before or after the Closing Date, and
(ii) with respect to the final Settlement Period, the period
ending on the Termination Date and beginning with the first day
of the calendar month in which the Termination Date occurs, and
(b) for all other purposes, (i) with respect to the initial
Settlement Period, the period from and including the Closing Date
through and including the last day of the calendar month in which
the Closing Date occurs, (ii) with respect to the final
Settlement Period, the period ending on the Termination Date and
beginning with the first day of the calendar month in which the
Termination Date occurs, and (iii) with respect to all other
Settlement Periods, each calendar month; provided, however, that
upon the occurrence of the earlier of the Redwood Transfer Date
or the date of the Committed Lender Funding Event, such
Settlement Period shall terminate on the day prior to the earlier
of the Redwood Transfer Date or the date of the Committed Lender
Funding Event (as the case may be), and the next Settlement
Period shall be the period from and including the Redwood
Transfer Date or the date of the Committed Lender Funding Event
(as the case may be) through and including the last day of the
calendar month in which the Redwood Transfer Date or the
Committed Lender Funding Event (as the case may be) occurs.
"Sold Receivable" shall have the meaning assigned to it
in Section 2.01(b) of the Sale and Contribution Agreement.
"Solvency Certificate" shall mean an Officer's
Certificate substantially in the form of Exhibit 3.01(a)(i) to
the Funding Agreement.
"Solvent" shall mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the
property of such Person is greater than the total amount of
liabilities, including contingent liabilities, of such Person;
(b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the
probable liability of such Person on its Debts as they become
absolute and matured; (c) such Person does not intend to, and
does not believe that it will, incur Debts or liabilities beyond
such Person's ability to pay as such Debts and liabilities
mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or
transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities
(such as Litigation, guaranties and pension plan liabilities) at
any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the
amount that can reasonably be expected to become an actual or
matured liability.
"Standby L/C Creditor" shall mean GE Capital as
Creditor under the Standby Letter of Credit Agreement.
"Standby L/C Guaranty" shall mean that certain Guaranty
dated as of April 27, 2001, by the Originator and certain other
domestic subsidiaries of the Parent in favor of the Standby L/C
Creditor, together with such amendments, restatements,
supplements or modifications thereto or any refinancings,
replacements or refundings thereof as may be agreed to by the
Lenders and the Administrative Agent.
"Standby Letter of Credit Agreement" shall mean that
certain Letter of Credit Agreement dated as of April 27, 2001,
between the Parent and the Standby L/C Creditor, together with
such amendments, restatements, supplements or modifications
thereto or any refinancings, replacements or refundings thereof
as may be agreed to by the Lenders and the Administrative Agent.
"Standby Letter of Credit Commitment Termination Date"
shall mean the Commitment Termination Date (as defined in the
Standby Letter of Credit Agreement).
"Stock" shall mean all shares, options, warrants,
member interests, general or limited partnership interests or
other equivalents (regardless of how designated) of or in a
corporation, limited liability company, partnership or equivalent
entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act).
"Stockholder" shall mean, with respect to any Person,
each holder of Stock of such Person.
"Sub-Servicer" shall mean any Person with whom the
Servicer enters into a Sub-Servicing Agreement.
"Sub-Servicing Agreement" shall mean any written
contract entered into between the Servicer and any Sub-Servicer
pursuant to and in accordance with Section 2.01 of the Servicing
Agreement relating to the servicing, administration or collection
of the Transferred Receivables.
"Subsidiary" shall mean, with respect to any Person,
any corporation or other entity (a) of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned by
such Person or (b) that is directly or indirectly controlled by
such Person within the meaning of control under Section 15 of the
Securities Act.
"Subsidiary Guarantors" shall mean the each domestic
Subsidiary of the Parent (other than the Originator and the
Borrower).
"Successor Servicer" shall have the meaning assigned to
it in Section 7.02 of the Servicing Agreement.
"Successor Servicing Fees and Expenses" shall mean the
fees and expenses payable to the Successor Servicer as agreed to
by the Borrower, the Lenders and the Administrative Agent.
"Termination Date" shall mean the date on which
(a) Outstanding Principal Amount has been permanently reduced to
zero, (b) all other Borrower Secured Obligations under the
Funding Agreement and the other Related Documents have been
indefeasibly repaid in full and completely discharged and (c) the
Maximum Facility Amount has been irrevocably terminated in
accordance with the provisions of Section 2.02(b) of the Funding
Agreement.
"Termination Event" shall have the meaning assigned to
it in Section 9.01 of the Funding Agreement.
"Three Month Aged Receivables Ratio" shall mean as of
any date of determination the three month average of the
following the ratio (expressed as a percentage):
(a) (i) the sum of the respective Outstanding Balances
of Transferred Receivables with respect to which any payment, or
part thereof, remaining unpaid for more than 120 but less than
181 days from their respective Billing Dates as of the last day
of the Settlement Period immediately preceding such date, plus
(ii) any Transferred Receivables that have been written off as
uncollectible less than 120 days from their Billing Date.
to
(b) the aggregate Billed Amount of Transferred
Receivables originated during the fifth and sixth Settlement
Periods immediately preceding such date.
"Title IV Plan" shall mean a Pension Plan (other than a
Multiemployer Plan) that is covered by Title IV of ERISA and that
any Originator or ERISA Affiliate maintains, contributes to or
has an obligation to contribute to on behalf of participants who
are or were employed by any of them.
"Transfer" shall mean any Sale or capital contribution
of Transferred Receivables by the Originator to the Borrower
pursuant to the terms of the Sale and Contribution Agreement.
"Transfer Date" shall have the meaning assigned to it
in Section 2.01(a) of the Sale and Contribution Agreement.
"Transferred Receivable" shall mean any Sold Receivable
or Contributed Receivable; provided, that any Receivable
repurchased by the Originator pursuant to Section 4.04 of the
Sale and Contribution Agreement or otherwise shall not be deemed
to be a Transferred Receivable from and after the date of such
repurchase unless such Receivable has subsequently been
repurchased by or contributed to the Borrower.
"UCC" shall mean, with respect to any jurisdiction, the
Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in such jurisdiction.
"Unapproved Receivable" shall mean any receivable
(a) with respect to which the obligor thereunder is not an
Obligor on any Transferred Receivable and whose customer
relationship with an Originator arises as a result of the
acquisition by such Originator of another Person or (b) that was
originated in accordance with standards established by another
Person acquired by an Originator, in each case, solely with
respect to any such acquisitions that have not been approved in
writing by the Administrative Agent and then only for the period
prior to any such approval.
"Unfunded Pension Liability" shall mean, at any time,
the aggregate amount, if any, of the sum of (a) the amount by
which the present value of all accrued benefits under each Title
IV Plan exceeds the fair market value of all assets of such Title
IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for
each such Title IV Plan using the actuarial assumptions for
funding purposes in effect under such Title IV Plan, and (b) for
a period of five years following a transaction that might
reasonably be expected to be covered by Section 4069 of ERISA,
the liabilities (whether or not accrued) that could be avoided by
any Originator or any ERISA Affiliate as a result of such
transaction.
"Unused Facility Fee" shall have the meaning assigned
to it in Section 2.07(c) of the Funding Agreement.
"Unused Facility Fee Shortfall" shall mean, as of any
date of determination within a Settlement Period, the amount, if
any, by which the Accrued Unused Facility Fee exceeds the
Retained Unused Facility Fee, in each case as of such date.
"Welfare Plan" shall mean a Plan described in Section
3(1) of ERISA.
"Yield Shortfall" shall mean, as of any date of
determination the amount, if any, by which the Accrued Yield
exceeds the Retained Yield, in each case as of such date.
SECTION 2. Other Terms and Rules of Construction.
(a) Accounting Terms. Rules of construction with
respect to accounting terms used in any Related Document shall be
as set forth in Annex 4.02 to the Sale and Contribution
Agreement. Unless otherwise specifically provided therein, any
accounting term used in any Related Document shall have the
meaning customarily given such term in accordance with GAAP, and
all financial computations thereunder shall be computed in
accordance with GAAP consistently applied. That certain items or
computations are explicitly modified by the phrase "in accordance
with GAAP" shall in no way be construed to limit the foregoing.
(b) Other Terms. All other undefined terms contained
in any of the Related Documents shall, unless the context
indicates otherwise, have the meanings provided for by the UCC as
in effect in the State of New York to the extent the same are
used or defined therein.
(c) Rules of Construction. Unless otherwise
specified, references in any Related Document or any of the
Appendices thereto to a Section, subsection or clause refer to
such Section, subsection or clause as contained in such Related
Document. The words "herein," "hereof" and "hereunder" and other
words of similar import used in any Related Document refer to
such Related Document as a whole, including all annexes, exhibits
and schedules, as the same may from time to time be amended,
restated, modified or supplemented, and not to any particular
section, subsection or clause contained in such Related Document
or any such annex, exhibit or schedule. Any reference to or
definition of any document, instrument or agreement shall, unless
expressly noted otherwise, include the same as amended, restated,
supplemented or otherwise modified from time to time. Wherever
from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter genders.
The words "including," "includes" and "include" shall be deemed
to be followed by the words "without limitation"; the word "or"
is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent
permitted by the Related Documents) or, in the case of
Governmental Authorities, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and
any successor statutes and regulations.
(d) Rules of Construction for Determination of Ratios.
The Ratios in respect of any applicable Settlement Period
preceding the Closing Date shall be established by the
Administrative Agent on or prior to the Closing Date and the
underlying calculations for periods preceding the Closing Date to
be used in future calculations of the Ratios shall be established
by the Administrative Agent on or prior to the Closing Date in
accordance with Schedule1 attached to this Annex X. For purposes
of calculating the Ratios, (i) averages shall be computed by
rounding to the third decimal place and (ii) the Settlement
Period in which the date of determination thereof occurs shall
not be included in the computation thereof and the first
Settlement Period immediately preceding such date of
determination shall be deemed to be the Settlement Period
immediately preceding the Settlement Period in which such date of
determination occurs.
(e) Rules of Construction Concerning Financial
Covenants. Unless otherwise specifically provided therein, any
accounting term used in any Related Document shall have the
meaning customarily given such term in accordance with GAAP, and
all financial computations thereunder shall be computed in
accordance with GAAP consistently applied. That certain items or
computations are explicitly modified by the phrase "in accordance
with GAAP" shall in no way be construed to limit the foregoing.
If any Accounting Changes occur and such changes result in a
change in the calculation of the financial covenants, standards
or terms used in any Related Document, then the parties thereto
agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such Accounting Changes
with the desired result that the criteria for evaluating the
financial condition of such Persons and their Subsidiaries shall
be the same after such Accounting Changes as if such Accounting
Changes had not been made. If the parties thereto agree upon the
required amendments thereto, then after appropriate amendments
have been executed and the underlying Accounting Change with
respect thereto has been implemented, any reference to GAAP
contained therein shall, only to the extent of such Accounting
Change, refer to GAAP consistently applied after giving effect to
the implementation of such Accounting Change. If such parties
cannot agree upon the required amendments within 30 days
following the date of implementation of any Accounting Change,
then all financial statements delivered and all calculations of
financial covenants and other standards and terms in accordance
with the Related Documents shall be prepared, delivered and made
without regard to the underlying Accounting Change.
RECEIVABLES FUNDING AGREEMENT
Dated as of April 27, 2001,
by and among
CONSOLIDATED FREIGHTWAYS FUNDING LLC
as Borrower,
and
REDWOOD RECEIVABLES CORPORATION,
as Conduit Lender
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Lender and as Administrative Agent
EXHIBITS
Exhibit 2.01(b) - Form of Revolving Note
Exhibit 2.02(a) - Form of Commitment Reduction Notice
Exhibit 2.02(b) - Form of Commitment Termination Notice
Exhibit 2.03(a) - Form of Borrowing Base Certificate
Exhibit 2.03(b) - Form of Borrowing Request
Exhibit 2.03(c) - Form of Repayment Notice
Exhibit - Form of Officer's Certificate as to Solvency
3.01(a)(i) of Borrower
Exhibit - Form of Officer's Closing Certificate of
3.01(a)(i)(A) Borrower
Exhibit - Form of Officer's Post-Closing Certificate of
3.01(a)(i)(B) Borrower
Exhibit - Form of Officer's Certificate as to Solvency
3.01(a)(ii) of Servicer
Exhibit - Form of Officer's Closing Certificate of
3.01(a)(ii)(A) Servicer
Exhibit - Form of Officer's Post-Closing Certificate of
3.01(a)(ii)(B) Servicer
Exhibit - Form of Monthly Report
3.01(a)(iv)
Exhibit - Form of Opinion of Brobeck, Phleger &
3.01(k)(i) Harrison LLP (True Sale)
Exhibit - Form of Opinion of Brobeck, Phleger &
3.01(k)(ii) Harrison LLP (Non-Consolidation)
Exhibit - Form of Opinion of Brobeck, Phleger &
3.01(k)(iii) Harrison LLP (Corporate Enforceability, etc.)
Exhibit - Form of Opinion of Stephen D. Richards, Esq.,
3.01(k)(iv) General Counsel
Exhibit - Form of Opinion of Stoel Rives LLP
3.01(k)(v)
Exhibit 10.03 Form of Power of Attorney
Exhibit A - Credit and Collection Policy
Annex 5.02(a) - Reporting Requirements of the Borrower
Annex X - Definitions
Annex Y - Schedule of Documents
Schedule 4.01(b) - Executive Offices; Collateral Locations;
Company or Other Names; FEIN/Borrower
Schedule 4.01(d) - Litigation
Schedule 4.01(h) - Ventures, Subsidiaries and Affiliates;
Outstanding Stock and Indebtedness/Borrower
Schedule 4.01(i) - Tax Matters/Borrower
Schedule 4.01(q) - Deposit and Disbursement Accounts/Borrower
Schedule 5.01(b) - Trade Names/Borrower
Schedule 5.03(a) - Existing Liens/Borrower
THIS RECEIVABLES FUNDING AGREEMENT (as amended,
supplemented or otherwise modified and in effect from time to
time, the "Agreement") is entered into as of April 27, 2001 by
and among CONSOLIDATED FREIGHTWAYS FUNDING LLC, a Delaware
limited liability company (the "Borrower"), REDWOOD RECEIVABLES
CORPORATION, a Delaware corporation, as Conduit Lender (the
"Conduit Lender") and GENERAL ELECTRIC CAPITAL CORPORATION, a New
York corporation, as a Committed Lender (the "Committed Lender"),
and as administrative agent for the Conduit Lender and the
Committed Lender hereunder (in such capacity, the "Administrative
Agent").
RECITALS
A. The Borrower is a special purpose corporation owned by the
Originator.
B. The Borrower has been formed for the purpose of purchasing,
or otherwise acquiring by capital contribution, Receivables of
the Originator party pursuant to the Sale and Contribution
Agreement.
C. The Borrower intends to fund its purchases of the
Receivables, in part, by borrowing Advances hereunder and
pledging all of its right, title and interest in and to the
Receivables and certain other assets as security therefor, and,
subject to the terms and conditions hereof, the Conduit Lender
and the Committed Lender intend to make such Advances, from time
to time, as described herein.
D. The Administrative Agent has been requested and is willing
to act as administrative agent on behalf of each of the Conduit
Lender and the Committed Lender in connection with the making and
financing of such Advances.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and
the mutual covenants hereinafter contained, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to
them in Annex X.
Section 1.02. Rules of Construction. For purposes of this
Agreement, the rules of construction set forth in Annex X shall
govern. All Appendices hereto, or expressly identified to this
Agreement, are incorporated herein by reference and, taken
together with this Agreement, shall constitute but a single
agreement.
ARTICLE II.
AMOUNTS AND TERMS OF ADVANCES
Section 2.01. Advances. (a) From and after the Closing
Date and until the Facility Termination Date and subject to the
terms and conditions hereof, the Conduit Lender (prior to the
occurrence of a Redwood Termination Date or the Redwood Transfer
Date) and the Committed Lender (after the occurrence of the
Committed Lender Funding Event) severally agree to make advances
(each such advance hereunder, an "Advance") to the Borrower from
time to time. Under no circumstances shall a Lender make any
Advances if, after giving effect thereto, a Funding Excess would
exist. The aggregate amount of Advances outstanding shall not
exceed at any time lesser of (i) the Availability as determined
by the most recent Borrowing Base Certificate delivered by the
Borrower under Section 2.03(a) and (ii) the Maximum Facility
Amount. Borrower may from time to time borrow, repay and
reborrow Advances hereunder on the terms and conditions set forth
herein.
(b) Borrower shall execute and deliver to each Lender a note to
evidence the Advances which may be made hereunder from time to
time by such Lender. The note shall be in the principal amount
of the Maximum Facility Amount, dated the Closing Date and
substantially in the form of Exhibit 2.01(b) (each, a "Revolving
Note"). Each Revolving Note shall represent the obligation of
Borrower to the applicable Lender to pay the amount of the
Maximum Facility Amount or, if less, the aggregate unpaid
principal amount of all Advances made by such Lender to Borrower
together with interest thereon as prescribed in Section 2.06.
The entire unpaid balance of all of the Advances and all other
unpaid Borrower Secured Obligations shall be immediately due and
payable in full in same day funds on the Facility Termination
Date.
Section 2.02. Optional Changes in Maximum Facility Amount.
(a) So long as no Incipient Termination Event or Termination
Event shall have occurred and be continuing, the Borrower may,
not more than four times during each calendar year, reduce the
Maximum Facility Amount permanently; provided, that (i) the
Borrower shall give ten Business Days' prior written notice of
any such reduction to the Administrative Agent substantially in
the form of Exhibit 2.02(a) (each such notice, a "Commitment
Reduction Notice"), (ii) any partial reduction of the Maximum
Facility Amount shall be in a minimum amount of $5,000,000 or an
integral multiple thereof, and (iii) no such reduction shall
reduce the Maximum Facility Amount below the greater of (x)
Outstanding Principal Amount and (y) $50,000,000.
(b) The Borrower may at any time on at least 30 days' prior
written notice by the Borrower to the Administrative Agent
irrevocably terminate the Maximum Facility Amount; provided, that
(i) such notice of termination shall be substantially in the form
of Exhibit 2.02(b) (the "Commitment Termination Notice") and (ii)
the Borrower shall reduce the Outstanding Principal Amount to
zero and make all payments required by Section 2.03(c) at the
time and in the manner specified therein. Upon such termination,
the Borrower's right to request that any Lender make Advances
hereunder shall simultaneously terminate and the Facility
Termination Date shall automatically occur.
(c) Each written notice required to be delivered pursuant to
Sections 2.02(a) and (b) shall be irrevocable and shall be
effective (i) on the day of receipt if received by the
Administrative Agent and the Lenders not later than 4:00 p.m.
(New York time) on any Business Day and (ii) on the immediately
succeeding Business Day if received by the Administrative Agent
and the Lenders after such time on such Business Day or if any
such notice is received on a day other than a Business Day
(regardless of the time of day such notice is received). Each
such notice of termination or reduction shall specify,
respectively, the amount of, or the amount of the proposed
reduction in, the Maximum Facility Amount.
Section 2.03. Notices Relating to Increases and Reductions
in the Outstanding Principal Amount.
(a) Not later than 12:00 noon (New York time) on the fourth
Business Day of each week (or on each Business Day if requested
by the Administrative Agent at any time when any Termination
Event or Incipient Termination Event is in existence), the
Borrower shall deliver to the Lenders and the Administrative
Agent an Officer's Certificate substantially in the form of
Exhibit 2.03(a) (each, a "Borrowing Base Certificate"). Funding
Availability shall be determined by the Administrative Agent
based on information related to the Borrower Collateral available
to it, including (A) any information obtained in connection with
any audit or reflected in the most recent Borrowing Base
Certificate or (B) any other information that may be available to
the Lenders and the Administrative Agent.
(b) Each Advance shall be made upon the provision of notice by
the Borrower to the Administrative Agent in the manner provided
herein. Any such notice must be accompanied by a Borrowing Base
Certificate as required pursuant to Section 2.03(a) updated with
information through the most recent date available, and must
given in writing so that it is received no later than 4:00 p.m.
(New York time) (i) in respect of any Advance to be made by the
Conduit Lender, on the Business Day immediately preceding the
proposed Advance Date set forth therein and (ii) after the
occurrence of a Committed Lender Funding Event, in respect of any
Advance to be made by the Committed Lender on the Business Day
immediately preceding the proposed Advance Date set forth
therein. Each such notice (a "Borrowing Request") shall (x) be
substantially in the form of Exhibit 2.03(b), (y) be irrevocable
and (z) specify the amount of the requested increase in
Outstanding Principal Amount (which shall be in a minimum amount
of $500,000) and the proposed Advance Date (which shall be a
Business Day), and shall include such other information as may be
reasonably required by the Lenders and the Administrative Agent.
(c) The Borrower may at any time reduce the Outstanding
Principal Amount; provided, that (i) the Borrower shall give one
Business Day's prior written notice of any such reduction to the
Administrative Agent substantially in the form of Exhibit 2.03(c)
(each such notice, a "Repayment Notice"), (ii) each such notice
shall be irrevocable, (iii) each such notice shall specify the
amount of the requested reduction in the Outstanding Principal
Amount and the proposed date of such reduction (which shall be a
Business Day) and (iv) any such reduction must be accompanied by
payment of (A) all Daily Yield accrued and unpaid on the
Outstanding Principal Amount being reduced through but excluding
the date of such reduction and (B) the costs, if any, required by
Section 2.10. Any such notice of reduction must be received by
the Administrative Agent no later than 4:00 p.m. (New York time)
on the Business Day immediately preceding the date of the
proposed reduction in the Outstanding Principal Amount.
Section 2.04. Making of Advances.
(a) Increases in Outstanding Principal Amount.
(i) Funding of Collection Account. Following receipt of any
Borrowing Request, and subject to satisfaction of the conditions
set forth in Section 3.02, the Applicable Lender shall make
available to or on behalf of the Borrower on the Advance Date
specified therein the lesser of (x) the requested increase in the
Outstanding Principal Amount specified in such Borrowing Request
and (y) the Funding Availability by depositing such amount in
immediately available funds into the Collection Account. The
Applicable Lender shall, or shall cause the Administrative Agent
to, deposit into the Borrower Account on each Business Day during
the Revolving Period, in immediately available funds, all amounts
on deposit in the Collection Account that are to be disbursed
pursuant to Section 6.03(b).
(ii) Recordation of Advances. The Borrower shall indicate in its
Records that interests in the Transferred Receivables have been
pledged hereunder and that the Administrative Agent has a lien on
and security interest in all such Transferred Receivables on
behalf of the Lenders. The Borrower shall hold all Contracts and
other documents and incidents relating to such Transferred
Receivables in trust for the benefit of the Administrative Agent
on behalf of the Conduit Lender and the Committed Lender in
accordance with their interests hereunder. The Borrower hereby
acknowledge that their retention and possession of such Contracts
and documents shall at all times be at the sole discretion of the
Administrative Agent and in a custodial capacity for the
Administrative Agent's (on behalf of the Lenders) benefit only.
(b) Repurchases of Transferred Receivables. If the Originator
is required to repurchase Transferred Receivables from the
Borrower pursuant to Section 4.04 of the Sale and Contribution
Agreement, upon payment from the Originator of the applicable
repurchase price thereof, the Administrative Agent and the
Applicable Lenders shall release their liens on and security
interests in the Transferred Receivables being so repurchased.
Section 2.05. Facility Termination Date. Notwithstanding
anything to the contrary set forth herein, no Lender shall have
any obligation to make any Advances from and after the Facility
Termination Date.
Section 2.06. Daily Yield.
(a) The Borrower shall pay Daily Yield to the Administrative
Agent, for the account of the Applicable Lenders, for each day on
which any Outstanding Principal Amount is outstanding, in the
manner and at the times specified in Sections 6.03, 6.04 and
6.05.
(b) Notwithstanding the foregoing, the Borrower shall pay
interest at the applicable Daily Yield Rate on unpaid Daily Yield
and on any other amount payable by the Borrower hereunder (to the
extent permitted by law) that shall not be paid in full when due
(whether at stated maturity, by acceleration or otherwise) for
the period commencing on the due date thereof to (but excluding)
the date the same is indefeasibly paid in full.
Section 2.07. Fees.
(a) On or prior to the Closing Date, the Borrower shall pay to
the Administrative Agent, for the account of itself and the
Lenders, the fees set forth in the Fee Letter that are payable on
the Closing Date.
(b) On each Settlement Date, the Borrower shall pay to the
Servicer or to the Successor Servicer, as applicable, the
Servicing Fee or the Successor Servicing Fees and Expenses,
respectively, in each case to the extent of available funds
therefor as provided in Section 6.04.
(c) The Borrower agrees to pay to the Administrative Agent, for
the account of the Applicable Lender, an unused facility fee (the
"Unused Facility Fee") equal to one-quarter of one percent
(0.25%) per annum, calculated daily from the Closing Date until
the Termination Date and payable monthly in arrears on the fifth
Business Day of each month, commencing with the first calendar
month following the Closing Date, on the amount by which the
Maximum Facility Amount as in effect on each such day exceeds the
sum (without duplication) of the aggregate Outstanding Principal
Amount and Standby L/C Exposure on such day, which fee shall be
fully earned when payable and shall be non-refundable.
Section 2.08. Time and Method of Payments.
(a) Subject to the provisions of Sections 6.02, 6.03, 6.04 and
6.05, all payments with respect to the Outstanding Principal
Amount and all payments of interest, fees and other amounts
payable by the Borrower hereunder shall be made in Dollars, in
immediately available funds, to the Administrative Agent (for its
account or the account of the Applicable Lenders, Affected
Parties or Indemnified Persons) not later than 12:00 noon (New
York time) on the due date therefor. Any such payment made on
such date but after such time shall be deemed to have been made
on, and interest shall continue to accrue and be payable thereon
at the applicable Daily Yield Rate until, the next succeeding
Business Day. If any such payment becomes due on a day other
than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day and interest thereon at the
applicable Daily Yield Rate shall be payable during such
extension.
(b) Any and all payments by the Borrower hereunder shall be made
in accordance with this Section 2.08 without setoff or
counterclaim and free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions,
charges or withholdings, excluding taxes imposed on or measured
by the net income of any Affected Party by the jurisdictions
under the laws of which such Affected Party is organized or by
any political subdivisions thereof (such non-excluded taxes,
levies, imposts, deductions, charges and withholdings being
"Indemnified Taxes"). If the Borrower shall be required by law
to deduct any Indemnified Taxes from or in respect of any sum
payable hereunder, (i) the sum payable shall be increased as much
as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section 2.08) the Affected Party entitled to
receive any such payment receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, and (iii) the Borrower shall
pay the full amount deducted to the relevant taxing or other
authority in accordance with applicable law. Within 30 days
after the date of any payment of Indemnified Taxes, the Borrower
shall furnish to the Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof. The
Borrower shall indemnify any Affected Party from and against,
and, within ten days of demand therefor, pay any Affected Party
for, the full amount of Indemnified Taxes (together with any
taxes imposed by any jurisdiction on amounts payable under this
Section 2.08) paid by such Affected Party and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Indemnified Taxes were
correctly or legally asserted.
(c) Each Lender that is organized under the laws of a
jurisdiction other than the United States of America or any state
thereof or the District of Columbia (each of "Foreign Lender")
agrees to furnish to the Borrower and the Administrative Agent,
prior to the time it becomes a Lender hereunder, two (2) copies
of either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 or any successor forms thereto
(wherein such Foreign Lender claims entitlement to complete
exemption from or a reduced rate of U.S. federal withholding tax
on interest paid by the Borrower hereunder) and to provide to the
Borrower and the Administrative Agent a new Form 4224 or Form
1001 or any successor forms thereto if any previously delivered
form is found to be incomplete or incorrect in any material
respect or upon the obsolescence of any previously delivered
form. Any Foreign Lender that is not entitled to claim an
exemption from or a reduced rate of withholding under applicable
law, promptly upon written request of the Borrower, shall so
inform the Borrower and the Administrative Agent in writing.
Borrower shall not be required to pay any amounts pursuant to
this Section 2.08(c) to any Foreign Lender for the account of
such Foreign Lender in respect of any United States withholding
taxes payable hereunder (and Borrower, if required by law to do
so, shall be entitled to withhold such amounts and to pay such
amounts to the United States Internal Revenue Service) if the
obligation to pay such additional amounts would not have arisen
but for the failure by such Foreign Lender to comply with its
obligations under the immediately preceding paragraph of this
Section, and such Foreign Lender shall not be entitled to
exemption from deduction of withholding of United States federal
income tax in respect of the payment of any such sum by Borrower
hereunder for, in each case, any reason other than a change in
the United States law or regulations or any applicable tax treaty
or regulations or in the official interpretation of any such law,
treaty or regulations by any governmental authority charged with
the interpretation or administration thereof (whether or not
having the force of law) after the date such Foreign Lender
becomes a Lender hereunder.
Section 2.09. Capital Requirements; Additional Costs.
(a) If the Administrative Agent on behalf of any Affected Party
shall have determined that the adoption after the date hereof of
any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy,
reserve requirements or similar requirements or compliance by
such Affected Party with any request or directive regarding
capital adequacy, reserve requirements or similar requirements
(whether or not having the force of law) from any central bank or
other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds
required to be maintained by such Affected Party against
commitments made by it under this Agreement, any other Related
Document or any Program Document and thereby reducing the rate of
return on such Affected Party's capital as a consequence of its
commitments hereunder or thereunder, then the Borrower shall from
time to time upon demand by the Administrative Agent pay to the
Administrative Agent on behalf of such Affected Party additional
amounts sufficient to compensate such Affected Party for the
Borrower's Share of such reduction together with interest thereon
from the date of any such demand until payment in full at the
applicable Daily Yield Rate. A certificate as to the amount of
that reduction and showing the basis of the computation thereof
submitted by the Administrative Agent to the Borrower shall be
final, binding and conclusive on the parties hereto (absent
manifest error) for all purposes.
(b) If, due to any Regulatory Change, there shall be any
increase in the cost to any Affected Party of agreeing to make or
making, funding or maintaining any commitment hereunder, under
any other Related Document or under any Program Document,
including with respect to any Advances, Outstanding Principal
Amount, CFF LOC Draws or Liquidity Loans, or any reduction in any
amount receivable by such Affected Party hereunder or thereunder,
including with respect to any Advances, Outstanding Principal
Amount, CFF LOC Draws or Liquidity Loans (any such increase in
cost or reduction in amounts receivable are hereinafter referred
to as "Additional Costs"), then the Borrower shall, from time to
time upon demand by the Administrative Agent, pay to the
Administrative Agent on behalf of such Affected Party additional
amounts sufficient to compensate such Affected Party for the
Borrower's Share of such Additional Costs together with interest
thereon from the date demanded until payment in full thereof at
the applicable Daily Yield Rate. Each Affected Party agrees
that, as promptly as practicable after it becomes aware of any
circumstance referred to above that would result in any such
Additional Costs, it shall, to the extent not inconsistent with
its internal policies of general application, use reasonable
commercial efforts to minimize costs and expenses incurred by it
and payable to it by the Borrower pursuant to this Section
2.09(b).
(c) Determinations by any Affected Party for purposes of this
Section 2.09 of the effect of any Regulatory Change on its costs
of making, funding or maintaining any commitments hereunder,
under any other Related Document or under any Program Document or
on amounts receivable by it hereunder or thereunder or of the
additional amounts required to compensate such Affected Party in
respect of any Additional Costs shall be set forth in a written
notice to the Borrower in reasonable detail and which is
calculated the same as for comparable claims with respect to
similarly situated sellers or borrowers of the Affected Party and
shall be final, binding and conclusive on the Borrower (absent
manifest error) for all purposes.
Section 2.10. Breakage Costs. The Borrower shall pay to
the Administrative Agent for the account of either Lender, upon
request of such Lender, such amount or amounts as shall
compensate such Lender for any actual, out-of-pocket loss, cost
or expense incurred by such Lender (as determined by such Lender)
as a result of any reduction by the Borrower in the Outstanding
Principal Amount (and accompanying loss of Daily Yield thereon)
other than on the maturity date of the Commercial Paper (or other
financing source) funding such Outstanding Principal Amount,
which compensation shall include an amount equal to any loss or
expense incurred by such Lender during the period from the date
of such reduction to (but excluding) the maturity date of such
Commercial Paper (or other financing source) if the rate of
interest obtainable by such Lender upon its redeployment of such
funds in an amount equal to such reduction (or, if such Lender is
Redwood, the rate of interest obtained by Redwood on its deposit
in the Retention Account of such reduction) is less than the
interest rate applicable to such Commercial Paper (or other
financing source) (any such loss, cost or expense,
"Breakage Costs"), provided that any such Breakage Costs shall,
to the extent relating to amounts arising under Program
Documents, be determined based upon an equitable and reasonable
allocation of such costs among all similarly situated
transactions subject to such Program Documents, and provided
further that no such Breakage Cost shall be due if there is a
reduction by the Borrower in the Outstanding Principal Amount
owed to the Conduit Lender as a result of or following the
occurrence of a Redwood Transfer Date or Redwood Termination
Date. The determination by such Lender of the amount of any such
loss, cost or expense shall be set forth in a written notice to
the Borrower in reasonable detail and shall be final, binding and
conclusive on the Borrower (absent manifest error) for all
purposes.
Section 2.11. Funding Excess. On each Business Day during
the Revolving Period and after completion of the disbursements
specified in Section 6.03, the Administrative Agent shall notify
the Borrower and the Servicer of any Funding Excess on such day,
and the Borrower shall deposit the amount of such Funding Excess
in the Collection Account by 12:00 noon (New York time) on the
immediately succeeding Business Day.
ARTICLE III.
CONDITIONS PRECEDENT
Section 3.01. Conditions to Initial Advance. Neither the
Conduit Lender nor the Committed Lender shall be obligated to
make the initial Advance hereunder or to take, fulfill or perform
any other action hereunder, until the following conditions have
been satisfied, in the sole discretion of, or waived in writing
by, the Lenders and the Administrative Agent:
(a) Funding Agreement; Other Related Documents. This Agreement
and the Revolving Notes shall have been duly executed by, and
delivered to, the parties hereto and the Lenders and the
Administrative Agent shall have received such other documents,
instruments, agreements and legal opinions as each Lender and the
Administrative Agent shall request in connection with the
transactions contemplated by this Agreement, including all those
listed in the Schedule of Documents (Annex Y), each in form and
substance satisfactory to each Lender and the Administrative
Agent.
(b) Governmental Approvals. The Lenders and the Administrative
Agent shall have received (i) satisfactory evidence that the
Borrower and the Servicer have obtained all required consents and
approvals of all Persons, including all requisite Governmental
Authorities, to the execution, delivery and performance of this
Agreement and the other Related Documents and the consummation of
the transactions contemplated hereby or thereby or (ii) an
Officer's Certificate from each of the Borrower and the Servicer
in form and substance satisfactory to the Lenders and the
Administrative Agent affirming that no such consents or approvals
are required.
(c) Compliance with Laws. The Borrower and the Servicer shall
be in compliance in all material respects with all applicable
foreign, federal, state and local laws and regulations, including
those specifically referenced in Section 5.01(a).
(d) Payment of Fees. The Borrower shall have paid all fees
required to be paid by it on the Closing Date, including all fees
required hereunder and under the Fee Letter, and shall have
reimbursed each Lender for all fees, costs and expenses of
closing the transactions contemplated hereunder and under the
other Related Documents, including each Lender's legal, rating
agency and audit expenses, and other document preparation costs.
(e) Representations and Warranties. Each representation and
warranty by the Borrower contained herein and in each other
Related Document shall be true and correct as of the Closing
Date, except to the extent that such representation or warranty
expressly relates solely to an earlier date.
(f) No Termination Event. No Incipient Termination Event or
Termination Event hereunder or any "Event of Default" or
"Default" (each as defined in the Standby Letter of Credit
Agreement) shall have occurred and be continuing or would result
after giving effect to any of the transactions contemplated on
the Closing Date.
(g) Audit. The Administrative Agent shall have completed a
satisfactory audit of the Receivables and of the Originator's
locations.
(h) Standby Letter of Credit Agreement. The Standby Letter of
Credit Agreement and the Collateral Documents (as defined
therein) shall have been executed and delivered by all parties
thereto and all conditions precedent to the effectiveness therein
(other than the effectiveness of this Agreement), shall have been
fulfilled to the satisfaction of the Lenders and the
Administrative Agent.
(i) CFRM. The Administrative Agent shall have received written
evidence satisfactory to it that CFRM has reassigned to the
Originator all outstanding Receivables previously assigned by the
Originator to CFRM.
(j) Confirmation of Commercial Paper Ratings. The
Administrative Agent shall have received written confirmation
from each Rating Agency that the then current rating of the
Commercial Paper shall not be withdrawn or downgraded after
giving effect to this Agreement and the transactions contemplated
thereby.
(k) Opinions of Counsel. Duly executed originals of the
following opinions of counsel for the Originator, the Servicer,
the Borrower, CF Delaware and the Guarantors:
(i) Opinions of Brobeck, Phleger & Harrison LLP dated the
Initial Funding Date, in the form of Exhibit 3.01(k)(i), (ii) and
(iii) attached hereto, together with such changes thereto as may
be acceptable to the Administrative Agent and the Lenders in
their sole and absolute discretion;
(ii) Opinion of Stephen D. Richards, Esq., General Counsel, dated
the Initial Funding Date, in the form of Exhibit 3.01(k)(iv)
attached hereto, together with such changes thereto as may be
acceptable to the Administrative Agent and the Lenders in their
sole and absolute discretion; and
(iii) Opinion of Stoel Rives LLP dated the Initial Funding
Date, in the form of Exhibit 3.01(k)(v) attached hereto, together
with such changes thereto as may be acceptable to the
Administrative Agent and the Lenders in their sole and absolute
discretion.
(l) Approval of Related Documents by Operating Agent. This
Agreement and each of the other Related Documents to which
Redwood is a party to shall be in form and substance acceptable
to the Operating Agent (not to be unreasonably withheld or
delayed).
The Administrative Agent will confirm in writing to
Borrower on the date of the initial Advance whether or not each
of the conditions set forth above in this Section 3.01 has been
satisfied or waived. Each of the parties hereto hereby
acknowledges and agrees that the Rating Agency Condition may not
be fulfilled if any Rating Agency objects to the form of one or
more of the opinions referred to in clause (j) and set forth as
exhibits hereto.
Section 3.02. Conditions Precedent to All Advances. No
Lender shall be obligated to make any Advances hereunder on any
date if, as of the date thereof:
(a) any representation or warranty of the Borrower contained
herein or in any of the other Related Documents shall be untrue
or incorrect in any material respect as of such date, either
before or after giving effect to the Advances on such date and to
the application of the proceeds therefrom, except to the extent
that such representation or warranty expressly relates to an
earlier date and except for changes therein expressly permitted
by this Agreement;
(b) any event shall have occurred, or would result from such
Advances on such Advance Date or from the application of the
proceeds therefrom, that constitutes an Incipient Termination
Event, a Termination Event, an Incipient Servicer Termination
Event or an Event of Servicer Termination;
(c) the Borrower shall not be in compliance with any of its
covenants or other agreements set forth herein;
(d) the Facility Termination Date shall have occurred;
(e) either before or after giving effect to such Advance, to the
application of the proceeds therefrom a Funding Excess would
exist; and
(f) the Administrative Agent shall not have received a Borrowing
Base Certificate as required pursuant to Section 2.03(a).
The delivery by the Borrower of a Borrowing Request, the
acceptance by the Borrower of the funds from such Advance on any
Advance Date shall be deemed to constitute, as of any such
Advance Date, a representation and warranty by the Borrower that
the conditions in this Section 3.02 have been satisfied.
Section 3.03. Conditions Precedent to Releases of Funds.
The Administrative Agent shall not be obligated to authorize any
release of funds to the Borrower Account under Section 6.03(b) on
any date if, as of the date thereof:
(a) any representation or warranty of the Borrower or the
Servicer contained herein or in any of the other Related
Documents shall be untrue or incorrect in any material respect as
of such date, either before or after giving effect to the release
of such funds on such date and to the application of the proceeds
therefrom, except to the extent that such representation or
warranty expressly relates to an earlier date and except for
changes therein expressly permitted by this Agreement;
(b) any event shall have occurred, or would result from such
release of funds or from the application of the proceeds
therefrom, that constitutes an Incipient Termination Event, a
Termination Event, an Incipient Servicer Termination Event or an
Event of Servicer Termination;
(c) the Borrower shall not be in compliance with any of its
covenants or other agreements set forth herein;
(d) the Facility Termination Date shall have occurred;
(e) either before or after giving effect to such release of
funds and to the application of the proceeds therefrom, a Funding
Excess would exist;
(f) the Originator, the Borrower or the Servicer shall fail to
have taken such other action, including delivery of approvals,
consents, opinions, documents and instruments to the Lenders and
the Administrative Agent, (i) as any Lender or the Administrative
Agent may reasonably request, or (ii) as either Rating Agency may
request;
(g) the Administrative Agent shall not have received a Borrowing
Base Certificate on or before such date as required pursuant to
Section 2.03(a); or
(h) the Borrower Account is not subject to a valid Borrower
Blocked Account Agreement as of such date.
The acceptance by the Borrower of the funds released to the
Borrower Account from the Collection Account on any date shall be
deemed to constitute, as of any such date, a representation and
warranty by the Borrower that the conditions in this Section 3.03
have been satisfied.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the
Borrower. To induce each Lender to make Advances from time to
time and the Administrative Agent to take any action required to
be performed by it hereunder, the Borrower makes the following
representations and warranties to each Lender and the
Administrative Agent, each and all of which shall survive the
execution and delivery of this Agreement.
(a) Company Existence; Compliance with Law. The Borrower (i) is
a limited liability company duly organized, validly existing and
in good standing under the laws of its jurisdiction of formation;
(ii) is duly qualified to conduct business and is in good
standing in each other jurisdiction where its ownership or lease
of property or the conduct of its business requires such
qualification; (iii) has the requisite company power and
authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the
property it operates under lease, and to conduct its business, in
each case, as now, heretofore and proposed to be conducted;
(iv) has all licenses, permits, consents or approvals from or by,
and has made all filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct; (v) is in
compliance with its certificate of formation and operating
agreement; and (vi) subject to specific representations set forth
herein regarding labor, employment, ERISA, tax and other laws, is
in compliance with all applicable provisions of law, except where
the failure to comply, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect as
to the Borrower.
(b) Executive Offices; Collateral Locations; Company or Other
Names; FEIN. As of the Closing Date, the current location of the
Borrower's chief executive office, principal place of business,
other offices, the premises within which any Borrower Collateral
is stored or located, and the locations of its company records
concerning the Borrower Collateral (including originals of the
Borrower Assigned Agreements) are set forth in Schedule 4.01(b)
and none of such locations has changed within the past 12 months
(or such shorter time as the Borrower has been in existence).
During the prior five years (or such shorter time as the Borrower
has been in existence), except as set forth in Schedule 4.01(b),
the Borrower has not been known as or used any company,
fictitious or trade name. In addition, Schedule 4.01(b) lists
the federal employer identification number of the Borrower.
(c) Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by the Borrower of this
Agreement and the other Related Documents to which it is a party,
the creation and perfection of all Liens and ownership interests
provided for therein: (i) are within the Borrower's company
power; (ii) have been duly authorized by all necessary or proper
company and member action; (iii) do not contravene any provision
of the Borrower's certificate of formation or operating
agreement; (iv) do not violate any law or regulation, or any
order or decree of any court or Governmental Authority; (v) do
not conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to
which the Borrower is a party or by which the Borrower or any of
the property of the Borrower is bound; (vi) do not result in the
creation or imposition of any Adverse Claim upon any of the
property of the Borrower or the Originator; and (vii) do not
require the consent or approval of any Governmental Authority or
any other Person, except those which have been duly obtained,
made or complied with prior to the Closing Date as provided in
Section 3.01(b). The exercise by each of the Borrower, the
Lenders or the Administrative Agent of any of its rights and
remedies under any Related Document to which it is a party, do
not require the consent or approval of any Governmental Authority
or any other Person (other than consents or approvals solely
relating to or required to be obtained by a Lender or the
Administrative Agent); except those which will have been duly
obtained, made or complied with prior to the Closing Date as
provided in Section 3.01(b). On or prior to the Closing Date,
each of the Related Documents to which the Borrower is a party
shall have been duly executed and delivered by the Borrower and
each such Related Document shall then constitute a legal, valid
and binding obligation of the Borrower enforceable against it in
accordance with its terms.
(d) No Litigation. No Litigation is now pending or, to the
knowledge of the Borrower, threatened against the Borrower that
(i) challenges the Borrower's right or power to enter into or
perform any of its obligations under the Related Documents to
which it is a party, or the validity or enforceability of any
Related Document or any action taken thereunder, (ii) seeks to
prevent the transfer, sale, pledge or contribution of any
Receivable or the consummation of any of the transactions
contemplated under this Agreement or the other Related Documents,
or (iii) has a reasonable risk of being determined adversely to
the Borrower and that, if so determined, could reasonably be
expected to have a Material Adverse Effect. Except as set forth
on Schedule 4.01(d), as of the Closing Date there is no
Litigation pending or threatened that seeks damages or injunctive
relief against, or alleges criminal misconduct by, the Borrower.
(e) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Agreement and the other Related
Documents and (ii) the payment and accrual of all transaction
costs in connection with the foregoing, the Borrower is and will
be Solvent.
(f) Material Adverse Effect. Since the date of the Borrower's
organization, (i) the Borrower has not incurred any obligations,
contingent or non-contingent liabilities, liabilities for
charges, long-term leases or unusual forward or long-term
commitments that, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect as to the Borrower,
(ii) no contract, lease or other agreement or instrument has been
entered into by the Borrower or has become binding upon the
Borrower's assets and no law or regulation applicable to the
Borrower has been adopted that has had or could reasonably be
expected to have a Material Adverse Effect as to the Borrower and
(iii) the Borrower is not in default and no third party is in
default under any material contract, lease or other agreement or
instrument to which the Borrower is a party that alone or in the
aggregate could reasonably be expected to have a Material Adverse
Effect as to the Borrower. Since the date of the Borrower's
organization, no event has occurred with respect to the Borrower
that alone or together with other events could reasonably be
expected to have a Material Adverse Effect as to the Borrower.
(g) Ownership of Property; Liens. None of the properties and
assets (including the Transferred Receivables) of the Borrower
are subject to any Adverse Claims other than Permitted
Encumbrances, and there are no facts, circumstances or conditions
known to the Borrower that may result in (i) with respect to the
Transferred Receivables, any Adverse Claims other than Permitted
Encumbrances (including Adverse Claims arising under
environmental laws) and (ii) with respect to its other properties
and assets, any Adverse Claims other than Permitted Encumbrances
(including Adverse Claims arising under environmental laws). The
Borrower has received all assignments, bills of sale and other
documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect the
Borrower's right, title and interest in and to the Transferred
Receivables and its other properties and assets. The Liens
granted to the Lender pursuant to Section 8.01 will at all times
be fully perfected first priority Liens in and to the Borrower
Collateral, subject only to Permitted Encumbrances.
(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Schedule 4.01(h), the
Borrower has no Subsidiaries, is not engaged in any joint venture
or partnership with any other Person, and as of the Closing Date
is not an Affiliate of any other Person. Borrower shall provide
the Administrative Agent with written notice, promptly upon
learning thereof, of each Person that becomes an Affiliate of
Borrower after the Closing Date. All of the issued and
outstanding Stock of the Borrower is owned by each of the
Stockholders in the amounts set forth on Schedule 4.01(h).
There are no outstanding rights to purchase, options, warrants or
similar rights or agreements pursuant to which the Borrower may
be required to issue, sell, repurchase or redeem any of its Stock
or other equity securities or any Stock or other equity
securities of its Subsidiaries. All outstanding Debt of the
Borrower as of the Closing Date complies with Section 5.03(i).
(i) Taxes. All material tax returns, reports and statements,
including information returns, required by any Governmental
Authority to be filed by the Borrower and each of its Affiliates
included in the Parent Group have been filed with the appropriate
Governmental Authority and all charges have been paid prior to
the date on which any fine, penalty, interest or late charge may
be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding
charges or other amounts being contested in accordance with
Section 5.01(e). Proper and accurate amounts have been withheld
by the Borrower or such Affiliate from its respective employees
for all periods in full and complete compliance with all
applicable federal, state, local and foreign laws and such
withholdings have been timely paid to the respective Governmental
Authorities, except for such amounts that in the aggregate for
the Borrower and such Affiliates combined would not at any time
exceed $1,000,000. Schedule 4.01(i) sets forth as of the Closing
Date (i) those taxable years for which the Borrower's or such
Affiliates' tax returns are currently being audited by the IRS or
any other applicable Governmental Authority and (ii) any
assessments or threatened assessments in connection with any such
audit or otherwise currently outstanding. Except as described on
Schedule 4.01(i), neither the Borrower nor any such Affiliate has
executed or filed with the IRS or any other Governmental
Authority any written agreement or other document extending, or
having the effect of extending, the period for assessment or
collection of any charges. The Borrower is not liable for any
charges: (A) under any agreement (including any tax sharing
agreements) or (B) to the best of the Borrower's knowledge, as a
transferee. As of the Closing Date, neither the Borrower nor any
of its Affiliates included in the Parent Group has agreed or been
requested to make any adjustment under IRC Section 481(a), by
reason of a change in accounting method or otherwise, that would
have a Material Adverse Effect.
(j) Full Disclosure. All information contained in this
Agreement, any Borrowing Base Certificate or any of the other
Related Documents, or any written statement furnished by or on
behalf of the Borrower to either Lender or the Administrative
Agent pursuant to the terms of this Agreement or any of the other
Related Documents is true and accurate in every material respect,
and none of this Agreement, any Borrowing Base Certificate or any
of the other Related Documents, or any written statement
furnished by or on behalf of the Borrower to either Lender or the
Administrative Agent pursuant to the terms of this Agreement or
any of the other Related Documents is misleading as a result of
the failure to include therein a material fact.
(k) ERISA. The Borrower is in compliance with ERISA and has not
incurred and does not expect to incur any liabilities (except for
premium payments arising in the ordinary course of business)
payable to the PBGC under ERISA.
(l) Brokers. No broker or finder acting on behalf of the
Borrower was employed or utilized in connection with this
Agreement or the other Related Documents or the transactions
contemplated hereby or thereby and the Borrower has no obligation
to any Person in respect of any finder's or brokerage fees in
connection therewith.
(m) Margin Regulations. The Borrower is not engaged in the
business of extending credit for the purpose of "purchasing" or
"carrying" any "margin security," as such terms are defined in
Regulation U of the Federal Reserve Board as now and from time to
time hereafter in effect (such securities being referred to
herein as "Margin Stock"). The Borrower shall not at any time
own any Margin Stock with a value, in the aggregate, in excess of
the lesser of (i) $500,000 and (ii) one percent (1%) of its gross
assets. No portion of the proceeds of the Advances made
hereunder will be used, directly or indirectly, for the purpose
of purchasing or carrying any Margin Stock, for the purpose of
reducing or retiring any Debt that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that
might cause any portion of such proceeds to be considered a
"purpose credit" within the meaning of Regulations T, U or X of
the Federal Reserve Board. The Borrower will not take or permit
to be taken any action that might cause any Related Document to
violate Regulation T, U or X of the Federal Reserve Board.
(n) Nonapplicability of Bulk Sales Laws. No transaction
contemplated by this Agreement or any of the Related Documents
requires compliance with any bulk sales act or similar law.
(o) Government Regulation. The Borrower is not subject to
regulation under Investment Company Act of 1940, as amended, the
Public Utility Holding Company Act of 1935, as amended, the
Federal Power Act, as amended, or any other federal or state
statute that restricts or limits its ability to incur Debt or to
perform its obligations hereunder or under the other Related
Documents. The making of Advances by the Lenders hereunder, the
application of the proceeds thereof and the consummation of the
transactions contemplated by this Agreement and the other Related
Documents will not violate any provision of any such statute or
any rule, regulation or order issued by the Securities and
Exchange Commission.
(p) Nonconsolidation. The Borrower is operated in such a manner
that the separate company existence of the Borrower, on the one
hand, and the corporate existence of any member of the Parent
Group, on the other hand, would not be disregarded in the event
of the bankruptcy or insolvency of any member of the Parent Group
and, without limiting the generality of the foregoing:
(i) the Borrower is a limited purpose limited liability
company
whose activities are restricted in its certificate of formation
and operating agreement to those activities expressly permitted
hereunder and under the other Related Documents and the Borrower
has not engaged, and does not presently engage, in any activity
other than those activities expressly permitted hereunder and
under the other Related Documents, nor has the Borrower entered
into any agreement other than this Agreement, the other Related
Documents to which it is a party and, with the prior written
consent of the Lenders and the Administrative Agent, any other
agreement necessary to carry out more effectively the provisions
and purposes hereof or thereof;
(ii) no individual at the time he or she is acting specifically
in the capacity as an officer or employee of any member of the
Parent Group is or will be acting in the capacity as an officer
or employee of the Borrower;
(iii) other than the purchase and acceptance through capital
contribution of Transferred Receivables, the payment of dividends
and the return of capital to the Originator and the payment of
Servicing Fees to the Servicer under this Agreement and the
Related Documents, the Borrower engages and has engaged in no
intercompany transactions with any member of the Parent Group;
(iv) the Borrower maintains company records and books of account
separate from that of each member of the Parent Group, holds
regular limited liability company meetings and otherwise observes
limited liability company formalities and has a business office
separate from that of each member of the Parent Group;
(v) the financial statements and books and records of the
Borrower, the Parent and the Originator reflect the separate
company existence of the Borrower;
(vi) (A) the Borrower maintains its assets separately from the
assets of each member of the Parent Group (including through the
maintenance of separate bank accounts and except for any Records
to the extent necessary to assist the Servicer in connection with
the servicing of the Transferred Receivables), (B) except as
contemplated by the Lockbox Account Agreement and the
Concentration Account Agreement, the Borrower's funds (including
all money, checks and other cash proceeds) and assets, and
records relating thereto, have not been and are not commingled
with those of any member of the Parent Group and (C) the separate
creditors of the Borrower will be entitled to be satisfied out of
the Borrower's assets prior to any value in the Borrower becoming
available to the Borrower's members;
(vii) no member of the Parent Group (A) pays the Borrower's
expenses, (B) guarantees the Borrower's obligations, or (C)
advances funds to the Borrower for the payment of expenses or
otherwise;
(viii) all business correspondence and other communications of
the Borrower are conducted in the Borrower's own name, on its own
stationery and through a separately-listed telephone number;
(ix) Borrower shall maintain separate office space from the
offices of any member of the Parent Group and identify such
office by a sign in its own name;
(x) Borrower shall respond to any inquiries with respect to
ownership of a Transferred Receivable by stating that it is the
owner of such Transferred Receivable, and that such Transferred
Receivable is pledged to the Administrative Agent;
(xi) the Borrower does not act as agent for any member of the
Parent Group, but instead presents itself to the public as a
company separate from each such member and independently engaged
in the business of purchasing and financing Receivables;
(xii) the Borrower maintains at least two independent
managers each of whom (A) is employed by a firm or company other
than the Parent, the Originator or any Affiliate thereof, which
provides such independent managers in the ordinary course of its
business, and is acceptable to the Administrative Agent, (B) by a
firm or company which is not an Affiliate of the Originator or
the Parent, provides such independent direction in the ordinary
course of its business, and is acceptable to the Administrative
Agent, (C) is not a Stockholder, director, officer, employee or
associate, or any relative of the foregoing, of any member of the
Parent Group (other than the Borrower), all as provided in its
certificate of formation and operating agreement, (D) has (1)
prior experience as an independent manager for a limited
liability company whose charter documents required the unanimous
consent of all independent managers thereof before such limited
liability company could consent to the institution of bankruptcy
or insolvency proceedings against it or could file a petition
seeking relief under any applicable federal or state law relating
to bankruptcy and (2) at least three years of employment
experience with one or more entities that provide, in the
ordinary course of their respective businesses, advisory,
management or placement services to issuers of securitization or
structured finance instruments, agreements or securities, and (E)
is otherwise acceptable to the Lenders and the Administrative
Agent; and
(xiii) the operating agreement or the certificate of formation
of the Borrower require (A) the affirmative vote of each
independent manager before a voluntary petition under Section 301
of the Bankruptcy Code may be filed by the Borrower, and (B) the
Borrower to maintain (1) correct and complete books and records
of account and (2) minutes of the meetings and other proceedings
of its Stockholders and managers.
(q) Deposit and Disbursement Accounts. Schedule 4.01(q) lists
all banks and other financial institutions at which the Borrower
maintains deposit or other bank accounts as of the Closing Date,
including the Concentration Account, any Lockbox Accounts, the
Borrower Account and such schedule correctly identifies as of the
Closing Date the name, address and telephone number of each
depository, the name in which the account is held, a description
of the purpose of the account, and the complete account number
therefor. The Borrower shall furnish to the Administrative Agent
on or prior to the Initial Funding Date an updated Schedule
4.01(q), which schedule shall be in form and substance
satisfactory to the Administrative Agent and the Lenders.
(r) Transferred Receivables.
(i) Transfers. Each Transferred Receivable was purchased by or
contributed to the Borrower on the relevant Transfer Date
pursuant to the Sale and Contribution Agreement.
(ii) Eligibility. Each Transferred Receivable designated as an
Eligible Receivable in the most recently delivered Borrowing Base
Certificate constitutes an Eligible Receivable as of the date
specified in such Borrowing Base Certificate.
(iii) No Material Adverse Effect. The Borrower has no
knowledge of any fact (including any defaults by the Obligor
thereunder on any other Receivable) that would reasonably cause
it or should have reasonably caused it to believe that it is
reasonably likely that any payments on each Transferred
Receivable designated as an Eligible Receivable in any Borrowing
Base Certificate will not be paid in full when due or has caused
it to reasonably expect any Material Adverse Effect as to the
Borrower.
(iv) Nonavoidability of Transfers. The Borrower shall have,
previously or contemporaneously with the funding of any Advance
relating to any Transferred Receivables, (A) received each such
Contributed Receivable as a contribution to the capital of the
Borrower by the Originator and (B) (1) purchased each such Sold
Receivable from the Originator for cash consideration and (2)
have accepted assignment of any such Eligible Receivables
transferred pursuant to clause (b) of Section 4.04 of the Sale
and Contribution Agreement, in each case in an amount that
constitutes fair consideration and reasonably equivalent value
therefor. Each Sale of a Sold Receivable effected pursuant to
the terms of the Sale and Contribution Agreement shall not have
been made for or on account of an antecedent debt owed by the
Originator to the Borrower and no such Sale is or may be
avoidable or subject to avoidance under any bankruptcy laws,
rules or regulations.
(s) Representations and Warranties in Other Related Documents.
Each of the representations and warranties of the Borrower
contained in the Related Documents (other than this Agreement) is
true and correct in all respects as of the date made or deemed
made and the Borrower hereby makes each such representation and
warranty to, and for the benefit of, the Lenders and the
Administrative Agent as if the same were set forth in full
herein.
ARTICLE V.
GENERAL COVENANTS OF THE BORROWER
Section 5.01. Affirmative Covenants of the Borrower. The
Borrower covenants and agrees that from and after the Closing
Date and until the Termination Date:
(a) Compliance with Agreements and Applicable Laws. The
Borrower shall perform each of its obligations under this
Agreement and the other Related Documents and comply with all
federal, state and local laws and regulations applicable to it
and the Transferred Receivables, including those relating to
truth in lending, retail installment sales, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt
collection practices, privacy, licensing, taxation, ERISA and
labor matters and environmental laws and environmental permits,
except to the extent that the failure to so comply, individually
or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Maintenance of Existence and Conduct of Business. The
Borrower shall: (i) do or cause to be done all things necessary
to preserve and keep in full force and effect its limited
liability company existence and its rights and franchises; (ii)
continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder and in accordance with (1)
the terms of its certificate of formation and operating
agreement, (2) Sections 4.01(p) and (q), (3) the assumptions set
forth in each legal opinion of Brobeck, Phleger & Harrison LLP,
or other counsel to the Borrower from time to time delivered
pursuant to Section 3.02(d) of the Sale and Contribution
Agreement with respect to issues of substantive consolidation and
true sale and absolute transfer and (4) the terms of the Non-
Consolidation Letter Agreement referred to in the opinion of
Brobeck, Phleger & Harrison LLP on the form attached hereto as an
exhibit with respect to issues of substantive consolidation and
true sale; (iii) at all times maintain, preserve and protect all
of its assets and properties used or useful in the conduct of its
business, including all licenses, permits, charters and
registrations, and keep the same in good repair, working order
and condition in all material respects (taking into consideration
ordinary wear and tear) and from time to time make, or cause to
be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and
(iv) transact business only in such company and trade names as
are set forth in Schedule 5.01(b).
(c) Deposit of Collections; Transfers from Borrower Account,
etc. The Borrower shall deposit or cause to be deposited into a
Lockbox Account and the Concentration Account and Borrower shall
use its best efforts to cause each such deposit to occur no later
than the first Business Day after receipt thereof, all
Collections it may receive with respect to any Transferred
Receivable (and each such deposit of such Collections shall in
all cases be made within three Business Days after receipt
thereof). All amounts that may from time to time be paid or
payable by the Borrower to the Originator under the Sale and
Contribution Agreement or any other Related Document (including,
any amounts in respect of the Sale Price for Sold Receivables,
any amounts on deposit in the Borrower Account and any amounts
owing to the Originator it its capacity as Servicer) shall be
transferred by the Borrower directly to the Originator Blocked
Account maintained by the Originator.
(d) Use of Proceeds. The Borrower shall utilize the proceeds of
the Advances made hereunder solely for (i) the purchase of
Receivables from the Originator pursuant to the Sale and
Contribution Agreement, (ii) the payment of distributions to its
members, and (iii) the payment of administrative fees or
Servicing Fees or expenses to the Servicer or routine
administrative or operating expenses, in each case in accordance
with the terms of this Agreement and the other Related Documents.
(e) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 5.01(e)(ii), the Borrower shall pay,
perform and discharge or cause to be paid, performed and
discharged when due all of its obligations and liabilities for
(x) all taxes, assessments and governmental charges upon its
income or properties (including, without limitation, all charges
with respect to social security and unemployment withholding with
respect to its employees), and (y) all lawful claims for labor,
materials, supplies and services (but in the case of this clause
(y), excluding current liabilities incurred in the ordinary
course of business).
(ii) The Borrower may in good faith contest, by appropriate
proceedings, the validity or amount of any charges or claims
described in Section 5.01(e)(i); provided, that (A) adequate
reserves with respect to such contest are maintained on the books
of the Borrower, in accordance with GAAP, (B) none of the
Borrower Collateral becomes subject to a material risk of
forfeiture or loss as a result of such contest, (D) no Lien shall
be imposed to secure payment of such charges that is superior to
any of the Liens securing the Borrower's obligations hereunder
and such contest is maintained and prosecuted continuously and
with diligence and operates to suspend collection or enforcement
of such charges, (D) the Borrower shall promptly pay or discharge
such contested charges or claims and all additional charges,
interest, penalties and expenses, if any, and shall deliver to
the Administrative Agent evidence acceptable to the
Administrative Agent of such compliance, payment or discharge, if
such contest is terminated or discontinued adversely to the
Borrower or the conditions set forth in this Section 5.01(e) are
no longer met, and (E) the Administrative Agent has not advised
the Borrower in writing that the Administrative Agent reasonably
believes that nonpayment or nondischarge thereof could reasonably
be expected to have or result in a Material Adverse Effect as to
the Borrower.
(f) ERISA. The Borrower shall give the Administrative Agent
prompt written notice of any event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302
or 4068 of ERISA or the imposition of any federal, state or local
tax lien on any of the Transferred Receivables.
Section 5.02. Reporting Requirements of the Borrower.
(a) The Borrower hereby agrees that, from and after the Closing
Date and until the Termination Date, it shall deliver or cause to
be delivered the reports, notices and other information required
under Annex 5.02(a), all at the times, to the Persons and in the
manner set forth in Annex 5.02(a).
(b) The Borrower hereby agrees that, from and after the Closing
Date and until the Termination Date, it shall deliver or cause to
be delivered to the Lenders, the Administrative Agent and the
Collateral Agent (i) as soon as available and in any event no
later than 12:00 noon (New York time) on the fourth Business Day
of each week, a Borrowing Base Certificate, and (ii) such other
reports, statements and reconciliations with respect to the
Borrowing Base or Borrower Collateral as any Lender, the
Administrative Agent or the Collateral Agent shall from time to
time request in its reasonable discretion.
Section 5.03. Negative Covenants of the Borrower. The
Borrower covenants and agrees that, without the prior written
consent of the Lenders and the Administrative Agent, from and
after the Closing Date until the Termination Date:
(a) Sale of Stock and Assets. The Borrower shall not sell,
transfer, convey, assign or otherwise dispose of, or assign any
right to receive income in respect of, any of its properties or
other assets, including its capital Stock (whether in a public or
a private offering or otherwise), any Transferred Receivable or
Contract therefor or any of its rights with respect to any
Lockbox or any Lockbox Account, the Concentration Account, the
Collection Account, the Retention Account or any other deposit
account in which any Collections of any Transferred Receivable
are deposited except as otherwise expressly permitted by this
Agreement or any of the other Related Documents.
(b) Liens. The Borrower shall not create, incur, assume or
permit to exist (i) any Adverse Claim on or with respect to its
Transferred Receivables (other than Liens in favor of the
Administrative Agent and the Lenders or Liens for taxes which are
yet due and payable) or (ii) any Adverse Claim on or with respect
to its other properties or assets (whether now owned or hereafter
acquired) except for the Liens set forth in Schedule 5.03(b) and
other Permitted Encumbrances. In addition, the Borrower shall
not become a party to any agreement, note, indenture or
instrument or take any other action that would prohibit the
creation of a Lien on any of its properties or other assets in
favor of the Lenders as additional collateral for the Borrower
Secured Obligations, except as otherwise expressly permitted by
this Agreement and the other Related Documents.
(c) Modifications of Receivables, Contracts or Credit and
Collection Policies. The Borrower shall not, without the prior
written consent of the Administrative Agent, extend, amend,
forgive, discharge, compromise, waive, cancel or otherwise modify
the terms of any Transferred Receivable or amend, modify or waive
any term or condition of any Contract related thereto in any
respect that would purport to adversely affect any Transferred
Receivable or its collectibility; provided that the Borrower may
authorize the Servicer to (i) take such actions as are expressly
permitted by the terms of any Related Document or the Credit and
Collection Policies, (ii) to amend, modify or waive any term or
provision of the Credit and Collection Policies solely to the
extent such amendment, modification or waiver is expressly
permitted by the definition of such term and (iii) to make such
other changes to the Credit and Collection Policies as may be
required to comply with any applicable laws, rules or
regulations.
(d) Changes in Instructions to Obligors. The Borrower shall not
make any change in its instructions to Obligors regarding the
deposit of Collections with respect to the Transferred
Receivables, other than to better insure compliance by Borrower
and Obligors with the terms of the Related Documents.
(e) Capital Structure and Business. The Borrower shall not
(i) make any changes in any of its business objectives, purposes
or operations that could have or result in a Material Adverse
Effect, (ii) make any change in its capital structure as
described on Schedule 4.01(h), including the issuance of any
shares of Stock, warrants or other securities convertible into
Stock or any revision of the terms of its outstanding Stock, or
(iii) amend its certificate of formation or operating agreement.
The Borrower shall not engage in any business other than as
provided in its organizational documents and the Related
Documents.
(f) Mergers, Subsidiaries, Etc. The Borrower shall not directly
or indirectly, by operation of law or otherwise, (i) form or
acquire any Subsidiary, or (ii) merge with, consolidate with,
acquire all or substantially all of the assets or capital Stock
of, or otherwise combine with or acquire, any Person.
(g) Sale Characterization; Sale and Contribution Agreement. The
Borrower shall not make statements or disclosures, prepare any
financial statements or in any other respect account for or treat
the transactions contemplated by the Sale and Contribution
Agreement (including for accounting, tax and reporting purposes)
in any manner other than (i) with respect to each Sale of each
Sold Receivable effected pursuant to the Sale and Contribution
Agreement, as a true sale and absolute assignment of the title to
and sole record and beneficial ownership interest of the
Transferred Receivables by the Originator to the Borrower and
(ii) with respect to each contribution of Contributed Receivables
thereunder, as an increase in the stated capital of the Borrower.
(h) Restricted Payments. The Borrower shall not enter into any
lending transaction with any other Person. The Borrower shall
not at any time (i) advance credit to any Person or (ii) declare
any dividends, repurchase any Stock, return any capital, or make
any other payment or distribution of cash or other property or
assets in respect of the Borrower's Stock if, after giving effect
to any such advance or distribution, a Funding Excess, Incipient
Termination Event or Termination Event would exist or otherwise
result therefrom.
(i) Indebtedness. The Borrower shall not create, incur, assume
or permit to exist any Debt, except (i) Debt of the Borrower to
any Affected Party, Indemnified Person, the Servicer or any other
Person expressly permitted by this Agreement or any other Related
Document, (ii) deferred taxes, (iii) unfunded pension fund and
other employee benefit plan obligations and liabilities to the
extent they are permitted to remain unfunded under applicable
law, and (iv) indorser liability in connection with the
indorsement of negotiable instruments for deposit or collection
in the ordinary course of business.
(j) Prohibited Transactions. The Borrower shall not enter into,
or be a party to, any transaction with any Person except as
expressly permitted hereunder or under any other Related
Document.
(k) Investments. Except as otherwise expressly permitted
hereunder or under the other Related Documents, the Borrower
shall not make any investment in, or make or accrue loans or
advances of money to, any Person, including any Stockholder,
manager, officer or employee of the Borrower, the Parent, the
Originator or any of the Parent's other Subsidiaries, through the
direct or indirect lending of money, holding of securities or
otherwise, except with respect to Transferred Receivables and
Permitted Investments.
(l) Commingling. The Borrower shall not knowingly deposit or
permit the deposit of any funds that do not constitute
Collections of Transferred Receivables into the Concentration
Account or any Lockbox Account (and the Borrower shall establish
and maintain, or cause to be established and maintained,
reasonable precautions to attempt to prevent any such funds from
being deposited in any such deposit accounts). If such funds are
nevertheless deposited into a Lockbox Account or the
Concentration Account and the Servicer has so notified the
Administrative Agent, the Administrative Agent shall promptly
remit (or direct the applicable Lockbox Account Bank or
Concentration Account Bank to remit) any such amounts that are
not Collections of Transferred Receivables to the applicable
Originator or other Person designated in such notice from the
Servicer.
(m) ERISA. The Borrower shall not, and shall not cause or
permit any of its ERISA Affiliates to, cause or permit to occur
an event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA.
(n) Related Documents. The Borrower shall not amend, modify or
waive any term or provision of any Related Document without the
prior written consent of the Administrative Agent.
(o) Board Policies. The Borrower shall not modify the terms of
any policy or resolutions of its board of managers if such
modification could have or result in a Material Adverse Effect.
(p) Borrower Blocked Account Agreement. The Borrower Account
and all amounts on deposit therein shall at all times be subject
to a valid Borrower Blocked Account Agreement. The
Administrative Agent agrees that it shall not give a Notice of
Direction (as such term is defined in the Borrower Blocked
Account Agreement) to the Borrower Blocked Account Bank unless
(i) the Originator has given an Election Notice in accordance
with Section 2.01(d) of the Sale and Contribution Agreement or
(ii) an Incipient Termination Event or a Termination Event has
occurred. Any Notice of Direction given by the Administrative
Agent may direct the Borrower Blocked Account Bank to transfer
all funds on deposit in the Borrower Account to any such account
as the Administrative Agent may direct and such funds shall be
applied in accordance with the terms of this Agreement; provided
that nothing contained herein shall be deemed to create a Lien on
such account in favor of any Person other than the Administrative
Agent, the Lenders or the Collateral Agent.
ARTICLE VI.
COLLECTIONS AND DISBURSEMENTS
Section 6.01. Establishment of Accounts.
(a) The Concentration Account and Lockbox Accounts.
(i) The Borrower has established the Concentration Account with
the Concentration Account Bank. The Borrower has established
with each Lockbox Account Bank one or more Lockbox Accounts. The
Borrower agrees that the Administrative Agent shall have
exclusive dominion and control of the Concentration Account and
each Lockbox Account and all monies, instruments and other
property from time to time on deposit therein. The Borrower
shall not make or cause to be made, or have any ability to make
or cause to be made, any withdrawals from the Concentration
Account or any Lockbox Account except as provided in
Section 6.01(b)(ii) or elsewhere in this Agreement.
(ii) The Borrower and the Servicer have instructed all existing
Obligors of Transferred Receivables, and shall instruct all
future Obligors of such Receivables, to make payments in respect
thereof only (A) by check or money order mailed to one or more
lockboxes or post office boxes under the control of the
Administrative Agent (each a "Lockbox" and collectively the
"Lockboxes") or (B) by wire transfer or moneygram directly to a
Lockbox Account. Schedule 4.01(q) (as updated by any notice
given pursuant to Section 6.01(a)(iii)) lists the Concentration
Account, the Concentration Account Bank and all Lockboxes and all
Lockbox Account Banks at which the Borrower maintains Lockbox
Accounts as of the Closing Date, and such schedule correctly
identifies (1) with respect to the Concentration Account Bank and
each such Lockbox Account Bank, the name, address and telephone
number thereof, (2) with respect to the Concentration Account and
each Lockbox Account, the name in which such account is held and
the complete account number therefor, and (3) with respect to
each Lockbox, the lockbox number and address thereof. The
Borrower and the Servicer shall endorse, to the extent necessary,
all checks or other instruments received in any Lockbox so that
the same can be deposited in the Lockbox Account, in the form so
received (with all necessary endorsements), on the first Business
Day after the date of receipt thereof. In addition, each of the
Borrower and the Servicer shall deposit or cause to be deposited
into a Lockbox Account or the Concentration Account all cash,
checks, money orders or other proceeds of Transferred Receivables
or Borrower Collateral received by it other than in a Lockbox or
a Lockbox Account, in the form so received (with all necessary
endorsements), and Borrower shall use its best efforts to cause
each such deposit to occur not later than the close of business
on the first Business Day following the date of receipt thereof
(and each such deposit shall be made in all cases by no later
than the close of business on the third Business Day following
the date of receipt thereof), and until so deposited all such
items or other proceeds shall be held in trust for the benefit of
the Administrative Agent. Neither the Borrower nor the Servicer
shall make any deposits into the Concentration Account, a Lockbox
or any Lockbox Account except in accordance with the terms of
this Agreement or any other Related Document.
(iii) If, for any reason, a Lockbox Account Agreement
terminates or any Lockbox Account Bank fails to comply with its
obligations under the Lockbox Account Agreement to which it is a
party, then the Borrower shall promptly notify all Obligors of
Transferred Receivables who had previously been instructed to
make wire payments to a Lockbox Account maintained at any such
Lockbox Account Bank to make all future payments to a new Lockbox
Account in accordance with this Section 6.01(a)(iii). If for any
reason the Concentration Account Agreement terminates or the
Concentration Account Bank fails to comply with its obligations
under the Concentration Account Agreement, then a new
Concentration Account shall be established in accordance with
this Section 6.01(a)(iii). The Borrower shall not close any such
Lockbox Account or the Concentration Account unless it shall have
(A) received the prior written consent of the Administrative
Agent, (B) established a new account with the same Lockbox
Account Bank or Concentration Account Bank (as the case may be)
or with a new depositary institution satisfactory to the
Administrative Agent, (C) entered into an agreement covering such
new account with such Lockbox Account Bank or Concentration
Account Bank (as the case may be) or with such new depositary
institution substantially in the form of such Lockbox Account
Agreement or Concentration Account Agreement (as the case may be)
or that is satisfactory in all respects to the Administrative
Agent (whereupon, for all purposes of this Agreement and the
other Related Documents, such new account shall become a Lockbox
Account or the Concentration Account (as the case may be), such
new agreement shall become a Lockbox Account Agreement and any
new depositary institution shall become a Lockbox Account Bank or
Concentration Account Bank (as the case may be)), and (D) taken
all such action as the Administrative Agent shall require to
grant and perfect a first priority Lien (subject only to bankers'
liens and setoff rights, which shall be limited in a manner
reasonably satisfactory to the Administrative Agent) in such new
Lockbox Account or the Concentration Account (as the case may be)
to the Lender under Section 8.01 of this Agreement. Except as
permitted by this Section 6.01(a), neither the Borrower nor the
Servicer shall open any new Lockbox, Lockbox Account or
Concentration Account without the prior written consent of the
Administrative Agent.
(b) Collection Account.
(i) The Lenders have established and shall maintain the
Collection Account with the Depositary. The Collection Account
shall be registered in the name of the Administrative Agent and
the Administrative Agent shall, subject to the terms of this
Agreement, have exclusive dominion and control thereof and of all
monies, instruments and other property from time to time on
deposit therein.
(ii) Pursuant to Section 6.02, the Borrower shall instruct each
Lockbox Account Bank to transfer, and the Borrower hereby grants
the Administrative Agent the authority to instruct each such
Lockbox Account Bank to transfer, on each Business Day in
immediately available funds, all available funds in each Lockbox
Account to the Concentration Account, and the Borrower hereby
instructs the Concentration Account Bank to transfer, and the
Borrower hereby grants the Administrative Agent the authority to
instruct the Concentration Account Bank to transfer, on each
Business Day in immediately available funds, all available funds
in the Concentration Account to the Collection Account. The
Lenders and the Administrative Agent may deposit into the
Collection Account from time to time all monies, instruments and
other property received by any of them as proceeds of the
Transferred Receivables. On each Business Day prior to the
Facility Termination Date the Administrative Agent shall instruct
and cause the Depositary (which instruction may be in writing or
by telephone confirmed promptly thereafter in writing) to release
funds on deposit in the Collection Account in the order of
priority set forth in Section 6.03. On each Business Day from
and after the Facility Termination Date the Administrative Agent
shall apply all amounts when received in the Collection Account
in the order of priority set forth in Section 6.05.
(iii) If, for any reason, the Depositary wishes to resign as
depositary of the Collection Account or fails to carry out the
instructions of the Administrative Agent, then the Administrative
Agent shall promptly notify the Lenders. Neither the Lenders nor
the Administrative Agent shall close the Collection Account
unless (A) a new deposit account has been established with the
Depositary, (B) the Lenders and the Administrative Agent have
entered into an agreement covering such new account with such new
depositary institution satisfactory in all respects to the
Administrative Agent (whereupon such new account shall become the
Collection Account for all purposes of this Agreement and the
other Related Documents), and (C) the Lenders and the
Administrative Agent have taken all such action as the
Administrative Agent shall require to grant and perfect a first
priority Lien in such new Collection Account to the
Administrative Agent on behalf of the Lenders and to the
Collateral Agent on behalf of the Conduit Lender under the
Collateral Agent Agreement.
(c) Retention Account. The Administrative Agent has established
and shall maintain the Retention Account with the Depositary for
the benefit of Redwood. The Retention Account shall be
registered in the name of the Administrative Agent and the
Administrative Agent shall, subject to the terms of this
Agreement, have exclusive dominion and control thereof and of all
monies, instruments and other property from time to time on
deposit therein.
Section 6.02. Funding of Collection Account.
(a) As soon as practicable, and in any event no later than 12:00
noon (New York time) on each Business Day:
(i) the Administrative Agent shall transfer or cause to be
transferred (A) all Collections deposited in any Lockbox Account
prior to such Business Day to the Concentration Account and (B)
all available funds in the Concentration Account to the
Collection Account;
(ii) the Applicable Lender or the Administrative Agent shall
deposit in the Collection Account the amount, if any, required
pursuant to Section 2.04(a)(i);
(iii) if, on the immediately preceding Business Day, the
Administrative Agent shall have notified the Borrower of any
Funding Excess or Letter of Credit Exposure Excess, then the
Borrower shall deposit cash in the amount of such Funding Excess
or Letter of Credit Exposure Excess in the Collection Account
(but deposits on account of any Letter of Credit Exposure Excess
shall not be required if there are no Outstanding Principal
Amounts at such time)
(iv) if on such Business Day the Borrower is required to make
other payments under this Agreement not previously retained out
of Collections (including Additional Amounts and Indemnified
Amounts not previously paid), then the Borrower shall deposit an
amount equal to such payments in the Collection Account;
(v) if, on the immediately preceding Business Day, the
Originator made a capital contribution or repurchased a
Transferred Receivable pursuant to Section 4.04 of the Sale and
Contribution Agreement or made a payment pursuant to
Section 4.02(o) of the Sale and Contribution Agreement, then the
Borrower shall deposit in the Collection Account cash in the
amount so received from the Originator for such contribution or
for such repurchase or payment;
(vi) the Servicer shall deposit in the Collection Account the
Outstanding Balance of any Transferred Receivable the Servicer
elects to pay pursuant to Section 2.04 of the Servicing
Agreement; and
(vii) the Borrower shall deposit in the Collection Account
the Outstanding Balance of any Transferred Receivable the
Borrower elects to pay pursuant to Section 8.06(d).
(b) If, on or before the second Business Day immediately
preceding any Settlement Date that occurs prior to the earlier of
the Redwood Transfer Date or the date of the Committed Lender
Funding Event, the Administrative Agent shall have notified the
Borrower of any Collection Account Deficiency pursuant to Section
6.04(b), then the Borrower shall deposit cash in the amount of
such deficiency in the Collection Account no later than 12:00
noon (New York time) on such Settlement Date. If, on or before
4:00 p.m. (New York time) on any Business Day that occurs on or
after the earlier of the Redwood Transfer Date or the date of the
Committed Lender Funding Event, the Administrative Agent shall
have notified the Borrower of any Collection Account Deficiency
pursuant to Section 6.04(b), then the Borrower shall deposit cash
in the amount of such deficiency in the Collection Account no
later than 12:00 noon (New York time) on the immediately
following Business Day.
(c) From and after the Facility Termination Date, the
Administrative Agent shall transfer all amounts on deposit in the
Retention Account as of that date to the Collection Account.
Section 6.03. Daily Disbursements From the Collection
Account; Revolving Period. No later than 1:00 p.m. (New York
time) on each Business Day during the Revolving Period, and
following the transfers made pursuant to Section 6.02, the
Administrative Agent shall disburse Collections then on deposit
in the Collection Account and its related subaccounts in the
following priority:
(a) to the Retention Account prior to the earlier of the Redwood
Transfer Date or the date of the Committed Lender Funding Event,
and to the Administrative Agent on or after the earlier of
Redwood Transfer Date or the date of the Committed Lender Funding
Event:
(i) the amount of any Collection Account Deficiency deposited
pursuant to Section 6.02(b); and
(ii) an amount equal to the sum of:
(1) Daily Yield;
(2) the Yield Shortfall as of the close of business on the
immediately preceding Business Day;
(3) the Servicing Fee;
(4) the Servicing Fee Shortfall as of the close of business on
the immediately preceding Business Day;
(5) the Unused Facility Fee;
(6) the Unused Facility Fee Shortfall as of the close of
business on the immediately preceding Business Day;
(7) any Additional Amounts and Indemnified Amounts then due; and
(8) to the Lenders:
(I) an amount equal to the deposits made in the Collection
Account pursuant to Section 6.02(a)(iv) and not otherwise
disbursed pursuant to Section 6.03(a)(i), to be disbursed ratably
based on the amounts owed to the applicable Lenders ;
(II) an amount equal to (without duplication) any Funding Excess
or Letter of Credit Exposure Excess to be applied in reduction of
Outstanding Principal Amount, to the Lenders ratably based on the
amount of their respective Outstanding Principal Amounts (but
payments to the Lenders with respect to any Letter of Credit
Exposure Excess shall not be made if there are no Outstanding
Principal Amounts at such time); and
(III) if, pursuant to a Repayment Notice, the Borrower has
requested a reduction of the Outstanding Principal Amount of the
Lenders, then to the Lenders, ratably based on the amount of
their respective Outstanding Principal Amounts, the lesser of (A)
the amount of such requested reduction of Outstanding Principal
Amount and (B) such balance; and
(b) to the Borrower Account, the balance of any amounts
remaining after making the foregoing disbursements.
Section 6.04. Revolving Period Settlement Procedures.
(a) On each Settlement Date during the Revolving Period that
occurs on or prior to the earlier of the Redwood Transfer Date or
the date of the Committed Lender Funding Event and on each
Business Day during the Revolving Period that occurs after the
earlier of the Redwood Transfer Date or the date of the Committed
Lender Funding Event, the amounts on deposit in the Retention
Account or transferred to the Administrative Agent pursuant to
Section 6.03(a) shall be disbursed or retained by the
Administrative Agent in the following priority:
(i) to the applicable Lenders (or, if applicable, any
Indemnified Person or Affected Party):
(1) if such Settlement Date occurs on or prior to the earlier of
the Redwood Transfer Date or the date of the Committed Lender
Funding Event, an amount equal to:
(A) the Accrued Yield for the immediately preceding Settlement
Period;
(B) the Accrued Unused Facility Fee for the immediately
preceding Settlement Period;
(C) all Additional Amounts incurred and payable to any Affected
Party as of the end of the immediately preceding Settlement
Period;
(D) all other amounts accrued and payable under this Agreement
(including Indemnified Amounts incurred and payable to any
Indemnified Person) as of the end of the immediately preceding
Settlement Period to the extent not already transferred pursuant
to Section 6.03(a)(ii); and
(E) if a Funding Excess or Letter of Credit Exposure Excess
exists on such date, an amount equal to such excess to the extent
not already transferred pursuant to Section 6.03(a)(ii), to be
applied in reduction of the Outstanding Principal Amount (but
payments to the Lenders with respect to any Letter of Credit
Exposure Excess shall not be made if there are no Outstanding
Principal Amounts at such time);
(2) if such Business Day occurs after the earlier of the Redwood
Transfer Date or the date of the Committed Lender Funding Event,
an amount equal to:
(A) the accrued and unpaid Daily Yield as of such date;
(B) the accrued and unpaid Unused Facility Fee as of such date;
(C) All Additional Amounts incurred and payable to any Affected
Party as of such date;
(D) all other amounts accrued and payable under this Agreement
(including Indemnified Amounts incurred and payable to any
Indemnified Person) as of such date to the extent not already
transferred pursuant to Section 6.03(a)(ii); and
(E) if a Funding Excess or a Letter of Credit Exposure Excess
exists on such date, an amount equal to such excess to the extent
not already transferred pursuant to Section 6.03(a)(ii), to be
applied in reduction of the Outstanding Principal Amount (but
payments to the Lenders with respect to any Letter of Credit
Exposure Excess shall not be made if there are no Outstanding
Principal Amounts at such time);
(ii) to the Servicer on behalf of the Borrower, an amount equal
to its accrued and unpaid Servicing Fee as of (x) the end of the
immediately preceding Settlement Date of the Period if such date
occurs on or prior to the earlier of the Redwood Transfer Date or
the Committed Lender Funding Event or (y) such date if it occurs
after the earlier of the Redwood Transfer Event or the date of
the Committed Lender Funding Event;
(iii) to be retained in the Retention Account if such
Settlement Date occurs prior to the earlier of the Redwood
Transfer Date or the date of the Committed Lender Funding Event,
an amount equal to the Accrued Yield, Accrued Unused Facility Fee
and Accrued Servicing Fee as of such Settlement Date; and
(iv) to the Borrower Account, the balance of any funds remaining
after retaining or disbursing the foregoing amounts (and, prior
to the occurrence of the Redwood Termination Date or the Redwood
Transfer Date, the Administrative Agent also shall transfer to
the Borrower Account on such date any and all interest earned on,
and paid by the Depositary with respect to, any funds on deposit
in the Retention Account during the preceding Settlement Period).
(b) No later than the second Business Day immediately preceding
each Settlement Date that occurs prior to the earlier of the
Redwood Transfer Date or the date of the Committed Lender Funding
Event, the Administrative Agent shall determine and notify the
Borrower of any Collection Account Deficiency for the preceding
Settlement Period, and the Borrower shall deposit cash in the
amount of such Collection Account Deficiency to the Collection
Account pursuant to Section 6.02(b). Not later than 4:00 p.m.
(New York time) on each Business Day that occurs on or after the
earlier of the Redwood Transfer Date or the date of the Committed
Lender Funding Event, the Administrative Agent shall determine
and notify the Borrower of any Collection Account Deficiency as
of that Business Day, and the Borrower shall deposit cash in the
amount of such Collection Account Deficiency to the Collection
Account pursuant to Section 6.02(b).
Section 6.05. Liquidation Settlement Procedures. On each
Business Day from and after the Facility Termination Date until
the Termination Date, the Administrative Agent shall, as soon as
practicable, transfer all amounts then on deposit in the
Retention Account to the Collection Account and shall transfer
all amounts in the Collection Account (including amounts
transferred from the Retention Account pursuant to Section
6.02(c)) in the following priority:
(a) if an Event of Servicer Termination has occurred and a
Successor Servicer has assumed the responsibilities and
obligations of the Servicer in accordance with Section 7.02 of
the Servicing Agreement, then to the Successor Servicer an amount
equal to its accrued and unpaid Successor Servicing Fees and
Expenses;
(b) to the Lenders, ratably, an amount equal to accrued and
unpaid Daily Yield through and including the date of maturity (if
any) of the Commercial Paper (or other funding source)
maintaining the Outstanding Principal Amount;
(c) to the Lenders, an amount equal to the unpaid Outstanding
Principal Amount;
(d) to the Administrative Agent, an amount equal to accrued and
unpaid Unused Facility Fees;
(e) all Additional Amounts and Indemnified Amounts incurred and
payable to any Indemnified Person; and
(f) if an Event of Servicer Termination shall not have occurred,
to the Servicer in an amount equal to the accrued and unpaid
Servicing Fee; and
(g) to the Borrower Account, the balance of any funds remaining
after payment in full of all amounts set forth in this Section
6.05 (and, prior to the occurrence of the Redwood Termination
Date or the Redwood Transfer Date, the Administrative Agent also
shall transfer to the Borrower Account on such date any and all
interest earned on, and paid by the Depositary with respect to,
the funds on deposit in the Retention Account during the
preceding Settlement Period).
Section 6.06. Investment of Funds in Accounts. To the
extent uninvested amounts are on deposit in the Retention Account
on any given day during the Revolving Period, the Administrative
Agent shall invest all such amounts in Permitted Investments
that mature no later than the immediately succeeding Settlement
Date. From and after the Facility Termination Date, any
investment of such amounts shall be solely at the discretion of
the Administrative Agent, subject to the restrictions described
above. All proceeds of any such investment shall be deposited
upon receipt into the Retention Account.
Section 6.07. Termination Procedures.
(a) On the earlier of (i) the first Business Day after the
Facility Termination Date on which the Outstanding Principal
Amount has been reduced to zero or (ii) the Final Advance Date,
if the obligations to be paid pursuant to Section 6.05 have not
been paid in full, the Borrower shall immediately deposit in the
Collection Account an amount sufficient to make such payments in
full.
(b) On the Termination Date, all amounts on deposit in the
Collection Account and the Retention Account shall be disbursed
to the Borrower and all Liens of the Lenders in and to all
Transferred Receivables and all Liens of the Lenders and the
Administrative Agent in and to the Borrower Collateral shall be
released by each Lender and the Administrative Agent. Such
disbursement shall constitute the final payment to which the
Borrower is entitled pursuant to the terms of this Agreement.
ARTICLE VII.
[RESERVED]
ARTICLE VIII.
GRANT OF SECURITY INTERESTS
Section 8.01. Borrower's Grant of Security Interest. To
secure the prompt and complete payment, performance and
observance of all Borrower Secured Obligations, and to induce the
Administrative Agent, the Conduit Lender and the Committed Lender
to enter into this Agreement and perform the obligations required
to be performed by them hereunder in accordance with the terms
and conditions thereof, the Borrower hereby grants, assigns,
conveys, pledges, hypothecates and transfers to the
Administrative Agent, for the benefit of itself, the Conduit
Lender and the Committed Lender, a Lien upon and security
interest in all of its right, title and interest in, to and
under, but none of its obligations arising from, the following
property, whether now owned by or owing to, or hereafter acquired
by or arising in favor of, the Borrower (including under any
trade names, styles or derivations of the Borrower), and
regardless of where located (all of which being hereinafter
collectively referred to as the "Borrower Collateral"):
(a) all Receivables, Contracts therefor and Collections thereon;
(b) the Sale and Contribution Agreement, the Servicing
Agreement, the Receivables Assignments, the Concentration Account
Agreement, all Lockbox Account Agreements, the Borrower Blocked
Account Agreement, and all other Related Documents now or
hereafter in effect relating to the purchase, servicing or
processing of Transferred Receivables (collectively, the
"Borrower Assigned Agreements"), including (i) all rights of the
Borrower to receive moneys due and to become due thereunder or
pursuant thereto, (ii) all rights of the Borrower to receive
proceeds of any insurance, indemnity, warranty or guaranty with
respect thereto, (iii) all claims of the Borrower for damages or
breach with respect thereto or for default thereunder and
(iv) the right of the Borrower to amend, waive or terminate the
same and to perform and to compel performance and otherwise
exercise all remedies thereunder;
(c) all of the following (collectively, the "Borrower Account
Collateral"):
(i) the Concentration Account, Lockbox Accounts, the Borrower
Account, the Lockboxes, and all funds on deposit therein and all
certificates and instruments, if any, from time to time
representing or evidencing the Lockbox Accounts, the Borrower
Account, the Lockboxes or such funds,
(ii) the Collection Account, the Retention Account and all funds
on deposit therein and all certificates and instruments, if any,
from time to time representing or evidencing the Collection
Account, the Retention Account or such funds,
(iii) all Investments from time to time of amounts in the
Collection Account and the Retention Account, and all
certificates, instruments and investment property, if any, from
time to time representing or evidencing such Investments,
(iv) all notes, certificates of deposit and other instruments
from time to time delivered to or otherwise possessed by any
Lender or any assignee or agent on behalf of any Lender in
substitution for or in addition to any of the then existing
Borrower Account Collateral, and
(v) all interest, dividends, cash, instruments, investment
property and other property from time to time received,
receivable or otherwise distributed with respect to or in
exchange for any and all of the then existing Borrower Account
Collateral;
(d) all other property that may from time to time hereafter be
granted and pledged by the Borrower under this Agreement,
including any deposit with any Lender or the Administrative Agent
of additional funds by the Borrower; and
(e) to the extent not otherwise included, all proceeds and
products of the foregoing and all accessions to, substitutions
and replacements for, and profits of, each of the foregoing
Borrower Collateral (including proceeds that constitute property
of the types described in Sections 8.01(a) through (d)).
The grant of the foregoing security interest shall become
effective automatically (without notice or any other action) on
(but not prior to) the Initial Funding Date and shall remain
effective until the Termination Date.
Section 8.02. Borrower's Certification. The Borrower
hereby certifies that (a) the benefits of the representations,
warranties and covenants made by the Originator to the Borrower
under the Sale and Contribution Agreement have been assigned by
the Borrower to the Administrative Agent on behalf of the Lenders
hereunder; (b) the rights of the Borrower to require a capital
contribution from the Originator or to require payment of a
Rejected Amount from the Originator under and in accordance with
the terms and provisions of Section 2.01 of the Sale and
Contribution Agreement may be enforced by the Lenders and the
Administrative Agent; and (c) the Sale and Contribution Agreement
provides that the representations, warranties and covenants
described in Sections 4.01, 4.02 and 4.03 thereof, the
indemnification and payment provisions of Article V thereof and
the provisions of Sections 4.03(g), 8.03 and 8.14 thereof shall
survive the sale of the Transferred Receivables (and undivided
percentage ownership interests therein) and the termination of
the Sale and Contribution Agreement and this Agreement. The
Borrower hereby acknowledges that the Conduit Lender has assigned
to the Collateral Agent under the Collateral Agent Agreement the
benefits of the representations, warranties and covenants
certified in Section 8.02(a) to have been assigned to the
Administrative Agent on behalf of the Lenders hereunder.
Section 8.03. Consent to Assignment. The Borrower
acknowledges and consents to the grant by the Conduit Lender to
the Collateral Agent pursuant to the Collateral Agent Agreement
of a Lien upon all of the Conduit Lender's right, title and
interest in, to and under the Borrower Collateral and
acknowledges the rights of the Collateral Agent thereunder and
the covenants made by the Conduit Lender in favor of the
Collateral Agent set forth therein, and further acknowledges and
consents that, upon the occurrence and during the continuance of
an Incipient Termination Event or a Termination Event prior to a
Committed Lender Funding Event, the Collateral Agent shall be
entitled to enforce the provisions of the Borrower Assigned
Agreements and shall be entitled to all the rights and remedies
of the Conduit Lender thereunder. Nothing in this Section 8.03
shall be construed as limiting the rights and remedies of the
Administrative Agent under this Agreement and the Related
Documents upon the occurrence of an Incipient Termination Event
or a Termination Event. In addition, the Borrower hereby
authorizes the Collateral Agent to rely on the representations
and warranties made by it in the Borrower Assigned Agreements to
which it is a party and in any other certificates or documents
furnished by it to any party in connection therewith.
Section 8.04. Delivery of Collateral. All certificates or
instruments representing or evidencing the Borrower Collateral
shall be delivered to and held by or on behalf of the
Administrative Agent and shall be in suitable form for transfer
by delivery or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent (but bills of
lading and warehouse receipts shall only be required to be so
delivered if requested in writing by the Administrative Agent at
a time when a Termination Event or Incipient Termination Event is
then in existence). The Administrative Agent shall have the
right (a) at any time to exchange certificates or instruments
representing or evidencing Borrower Collateral for certificates
or instruments of smaller or larger denominations and (b) at any
time in its discretion following the occurrence and during the
continuation of a Termination Event and without notice to the
Borrower, to transfer to or to register in the name of the
Administrative Agent or its nominee any or all of the Borrower
Collateral.
Section 8.05. Borrower Remains Liable. It is expressly
agreed by the Borrower that, anything herein to the contrary
notwithstanding, the Borrower (or the Originator as the case may
be) shall remain liable under any and all of the Transferred
Receivables, the Contracts therefor, the Borrower Assigned
Agreements and any other agreements constituting the Borrower
Collateral to which it is a party to observe and perform all the
conditions and obligations to be observed and performed by it
thereunder. The Lenders, the Administrative Agent, the
Collateral Agent and the other Conduit Lender Secured Parties
shall not have any obligation or liability under any such
Receivables, Contracts or agreements by reason of or arising out
of this Agreement or the Collateral Agent Agreement or the
granting herein or therein of a Lien thereon or the receipt by
the Administrative Agent, Lenders, the Collateral Agent or any
Conduit Lender Secured Party of any payment relating thereto
pursuant hereto or thereto. The exercise by any Lender or the
Administrative Agent of any of its respective rights under this
Agreement shall not release the Originator, the Borrower or the
Servicer from any of their respective duties or obligations under
any such Receivables, Contracts or agreements. None of the
Lenders, the Administrative Agent, the Collateral Agent or any of
the Conduit Lender Secured Parties shall be required or obligated
in any manner to perform or fulfill any of the obligations of the
Originator, the Borrower or the Servicer under or pursuant to any
such Receivable, Contract or agreement, or to make any payment,
or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by
any party under any such Receivable, Contract or agreement, or to
present or file any claims, or to take any action to collect or
enforce any performance or the payment of any amounts that may
have been assigned to it or to which it may be entitled at any
time or times.
Section 8.06. Covenants of the Borrower Regarding the
Borrower Collateral.
(a) Offices and Records. The Borrower shall maintain its
principal place of business and chief executive office and the
office at which it stores its Records at the respective locations
specified in Schedule 4.01(b) or, upon 30 days' prior written
notice to the Administrative Agent, at such other location in a
jurisdiction where all action reasonably requested by the
Administrative Agent pursuant to Section 14.15 shall have been
taken with respect to the Borrower Collateral. The Borrower
shall, at its own cost and expense, maintain or cause to be
maintained adequate and complete records of the Transferred
Receivables and the Borrower Collateral, including records of any
and all payments received, credits granted and merchandise
returned with respect thereto and all other dealings therewith.
The Borrower shall mark or cause to be marked conspicuously with
a legend, in form and substance satisfactory to the
Administrative Agent, its books and records, computer tapes,
computer disks and credit files pertaining to the Borrower
Collateral, and its file cabinets or other storage facilities
where it maintains information pertaining thereto, to evidence
this Agreement and the assignment and Liens granted pursuant to
this Article VIII. Upon the occurrence and during the continuance
of a Termination Event, the Borrower shall deliver and turn over
such books and records to the Administrative Agent or its
representatives at any time on demand of the Administrative
Agent. Prior to the occurrence of a Termination Event and upon
notice from the Administrative Agent, the Borrower shall permit
any representative of the Administrative Agent to inspect such
books and records relating to the Borrower Collateral and shall
provide photocopies thereof to the Administrative Agent as more
specifically set forth in Section 8.06(b).
(b) Access. The Borrower shall, at its own expense, during
normal business hours, subject to Borrower's reasonable and
customary safety, security and confidentiality policies and
regulations, from time to time upon one Business Day's prior
notice, but not more frequently than once per calendar quarter
(or with such greater frequency during the existence of a
Termination Event or Incipient Termination Event), as the
Administrative Agent determines to be appropriate: (i) provide
the Lenders, the Administrative Agent and any of their respective
officers, employees and agents access to its properties
(including properties utilized in connection with the collection,
processing or servicing of the Transferred Receivables),
facilities, advisors and employees (including officers) and to
the Borrower Collateral, (ii) permit the Lenders, the
Administrative Agent and any of their respective officers,
employees and agents to inspect, audit and make extracts from its
books and records, including all Records, (iii) permit the
Lenders or the Administrative Agent and their respective
officers, employees and agents to inspect, review and evaluate
the Transferred Receivables and the Borrower Collateral and
(iv) permit the Lenders or the Administrative Agent and their
respective officers, employees and agents to discuss matters
relating to the Transferred Receivables or its performance under
this Agreement or the other Related Documents or its affairs,
finances and accounts with any of its officers, managers,
employees, representatives or agents (in each case, with those
persons having knowledge of such matters) and with its
independent certified public accountants; provided that, (x)
prior to the existence of a Termination Event or an Incipient
Termination Event, the Borrower shall only be liable for the
costs and expenses for not more than two of the foregoing
inspections, appraisals, evaluations and reviews in any calendar
year, and (y) during the existence of a Termination Event or an
Incipient Termination Event, the Borrower shall be liable for the
costs and expenses relating to all of the foregoing inspections,
appraisals, evaluations and reviews conducted during the
existence of such Incipient Termination Event or Termination
Event. If (A) an Incipient Termination Event or a Termination
Event shall have occurred and be continuing or (B) the
Administrative Agent, in good faith, believes that an Incipient
Termination Event or a Termination Event is imminent or deems any
Lender's rights or interests in the Transferred Receivables, the
Borrower Assigned Agreements or any other Borrower Collateral
insecure, then the Borrower shall, at its own expense, provide
such access at all times and without advance notice and provide
the Lenders or the Administrative Agent with access to its
suppliers and customers. The Borrower shall make available to
the Administrative Agent and its counsel, as quickly as is
possible under the circumstances, originals or copies of all
books and records, including Records, that the Administrative
Agent may request. The Borrower shall deliver any document or
instrument necessary for the Administrative Agent, as the
Administrative Agent may from time to time request, to obtain
records from any service bureau or other Person that maintains
records for the Borrower or the Servicer, and shall maintain
duplicate records or supporting documentation on media, including
computer tapes and discs owned by the Borrower or the Servicer.
(c) Communication with Accountants. The Borrower authorizes the
Lenders and the Administrative Agent to communicate directly with
its independent certified public accountants and authorizes and
shall instruct those accountants and advisors to disclose and
make available to the Lenders and the Administrative Agent any
and all financial statements and other supporting financial
documents, schedules and information relating to the Borrower or
the Servicer (including copies of any issued management letters)
with respect to its business, financial condition and other
affairs; provided, however, in the absence of an Incipient
Termination Event or a Termination Event, the Lenders and the
Administrative Agent shall give not less than (5) Business Days'
notice to the Borrower prior to scheduling any meeting or other
material communication with such independent certified public
accountants. Such notice shall contain the date, time, location
and other pertinent logistical information regarding any such
meeting or other material communication , as well as an agenda
for such meeting or other material communication.
(d) Collection of Transferred Receivables. Except as otherwise
provided in this Section 8.06(d), the Servicer shall continue to
collect or cause to be collected, at its sole cost and expense,
all amounts due or to become due to the Borrower under the
Transferred Receivables, the Borrower Assigned Agreements and any
other Borrower Collateral. In connection therewith, the Borrower
and the Servicer shall take such action as it, and from and after
the occurrence and during the continuance of a Termination Event,
the Administrative Agent, may deem necessary or desirable to
enforce collection of the Transferred Receivables, the Borrower
Assigned Agreements and the other Borrower Collateral; provided,
that the Borrower or the Servicer may, rather than commencing any
such action or taking any other enforcement action, at its
option, elect to pay to the Administrative Agent, for the account
of the Applicable Lender (in accordance with its Advances), the
Outstanding Balance of any such Transferred Receivable; provided
further, that if a Termination Event shall have occurred and be
continuing, the Borrower Assigned Agreements or any other
Borrower Collateral insecure, then the Administrative Agent may,
without prior notice to the Borrower or the Servicer, notify any
Obligor under any Transferred Receivable or obligors under the
Borrower Assigned Agreements of the assignment of such
Transferred Receivables or Borrower Assigned Agreements, as the
case may be, to the Administrative Agent on behalf of the Lenders
hereunder and direct that payments of all amounts due or to
become due to the Borrower thereunder be made directly to the
Administrative Agent or any servicer, collection agent or lockbox
or other account designated by the Administrative Agent and, upon
such notification and at the sole cost and expense of the
Borrower and the Servicer, the Administrative Agent may enforce
collection of any such Transferred Receivable or the Borrower
Assigned Agreements and adjust, settle or compromise the amount
or payment thereof. The Administrative Agent shall provide
prompt notice to the Borrower and the Servicer of any such
notification of assignment or direction of payment to the
Obligors under any Transferred Receivables.
(e) Performance of Borrower Assigned Agreements. The Borrower
shall (i) perform and observe all the terms and provisions of the
Borrower Assigned Agreements to be performed or observed by it,
maintain the Borrower Assigned Agreements in full force and
effect, enforce the Borrower Assigned Agreements in accordance
with their terms and take all action as may from time to time be
requested by the Administrative Agent in order to accomplish the
foregoing, and (ii) upon the request of and as directed by the
Administrative Agent, make such demands and requests to any other
party to the Borrower Assigned Agreements as are permitted to be
made by the Borrower or the Servicer thereunder.
(f) License for Use of Software and Other Intellectual Property.
Unless expressly prohibited by the licensor thereof or any
provision of applicable law, if any, each of the Borrower and the
Originator hereby grants to the Administrative Agent on behalf of
the Lenders a license to use, without charge, the Borrower's and
the Originator's computer programs, software, printouts and other
computer materials, technical knowledge or processes, data bases,
materials, trademarks, registered trademarks, trademark
applications, service marks, registered service marks, service
mark applications, patents, patent applications, trade names,
rights of use of any name, labels fictitious names, inventions,
designs, trade secrets, goodwill, registrations, copyrights,
copyright applications, permits, licenses, franchises, customer
lists, credit files, correspondence, and advertising materials or
any property of a similar nature, in each case solely as it
pertains to the Borrower Collateral, or any rights to any of the
foregoing, in the advertising for sale, and selling any of the
Borrower Collateral, or exercising of any other remedies hereto,
and each of the Borrower and the Originator agrees that its
rights under all such licenses and franchise agreements shall
inure to the Administrative Agent's benefit (on behalf of itself
and the Lenders). Except upon the occurrence and continuation of
a Termination Event under Section 9.01(c) or (d), the
Administrative Agent and the Lenders agree not to use any such
license without giving the Borrower and the Originator notice.
ARTICLE IX.
TERMINATION EVENTS
Section 9.01. Termination Events. If any of the following
events (each, a "Termination Event") shall occur (regardless of
the reason therefor):
(a) the Borrower shall (i) fail to make any payment of any
Borrower Secured Obligation when due and payable and the same
shall remain unremedied for one Business Day or more, (ii) fail
or neglect to perform, keep or observe the provisions of Section
5.01(c); or (iii) fail or neglect to perform, keep or observe any
other provision of this Agreement or the other Related Documents
(other than any provision embodied in or covered by any other
clause of this Section 9.01) and the same shall remain unremedied
for five Business Days or more after written notice thereof shall
have been given by the Administrative Agent to the Borrower; or
(b) a default or breach shall occur under any other agreement,
document or instrument to which the Originator, the Borrower, the
Parent or any Subsidiary Guarantor is a party or by which any
such Person or its property is bound, and such default or breach
(i) involves the failure to make any payment when due in respect
of any Debt (other than the Borrower Secured Obligations) of any
such Person or (ii) permits any holder of such Debt or a trustee
or agent to cause Debt or a portion thereof which, except with
respect to the Borrower, is in excess of a principal amount of
$10,000,000 in the aggregate to become due prior to its stated
maturity or prior to its regularly scheduled dates of payment or
(iii) causes Debt or a portion thereof which, except with respect
to the Borrower, is in excess of a principal amount of
$10,000,000 in the aggregate to become due prior to its stated
maturity or prior to its regularly scheduled dates of payment; in
each case, regardless of whether such default is waived, or such
right is exercised, by such holder, trustee or agent; or
(c) a case or proceeding shall have been commenced against the
Borrower, the Parent, the Originator or any Subsidiary Guarantor
seeking a decree or order in respect of any such Person (i) under
the Bankruptcy Code or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) appointing a
custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any such Person or for any
substantial part of such Person's assets, or (iii) ordering the
winding-up or liquidation of the affairs of any such Person; or
(d) the Borrower, the Parent, the Originator or any Subsidiary
Guarantor shall (i) file a petition seeking relief under the
Bankruptcy Code or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) consent or fail to object
in a timely and appropriate manner to the institution of
proceedings thereunder or to the filing of any such petition or
to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or
similar official) for any such Person or for any substantial part
of such Person's assets, (iii) make an assignment for the benefit
of creditors, or (iv) take any company or corporate action in
furtherance of any of the foregoing; or
(e) (i) the Originator, the Borrower, the Parent or any
Subsidiary Guarantor generally does not pay its debts as such
debts become due or admits in writing its inability to, or is
generally unable to, pay its debts as such debts become due or
(ii) the fair market value of the Originator's, the Parent's, the
Borrower's or any Subsidiary Guarantor's liabilities exceeds the
fair market value of its assets; or
(f) a final judgment or judgments for the payment of money in
excess of $10,000,000 in the aggregate at any time outstanding
shall be rendered against the Parent, the Originator or any
Subsidiary Guarantor and the same shall not, within 30 days after
the entry thereof, have been satisfied, or discharged or
execution thereof stayed or bonded pending appeal, or discharged
prior to the expiration of any such stay; or
(g) a judgment or order for the payment of money shall be
rendered against the Borrower; or
(h) (i) any information contained in any Borrowing Base
Certificate is untrue or incorrect in any respect, or (ii) any
representation or warranty of the Originator, the Parent, the
Borrower or any Subsidiary Guarantor herein or in any other
Related Document or in any written statement, report, financial
statement or certificate (other than a Borrowing Base
Certificate) made or delivered by or on behalf of the Originator,
the Parent, the Borrower or any Subsidiary Guarantor to any
Affected Party hereto or thereto is untrue or incorrect in any
material respect as of the date when made or deemed made and such
information, representation and warranty, if relating to any
Transferred Receivable, has not been cured by the repurchase of
any such Transferred Receivable pursuant to Section 4.04 of the
Sale and Contribution Agreement; or
(i) any Governmental Authority (including the IRS or the PBGC)
shall file notice of a Lien with regard to (i) any assets of the
Originator (other than a Lien (i) limited by its terms to assets
other than Receivables and (ii) not materially adversely
affecting the financial condition of the Originator or the
ability of the Originator to perform as Servicer under the
Servicing Agreement), or (ii) any assets of the Guarantors (other
than a Lien not materially adversely affecting the financial
condition of the Guarantor or the ability of the Guarantor to
perform its obligations under the Guaranty and Security Agreement
and any other Related Documents to which it is party to); or
(j) any Governmental Authority (including the IRS or the PBGC)
shall file notice of a Lien with regard to any of the assets of
the Borrower; or
(k) (i) a default or breach shall occur under any provision of
Sections 4.02(o), 4.04, 5.01 or 8.14 of the Sale and Contribution
Agreement and the same shall remain unremedied for one Business
Day or more after the occurrence thereof, (ii) a default or
breach shall occur under any other provision of the Sale and
Contribution Agreement and the same shall remain unremedied for
five Business Days or more after written notice thereof shall
have been given by the Administrative Agent to the Borrower or
(iii) the Sale and Contribution Agreement shall for any reason
cease to evidence the transfer to the Borrower of the legal and
equitable title to, and ownership of, the Transferred
Receivables; or
(l) except as otherwise expressly provided herein, any Lockbox
Account Agreement, the Borrower Blocked Account Agreement or the
Sale and Contribution Agreement shall have been modified, amended
or terminated without the prior written consent of the Lenders
and the Administrative Agent, and, in the case of any Lockbox
Account Agreement or Borrower Blocked Account Agreement, has not
been replaced by a substitute agreement in accordance with
Section 6.01 of this Agreement prior to the date of termination
of such agreement; or
(m) an Event of Servicer Termination shall have occurred; or
(n) a Change of Control shall occur with respect to the
Borrower; or
(o) the Borrower shall have received an Election Notice pursuant
to Section 2.01(d) of the Sale and Contribution Agreement; or
(p) (i) the Default Ratio shall exceed 18.5%; (ii) the Dilution
Trigger Ratio shall exceed 6.5%; (iii) the Receivables Collection
Turnover shall exceed 67 days; (iv) the Borrower's Net Worth
Percentage shall be less than 5%; or (v) the Delinquency Ratio
shall exceed 6.7%; or
(q) any material provision of any Related Document shall for any
reason cease to be valid, binding and enforceable in accordance
with its terms (or the Originator or the Borrower shall challenge
the enforceability of any Related Document or shall assert in
writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Related Documents has
ceased to be or otherwise is not valid, binding and enforceable
in accordance with its terms); or
Then, and in any such event, the Administrative Agent
shall, at the request of, or may, with the consent of, the
Lenders or the Administrative Agent, by notice to the Borrower,
declare the Facility Termination Date to have occurred without
demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, that the
Facility Termination Date shall automatically occur (i) upon the
occurrence of any of the Termination Events described in Sections
9.01(c), (d), (e) or (o) or (ii) three Business Days after the
occurrence of the Termination Event described in Section
9.01(a)(i) if the same shall not have been remedied by such time
(unless such failure is due to a breach of a Lockbox Account
Bank's or the Concentration Account Bank's failure to transfer
funds from any Lockbox Account or the Concentration Account, as
the case may be, notwithstanding Borrower's and the Servicer's
reasonable efforts to cause such transfers to occur when due), in
each case without demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower. Upon the
occurrence of an Event of Servicer Termination, the
Administrative Agent shall, at the request of, or may, with the
consent of, the Lenders or the Administrative Agent, by delivery
of a Servicer Termination Notice to the Borrower and the
Servicer, terminate the servicing responsibilities of the
Servicer under the Servicing Agreement, without demand, protest
or further notice of any kind, all of which are hereby waived by
the Servicer pursuant to the terms of the Servicing Agreement.
ARTICLE X.
REMEDIES
Section 10.01. Actions Upon Termination Event. If any
Termination Event shall have occurred and be continuing and the
Administrative Agent shall have declared the Facility Termination
Date to have occurred or the Facility Termination Date shall be
deemed to have occurred pursuant to Section 9.01, then the
Administrative Agent may exercise in respect of the Borrower
Collateral, in addition to any and all other rights and remedies
granted to it hereunder, under any other Related Document or
under any other instrument or agreement securing, evidencing or
relating to the Borrower Secured Obligations or otherwise
available to it, all of the rights and remedies of a secured
party upon default under the UCC (such rights and remedies to be
cumulative and nonexclusive), and, in addition, may take the
following actions:
(a) The Administrative Agent may, without notice to the Borrower
except as required by law, and at any time or from time to time,
charge, offset or otherwise apply amounts payable to the Borrower
from the Collection Account, any Lockbox Account, the Retention
Account or any part of such accounts in accordance with the
priorities set forth in Sections 6.05 and 6.07 against all or any
part of the Borrower Secured Obligations.
(b) The Administrative Agent may, without notice except as
specified below, solicit and accept bids for and sell the
Borrower Collateral or any part thereof in one or more parcels at
public or private sale, at any exchange, broker's board or any of
the Lenders', or Agent's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. The
Administrative Agent shall have the right to conduct such sales
on the Borrower's premises or elsewhere and shall have the right
to use any of the Borrower's premises without charge for such
sales at such time or times as the Administrative Agent deems
necessary or advisable. The Borrower agrees that, to the extent
notice of sale shall be required by law, at least ten Business
Days' notice to the Borrower of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Administrative Agent
shall not be obligated to make any sale of Borrower Collateral
regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed for such
sale, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Every such sale
shall operate to divest all right, title, interest, claim and
demand whatsoever of the Borrower in and to the Borrower
Collateral so sold, and shall be a perpetual bar, both at law and
in equity, against each Originator, the Borrower, any Person
claiming the Borrower Collateral sold through the Originator or
the Borrower, and their respective successors or assigns. The
Administrative Agent shall deposit the net proceeds of any such
sale in the Collection Account and such proceeds shall be
disbursed in accordance with Section 6.05.
(c) Upon the completion of any sale under Section 10.01(b), the
Borrower or the Servicer shall deliver or cause to be delivered
to the purchaser or purchasers at such sale on the date thereof,
or within a reasonable time thereafter if it shall be
impracticable to make immediate delivery, all of the Borrower
Collateral sold on such date, but in any event full title and
right of possession to such property shall vest in such purchaser
or purchasers upon the completion of such sale. Nevertheless, if
so requested by the Administrative Agent or by any such
purchaser, the Borrower shall confirm any such sale or transfer
by executing and delivering to such purchaser all proper
instruments of conveyance and transfer and releases as may be
designated in any such request.
(d) At any sale under Section 10.01(b), the Lenders, the
Administrative Agent or any other Conduit Lender Secured Party
may bid for and purchase the property offered for sale and, upon
compliance with the terms of sale, may hold, retain and dispose
of such property without further accountability therefor.
(e) The Administrative Agent may exercise, at the sole cost and
expense of the Borrower, any and all rights and remedies of the
Borrower under or in connection with the Borrower Assigned
Agreements or the other Borrower Collateral, including any and
all rights of the Borrower to demand or otherwise require payment
of any amount under, or performance of any provisions of, the
Borrower Assigned Agreements.
Section 10.02. Exercise of Remedies. No failure or delay on
the part of the Administrative Agent in exercising any right,
power or privilege under this Agreement and no course of dealing
between the Originator, the Borrower or the Servicer, on the one
hand, and the Administrative Agent, on the other hand, shall
operate as a waiver of such right, power or privilege, nor shall
any single or partial exercise of any right, power or privilege
under this Agreement preclude any other or further exercise of
such right, power or privilege or the exercise of any other
right, power or privilege. The rights and remedies under this
Agreement are cumulative, may be exercised singly or
concurrently, and are not exclusive of any rights or remedies
that the Administrative Agent would otherwise have at law or in
equity. No notice to or demand on any party hereto shall entitle
such party to any other or further notice or demand in similar or
other circumstances, or constitute a waiver of the right of the
party providing such notice or making such demand to any other or
further action in any circumstances without notice or demand.
Section 10.03. Power of Attorney. On the Closing Date, each
of the Borrower and the Servicer shall execute and deliver a
power of attorney substantially in the form attached hereto as
Exhibit 10.03 (each, a "Power of Attorney"). The power of
attorney granted pursuant to each Power of Attorney is a power
coupled with an interest and shall be irrevocable until all of
the Borrower Secured Obligations are indefeasibly paid or
otherwise satisfied in full. The powers conferred on the
Administrative Agent under each Power of Attorney are solely to
protect the Administrative Agent's and the Lenders' Liens upon
and interests in the Borrower Collateral and shall not impose any
duty upon the Administrative Agent to exercise any such powers.
The Administrative Agent and the Lenders shall not be accountable
for any amount other than amounts that the Administrative Agent
actually receives as a result of the exercise of such powers and
none of the Administrative Agent's or any Lender's officers,
directors, employees, agents or representatives shall be
responsible to the Borrower or the Servicer for any act or
failure to act, except in respect of damages attributable solely
to their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
Section 10.04. Continuing Security Interest. This Agreement
shall create a continuing Lien in the Borrower Collateral until
the conditions to the release of the Liens of the Lender and the
Administrative Agent thereon set forth in Section 6.07(b) have
been satisfied.
ARTICLE XI.
[RESERVED]
ARTICLE XII.
INDEMNIFICATION
Section 12.01. Indemnities by the Borrower.
(a) Without limiting any other rights that the Conduit Lender,
the Committed Lender, the Administrative Agent, the Collateral
Agent, the Liquidity Agent, any Liquidity Lender, the Letter of
Credit Agent or any Letter of Credit Provider or any of their
respective officers, directors, employees, attorneys, agents or
representatives (each, an "Indemnified Person") may have
hereunder, or under applicable law, the Borrower hereby agrees to
indemnify and hold harmless each Indemnified Person from and
against any and all Indemnified Amounts that may be claimed or
asserted against or incurred by any such Indemnified Person in
connection with or arising out of the transactions contemplated
under this Agreement or under any other Related Document or any
actions or failures to act in connection therewith, including any
and all legal costs and expenses arising out of or incurred in
connection with disputes between or among any parties to any of
the Related Documents; provided, that the Borrower shall not be
liable for any indemnification to an Indemnified Person to the
extent that any such Indemnified Amount results from such
Indemnified Person's gross negligence or willful misconduct or
breach of its obligations under a Related Document.
(b) Any Indemnified Amounts subject to the indemnification
provisions of this Section 12.01 not paid in accordance with
Article VI shall be paid by the Borrower to the Indemnified
Person entitled thereto within five Business Days following
demand therefor.
Section 12.02. Limitation of Damages; Indemnified Persons.
NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY
SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR
ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.
ARTICLE XIII.
AGENT
Section 13.01. Authorization and Action.
(a) The Administrative Agent may take such action and carry out
such functions under this Agreement as are authorized to be
performed by it pursuant to the terms of this Agreement, any
other Related Document or otherwise contemplated hereby or
thereby or are reasonably incidental thereto; provided, that the
duties of the Administrative Agent hereunder shall be determined
solely by the express provisions of this Agreement, and, other
than the duties set forth in Section 13.02, any permissive right
of the Administrative Agent hereunder shall not be construed as a
duty.
Section 13.02. Reliance. None of the Administrative Agent,
any of its Affiliates or any of their respective directors,
officers, agents or employees shall be liable for any action
taken or omitted to be taken by any of them under or in
connection with this Agreement or the other Related Documents,
except for damages solely caused by its or their own gross
negligence or willful misconduct as finally determined by a court
of competent jurisdiction. Without limiting the generality of
the foregoing, and notwithstanding any term or provision hereof
to the contrary, the Borrower, the Conduit Lender and the
Committed Lender hereby acknowledge and agree that the
Administrative Agent (a) acts as agent hereunder for the Conduit
Lender and the Committed Lender and has no duties or obligations
to, shall incur no liabilities or obligations to, and does not
act as an agent in any capacity for, the Borrower (other than,
with respect to the Administrative Agent, under the Power of
Attorney with respect to remedial actions) or the Originator, (b)
may consult with legal counsel, independent public accountants
and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts, (c) makes no representation or warranty hereunder to any
Affected Party and shall not be responsible to any such Person
for any statements, representations or warranties made in or in
connection with this Agreement or the other Related Documents,
(d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of this Agreement, or the other Related Documents on
the part of the Borrower, the Servicer, the Conduit Lender or the
Committed Lender or to inspect the property (including the books
and records) of the Borrower, the Servicer, the Conduit Lender or
the Committed Lender, (e) shall not be responsible to the
Borrower, the Servicer or any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Related Documents or any
other instrument or document furnished pursuant hereto or
thereto, (f) shall incur no liability under or in respect of this
Agreement or the other Related Documents by acting upon any
notice, consent, certificate or other instrument or writing
believed by it to be genuine and signed, sent or communicated by
the proper party or parties and (g) shall not be bound to make
any investigation into the facts or matters stated in any notice
or other communication hereunder and may rely on the accuracy of
such facts or matters. Notwithstanding the foregoing, the
Administrative Agent acknowledges that it has a duty to transfer
funds between and among the Accounts and the Collection Account,
and make investments of funds on deposit in the Retention
Account, in accordance with Article VI and the instructions of
the Servicer.
Section 13.03. GE Capital and Affiliates. GE Capital and
its Affiliates may generally engage in any kind of business with
any Obligor, the Parent, the Originator, the Borrower, the
Servicer, the Conduit Lender or the Committed Lender, any of
their respective Affiliates and any Person who may do business
with or own securities of such Persons or any of their respective
Affiliates, all as if GE Capital were not the Administrative
Agent and without the duty to account therefor to any Obligor,
the Parent, the Originator, the Borrower, the Servicer, any
Lender or any other Person.
ARTICLE XIV.
MISCELLANEOUS
Section 14.01. Notices. Except as otherwise provided
herein, whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication
shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to
this Agreement, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing
and shall be deemed to have been validly served, given or
delivered (a) upon the earlier of actual receipt and three
Business Days after deposit in the United States Mail, registered
or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by facsimile (with such
facsimile promptly confirmed by delivery of a copy by personal
delivery or United States Mail as otherwise provided in this
Section 14.01), (c) one Business Day after deposit with a
reputable overnight courier with all charges prepaid or (d) when
delivered, if hand-delivered by messenger, all of which shall be
addressed to the party to be notified and sent to the address or
facsimile number set forth under its name on the signature page
hereof or to such other address (or facsimile number) as may be
substituted by notice given as herein provided. The giving of
any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in
delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to any Person (other
than the Conduit Lender, the Committed Lender and the
Administrative Agent) designated in any written notice provided
hereunder to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval,
declaration or other communication. Notwithstanding the
foregoing, whenever it is provided herein that a notice is to be
given to any other party hereto by a specific time, such notice
shall only be effective if actually received by such party prior
to such time, and if such notice is received after such time or
on a day other than a Business Day, such notice shall only be
effective on the immediately succeeding Business Day.
Section 14.02. Binding Effect; Assignability.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Servicer, the Conduit Lender, the
Committed Lender and the Administrative Agent and their
respective successors and permitted assigns. Neither the
Borrower nor the Servicer may assign, transfer, hypothecate or
otherwise convey any of their respective rights or obligations
hereunder or interests herein without the express prior written
consent of the Conduit Lender, the Committed Lender and the
Administrative Agent and unless the Rating Agency Condition shall
have been satisfied with respect to any such assignment. Any
such purported assignment, transfer, hypothecation or other
conveyance by the Borrower or the Servicer without the prior
express written consent of the Conduit Lender, the Committed
Lender and the Administrative Agent shall be void.
(b) The Conduit Lender, the Committed Lender or the
Administrative Agent may, at any time, assign any of its rights
and obligations hereunder or interests herein to any Eligible
Transferee which has a short-term debt rating of at least A-1 by
S&P and P-1 by Moody's, and any such assignee may further assign
at any time its rights and obligations hereunder or interests
herein (including any rights it may have in and to the Advances
and the Borrower Collateral and any rights it may have to
exercise remedies hereunder) to an Eligible Transferee, in each
case without the consent of the Originator, the Borrower or the
Servicer. The Borrower acknowledges and agrees that, upon any
such assignment, the assignee thereof may enforce directly,
without joinder of any Lender, all of the obligations of the
Borrower hereunder. Any sale of a participation by the Committed
Lender of its right hereunder, after the occurrence of a Redwood
Termination Date, shall be made only to an Eligible Transferee.
(c) The Borrower hereby acknowledges that in accordance with the
provisions of the LAPA, (i) on the day of the Committed Lender
Funding Event, (A) the Committed Lender may purchase from the
Conduit Lender all or any part of the outstanding Advances made
by the Conduit Lender prior to the Committed Lender Funding
Event, and (B) the Conduit Lender may assign all or any part of
its rights and interest in the Borrower Collateral to the
Committed Lender, and (ii) on the Redwood Transfer Date, (A)
Redwood may assign and transfer to the Liquidity Lenders all of
the Redwood Interest (as defined in the LAPA), and (B) the
Liquidity Lenders may purchase from Redwood all of the Redwood
Interest (as defined in the LAPA).
Section 14.03. Termination; Survival of Borrower Secured
Obligations Upon Facility Termination Date.
(a) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms,
and shall remain in full force and effect until the Termination
Date.
(b) Except as otherwise expressly provided herein or in any
other Related Document, no termination or cancellation
(regardless of cause or procedure) of any commitment made by any
Affected Party under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of the Borrower or
the rights of any Affected Party relating to any unpaid portion
of the Borrower Secured Obligations, due or not due, liquidated,
contingent or unliquidated or any transaction or event occurring
prior to such termination, or any transaction or event, the
performance of which is required after the Facility Termination
Date. Except as otherwise expressly provided herein or in any
other Related Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon the Borrower or
the Servicer, and all rights of any Affected Party hereunder, all
as contained in the Related Documents, shall not terminate or
expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until
the Termination Date; provided, that the rights and remedies
provided for herein with respect to any breach of any
representation or warranty made by the Borrower or the Servicer
pursuant to Article IV, the indemnification and payment
provisions of Article XII and Sections 14.04, 14.05 and 14.06
shall be continuing and shall survive the Termination Date.
Section 14.04. Costs, Expenses and Taxes. (a) The Borrower
shall reimburse each Lender and the Administrative Agent for all
out-of-pocket expenses incurred in connection with the
negotiation and preparation of this Agreement and the other
Related Documents (including the reasonable fees and expenses of
all of its special counsel, advisors, consultants and auditors
retained in connection with the transactions contemplated thereby
and advice in connection therewith). The Borrower shall
reimburse the Conduit Lender, the Committed Lender and the
Administrative Agent for all fees, costs and expenses, including
the fees, costs and expenses of counsel or other advisors
(including environmental and management consultants and
appraisers) for advice, assistance, or other representation in
connection with:
(i) the forwarding to the Borrower or any other Person on
behalf of the Borrower by any Lender of any proceeds of Advances made
by such Lender hereunder;
(ii) any amendment, modification or waiver of, consent with
respect to, or termination of this Agreement or any of the other
Related Documents or advice in connection with the administration
thereof or their respective rights hereunder or thereunder;
(iii) any Litigation, contest or dispute (whether instituted
by the Borrower, the Conduit Lender, the Committed Lender, the
Administrative Agent or any other Person as a party, witness, or
otherwise) in any way relating to the Borrower Collateral, any of
the Related Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any
Litigation, contest, dispute, suit, case, proceeding or action,
and any appeal or review thereof, in connection with a case
commenced by or against the Borrower or any other Person that may
be obligated to the Lender or the Administrative Agent by virtue
of the Related Documents, including any such Litigation, contest,
dispute, suit, proceeding or action arising in connection with
any work-out or restructuring of the transactions contemplated
hereby during the pendency of one or more Termination Events;
(iv) any attempt to enforce any remedies of the Conduit Lender,
the Committed Lender or the Administrative Agent against the
Borrower or any other Person that may be obligated to them by
virtue of any of the Related Documents, including any such
attempt to enforce any such remedies in the course of any work-
out or restructuring of the transactions contemplated hereby
during the pendency of one or more Termination Events;
(v) any work-out or restructuring of the transactions
contemplated hereby during the pendency of one or more
Termination Events; and
(vi) subject to any applicable limitation set forth in Section
8.06(b), efforts to (A) monitor the Advances or any of the
Borrower Secured Obligations, (B) evaluate, observe or assess the
Originator, the Borrower or the Servicer or their respective
affairs, and (C) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the
Borrower Collateral;
including all attorneys' and other professional and service
providers' fees arising from such services, including those in
connection with any appellate proceedings, and all expenses,
costs, charges and other fees incurred by such counsel and others
in connection with or relating to any of the events or actions
described in this Section 14.04, all of which shall be payable,
on demand, by the Borrower to the Conduit Lender, the Committed
Lender or the Administrative Agent, as applicable. Without
limiting the generality of the foregoing, such expenses, costs,
charges and fees may include: fees, costs and expenses of
accountants, environmental advisors, appraisers, investment
bankers, management and other consultants and paralegals; court
costs and expenses; photocopying and duplication expenses; court
reporter fees, costs and expenses; long distance telephone
charges; air express charges; telegram or facsimile charges;
secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of
such legal or other advisory services.
(b) In addition, the Borrower shall pay on demand any and all
stamp, sales, excise and other taxes (excluding income taxes) and
fees payable or determined to be payable in connection with the
execution, delivery, filing or recording of this Agreement or any
other Related Document, and the Borrower agrees to indemnify and
save each Indemnified Person harmless from and against any and
all liabilities with respect to or resulting from any delay or
failure to pay such taxes and fees.
Section 14.05. Confidentiality.
(a) Except to the extent otherwise required by applicable law,
as required to be filed publicly with the Securities and Exchange
Commission, or unless the Administrative Agent shall otherwise
consent in writing, the Borrower and the Servicer each severally
agree to maintain the confidentiality of this Agreement (and all
drafts hereof and documents ancillary hereto) in their
communications with third parties other than any Affected Party
or any Indemnified Person and otherwise and not to disclose,
deliver or otherwise make available to any third party (other
than its directors, officers, employees, accountants or counsel)
the original or any copy of all or any part of this Agreement (or
any draft hereof and documents ancillary hereto) except to an
Affected Party or an Indemnified Person.
(b) The Borrower and the Servicer each agrees that it shall not
(and shall not permit any of its Subsidiaries to) issue any news
release or make any public announcement pertaining to the
transactions contemplated by this Agreement and the other Related
Documents without the prior written consent of the Conduit
Lender, the Committed Lender and the Administrative Agent (which
consent shall not be unreasonably withheld) unless such news
release or public announcement is required by law, in which case
the Borrower or the Servicer, as applicable, shall consult with
the Conduit Lender, the Committed Lender and the Administrative
Agent prior to the issuance of such news release or public
announcement. The Borrower may, however, disclose the general
terms of the transactions contemplated by this Agreement and the
other Related Documents to trade creditors, suppliers and other
similarly-situated Persons so long as such disclosure is not in
the form of a news release or public announcement.
(c) Each of the Lenders and the Administrative Agent agrees to
use commercially reasonable efforts (equivalent to the efforts
that such Persons apply to maintain as confidential its own
confidential information) to maintain as confidential all
confidential information provided to it by the Borrower and
designated as confidential for a period of two (2) years
following receipt thereof, except that the Lenders and the
Administrative Agent may disclose such information (a) to Persons
employed or engaged by the Lenders or the Administrative Agent in
evaluating, approving, structuring or administering the Advances,
this Agreement or any of the Related Documents; (b) to any bona
fide participant or potential participant that is an Eligible
Transferee and to any insurer of any Lender, in each case, that
has agreed to comply with the covenant contained in this Section
14.05(c) (and any such bona fide participant or potential
participant may disclose such information to Persons employed or
engaged by them as described in clause (a) above); (c) as
required or requested by any Governmental Authority or reasonably
believed by the Administrative Agent or any Lender to be
compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of the
Administrative Agent's or any Lender's counsel, required by law;
(e) in connection with the exercise of any right or remedy under
this Agreement or any Related Document or in connection with any
litigation to which any Lender or the Administrative Agent is a
party, (f) to any Rating Agency or (g) which ceases to be
confidential through no fault of the Administrative Agent and the
Lenders. For purposes of this Section 14.05(c), all financial
projections and the names of the Originator's customers, shippers
and consignees shall be deemed to be designated as confidential
by the Lenders and the Administrative Agent.
Section 14.06. No Proceedings. Each of the Borrower and the
Servicer hereby agrees that, from and after the Closing Date and
until the date one year plus one day following the date on which
the Commercial Paper with the latest maturity has been
indefeasibly paid in full in cash, it will not, directly or
indirectly, institute or cause to be instituted against the
Conduit Lender or the Committed Lender any proceeding of the type
referred to in Sections 9.01(c) and 9.01(d).
Section 14.07. Complete Agreement; Modification of
Agreement. This Agreement and the other Related Documents
constitute the complete agreement among the parties hereto with
respect to the subject matter here of and thereof, supersede all
prior agreements and understandings relating to the subject
matter hereof and thereof, and may not be modified, altered or
amended except as set forth in Section 14.08.
Section 14.08. Amendments and Waivers. No amendment,
modification, termination or waiver of any provision of this
Agreement or any of the other Related Documents, or any consent
to any departure by the Borrower or the Servicer therefrom, shall
in any event be effective unless the same shall be in writing and
signed by each of the parties hereto or thereto and by the
Collateral Agent; provided, that (i) the Administrative Agent
shall notify each of the Rating Agencies concurrently with the
execution of any amendment to any provision of this Agreement or
any of the other Related Documents, and (ii) it shall be a
condition precedent to the effectiveness of any material
amendment to any provision of this Agreement or any of the other
Related Documents that the Rating Agency Condition shall have
been satisfied in respect thereof.
Section 14.09. No Waiver; Remedies. The failure by the
Conduit Lender, the Committed Lender or the Administrative Agent,
at any time or times, to require strict performance by the
Borrower or the Servicer of any provision of this Agreement or
any Receivables Assignment shall not waive, affect or diminish
any right of any Lender or the Administrative Agent thereafter to
demand strict compliance and performance herewith or therewith.
Any suspension or waiver of any breach or default hereunder shall
not suspend, waive or affect any other breach or default whether
the same is prior or subsequent thereto and whether the same or
of a different type. None of the undertakings, agreements,
warranties, covenants and representations of the Borrower or the
Servicer contained in this Agreement or any Receivables
Assignment, and no breach or default by the Borrower or the
Servicer hereunder or thereunder, shall be deemed to have been
suspended or waived by any Lender or the Administrative Agent
unless such waiver or suspension is by an instrument in writing
signed by an officer of or other duly authorized signatory of the
Conduit Lender, the Committed Lender, the Collateral Agent and
the Administrative Agent and directed to the Borrower or the
Servicer, as applicable, specifying such suspension or waiver.
The rights and remedies of the Conduit Lender, the Committed
Lender, the Collateral Agent and the Administrative Agent under
this Agreement shall be cumulative and nonexclusive of any other
rights and remedies that the Conduit Lender, the Committed
Lender, the Collateral Agent and the Administrative Agent may
have under any other agreement, including the other Related
Documents, by operation of law or otherwise. Recourse to the
Borrower Collateral shall not be required.
Section 14.10. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND EACH OTHER RELATED DOCUMENT (EXCEPT TO
THE EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE
CONTRARY) AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER
SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT
OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES) EXCEPT
TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR
PRIORITY OF THE INTERESTS OF THE ADMINISTRATIVE AGENT IN THE
RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT
THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF NEW YORK, AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR
TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN
NEW YORK CITY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE ANY LENDER OR THE
ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE BORROWER
COLLATERAL OR ANY OTHER SECURITY FOR THE BORROWER SECURED
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF THE CONDUIT LENDER, THE COMMITTED LENDER OR THE
ADMINISTRATIVE AGENT. EACH PARTY HERETO SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION
THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE
OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE
ADDRESS SET FORTH BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF
AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR THREE DAYS
AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID.
NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY
HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 14.11. Counterparts. This Agreement may be executed
in any number of separate counterparts, each of which shall
collectively and separately constitute one agreement.
Section 14.12. Severability. Wherever possible, each
provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of
this Agreement.
Section 14.13. Section Titles. The section titles and table
of contents contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not
a part of the agreement between the parties hereto.
Section 14.14. Limited Recourse. The obligations of the
Conduit Lender and the Committed Lender under this Agreement and
all Related Documents are solely the corporate obligations of
each such Lender. No recourse shall be had for the payment of
any amount owing in respect of Advances or for the payment of any
fee hereunder or any other obligation or claim arising out of or
based upon this Agreement or any other Related Document against
any Stockholder, employee, officer, director, agent or
incorporator of such Lender. Any accrued obligations owing by
the Conduit Lender or the Committed Lender under this Agreement
shall be payable by such Lender solely to the extent that funds
are available therefor from time to time in accordance with the
provisions of Article VI of this Agreement, and, with respect to
the Conduit Lender, in accordance with Article VI of the
Collateral Agent Agreement (and such accrued obligations shall
not be extinguished until paid in full).
Section 14.15. Further Assurances.
(a) Each of the Borrower and the Servicer shall, at its sole
cost and expense, upon request of the Conduit Lender, the
Committed Lender or the Administrative Agent, promptly and duly
execute and deliver any and all further instruments and documents
and take such further action that may be necessary or desirable
or that the Conduit Lender, the Committed Lender or the
Administrative Agent may request to (i) perfect, protect,
preserve, continue and maintain fully the Liens granted to the
Administrative Agent and the Lenders under this Agreement, (ii)
enable the Conduit Lender, the Committed Lender or the
Administrative Agent to exercise and enforce its rights under
this Agreement or any of the other Related Documents or (iii)
otherwise carry out more effectively the provisions and purposes
of this Agreement or any other Related Document. Without
limiting the generality of the foregoing, the Borrower shall,
upon request of the Conduit Lender and the Committed Lender or
the Administrative Agent, (A) execute and file such financing or
continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices that may be
necessary or desirable or that the Lenders or the Administrative
Agent may request to perfect, protect and preserve the Liens
granted pursuant to this Agreement, free and clear of all Adverse
Claims, (B) mark, or cause the Servicer to mark, each Contract
evidencing each Transferred Receivable with a legend, acceptable
to each Lender and the Administrative Agent evidencing that the
Borrower has purchased such Transferred Receivables and that the
Administrative Agent, for the benefit of itself and the Lenders,
has a security interest in and lien thereon, (C) mark, or cause
the Servicer to mark, its master data processing records
evidencing such Transferred Receivables with such a legend and
(D) notify or cause the Servicer to notify Obligors of the Liens
on the Transferred Receivables granted hereunder.
Notwithstanding anything herein to the contrary, Borrower shall
not be required hereunder to deliver any warehouse receipts or
bills of lading to the Administrative Agent unless requested in
writing by the Administrative Agent at a time when a Termination
Event or Incipient Termination Event is then in existence.
(b) Without limiting the generality of the foregoing, the
Borrower hereby authorizes the Conduit Lender, the Committed
Lender and the Administrative Agent, and each of the Conduit
Lender and the Committed Lender hereby authorizes the
Administrative Agent, to file one or more financing or
continuation statements, or amendments thereto or assignments
thereof, relating to all or any part of the Transferred
Receivables, including Collections with respect thereto, or the
Borrower Collateral without the signature of the Borrower or, as
applicable, the Conduit Lender or the Committed Lender, as
applicable, to the extent permitted by applicable law. A carbon,
photographic or other reproduction of this Agreement or of any
notice or financing statement covering the Transferred
Receivables, the Borrower Collateral or any part thereof shall be
sufficient as a notice or financing statement where permitted by
law.
[Remainder of page intentionally left blank; next page is
signature page]
IN WITNESS WHEREOF, the parties have caused this
Receivables Funding Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above
written.
CONSOLIDATED FREIGHTWAYS FUNDING LLC, as
the Borrower
By: /s/Kerry K. Morgan
Name: Kerry K. Morgan
Vice President and Treasurer
Address: 16400 SE CF Way
Vancouver, WA 98683
REDWOOD RECEIVABLES CORPORATION,
as Conduit Lender
By:
Name:
Duly Authorized Signatory
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Committed Lender
By /s/Craig Winslow
Name Craig Winslow
Duly Authorized Signatory
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Administrative Agent
By /s/Craig Winslow
Name Craig Winslow
Duly Authorized Signatory
ACKNOWLEDGED AND AGREED:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Collateral Agent
By /s/Craig Winslow
Name Craig Winslow
Duly Authorized Signatory
ANNEX 5.02(a)
to
FUNDING AGREEMENT
REPORTING REQUIREMENTS OF THE BORROWER
The Borrower shall furnish, or cause to be furnished,
to the Lender, the Administrative Agent and the Collateral Agent:
(a) Monthly Report. As soon as available, and in any
event no later than 11:00 a.m. (New York time) on the tenth
Business Day of each fiscal month, a Monthly Report in the form
of Exhibit 3.01(a)(iv) prepared by the Borrower as of the last
day of the previous fiscal month.
(b) Default Notices. As soon as practicable, and in
any event within five Business Days after an Authorized Officer
of the Borrower has actual knowledge of the existence thereof,
telephonic or telecopied notice of each of the following events,
in each case specifying the nature and anticipated effect thereof
and what action, if any, the Borrower proposes to take with
respect thereto, which notice, if given telephonically, shall be
promptly confirmed in writing on the next Business Day:
(i) any Incipient Termination Event or
Termination Event;
(ii) any Adverse Claim made or asserted against
any of the Borrower Collateral of which it becomes aware;
(iii) the occurrence of any event that would
have a material adverse effect on the aggregate value of the
Borrower Collateral or on the assignments and Liens granted by
the Borrower pursuant to this Agreement;
(iv) the occurrence of any event of the type
described in Sections 4.02(h)(ii) or (iii) of the Sale and
Contribution Agreement involving any Obligor obligated under
Transferred Receivables with an aggregate Outstanding Balance at
such time of $1,000,000 or more;
(v) the commencement of a case or proceeding by
or against the Borrower seeking a decree or order in respect of
the Borrower (A) under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar
law, (B) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for the Borrower or
for any substantial part of its assets, or (C) ordering the
winding up or liquidation of the affairs of the Borrower;
(vi) the receipt of notice that (A) the Borrower
is being placed under regulatory supervision, (B) any license,
permit, charter, registration or approval necessary for the
conduct of the Borrower's business is to be, or may be, suspended
or revoked, or (C) the Borrower is to cease and desist any
practice, procedure or policy employed by it in the conduct of
its business if such cessation may have a Material Adverse
Effect; or
(vii) any other event, circumstance or
condition that has had or could reasonably be expected to have a
Material Adverse Effect.
(c) Litigation. Promptly upon learning thereof,
written notice of any Litigation affecting the Borrower, the
Transferred Receivables or the Borrower Collateral, whether or
not fully covered by insurance, and regardless of the subject
matter thereof that (i) seeks damages in excess of $500,000, (ii)
seeks injunctive relief, (iii) is asserted or instituted against
any Plan, its fiduciaries or its assets or against the Borrower
or any ERISA Affiliate of the Borrower in connection with any
Plan, (iv) alleges criminal misconduct the Borrower or (v) would,
if determined adversely, have a Material Adverse Effect.
(d) Other Documents. Such other financial and other
information respecting the Transferred Receivables, the Contracts
therefor or the condition or operations, financial or otherwise,
of the Borrower or the Parent or any of its Subsidiaries as the
Lender, the Administrative Agent or the Collateral Agent shall,
from time to time, request.
(e) Miscellaneous Certifications. As soon as
available, and in any event within 90 days after the end of each
fiscal year, (i) a Bringdown Certificate, (ii) a Servicer's
Certificate, and (iii) if requested, an opinion of counsel, in
form and substance satisfactory to the Lender, the Administrative
Agent, and the Collateral Agent, reaffirming as of the date of
such opinion the opinion of counsel with respect to the Borrower
and the Originator delivered to the Lender, the Administrative
Agent and the Collateral Agent on the Closing Date.
ARTICLE I. DEFINITIONS AND INTERPRETATION 2
Section 1.01. Definitions 2
Section 1.02. Rules of Construction 2
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES 2
Section 2.01. Advances 2
Section 2.02. Optional Changes in Maximum Facility Amount 2
Section 2.03.Notices Relating to Increases and Reductions in
the Outstanding Principal Amount 3
Section 2.04. Making of Advances 4
Section 2.05. Facility Termination Date 5
Section 2.06. Daily Yield 5
Section 2.07. Fees 5
Section 2.08. Time and Method of Payments 5
Section 2.09. Capital Requirements; Additional Costs 7
Section 2.10. Breakage Costs 8
Section 2.11. Funding Excess 8
ARTICLE III. CONDITIONS PRECEDENT 8
Section 3.01. Conditions to Initial Advance 8
Section 3.02. Conditions Precedent to All Advances 10
Section 3.03. Conditions Precedent to Releases of Funds 11
ARTICLE IV. REPRESENTATIONS AND WARRANTIES 12
Section 4.01. Representations and Warranties of the Borrower 12
ARTICLE V. GENERAL COVENANTS OF THE BORROWER 19
Section 5.01. Affirmative Covenants of the Borrower 19
Section 5.02. Reporting Requirements of the Borrower 20
Section 5.03. Negative Covenants of the Borrower 21
ARTICLE VI. COLLECTIONS AND DISBURSEMENTS 23
Section 6.01. Establishment of Accounts 23
Section 6.02. Funding of Collection Account 26
Section 6.03.Daily Disbursements From the Collection Account;
Revolving Period 27
Section 6.04. Revolving Period Settlement Procedures 29
Section 6.05. Liquidation Settlement Procedures 31
Section 6.06. Investment of Funds in Accounts 31
Section 6.07. Termination Procedures 31
ARTICLE VII. [RESERVED] 32
ARTICLE VIII. GRANT OF SECURITY INTERESTS 32
Section 8.01. Borrower's Grant of Security Interest 32
Section 8.02. Borrower's Certification 33
Section 8.03. Consent to Assignment 34
Section 8.04. Delivery of Collateral 34
Section 8.05. Borrower Remains Liable 34
Section 8.06.Covenants of the Borrower Regarding the Borrower
Collateral 35
ARTICLE IX. TERMINATION EVENTS 38
Section 9.01. Termination Events 38
ARTICLE X. REMEDIES 41
Section 10.01. Actions Upon Termination Event 41
Section 10.02. Exercise of Remedies 42
Section 10.03. Power of Attorney 42
Section 10.04. Continuing Security Interest 43
ARTICLE XI. [RESERVED] 43
ARTICLE XII. INDEMNIFICATION 43
Section 12.01. Indemnities by the Borrower 43
Section 12.02. Limitation of Damages; Indemnified Persons 43
ARTICLE XIII. AGENT 44
Section 13.01. Authorization and Action 44
Section 13.02. Reliance 44
Section 13.03. GE Capital and Affiliates 45
ARTICLE XIV. MISCELLANEOUS 45
Section 14.01. Notices 45
Section 14.02. Binding Effect; Assignability 45
Section 14.03.Termination; Survival of Borrower Secured
Obligations Upon Facility Termination Date 46
Section 14.04. Costs, Expenses and Taxes 47
Section 14.05. Confidentiality 48
Section 14.06. No Proceedings 49
Section 14.07. Complete Agreement; Modification of Agreement 49
Section 14.08. Amendments and Waivers 49
Section 14.09. No Waiver; Remedies 50
Section 14.10.GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL 50
Section 14.11. Counterparts 51
Section 14.12. Severability 51
Section 14.13. Section Titles 52
Section 14.14. Limited Recourse 52
Section 14.15. Further Assurances 52
SERVICING AGREEMENT
Dated as of April 27, 2001
by and among
CONSOLIDATED FREIGHTWAYS FUNDING LLC
as Borrower,
CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE
as Servicer,
REDWOOD RECEIVABLES CORPORATION,
as Conduit Lender
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Lender and as Administrative Agent
THIS SERVICING AGREEMENT, (as amended, supplemented or
otherwise modified and in effect from time to time, this
"Agreement") is entered into as of April 27, 2001, by and among
CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE, a Delaware
corporation (individually, "CF Delaware", and in its capacity as
servicer hereunder, the "Servicer"), REDWOOD RECEIVABLES
CORPORATION, a Delaware corporation, as Conduit Lender (the
"Conduit Lender"), CONSOLIDATED FREIGHTWAYS FUNDING LLC, a
Delaware limited liability company ("CF Funding"), and GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation, as a
Committed Lender (the "Committed Lender") (Conduit Lender and
Committed Lender being herein collectively called the "Lenders")
and as administrative agent for the Conduit Lender and the
Committed Lender hereunder (in such capacity, the "Administrative
Agent").
RECITALS
A. CF Delaware, as originator (in such capacity, the
"Originator"), and CF Funding, as purchaser, are parties to that
certain Receivables Sale and Contribution Agreement, dated as of
April 27, 2001 (as amended, supplemented or otherwise modified
and in effect from time to time, the "Sale and Contribution
Agreement"), pursuant to which the Originator has agreed to sell
and CF Funding has agreed to purchase all of the Originator's
Receivables (as defined below).
B. CF Funding, as borrower (in such capacity, the
"Borrower"), the Lenders and the Administrative Agent are parties
to that certain Receivables Funding Agreement, dated as of April
27, 2001 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Funding Agreement"), pursuant to
which the Borrower will fund its purchases of the Receivables, in
part, by borrowing Advances from the Lenders and pledging to the
Administrative Agent (for the benefit of itself and the Lenders)
all of Borrower's right, title and interest in and to the
Receivables and certain other assets (including, without
limitation, its rights under this Agreement), as security
therefor, and, subject to the terms and conditions thereof, the
Lenders will make such Advances, from time to time, as described
therein.
C. In order to effectuate the purposes of the Funding
Agreement, the Borrower desires to appoint CF Delaware to
service, administer and collect the Receivables pursuant to the
Funding Agreement and CF Delaware is willing to act in such
capacity as Servicer hereunder on the terms and conditions set
forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01 Definitions. Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in
Annex X to the Funding Agreement.
Section 1.02 Rules of Construction. For purposes of this
Agreement, the rules of construction set forth in Annex X shall
govern. All Appendices hereto, or expressly identified to this
Agreement, are incorporated herein by reference and, taken
together with this Agreement, shall constitute but a single
agreement.
ARTICLE II
SERVICER PROVISIONS
Section 2.01 Appointment of the Servicer. The Borrower hereby
appoints the Servicer as its agent, and the Lenders hereby
acknowledge such appointment, to service the Transferred
Receivables and enforce its rights and interests in and under
each Transferred Receivable and Contract therefor and to serve in
such capacity until the termination of its responsibilities
pursuant to Article VI or Section 7.01. In connection therewith,
the Servicer hereby accepts such appointment and agrees to
perform the duties and obligations set forth herein. The
Servicer may, with the prior written consent of the Borrower,
each Lender and the Administrative Agent (other than Sub-
Servicers retained solely to collect Defaulted Receivables, which
shall require no such prior consent) not to be unreasonably
withheld, subcontract with one or more Sub-Servicers for the
collection, servicing or administration of the Transferred
Receivables; provided, that (a) the Servicer shall remain liable
for the performance of the duties and obligations of such Sub-
Servicer pursuant to the terms hereof and (b) any Sub-Servicing
Agreement that may be entered into and any other transactions or
services relating to the Transferred Receivables involving a Sub-
Servicer shall be deemed to be between the Sub-Servicer and the
Servicer alone, and the Lenders and the Administrative Agent
shall not be deemed parties thereto or have any obligations,
duties or liabilities with respect to the Sub-Servicer.
Section 2.02 Duties and Responsibilities of the Servicer.
Subject to the provisions of this Agreement, the Servicer shall
conduct the servicing, administration and collection of the
Transferred Receivables and shall take, or cause to be taken, all
actions that (i) may be necessary or advisable to service,
administer and collect each Transferred Receivable from time to
time, (ii) the Servicer would take if the Transferred Receivables
were owned by the Servicer, and (iii) are consistent with
industry practice for the servicing of such Transferred
Receivables.
Section 2.03 Collections on Receivables. (a) In the event that
the Servicer is unable to determine the specific Transferred
Receivables on which Collections have been received from the
Obligor thereunder, the parties agree for purposes of this
Agreement and the Funding Agreement only that such Collections
shall be deemed to have been received on such Receivables in the
order in which they were originated with respect to such Obligor.
In the event that the Servicer is unable to determine the
specific Transferred Receivables on which discounts, offsets or
other non-cash reductions have been granted or made with respect
to the Obligor thereunder, the parties agree for purposes of this
Agreement and the Funding Agreement only that such reductions
shall be deemed to have been granted or made (i) prior to a
Termination Event, on such Receivables as determined by the
Servicer, and (ii) from and after the occurrence of a Termination
Event, in the reverse order in which they were originated with
respect to such Obligor.
(b) If the Servicer determines that amounts unrelated to the
Transferred Receivables (the "Unrelated Amounts") have been
deposited in the Collection Account, then the Servicer shall
provide written evidence thereof to the Lenders and the
Administrative Agent no later than the first Business Day
following the day on which the Servicer had actual knowledge
thereof, which evidence shall be provided in writing and shall be
otherwise satisfactory to each such Affected Party. Upon receipt
of any such notice, the Administrative Agent shall segregate the
Unrelated Amounts and the same shall not be deemed to constitute
Collections on Transferred Receivables and shall not be subject
to the provisions of Article VI of the Funding Agreement.
Section 2.04 Authorization of the Servicer. The Borrower
hereby authorizes the Servicer to take any and all commercially
reasonable steps in its name and on its behalf necessary or
desirable and not inconsistent with the rights of the
Administrative Agent and the Lenders hereunder and under the
Funding Agreement and the pledge of the Conduit Lender's
Revolving Note by the Conduit Lender to the Collateral Agent
pursuant to the Collateral Agent Agreement, in the determination
of the Servicer, to (a) collect all amounts due under any
Transferred Receivable, including endorsing its name on checks
and other instruments representing Collections on such
Receivable, and execute and deliver any and all instruments of
satisfaction or cancellation or of partial or full release or
discharge and all other comparable instruments with respect to
any such Receivable and (b) after any Transferred Receivable
becomes a Defaulted Receivable and to the extent permitted under
and in compliance with applicable law and regulations, undertake
commercially reasonable defaulted receivable collection efforts,
including commencing proceedings with respect to the enforcement
of payment of any such Receivable and the Contract therefor and
adjust, settle or compromise any payments due thereunder, in each
case to the same extent as the applicable Originator could have
done if it had continued to own such Receivable. The Borrower,
the Administrative Agent and each Lender shall furnish the
Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. Notwithstanding
anything to the contrary contained herein, the Lenders and the
Administrative Agent shall have the absolute and unlimited right
to direct the Servicer (whether the Servicer is the Originator or
otherwise) (i) to commence or settle any legal action to enforce
collection of any Transferred Receivable or (ii) to foreclose
upon, repossess or take any other action that the Administrative
Agent deems necessary or advisable with respect thereto;
provided, that (A) in lieu of commencing any such action or
taking other enforcement action, the Servicer may, at its option,
elect to pay to the Collection Account for the benefit of the
Applicable Lenders, an amount equal to the Outstanding Balance of
such Transferred Receivable, and (B) the Originator or Servicer
shall not, unless indemnified to its satisfaction by the Lenders,
be obligated to commence or take any legal action that is in
contravention of law or regulation, or to settle any action that
would entail an admission by the Originator or Servicer of legal
wrongdoing or culpability or require the payment of damages by
the Originator or Servicer to any third party. In no event shall
the Servicer be entitled to make any Affected Party a party to
any Litigation without such Affected Party's express prior
written consent, or to make the Borrower a party to any
Litigation without the Administrative Agent's consent.
Section 2.05 Servicing Fees. As compensation for its servicing
activities and as reimbursement for its reasonable expenses in
connection therewith, the Servicer shall be entitled to receive
the Servicing Fees in accordance with Sections 6.04 and 6.05 of
the Funding Agreement. The Servicer shall be required to pay for
all expenses incurred by it in connection with its activities
hereunder (including any payments to accountants, counsel or any
other Person) and shall not be entitled to any payment therefor
other than the Servicing Fees. On each Settlement Date, the
Borrower shall pay to the Servicer or to the Successor Servicer,
as applicable, the Servicing Fee or the Successor Servicing Fees
and Expenses, respectively, in each case to the extent of
available funds therefor as provided in Section 6.04 of the
Funding Agreement.
Section 2.06 Administrative Agent. The Servicer hereby
acknowledges and agrees to the provisions of Section 13.02 of the
Funding Agreement.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
Section 3.01 Conditions to Effectiveness. This Agreement and
the appointment of CF Delaware as the Servicer hereunder are
subject to the fulfillment of the following conditions precedent:
(a) One or more counterparts of this Agreement shall have been
executed and delivered by the Borrower and CF Delaware and this
Agreement shall have been acknowledged and agreed to by the
Administrative Agent and the Lenders.
(b) the Servicer shall have executed and delivered to the
Administrative Agent a power of attorney substantially in the
form attached as Exhibit 10.03 to the Funding Agreement (each, a
"Power of Attorney"). The power of attorney granted pursuant to
each Power of Attorney is a power coupled with an interest and
shall be irrevocable until all of the Borrower Secured
Obligations are indefeasibly paid or otherwise satisfied in full.
The powers conferred on the Administrative Agent under each Power
of Attorney are solely to protect the Administrative Agent's and
the Lenders' Liens upon and interests in the Borrower Collateral
and shall not impose any duty upon the Administrative Agent to
exercise any such powers. The Administrative Agent and the
Lenders shall not be accountable for any amount other than
amounts that the Administrative Agent actually receives as a
result of the exercise of such powers and none of the
Administrative Agent's or any Lender's officers, directors,
employees, agents or representatives shall be responsible to the
Borrower or the Servicer for any act or failure to act, except in
respect of damages attributable solely to their own gross
negligence or willful misconduct as finally determined by a court
of competent jurisdiction.
(c) There shall not have occurred any Termination Event or Event
of Servicer Termination or any event that with the passage of
time or giving of notice or both would result in a Termination
Event or Event of Servicer Termination.
(d) The execution and delivery of this Agreement will not cause
a Termination Event or an Event of Servicer Termination.
(e) the Servicer shall have executed and delivered to the
Borrower and the Administrative Agent the Officer's Certificate
as to solvency of the Servicer, substantially in the form
attached hereto as Exhibit 3.01(a)(ii) to the Funding Agreement.
(f) the Servicer shall have executed and delivered to the
Borrower and the Administrative Agent the Officer's Certificate
of Servicer, substantially in the form attached hereto as Exhibit
3.01(a)(ii)(A) to the Funding Agreement.
The Administrative Agent will confirm in writing to the
Servicer on the Closing Date whether or not each of the
conditions set forth above in this Section 3.01 has been
satisfied or waived.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Servicer.
To induce the Borrower to appoint CF Delaware as Servicer
hereunder and to induce the Lenders to make Advances from time to
time to the Borrower under the Funding Agreement and the
Administrative Agent to take any action required to be performed
by it under the Funding Agreement, the Servicer represents and
warrants to the Borrower, the Lenders and the Administrative
Agent, which representation and warranty shall survive the
execution and delivery of this Agreement:
Section 4.02 Corporate Existence; Compliance with Law. The
Servicer (i) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation; (ii) is duly qualified to conduct business and is
in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified,
individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; (iii) has the
requisite corporate power and authority and the legal right to
own and operate its properties, to lease the property it operates
under lease, and to conduct its business as now, heretofore and
proposed to be conducted; (iv) has all licenses, permits,
consents or approvals from or by, and has made all filings with,
and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership,
operation and conduct; (v) is in compliance with its charter and
bylaws; and (vi) subject to specific representations set forth
herein regarding ERISA, tax and other laws, is in compliance with
all applicable provisions of law, except where the failure to
comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
Section 4.03 Corporate Power, Authorization, Enforceable
Obligations. The execution, delivery and performance by the
Servicer of this Agreement and the other Related Documents to
which it is a party and, solely with respect to clause (vii)
below, the exercise by each of the Borrower, the Lenders or the
Administrative Agent of any of its rights and remedies under any
Related Document to which it is a party: (i) are within the
Servicer's corporate power; (ii) have been duly authorized by all
necessary or proper corporate and shareholder action; (iii) do
not contravene any provision of the Servicer's charter or bylaws;
(iv) do not violate any law or regulation, or any order or decree
of any court or Governmental Authority; (v) do not conflict with
or result in the breach or termination of, constitute a default
under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which the Servicer is a party or
by which the Servicer or any of the property of the Servicer is
bound; (vi) do not result in the creation or imposition of any
Adverse Claim upon any of the property of the Servicer; and (vii)
do not require the consent or approval of any Governmental
Authority or any other Person, except those referred to in
Section 3.01(b) of the Funding Agreement, all of which will have
been duly obtained, made or complied with prior to the Closing
Date. On or prior to the Closing Date, each of the Related
Documents to which the Servicer is a party shall have been duly
executed and delivered by the Servicer and each such Related
Document shall then constitute a legal, valid and binding
obligation of the Servicer enforceable against it in accordance
with its terms.
Section 4.04 No Litigation. No Litigation is now pending or,
to the knowledge of the Servicer, threatened against the Servicer
that (i) challenges the Servicer's right or power to enter into
or perform any of its obligations under the Related Documents to
which it is a party, or the validity or enforceability of any
Related Document or any action taken thereunder, (ii) seeks to
prevent the transfer, sale, pledge or contribution of any
Receivable or the consummation of any of the transactions
contemplated under this Agreement or the other Related Documents,
or (iii) has a reasonable risk of being determined adversely to
the Servicer and that, if so determined, could reasonably be
expected to have a Material Adverse Effect.
Section 4.05 Full Disclosure. No information contained in this
Agreement, any Borrowing Base Certificate or any of the other
Related Documents, or any written statement furnished by or on
behalf of the Servicer to either Lender or the Administrative
Agent pursuant to the terms of this Agreement or any of the other
Related Documents contains any untrue statement of a material
fact or omits or will omit to state a material fact necessary to
make the statements contained herein or therein not misleading in
light of the circumstances under which they were made.
Section 4.06 Other Representations and Warranties. Each of the
representations and warranties of the Servicer (whether made by
the Servicer in its capacity as an Originator or as the Servicer)
contained in any Related Document is true and correct as of the
date made or deemed made and, if made by the Servicer in its
capacity as an Originator, applies with equal force to the
Servicer in its capacity as Servicer.
ARTICLE V
COVENANTS
The Servicer covenants and agrees that from and after the
Closing Date and until the Termination Date:
Section 5.01 Ownership of Transferred Receivables. The
Servicer shall identify the Transferred Receivables clearly and
unambiguously in its Servicing Records to reflect that such
Transferred Receivables have been sold or contributed to the
Borrower and have been pledged to the Administrative Agent for
the benefit of itself and the Lenders.
Section 5.02 Compliance with Credit and Collection Policies.
The Servicer shall comply in all respects with the Credit and
Collection Policies with respect to each Transferred Receivable
and the Contract therefor. The Servicer shall not amend, waive
or modify any term or provision of the Credit and Collection
Policies, except as required to maintain compliance with
applicable law or regulation, or to comply with changes in GAAP,
without the prior written consent of the Administrative Agent.
Section 5.03 Covenants in Other Related Documents. The
Servicer shall perform, keep and observe all covenants applicable
to it in its capacity as an Originator under the Sale and
Contribution Agreement and the other Related Documents (including
those covenants set forth in Sections 4.02 and 4.03 of the Sale
and Contribution Agreement) and the Servicer hereby agrees to be
bound by such covenants in its capacity as Servicer hereunder for
the benefit of the Lenders and the Administrative Agent as if the
same were set forth in full herein.
Section 5.04 Reporting Requirements of the Servicer. The
Servicer hereby agrees that, from and after the Closing Date and
until the Termination Date, it shall deliver or cause to be
delivered to the Lenders and the Administrative Agent the
financial statements, notices, and other information at the
times, to the Persons and in the manner set forth in Annex 5.04.
Section 5.05 The Lockbox Accounts, Etc.
(a) The Servicer has instructed all existing Obligors of
Transferred Receivables, and shall instruct all future Obligors
of such Receivables, to make payments in respect thereof only (A)
by check or money order mailed to one or more Lockboxes or (B) by
wire transfer or moneygram directly to a Lockbox Account.
Schedule 4.01(q) to the Funding Agreement lists all Lockboxes and
all Lockbox Account Banks at which the Borrower maintains Lockbox
Accounts as of the Closing Date, and such schedule correctly
identifies (1) with respect to the Concentration Account Bank and
each such Lockbox Account Bank, the name, address and telephone
number thereof, (2) with respect to the Concentration Account and
each Lockbox Account, the name in which such account is held and
the complete account number therefor, and (3) with respect to
each Lockbox, the lockbox number and address thereof. The
Servicer shall endorse, to the extent necessary, all checks or
other instruments received in any Lockbox so that the same can be
deposited in the Lockbox Account, in the form so received (with
all necessary endorsements), on the first Business Day after the
date of receipt thereof. In addition, the Servicer shall deposit
or cause to be deposited into a Lockbox Account all cash, checks,
money orders or other proceeds of Transferred Receivables or
Borrower Collateral received by it other than in a Lockbox or a
Lockbox Account, in the form so received (with all necessary
endorsements), not later than the close of business on the first
Business Day following the date of receipt thereof, and until so
deposited all such items or other proceeds shall be held in trust
for the benefit of the Administrative Agent. The Servicer shall
not make any deposits into the Concentration Account, a Lockbox
or any Lockbox Account except in accordance with the terms of
this Agreement or any other Related Document.
(b) the Servicer shall deposit in the Collection Account the
Outstanding Balance of any Transferred Receivable the Servicer
elects to pay pursuant to Section 2.04; and
(c) The Servicer shall hold all Contracts and other documents
and instruments relating to such Transferred Receivables in trust
for the benefit of the Administrative Agent on behalf of the
Conduit Lender and the Committed Lender in accordance with their
respective interests; provided that the Servicer shall incur no
trustee or fiduciary liabilities as a result of this provision.
The Servicer hereby acknowledges that its retention and
possession of such Contracts and documents shall at all times be
at the sole discretion of the Administrative Agent and in a
custodial capacity for the Borrower's and the Administrative
Agent's (on behalf of the Lenders) benefit only.
(d) The Servicer acknowledges and consents to any grant on or
after the Closing Date by the Conduit Lender to the Collateral
Agent pursuant to the Collateral Agent Agreement of a Lien upon
all of the Conduit Lender's right, title and interest in, to and
under the Borrower Collateral and acknowledges the rights of the
Collateral Agent thereunder and the covenants made by the Conduit
Lender in favor of the Collateral Agent set forth therein, and
further acknowledges and consents that, upon the occurrence and
during the continuance of an Incipient Termination Event or a
Termination Event prior to a Committed Lender Funding Event, the
Collateral Agent shall be entitled to enforce the provisions of
the Borrower Assigned Agreements and shall be entitled to all the
rights and remedies of the Conduit Lender thereunder. In
addition, the Servicer hereby authorizes the Collateral Agent to
rely on the representations and warranties made by it in the
Borrower Assigned Agreements to which it is a party and in any
other certificates or documents furnished by it to any party in
connection therewith.
(e) The exercise by any Lender or the Administrative Agent of
any of its respective rights under this Agreement, the Funding
Agreement or any Related Document shall not release the
Originator, the Borrower or the Servicer from any of their
respective duties or obligations under any such Receivables,
Contracts or agreements.
Section 5.06 Offices and Records. The Servicer shall, at its
own cost and expense, maintain or cause to be maintained adequate
and complete records of the Transferred Receivables and the
Borrower Collateral, including records of any and all payments
received, credits granted and merchandise returned with respect
thereto and all other dealings therewith. The Servicer shall
mark or cause to be marked conspicuously with a legend, in form
and substance satisfactory to the Administrative Agent, its books
and records, computer tapes, computer disks and credit files
pertaining to the Borrower Collateral, and its file cabinets or
other storage facilities where it maintains information
pertaining thereto, to evidence the Sale or contribution of
Transferred Receivables pursuant to the Sale and Contribution
Agreement and this Agreement and the assignment and Liens granted
pursuant to Article VIII of the Funding Agreement. Upon the
occurrence and during the continuance of a Termination Event, the
Servicer shall deliver and turn over such books and records to
the Administrative Agent or its representatives at any time on
demand of the Administrative Agent. Prior to the occurrence of a
Termination Event and upon notice from the Administrative Agent,
the Servicer shall permit any representative of the
Administrative Agent to inspect such books and records relating
to the Borrower Collateral and shall provide photocopies thereof
to the Administrative Agent as more specifically set forth in
Section 8.06(b) of the Funding Agreement.
Section 5.07 Access. The Servicer shall, at its own expense,
during normal business hours, subject to Servicer's reasonable
and customary safety, security and confidentiality policies and
regulations, from time to time upon one Business Day's prior
notice, but not more frequently than once per calendar quarter
(or with such greater frequency during the existence of a
Termination Event or Incipient Termination Event, as the
Administrative Agent determines to be appropriate): (i) provide
the Lenders, the Administrative Agent and any of their respective
officers, employees and agents access to its properties
(including properties utilized in connection with the collection,
processing or servicing of the Transferred Receivables),
facilities, advisors and employees (including officers) and to
the Borrower Collateral, (ii) permit the Lenders, the
Administrative Agent and any of their respective officers,
employees and agents to inspect, audit and make extracts from its
books and records, including all Records, (iii) permit the
Lenders or the Administrative Agent and their respective
officers, employees and agents to inspect, review and evaluate
the Transferred Receivables and the Borrower Collateral and (iv)
permit the Lenders or the Administrative Agent and their
respective officers, employees and agents to discuss matters
relating to the Transferred Receivables or its performance under
this Agreement or the other Related Documents or its affairs,
finances and accounts with any of its officers, directors,
employees, representatives or agents (in each case, with those
persons having knowledge of such matters) and with its
independent certified public accountants; provided that, unless a
Termination Event or Incipient Termination Event is then in
existence, the Servicer, the Borrower and the Parent shall not be
liable for the costs and expenses of more than two of the
foregoing inspections, appraisals and reviews in any calendar
year. If (A) an Incipient Termination Event or a Termination
Event shall have occurred and be continuing or (B) the
Administrative Agent, in good faith, believes that an Incipient
Termination Event or a Termination Event is imminent or deems any
Lender's rights or interests in the Transferred Receivables, the
Borrower Assigned Agreements or any other Borrower Collateral
insecure, then the Servicer shall, at its own expense, provide
such access at all times and without advance notice and provide
the Lenders or the Administrative Agent with access to its
suppliers and customers. The Servicer shall make available to
the Administrative Agent and its counsel, as quickly as is
possible under the circumstances, originals or copies of all
books and records, including Records, that the Administrative
Agent may request. The Servicer shall deliver any document or
instrument necessary for the Administrative Agent, as the
Administrative Agent may from time to time request, to obtain
records from any service bureau or other Person that maintains
records for the Borrower or the Servicer, and shall maintain
duplicate records or supporting documentation on media, including
computer tapes and discs owned by the Borrower or the Servicer.
Section 5.08 Communication with Accountants. The Servicer
authorizes the Lenders and the Administrative Agent to
communicate directly with its independent certified public
accountants and authorizes and shall instruct those accountants
and advisors to disclose and make available to the Lenders and
the Administrative Agent any and all financial statements and
other supporting financial documents, schedules and information
relating to the Borrower or the Servicer (including copies of any
issued management letters) with respect to its business,
financial condition and other affairs; provided, however, in the
absence of a Termination Event, the Lenders and the
Administrative Agent shall give not less than (5) Business Days'
notice to the Servicer prior to scheduling any meeting or other
material communication with such independent certified public
accountants. Such notice shall contain the date, time, location
and other pertinent logistical information regarding any such
meeting or other material communication, as well as an agenda for
such meeting or other material communication.
Section 5.09 Collection of Transferred Receivables. Except as
otherwise provided in this Section 5.09, the Servicer shall
continue to collect or cause to be collected, at its sole cost
and expense, all amounts due or to become due to the Borrower
under the Transferred Receivables, the Borrower Assigned
Agreements and any other Borrower Collateral. In connection
therewith, the Borrower and the Servicer shall take such action
as it, and from and after the occurrence and during the
continuance of a Termination Event, the Administrative Agent, may
deem necessary or desirable to enforce collection of the
Transferred Receivables, the Borrower Assigned Agreements and the
other Borrower Collateral; provided, that the Borrower or the
Servicer may, rather than commencing any such action or taking
any other enforcement action, at its option, elect to pay to the
Administrative Agent, for the account of the Applicable Lender
(in accordance with its Advances), the Outstanding Balance of any
such Transferred Receivable; provided further, that if a
Termination Event shall have occurred and be continuing, then the
Administrative Agent may, without prior notice to the Borrower or
the Servicer, notify any Obligor under any Transferred Receivable
or obligors under the Borrower Assigned Agreements of the
assignment of such Transferred Receivables or Borrower Assigned
Agreements, as the case may be, to the Administrative Agent on
behalf of the Lenders hereunder and direct that payments of all
amounts due or to become due to the Borrower thereunder be made
directly to the Administrative Agent or any servicer, collection
agent or lockbox or other account designated by the
Administrative Agent and, upon such notification and at the sole
cost and expense of the Borrower and the Servicer, the
Administrative Agent may enforce collection of any such
Transferred Receivable or the Borrower Assigned Agreements and
adjust, settle or compromise the amount or payment thereof. The
Administrative Agent shall provide prompt notice to the Borrower
and the Servicer of any such notification of assignment or
direction of payment to the Obligors under any Transferred
Receivables.
Section 5.10 Performance of Borrower Assigned Agreements. Each
of the Borrower and the Servicer shall (i) perform and observe
all the terms and provisions of the Borrower Assigned Agreements
to be performed or observed by it, maintain the Borrower Assigned
Agreements in full force and effect, enforce the Borrower
Assigned Agreements in accordance with their terms and take all
action as may from time to time be requested by the
Administrative Agent in order to accomplish the foregoing, and
(ii) upon the request of and as directed by the Administrative
Agent, make such demands and requests to any other party to the
Borrower Assigned Agreements as are permitted to be made by the
Borrower or the Servicer thereunder.
Section 5.11 License for Use of Software and Other Intellectual
Property. Unless expressly prohibited by the licensor thereof or
any provision of applicable law, if any, each of the Borrower and
CF Delaware hereby grants to the Administrative Agent on behalf
of the Lenders a license to use, without charge, the Borrower's
and the CF Delaware's computer programs, software, printouts and
other computer materials, technical knowledge or processes, data
bases, materials, trademarks, registered trademarks, trademark
applications, service marks, registered service marks, service
mark applications, patents, patent applications, trade names,
rights of use of any name, labels fictitious names, inventions,
designs, trade secrets, goodwill, registrations, copyrights,
copyright applications, permits, licenses, franchises, customer
lists, credit files, correspondence, and advertising materials or
any property of a similar nature, in each case solely as it
pertains to the Borrower Collateral, or any rights to any of the
foregoing, in the advertising for sale, and selling any of the
Borrower Collateral, or exercising of any other remedies hereto,
and each of the Borrower and CF Delaware agrees that its rights
under all such licenses and franchise agreements shall inure to
the Administrative Agent's benefit (on behalf of itself and the
Lenders). Except upon the occurrence and continuation of an
Event of Servicer Termination under Section 6.01(d) or (e), the
Administrative Agent and the Lenders agree not to use any such
license without giving the Borrower and the CF Delaware notice.
ARTICLE VI
EVENTS OF SERVICER TERMINATION
Section 6.01 Events of Servicer Termination. If any of the
following events (each, an "Event of Servicer Termination") shall
occur (regardless of the reason therefor):
(a) the Servicer shall (i) fail to deliver when due the Monthly
Reports or any other reports, statements or reconciliations
required to be delivered pursuant to Annex 5.04 or any other
report related to the Receivables as required by the other
Related Documents and the same shall remain unremedied for two
(2) Business Days or more after written notice thereof shall have
been given by the Lenders or the Administrative Agent to the
Servicer or (ii) fail or neglect to perform, keep or observe any
provision of this Agreement or the other Related Documents
(whether in its capacity as an Originator or as Servicer)
including, without limitation, the obligation to make any payment
or deposit hereunder or thereunder and such failure shall not be
cured within a period of five (5) Business Days; or
(b) any representation or warranty of the Servicer herein or in
any other Related Document or in any written statement, report,
financial statement or certificate made or delivered by the
Servicer to the Lenders or the Administrative Agent hereto or
thereto is untrue or incorrect in any material respect as of the
date when made or deemed made; or
(c) a default or breach shall occur under any other agreement,
document or instrument to which the Originator or the Servicer is
a party or by which the Originator or the Servicer or the
property of any such Person is bound, and such default or breach
(i) involves the failure to make any payment when due in respect
of any Debt (other than the Borrower Secured Obligations) of any
such Person which, except as provided in clause (iii) below, is
not cured within a period of fifteen days, or (ii) permits any
holder of such Debt or a trustee or agent to cause Debt or a
portion thereof which is in excess of a principal amount of
$10,000,000 in the aggregate to become due prior to its stated
maturity or prior to its regularly scheduled dates of payment,
and which, except as provided in clause (iii) below, is not cured
within a period of thirty days, or (iii) causes Debt or a portion
thereof which is in excess of a principal amount of $10,000,000
in the aggregate to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment; in each case,
regardless of whether such default is waived, or such right is
exercised, by such holder, trustee or agent; or
(d) a case or proceeding shall have been commenced against the
Servicer or any Affiliate which acts as a Sub-Servicer seeking a
decree or order in respect of any such Person (i) under the
Bankruptcy Code or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or
similar official) for any such Person or for any substantial part
of such Person's assets, or (iii) ordering the winding-up or
liquidation of the affairs of any such Person; or
(e) the Servicer or any Affiliate which acts as a Sub-Servicer
shall (i) file a petition seeking relief under the Bankruptcy
Code or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) consent or fail to object in a timely
and appropriate manner to the institution of proceedings
thereunder or to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar
official) for any such Person or for any substantial part of such
Person's assets, (iii) make an assignment for the benefit of
creditors, or (iv) take any corporate action in furtherance of
any of the foregoing; or
(f) (i) the Servicer or any Affiliate which acts as a Sub-
Servicer generally does not pay its debts as such debts become
due or admits in writing its inability to, or is generally unable
to, pay its debts as such debts become due or (ii) the fair
market value of the Servicer's liabilities exceeds the fair
market value of its assets; or
(g) a final judgment or judgments for the payment of money in
excess of $10,000,000 in the aggregate at any time outstanding
shall be rendered against the Servicer or any other Subsidiary of
the Originator which acts as a Sub-Servicer and the same shall
not, within 30 days after the entry thereof, have been satisfied,
or discharged or execution thereof stayed or bonded pending
appeal, or shall not have been discharged prior to the expiration
of any such stay; or
(h) any representation or warranty of the Servicer herein or in
any other Related Document or in any written statement, report,
financial statement or certificate (other than a Borrowing Base
Certificate) made or delivered by the Servicer to any Affected
Party thereto is untrue or incorrect in any material respect as
of the date when made or deemed made and such representation and
warranty, if relating to any Transferred Receivable, has not
been cured by the repurchase of any such Transferred Receivable
pursuant to Section 4.04 of the Sale and Contribution Agreement;
or
(i) the Administrative Agent shall have determined that any
event or condition that materially adversely affects the ability
of the Servicer to collect the Transferred Receivables or to
otherwise perform hereunder has occurred; or
(j) a Termination Event shall have occurred or this Agreement
shall have been terminated; or
(k) a material deterioration has taken place in the quality of
servicing of Transferred Receivables or other Receivables
serviced by the Servicer that the Administrative Agent, in its
sole discretion, determines to be material, and such material
deterioration has not been eliminated within 30 days after
written notice thereof shall have been given by the
Administrative Agent to the Servicer; or
(l) the Servicer shall, assign or purport to assign any of its
obligations hereunder or under the Sale and Contribution
Agreement without the prior written consent of the Administrative
Agent; or
(m) a default or breach of any of the covenants set forth in
Annex A shall have occurred; or
(n) a Change of Control shall occur; or
(o) the Borrower's board of directors shall have determined that
it is in the best interests of the Borrower to terminate the
duties of the Servicer hereunder and shall have given the
Servicer, the Lenders and the Administrative Agent at least 30
days' written notice thereof; or
(p) an "Event of Default" (as such term is defined in the
Standby Letter of Credit Agreement) shall occur or the occurrence
of the Standby Letter of Credit Commitment Termination Date; or
(q) a default or breach of any of the covenants set forth in
Annex 4.02(o) to the Sale and Contribution Agreement shall have
occurred; or
(r) there shall have occurred any event which materially and
adversely impairs the ability of the Originator to originate
Receivables of a general credit quality which are at least of the
general credit quality of the Receivables as of the date of the
initial Advance, or any event or condition has occurred that has
had or could reasonably be expected to have a Material Adverse
Effect.
Then, and in any such event, the Administrative Agent shall,
at the request of, or may, with the consent of, the Lenders or
the Administrative Agent, by delivery of a Servicer Termination
Notice to the Borrower and the Servicer, terminate the servicing
responsibilities of the Servicer hereunder, without demand,
protest or further notice of any kind, all of which are hereby
waived by the Servicer. Upon the delivery of any such notice,
all authority and power of the Servicer under this Agreement and
the Sale and Contribution Agreement shall pass to and be vested
in the Successor Servicer acting pursuant to Section 7.02;
provided, that notwithstanding anything to the contrary herein,
the Servicer agrees to continue to follow the procedures set
forth in Section 2.02 with respect to Collections on the
Transferred Receivables until a Successor Servicer has assumed
the responsibilities and obligations of the Servicer in
accordance with Section 7.02.
ARTICLE VII
SUCCESSOR SERVICER PROVISIONS
Section 7.01 Servicer Not to Resign. The Servicer shall not
resign from the obligations and duties hereby imposed on it
except upon a determination that (a) the performance of its
duties hereunder has become impermissible under applicable law or
regulation and (b) there is no reasonable action that the
Servicer could take to make the performance of its duties
hereunder become permissible under applicable law. Any such
determination shall (i) with respect to clause (a) above, be
evidenced by an opinion of counsel to such effect and (ii) with
respect to clause (b) above, be evidenced by an Officer's
Certificate to such effect, in each case delivered to the
Administrative Agent. No such resignation shall become effective
until a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance
with Section 7.02.
Section 7.02 Appointment of the Successor Servicer. In
connection with the termination of the Servicer's
responsibilities or the resignation by the Servicer under this
Agreement pursuant to Article VI or Section 7.01, the
Administrative Agent shall (a) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations as
Servicer (but not in any other capacity, including specifically
not the obligations of the Servicer set forth in Section 8.14)
under this Agreement (and except that the Administrative Agent
makes no representations and warranties pursuant to Article IV)
and (b) may at any time appoint a successor servicer to the
Servicer that shall be acceptable to the Administrative Agent and
shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under
this Agreement (the Administrative Agent, in such capacity, or
such successor servicer being referred to as the "Successor
Servicer"); provided, that the Successor Servicer shall have no
responsibility for any actions of the Servicer prior to the date
of its appointment or assumption of duties as Successor Servicer.
In selecting a Successor Servicer, the Administrative Agent may
obtain bids from any potential Successor Servicer and may agree
to any bid it deems appropriate. The Successor Servicer shall
accept its appointment by executing, acknowledging and delivering
to the Administrative Agent an instrument in form and substance
acceptable to the Administrative Agent.
Section 7.03 Duties of the Servicer. The Servicer covenants
and agrees that, following the appointment of, or assumption of
duties by, a Successor Servicer:
(a) The Servicer shall terminate its activities as Servicer
hereunder in a manner that facilitates the transfer of servicing
duties to the Successor Servicer and is otherwise acceptable to
each Lender and the Administrative Agent and, without limiting
the generality of the foregoing, shall timely deliver (i) any
funds to the Administrative Agent that were required to be
remitted to the Administrative Agent for deposit in the
Collection Account and (ii) all Servicing Records and other
information with respect to the Transferred Receivables to the
Successor Servicer at a place selected by the Successor Servicer.
The Servicer shall account for all funds and shall execute and
deliver such instruments and do such other things as may be
required to vest and confirm in the Successor Servicer all
rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
(b) The Servicer shall terminate each existing Sub-Servicing
Agreement and the Successor Servicer shall not be deemed to have
assumed any of the Servicer's interests therein or to have
replaced the Servicer as a party thereto.
Section 7.04 Effect of Termination or Resignation. Any
termination of or resignation by the Servicer hereunder shall not
affect any claims that the Borrower, the Lenders, or the
Administrative Agent may have against the Servicer for events or
actions taken or not taken by the Servicer arising prior to any
such termination or resignation.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Notices. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request,
consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by any other
parties, or whenever any of the parties desires to give or serve
upon any other parties any communication with respect to this
Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall
be deemed to have been validly served, given or delivered (a)
upon the earlier of actual receipt and three Business Days after
deposit in the United States Mail, registered or certified mail,
return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by facsimile (with such facsimile
promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 8.01),
(c) one Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-
delivered by messenger, all of which shall be addressed to the
party to be notified and sent to the address or facsimile number
set forth under its name on the signature page hereof or to such
other address (or facsimile number) as may be substituted by
notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled
to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or
other communication to any Person (other than the Conduit Lender,
the Committed Lender and the Administrative Agent) designated in
any written notice provided hereunder to receive copies shall in
no way adversely affect the effectiveness of such notice, demand,
request, consent, approval, declaration or other communication.
Notwithstanding the foregoing, whenever it is provided herein
that a notice is to be given to any other party hereto by a
specific time, such notice shall only be effective if actually
received by such party prior to such time, and if such notice is
received after such time or on a day other than a Business Day,
such notice shall only be effective on the immediately succeeding
Business Day.
Section 8.02 Binding Effect; Assignability. This Agreement
shall be binding upon and inure to the benefit of the Borrower,
the Servicer, the Conduit Lender, the Committed Lender and the
Administrative Agent and their respective successors and
permitted assigns. Neither the Borrower nor the Servicer may
assign, transfer, hypothecate or otherwise convey any of their
respective rights or obligations hereunder or interests herein
without the express prior written consent of the Conduit Lender,
the Committed Lender and the Administrative Agent and unless the
Rating Agency Condition shall have been satisfied with respect to
any such assignment. Any such purported assignment, transfer,
hypothecation or other conveyance by the Borrower or the Servicer
without the prior express written consent of the Conduit Lender,
the Committed Lender and the Administrative Agent shall be void.
Section 8.03 Termination; Survival of Borrower Secured
Obligations Upon Facility Termination Date.
(a) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms,
and shall remain in full force and effect until the Termination
Date.
(b) Except as otherwise expressly provided herein or in any
other Related Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon the Borrower or
the Servicer, and all rights of any Affected Party, all as
contained in the Related Documents, shall not terminate or
expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until
the Termination Date; provided, that the rights and remedies
provided for herein with respect to any breach of any
representation or warranty made by the Servicer pursuant to
Article IV, the indemnification and payment provisions of Section
8.14 and Sections 8.04 and 8.05 shall be continuing and shall
survive the Termination Date.
Section 8.04 Confidentiality.
(a) Except to the extent otherwise required by applicable law,
as required to be filed publicly with the Securities and Exchange
Commission, or unless the Administrative Agent shall otherwise
consent in writing, the Borrower and the Servicer each severally
agree to maintain the confidentiality of this Agreement (and all
drafts hereof and documents ancillary hereto) in their
communications with third parties other than any Affected Party
or any Indemnified Person and otherwise and not to disclose,
deliver or otherwise make available to any third party (other
than its directors, officers, employees, accountants or counsel)
the original or any copy of all or any part of this Agreement (or
any draft hereof and documents ancillary hereto) except to an
Affected Party or an Indemnified Person.
(b) The Borrower and the Servicer each agrees that it shall not
(and shall not permit any of its Subsidiaries to) issue any news
release or make any public announcement pertaining to the
transactions contemplated by this Agreement and the other Related
Documents without the prior written consent of the Conduit
Lender, the Committed Lender and the Administrative Agent (which
consent shall not be unreasonably withheld) unless such news
release or public announcement is required by law, in which case
the Borrower or the Servicer, as applicable, shall consult with
the Conduit Lender, the Committed Lender and the Administrative
Agent prior to the issuance of such news release or public
announcement. The Borrower may, however, disclose the general
terms of the transactions contemplated by this Agreement and the
other Related Documents to trade creditors, suppliers and other
similarly-situated Persons so long as such disclosure is not in
the form of a news release or public announcement.
Section 8.05 No Proceedings. The Servicer hereby agrees that,
from and after the Closing Date and until the date one year plus
one day following the date on which the Commercial Paper with the
latest maturity has been indefeasibly paid in full in cash, it
will not, directly or indirectly, institute or cause to be
instituted against the Conduit Lender or the Committed Lender any
proceeding of the type referred to in Sections 9.01(c) and
9.01(d) of the Funding Agreement.
Section 8.06 Complete Agreement; Modification of Agreement.
This Agreement and the other Related Documents constitute the
complete agreement among the parties hereto with respect to the
subject matter hereof and thereof, supersede all prior agreements
and understandings relating to the subject matter hereof and
thereof, and this Agreement may not be modified, altered or
amended except as set forth in Section 8.07.
Section 8.07 Amendments and Waivers. No amendment,
modification, termination or waiver of any provision of this
Agreement, or any consent to any departure by the Borrower or the
Servicer therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent,
the Lenders and each of the parties hereto; provided, that (i)
the Administrative Agent shall notify each of the Rating Agencies
concurrently with the execution of any amendment to any provision
of this Agreement, and (ii) it shall be a condition precedent to
the effectiveness of any material amendment to any provision of
this Agreement that the Rating Agency Condition shall have been
satisfied in respect thereof.
Section 8.08 No Waiver; Remedies. The failure by the Borrower,
the Conduit Lender, the Committed Lender or the Administrative
Agent, at any time or times, to require strict performance by the
Servicer of any provision of this Agreement shall not waive,
affect or diminish any right of any Lender or the Administrative
Agent thereafter to demand strict compliance and performance
herewith or therewith. Any suspension or waiver of any breach or
default hereunder shall not suspend, waive or affect any other
breach or default whether the same is prior or subsequent thereto
and whether the same or of a different type. None of the
undertakings, agreements, warranties, covenants and
representations of the Servicer contained in this Agreement, and
no breach or default by the Servicer hereunder or thereunder,
shall be deemed to have been suspended or waived by any Lender or
the Administrative Agent unless such waiver or suspension is by
an instrument in writing signed by an officer of or other duly
authorized signatory of the Conduit Lender, the Committed Lender
and the Administrative Agent and directed to the Servicer
specifying such suspension or waiver. The rights and remedies of
the Administrative Agent and the Lenders under this Agreement
shall be cumulative and nonexclusive of any other rights and
remedies that the Borrower or the Administrative Agent or the
Lenders may have under any other agreement, including the other
Related Documents, by operation of law or otherwise. Recourse to
the Borrower Collateral shall not be required.
Section 8.09 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL. THIS AGREEMENT (EXCEPT TO THE EXTENT THAT ANY
RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).
EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR
TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN
NEW YORK CITY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE ANY LENDER OR THE
ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE BORROWER
COLLATERAL OR ANY OTHER SECURITY FOR THE BORROWER SECURED
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF THE CONDUIT LENDER, THE COMMITTED LENDER OR THE
ADMINISTRATIVE AGENT. EACH PARTY HERETO SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION
THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE
OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE
ADDRESS SET FORTH BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF
AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR THREE DAYS
AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID.
NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY
HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 8.10 Counterparts. This Agreement may be executed in
any number of separate counterparts, each of which shall
collectively and separately constitute one agreement.
Section 8.11 Severability. Wherever possible, each provision
of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of
such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
Section 8.12 Section Titles. The section titles and table of
contents contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not
a part of the agreement between the parties hereto.
Section 8.13 Collateral Assignment; Third Party Beneficiaries,
Etc. Each of the Borrower and the Servicer hereby acknowledges
and agrees that this Agreement has been pledged and collaterally
assigned by the Borrower to the Administrative Agent (on behalf
of itself and the Lenders) pursuant to the terms of the Funding
Agreement. The Servicer hereby acknowledges and agrees that (a)
Borrower's rights and benefits (but not obligations and duties)
under this Agreement shall inure to the benefit of the Lenders,
the Administrative Agent and the Collateral Agent, as express
third party beneficiaries of such rights and benefits (but not
obligations and duties) of the Borrower under this Agreement, (b)
the Administrative Agent on behalf of itself and the Lenders may
at any time (whether prior to or after the occurrence of any
Incipient Servicer Termination Event, Servicer Termination Event,
Incipient Termination Event or Termination Event) enforce all of
the Borrower's rights and remedies against the Servicer under
this Agreement and under law, and (c) without limiting the
foregoing clause (b), the Servicer shall follow all instructions
and directions given by the Administrative Agent from time to
time in accordance with this Agreement.
(a) Further Assurances. Each of the Borrower and the Servicer
shall, at its sole cost and expense, upon request of the Conduit
Lender, the Committed Lender or the Administrative Agent,
promptly and duly execute and deliver any and all further
instruments and documents and take such further action that may
be necessary or desirable or that the Conduit Lender, the
Committed Lender or the Administrative Agent may request to (i)
perfect, protect, preserve, continue and maintain fully the Liens
granted to the Administrative Agent and the Lenders under the
Funding Agreement, (ii) enable the Conduit Lender, the Committed
Lender or the Administrative Agent to exercise and enforce its
rights under this Agreement or any of the other Related Documents
or (iii) otherwise carry out more effectively the provisions and
purposes of this Agreement or any other Related Document.
Section 8.14 Indemnities by the Servicer.
(a) Without limiting any other rights that an Indemnified Person
may have hereunder or under applicable law, the Servicer hereby
agrees to indemnify and hold harmless each Indemnified Person
from and against any and all Indemnified Amounts that may be
claimed or asserted against or incurred by any such Indemnified
Person in connection with or arising out of any breach by the
Servicer of its obligations hereunder or under any other Related
Document; provided, that the Servicer shall not be liable for any
indemnification to an Indemnified Person to the extent that any
such Indemnified Amount directly or indirectly (x) results from
such Indemnified Person's gross negligence or willful misconduct,
in each case as finally determined by a court of competent
jurisdiction, or (y) constitutes recourse for uncollectible or
uncollected Transferred Receivables. Without limiting the
generality of the foregoing, but subject to the preceding
exceptions (x) and (y), the Servicer shall pay on demand to each
Indemnified Person any and all Indemnified Amounts relating to or
resulting from:
(i) reliance on any representation or warranty made or deemed
made by the Servicer (or any of its officers) under or in
connection with this Agreement or any other Related Document or
on any other information delivered by the Servicer pursuant
hereto or thereto that shall have been incorrect in any material
respect when made or deemed made or delivered;
(ii) the failure by the Servicer to comply with any term,
provision or covenant contained in this Agreement, any other
Related Document or any agreement executed in connection herewith
or therewith, any applicable law, rule or regulation with respect
to any Transferred Receivable or the Contract therefor, or the
nonconformity of any Transferred Receivable or the Contract
therefor with any such applicable law, rule or regulation;
(iii) the imposition of any Adverse Claim with respect to any
Transferred Receivable or the Borrower Collateral as a result of
any action taken by the Servicer; or
(iv) the commingling of Collections with respect to Transferred
Receivables by the Servicer at any time with its other funds or
the funds of any other Person.
(b) Any Indemnified Amounts subject to the indemnification
provisions of this Section 8.14 not paid in accordance with
Article VI of the Funding Agreement shall be paid by the Servicer
to the Indemnified Person entitled thereto within five Business
Days following demand therefor.
Section 8.15 Limitation of Damages; Indemnified Persons. NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY
SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR
ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.
[Remainder of Page Intentionally Blank; Next Page is Signature
Page]
IN WITNESS WHEREOF, the parties hereto have caused this
Servicing Agreement to be duly executed by their respective
authorized officers as of the date first above written.
CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE, as Servicer
By:/s/Robert E. Wrightson
Name: Robert E. Wrightson
Title:Executive Vice President and
Chief Financial Officer
Address: 16400 SE CF Way
Vancouver, WA 98683
Attention: Chief Financial
Officer
CONSOLIDATED FREIGHTWAYS FUNDING LLC,
as Borrower
By: /s/Kerry K. Morgan
Name: Kerry K. Morgan
Title:Vice President and Treasurer
Address: 16400 SE CF Way
Vancouver, WA 98683
REDWOOD RECEIVABLES CORPORATION, as
Conduit Lender
By:___________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Lender and Administrative
Agent
By: /s/Craig Winslow
Name: Craig Winslow
Its Duly Authorized Signatory
ANNEX 5.04
to
SERVICING AGREEMENT
REPORTING REQUIREMENTS OF THE SERVICER
The Servicer shall furnish, or cause to be furnished, to the
Lender, the Administrative Agent and the Collateral Agent all of
the following:
(a) Annual Audited Financials. As soon as available and in
any event within 90 days after the end of each fiscal year of the
Servicer, a copy of the audited consolidated financial statements
of the Servicer and its Subsidiaries for such year, certified in
each case in a manner satisfactory to the Administrative Agent
and the Collateral Agent by Arthur Andersen LLP (or any successor
thereto) or another firm of nationally recognized independent
certified public accountants acceptable to the Administrative
Agent and the Collateral Agent, with such financial statements
being prepared in accordance with GAAP applied consistently
throughout the period involved (except as approved by such
accountants and disclosed therein).
(b) Quarterly Officer's Certificate. As soon as available,
and in any event within 45 days after the end of each of the
first three fiscal quarters of each fiscal year and 90 days after
the end of each fiscal year, an Officer's Certificate stating, as
to each signer thereof, that (i) a review of the activities of
the Servicer during the preceding fiscal quarter and of its
performance under this Agreement has been made under such
officer's supervision, (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all
of its obligations under this Agreement throughout such period
or, if there has been a default in the fulfillment of any such
obligation, describing the nature and status thereof and all
efforts undertaken to cure such default, (iii) there was no Event
of Servicer Termination in existence as of such time or, if an
Event of Servicer Termination shall have occurred and be
continuing, describing the nature and status thereof and all
efforts undertaken to cure such Event of Servicer Termination,
(iv) the Servicer has complied with each of its covenants under
the Servicing Agreement and the other Related Documents, and (v)
each of the representations and warranties of the Servicer
contained in the Servicing Agreement or in any other Related
Document is true and correct in all respects and with the same
force and effect as though made on and as of the date of such
certification, except to the extent that any such representation
or warranty expressly relates to an earlier date and except for
changes therein expressly permitted therein.
(c) Management Letters. Within five Business Days after
receipt thereof by the Servicer, copies of all management
letters, exception reports or similar letters or reports received
by the Servicer from its independent certified public
accountants.
(d) Default Notices. As soon as practicable, and in any
event within five Business Days after an Authorized Officer of
the Servicer has actual knowledge of the existence thereof,
telephonic or telecopied notice of each of the following events,
in each case specifying the nature and anticipated effect
thereof, which notice, if given telephonically, shall be promptly
confirmed in writing on the next Business Day:
(i) any Incipient Termination Event, Termination
Event, Incipient Servicer Termination Event or Event of
Servicer Termination;
(ii) (A) any Adverse Claim made or asserted against any
of the Borrower Collateral of which it becomes aware or (B)
any determination that any Transferred Receivable designated
as an Eligible Receivable in any Borrowing Base Certificate
was not an Eligible Receivable at the time of such
designation;
(iii) the occurrence of any event that would have a
material adverse effect on the aggregate value of the
Borrower Collateral or on the assignments and Liens granted
by the Borrower pursuant to the Funding Agreement;
(iv) the occurrence of any event of the type described
in clause (f)(iii) of Annex 4.02(h) of the Sale and
Contribution Agreement or (iii) of the Sale and Contribution
Agreement involving any Obligor obligated under Transferred
Receivables with an aggregate Outstanding Balance at such
time of $1,000,000 or more; or (v) any other event,
circumstance or condition that has had or could reasonably
be expected to have a Material Adverse Effect.
(e) SEC Filings and Press Releases. Promptly upon their
becoming available, copies of: (i) all financial statements,
reports, notices and proxy statements made publicly available by
the Servicer to its security holders; (ii) all regular and
periodic reports and all registration statements and
prospectuses, if any, filed by the Servicer with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press
releases and other statements made available by the Servicer to
the public concerning material adverse changes or developments in
the business of any such Person.
(f) Litigation. Promptly upon learning thereof, written
notice of any Litigation commenced or threatened against the
Originator, the Borrower, the Servicer, the Transferred
Receivables or the Borrower Collateral that (A) seeks damages or
penalties in an uninsured amount in excess of $10,000,000 in any
one instance or $10,000,000 in the aggregate, (B) seeks
injunctive relief (other than injunctive relief relating to labor
practices which together with all other such injunctions could
not reasonably be expected to have a Material Adverse Effect),
(C) is asserted or instituted against any Plan, its fiduciaries
or its assets or against Debtor or any of its ERISA Affiliates
in connection with any Plan, (D) alleges criminal misconduct by
Debtor or any of its Subsidiaries, or (E) could reasonably be
expected, if determined adversely, to have a Material Adverse
Effect.
(g) Other Documents. Such other financial and other
information respecting the Transferred Receivables, the Contracts
therefor or the condition or operations, financial or otherwise,
of the Servicer or any of its Subsidiaries as the Lender, the
Administrative Agent or the Collateral Agent shall, from time to
time, request.
ANNEXES
Annex 5.04 Reporting Requirements of the Servicer
ARTICLE I DEFINITIONS AND INTERPRETATIONS 1
Section 1.01 Definitions 1
Section 1.02 Rules of Construction 2
ARTICLE II SERVICER PROVISIONS 2
Section 2.01 Appointment of the Servicer 2
Section 2.02 Duties and Responsibilities of the Servicer 2
Section 2.03 Collections on Receivables 2
Section 2.04 Authorization of the Servicer 3
Section 2.05 Servicing Fees 3
Section 2.06 Administrative Agent 4
ARTICLE III CONDITIONS TO EFFECTIVENESS 4
Section 3.01 Conditions to Effectiveness 4
ARTICLE IV REPRESENTATIONS AND WARRANTIES 5
Section 4.01 Representations and Warranties of the Servicer 5
Section 4.02 Corporate Existence; Compliance with Law 5
Section 4.03 Corporate Power, Authorization, Enforceable
Obligations 5
Section 4.04 No Litigation 6
Section 4.05 Full Disclosure 6
Section 4.06 Other Representations and Warranties 6
ARTICLE V COVENANTS 6
Section 5.01 Ownership of Transferred Receivables 6
Section 5.02 Compliance with Credit and Collection Policies 6
Section 5.03 Covenants in Other Related Documents 7
Section 5.04 Reporting Requirements of the Servicer 7
Section 5.05 The Lockbox Accounts, Etc 7
Section 5.06 Offices and Records 8
Section 5.07 Access 8
Section 5.08 Communication with Accountants 9
Section 5.09 Collection of Transferred Receivables 9
Section 5.10 Performance of Borrower Assigned Agreements 10
Section 5.11 License for Use of Software and Other Intellectual
Property 10
ARTICLE VI EVENTS OF SERVICER TERMINATION 11
Section 6.01 Events of Servicer Termination 11
ARTICLE VII SUCCESSOR SERVICER PROVISIONS 13
Section 7.01 Servicer Not to Resign 13
Section 7.02 Appointment of the Successor Servicer 13
Section 7.03 Duties of the Servicer 14
Section 7.04 Effect of Termination or Resignation 14
ARTICLE VIII MISCELLANEOUS 14
Section 8.01 Notices 14
Section 8.02 Binding Effect; Assignability 15
Section 8.03 Termination; Survival of Borrower Secured
Obligations Upon Facility Termination Date 15
Section 8.04 Confidentiality 16
Section 8.05 No Proceedings 16
Section 8.06 Complete Agreement; Modification of Agreement 16
Section 8.07 Amendments and Waivers 16
Section 8.08 No Waiver; Remedies 17
Section 8.09 Governing Law; Consent To Jurisdiction; Waiver Of
Jury Trial 17
Section 8.10 Counterparts 18
Section 8.11 Severability 18
Section 8.12 Section Titles 18
Section 8.13 Collateral Assignment; Third Party Beneficiaries,
Etc 19
Section 8.14 Indemnities by the Servicer 19
Section 8.15 Limitation of Damages; Indemnified Persons 20
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Agreement"), is entered
into as of April 27, 2001, by CONSOLIDATED FREIGHTWAYS
CORPORATION, a Delaware corporation (the "Parent"), the
Subsidiaries of the Parent identified on the signature pages
hereof (the "Subsidiary Guarantors"; together with the Parent
referred to herein collectively, as the "Guarantors") in favor of
CONSOLIDATED FREIGHTWAYS FUNDING LLC, a Delaware limited
liability company ("Buyer"), REDWOOD RECEIVABLES CORPORATION, a
Delaware corporation, as Conduit Lender ("Conduit Lender"), and
GENERAL ELECTRIC CAPITAL CORPORATION, in its capacities as
Committed Lender ("Committed Lender"; together with Conduit
Lender referred to herein collectively as the "Lenders"), and
Administrative Agent ("Administrative Agent") under the
Receivables Funding Agreement described below (the Buyer, the
Lenders, the Administrative Agent, and their respective
successors and assigns, are herein collectively called the
"Guaranteed Parties").
RECITALS
A. Buyer has entered into a Receivables Sale and
Contribution Agreement dated as of April 27, 2001 (as the same
may from time to time be amended, restated, supplemented or
replaced, the "Sale and Contribution Agreement"), with the
Consolidated Freightways Corporation of Delaware, a Delaware
corporation (the "Originator").
B. Buyer, Lenders and the Administrative Agent have
entered into a Receivables Funding Agreement, dated as of April
27, 2001 (as the same may from time to time be amended, restated,
supplemented or replaced, the "Funding Agreement"). Unless
otherwise defined herein, capitalized terms or matters of
construction defined or established in the Funding Agreement
shall be applied herein as defined or established therein.
C. Buyer, Lenders, Administrative Agent and the
Originator (in its capacity as Servicer) have entered into a
Servicing Agreement, dated as of April 27, 2001 (as the same may
from time to time be amended, restated, supplemented or replaced,
the "Servicing Agreement"), pursuant to which, among other
things, Buyer has appointed the Originator to act as Servicer in
respect of the Transferred Receivables as provided for therein.
D. The Originator is a direct Subsidiary of the
Parent and the Subsidiary Guarantors are each a direct or
indirect Subsidiary of Parent. Each of the Parent and the
Subsidiary Guarantors will derive direct and indirect economic
benefits from transactions contemplated by the Sale and
Contribution Agreement, the Servicing Agreement, the Funding
Agreement and the other Related Documents.
E. It is a condition precedent to the acquisition of
Transferred Receivables by Buyer from the Originator under the
Sale and Contribution Agreement and to the funding of Advances by
the Lenders to the Buyer under the Funding Agreement, that each
of the Guarantors shall have executed and delivered this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in order to induce Buyer to make
purchases under the Sale and Contribution Agreement and the
Lenders to make Advances under the Funding Agreement, each of the
Guarantors hereby agrees as follows:
ARTICLE I
GUARANTY
Section 1.01 Unconditional Guaranty. Each Guarantor hereby
unconditionally and irrevocably (i) guaranties to each of the
Guaranteed Parties the due and punctual performance and
observance by the Originator and its successors and assigns of
all of the terms, covenants, conditions, agreements and
undertakings on the part of the Originator (in its capacity as
the Originator or as the Servicer) to be performed or observed
under the Sale and Contribution Agreement, the Servicing
Agreement or any of the other Related Documents in accordance
with the terms thereof, including the punctual performance when
due of all payment obligations of the Originator now or hereafter
existing under the Sale and Contribution Agreement, the Servicing
Agreement or any of the other Related Documents, whether for
indemnification payments, fees, expenses or otherwise (such
terms, covenants, conditions, agreements, undertakings and other
obligations being herein collectively the "Originator
Obligations"), and (ii) agrees to pay any and all expenses
(including fees and expenses of attorneys, auditors and
accountants) incurred by any of the Guaranteed Parties in
enforcing any rights under this Agreement; provided, that the
foregoing unconditional undertaking of each of the Guarantors is
not intended to, and shall not, constitute a guarantee of the
collectibility or payment of the Transferred Receivables or the
Advances. In the event that the Originator shall fail in any
manner whatsoever to perform or observe any of its Originator
Obligations when the same shall be required to be performed or
observed under the Sale and Contribution Agreement, the Servicing
Agreement or any of the other Related Documents, then each of the
Guarantors will itself duly and punctually perform or observe, or
cause to be duly and punctually performed or observed, the
Originator Obligations, and it shall not be a condition to the
accrual of the obligation of the Guarantors hereunder to perform
or observe the Originator Obligation (or to cause the same to be
performed or observed) that any Guaranteed Party shall have first
made any request of or demand upon or given any notice to any
Guarantor or to the Originator or their respective successors or
assigns, or have instituted any action or proceeding against any
Guarantor or the Originator or their respective successors or
assigns in respect thereof. This Agreement constitutes a
guaranty of payment and performance (not of collection).
Section 1.02 Obligation Absolute. Each of the Guarantors
undertakes that the Originator Obligations will be performed or
paid strictly in accordance with the terms of the Related
Documents, regardless of any law, regulation or order applicable
to any of the Guaranteed Parties now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any
of the Guaranteed Parties with respect thereto. The obligations
of each of the Guarantors under this Agreement are independent of
the Originator Obligations, and a separate action or actions may
be brought and prosecuted against the Guarantors to enforce this
Agreement, irrespective of whether any action is brought against
the Originator or whether the Originator is joined in any such
action or actions. The liability of each of the Guarantors under
this Agreement shall be absolute and unconditional irrespective
of:
(a) any lack of validity or enforceability of any of the
Related Documents;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Originator Obligations, or
any other amendment or waiver of or any consent to departure from
any of the Related Documents, including, without limitation, any
increase in the Originator Obligations resulting from additional
purchases or contributions of Receivables or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the
Originator Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Originator Obligations, or any
manner of sale or other disposition of any collateral for all or
any of the Originator Obligations or any other assets of the
Originator or any of its subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Originator or any of its
subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Originator, any
Guarantor or any other guarantor.
This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any
of the Originator Obligations is rescinded or must otherwise be
returned by any Guaranteed Party upon the insolvency, bankruptcy
or reorganization of the Originator or otherwise, all as though
payment had not been made.
Section 1.03 Waivers. Each of the Guarantors hereby waives
promptness, diligence, notice of acceptance and, except to the
extent required under any of the Related Documents, any other
notice with respect to any of the Originator Obligations and this
Agreement and any requirement that any Guaranteed Party protect,
secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against the
Originator or any other person or entity or any collateral.
Section 1.04 Subrogation. Each of the Guarantors agrees not to
exercise any rights that it may acquire by way of subrogation
against the Originator and its property or any rights of
indemnification, contribution and reimbursement from the
Originator and its property, in each case in connection with this
Agreement and any payments made hereunder, until such time as the
Originator Obligations have been indefeasibly paid in cash and
performed in full and the Termination Date has occurred.
Section 1.05 Limitation on Subsidiary Guaranteed Obligations.
Notwithstanding any provision herein contained to the contrary,
each Subsidiary Guarantor's liability hereunder shall be limited
to an amount not to exceed as of any date of determination the
amount which could be claimed by the Guaranty Parties from such
Subsidiary Guarantor under this Guaranty without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or
similar statute or common law after taking into account, among
other things, such Subsidiary Guarantor's right of contribution
and indemnification from each other Guarantor under Section
1.06.
Section 1.06 Contribution with Respect to Guaranteed
Obligations.
(a) To the extent that any Guarantor shall make a payment
under
this Guaranty of all or any of the Originator Obligations (a
"Guarantor Payment") which, after taking into account all other
Guarantor Payments then previously or concurrently made by the
other Guarantors, exceeds the amount which such Guarantor would
otherwise have paid if each Guarantor had paid the aggregate
Originator Obligations satisfied by such Guarantor Payment in the
same proportion that such Guarantor's Allocable Amount (as
defined below) (in effect immediately prior to such Guarantor
Payment) bore to the aggregate Allocable Amounts of all of
Guarantors in effect immediately prior to the making of such
Guarantor Payment, then, following indefeasible payment in full
in cash of the Originator Obligations and the occurrence of the
Termination Date, such Guarantor shall be entitled to receive
contribution and indemnification payments from, and be reimbursed
by, each of the other Guarantors for the amount of such excess,
pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of
any Guarantor shall be equal to the maximum amount of the claim
which could then be recovered from such Guarantor under this
Guaranty without rendering such claim voidable or avoidable under
Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 1.06 is intended only to define the relative
rights of Guarantors and nothing set forth in this Section 1.06
is intended to or shall impair the obligations of Guarantors,
jointly and severally, to pay any amounts as and when the same
shall become due and payable in accordance with the terms of this
Guaranty.
(d) The rights of the parties under this Section 1.06 shall be
exercisable upon the full and indefeasible payment of the
Originator Obligations and the occurrence of the Termination
Date.
(e) The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute
assets of any Guarantor to which such contribution and
indemnification is owing.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01 Representations and Warranties of the Guarantors.
To induce Buyer to purchase the Sold Receivables and to acquire
the Contributed Receivables, each Guarantor makes the following
representations and warranties to Buyer, Lenders and
Administrative Agent each and all of which shall survive the
execution and delivery of this Agreement.
(a) Existence; Compliance with Law. Each Guarantor (i) is a
corporation, limited liability company or limited partnership
duly formed, validly existing and in good standing under the laws
of its jurisdiction of formation; (ii) is duly qualified to
conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification, except where
the failure to be so qualified, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse
Effect; (iii) has the requisite corporate, company or partnership
power and authority and the legal right to own, pledge, mortgage
or otherwise encumber and operate its properties, to lease the
property it operates under lease, and to conduct its business, in
each case, as now, heretofore and proposed to be conducted; (iv)
subject to specific representations set forth herein regarding
ERISA has all licenses, permits, consents or approvals from or
by, and has made all filings with, and has given all notices to,
all Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct, except where
the failure to obtain such licenses, permits, consents or
approvals is not reasonably likely to result in a Material
Adverse Effect; (v) is in compliance with its charter and bylaws;
and (vi) subject to specific representations set forth herein
regarding ERISA, tax laws and other laws, is in compliance with
all applicable provisions of law, except where the failure to
comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(b) Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by each Guarantor of this
Agreement and any other Related Documents to which it is a party:
(i) are within such Person's corporate, company or partnership
power, as applicable; (ii) have been duly authorized by all
necessary or proper corporate, company, partnership and
shareholder action; (iii) do not contravene any provision of such
Person's charter, bylaws, operating agreement or other
constitutive documents; (iv) do not violate any law or
regulation, or any order or decree of any court or Governmental
Authority; (v) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or
permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other
instrument to which such Person is a party or by which such
Person or any of its property is bound; (vi) do not result in the
creation or imposition of any Adverse Claim upon any of the
property of such Person; and (vii) do not require the consent or
approval of any Governmental Authority or any other Person,
except those which will have been duly obtained, made or complied
with prior to the Closing Date. On or prior to the Closing Date,
this Agreement and each of the other Related Documents shall have
been duly executed and delivered by the Guarantor party thereto
and each such Related Document to which the Guarantor is party to
shall then constitute a legal, valid and binding obligation of
such Guarantor enforceable against it in accordance with its
terms.
(c) No Litigation. No Litigation is now pending or, to the
knowledge of any Guarantor, threatened against any Guarantor that
(i) challenges any Guarantor's right or power to enter into or
perform any of its obligations under this Agreement or any of the
Related Documents to which it is a party, or the validity or
enforceability of this Agreement or any Related Document or any
action taken thereunder, (ii) seeks to prevent the Transfer,
purchase, contribution or pledge of any Receivable or the
consummation of any of the transactions contemplated under this
Agreement or the other Related Documents or (iii) has a
reasonable risk of being determined adversely to such Guarantor
and that, if so determined, could reasonably be expected to have
a Material Adverse Effect. Except as set forth on Schedule
2.01(c), as of the Closing Date there is no Litigation pending
or, to the knowledge of any Guarantor, threatened that seeks
damages in excess of $10,000,000 or injunctive relief (other than
injunctive relief relating to labor practices, which, together
with all other such injunctions, could not reasonably be expected
to have a Material Adverse Effect), or alleges criminal
misconduct by, any Guarantor.
(d) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Agreement and the other Related
Documents and (ii) the payment and accrual of all transaction
costs in connection with the foregoing, the each Guarantor is
Solvent.
(e) Material Adverse Effect. Between December 31, 2000 and the
Closing Date, (i) no Guarantor has incurred any obligations,
contingent or non-contingent liabilities, liabilities for
charges, long-term leases or unusual forward or long-term
commitments that, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, (ii) no contract,
lease or other agreement or instrument has been entered into by
any Guarantor or has become binding upon the assets of any
Guarantor and no law or regulation applicable to any Guarantor
has been adopted that, in any case, has had or could reasonably
be expected to have a Material Adverse Effect; (iii) except for
the defaults, if any, under the Existing Credit Agreement and the
Participation Agreement, in each case as disclosed on Schedule
4.01(f) to the Sale and Contribution Agreement, no Guarantor is
in default under any loan agreement, indenture, note or bond
evidencing any obligations of any Guarantor; and (iv) no
Guarantor is in default and no third party is in default under
any material contract, lease or other agreement or instrument to
which such Person is a party that alone or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
Between December 31, 2000, and the Closing Date no event has
occurred that alone or together with other events could
reasonably be expected to have a Material Adverse Effect.
(f) Ventures, Subsidiaries and Affiliates; Outstanding Stock.
Except as set forth in Schedule 2.01(f) to this Agreement, the
Guarantors do not have any Subsidiaries, are not engaged in any
joint venture or partnership with any other Person, under which
any Guarantor is liable for any debts or liabilities of such
Person, or as of the Closing Date or is an Affiliate of any other
Person. All of the issued and outstanding Stock of the
Originator is owned by the Parent and all of the issued and
outstanding stock of the Buyer is owned by the Originator. Each
Guarantor will provide the Guaranteed Parties written notice,
promptly upon its learning thereof, of each Person who becomes an
Affiliate of any Guarantor after the Closing Date.
(g) Taxes. All material tax returns, reports and statements,
including information returns, required by any Governmental
Authority to be filed by the Parent and each of its Affiliates
included in the Parent Group have been filed with the appropriate
Governmental Authority and all charges have been paid prior to
the date on which any fine, penalty, interest or late charge may
be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding
charges or other amounts being contested in accordance with
Section 2.02(g). Proper and accurate amounts have been withheld
by the Parent or such Affiliate from its respective employees for
all periods in full and complete compliance with all applicable
federal, state, local and foreign laws and such withholdings have
been timely paid to the respective Governmental Authorities,
except for such amounts that in the aggregate for the Parent and
such Affiliates of the Parent combined would not at any time
exceed $1,000,000. Schedule 2.01(g) sets forth as of the Closing
Date (i) those taxable years for which the Parent's or such
Affiliates' tax returns are currently being audited by the IRS or
any other applicable Governmental Authority and (ii) any
assessments or threatened assessments in connection with such
audit or otherwise currently outstanding. Except as described on
Schedule 2.01(g), neither the Parent nor any such Affiliate has
executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having
the effect of extending, the period for assessment or collection
of any charges. The Parent and such Affiliates are not liable
for any charges: (A) under any agreement (including any tax
sharing agreements) or (B) to the best of the Parent's knowledge,
as a transferee. As of the Closing Date, neither the Parent nor
any such Affiliate has not agreed or been requested to make any
adjustment under IRC Section 481(a), by reason of a change in
accounting method or otherwise, that would have a Material
Adverse Effect.
(h) Intellectual Property. As of the Closing Date, each
Guarantor and each of its Subsidiaries owns or has rights to use
all intellectual property necessary to continue to conduct its
business as now or heretofore conducted by it or proposed to be
conducted by it. Each Guarantor and each of its Subsidiaries
conducts its business and affairs without known infringement of
or interference with any intellectual property of any other
Person. Except as set forth in Schedule 4.01(h), as of the
Closing Date none of the Guarantors are aware of any infringement
or claim of infringement by others of any intellectual property
of the Guarantors or any of their Subsidiaries.
(i) Full Disclosure. All information pertaining to any of the
Guarantors contained in this Agreement, any of the other Related
Documents, or any written statement pertaining to any of the
Guarantors furnished by or on behalf of any Guarantor to any
Guaranteed Party pursuant to the terms of this Agreement or any
of the other Related Documents is true and accurate in every
material respect, and none of this Agreement, any of the other
Related Documents, or any written statement furnished by or on
behalf of any Guarantor to any Guaranteed Party pursuant to the
terms of this Agreement or any of the other Related Documents, is
misleading as a result of the failure to include therein a
material fact.
(j) ERISA.
(i) Schedule 4.01(m) to the Sale and Contribution Agreement
lists and separately identifies all Title IV Plans, Multiemployer
Plans, ESOPs and Retiree Welfare Plans other than any Plans
maintained by a labor union. Except with respect to
Multiemployer Plans and Plans maintained by a labor union, each
Qualified Plan has been determined by the IRS or has been
submitted for such a determination to qualify under Section 401
of the IRC, the trusts created thereunder have been determined to
be exempt from tax under the provisions of Section 501 of the IRC
and nothing has occurred that would cause the loss of such
qualification or tax-exempt status. Each Plan is in compliance
in all material respects with the applicable provisions of ERISA
and the IRC including filing of reports required under the IRC or
ERISA, and no Guarantor or ERISA Affiliate has failed to make any
contribution or pay any amount due as required by either Section
412 of the IRC or Section 302 of ERISA or the terms of any such
Plan, except for any such failures which individually or in the
aggregate, together with the aggregate amount of any liability of
the type described in Section 2.01(j)(ii) and the aggregate
amount of any liability described in the last sentence of this
Section 2.01(j)(i), could not reasonably be expected to result in
a liability of the Guarantors and their domestic Subsidiaries
individually or in the aggregate of $10,000,000 or more. No
Guarantor or any ERISA Affiliate has engaged in a "prohibited
transaction," as defined in Section 4975 of the IRC, in
connection with any Plan which would subject any Guarantor to a
tax on prohibited transactions imposed by Section 4975 of the
IRC, except for such prohibited transactions, which individually
or in the aggregate, together with the aggregate amount of any
liability of the type described in Section 2.01(j)(ii) and in the
immediately preceding sentence, could not reasonably be expected
to result in a liability of the Guarantors or their domestic
Subsidiaries individually or in the aggregate of $10,000,000 or
more.
(ii) Except as set forth in Schedule 4.01(m) to the Sale and
Contribution Agreement: (A) no Title IV Plan has any Unfunded
Pension Liability; (B) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (C) there are no
pending or, to the knowledge of any Guarantor, threatened claims
(other than claims for benefits in the normal course), sanctions,
actions or lawsuits, asserted or instituted against any Plan or
any Person as fiduciary or sponsor of any Plan; (D) none of the
Guarantors or any ERISA Affiliate has incurred or reasonably
expects to incur any liability as a result of a complete or
partial withdrawal from a Multiemployer Plan; (E) within the last
five years no Title IV Plan with Unfunded Pension Liabilities has
been transferred outside of the "controlled group" (within the
meaning of Section 4001(a)(14) of ERISA) of any Guarantor or
ERISA Affiliate; and (F) no liability under any Title IV Plan has
been satisfied with the purchase of a contract from an insurance
company that is not rated AAA by Standard & Poor's Corporation or
an equivalent rating by another nationally recognized rating
agency, except for any such liability under this Section
2.01(j)(ii) which individually or in the aggregate, together with
the aggregate amount of any liability of the type described in
the penultimate sentence and the last sentence of Section
2.01(j)(i), could not reasonably be expected to result in a
liability of the Guarantors and their domestic Subsidiaries
individually or in the aggregate of $10,000,000 or more.
(k) Brokers. No broker or finder acting on behalf of the
Guarantors was employed or utilized in connection with the Sale
and Contribution Agreement or the other Related Documents or the
transactions contemplated hereby or thereby and none of the
Guarantors has any obligation to any Person in respect of any
finder's or brokerage fees in connection therewith.
(l) Margin Regulations. Notwithstanding the parties' express
intent that each Transfer shall constitute an absolute
assignment, purchase and sale or capital contribution, as
applicable, of Transferred Receivables and not a loan, and to the
extent that any court may nevertheless determine that any such
Transfer constitutes a loan rather than a sale transaction, and
in addition to but not in derogation of any rights now or
hereafter acquired by Buyer under Section 2.01 of the Sale and
Contribution Agreement, the following provisions shall apply: No
Guarantor is engaged, nor will it engage, principally or as one
of its important activities, in the business of extending credit
for the purpose of "purchasing" or "carrying" any "margin
security" as such terms are defined in Regulation U of the
Federal Reserve Board as now and from time to time hereafter in
effect (such securities being referred to herein as "Margin
Stock"). No Guarantor owns any Margin Stock with a value, in the
aggregate, in excess of one percent (1%) of such Person's gross
assets, and no portion of the proceeds of the Sale Price for any
Sale under the Sale and Contribution Agreement will be used,
directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any
Debt that was originally incurred to purchase or carry any Margin
Stock or for any other purpose that might cause any portion of
such proceeds to be considered a "purpose credit" within the
meaning of Regulations T, U or X of the Federal Reserve Board.
The Guarantors will not take or permit to be taken any action
that might cause any Related Document to violate Regulations T, U
or X of the Federal Reserve Board.
(m) Government Regulation. Notwithstanding the parties' express
intent that each Transfer shall constitute an absolute
assignment, purchase and sale or capital contribution, as
applicable, of Transferred Receivables and not a loan, and to the
extent that any court may nevertheless determine that any such
Transfer constitutes a loan rather than a sale transaction, and
in addition to but not in derogation of any rights now or
hereafter acquired by Buyer under Section 2.01 of the Sale and
Contribution Agreement, the following provisions shall apply: No
Guarantor is subject to regulation under the Investment Company
Act of 1940, as amended, the Public Utility Holding Company Act
of 1935, as amended, the Federal Power Act, as amended, or any
other federal or state statute that restricts or limits its
ability to incur Indebtedness or to perform its obligations
hereunder or under the other Related Documents to which it is a
party to.
(n) Representations and Warranties in Other Related Documents.
Each of the representations and warranties of the Guarantors
contained in the Related Documents (other than this Agreement) is
true and correct in all material respects as of the date made or
deemed made and the Guarantors hereby makes each such
representation and warranty to, and for the benefit of, the
Lenders and the Administrative Agent as if the same were set
forth in full herein.
The representations and warranties described in this
Section 2.01 shall survive the Transfer of the Transferred
Receivables to Buyer, any subsequent assignment of the
Transferred Receivables by Buyer, and the termination of this
Agreement and the other Related Documents and shall continue
until the indefeasible payment in full of all Transferred
Receivables.
Section 2.02 Affirmative Covenants of the Guarantors. Each of
the Guarantors covenants and agrees that, unless otherwise
consented to by Buyer and the Administrative Agent, from and
after the Closing Date and until the Termination Date:
(a) Access. The Guarantors shall during normal business hours,
from time to time upon one Business Day's prior notice, but not
more frequently than once per calendar quarter (or with such
greater frequency during the existence of a Termination Event or
Incipient Termination Event under the Funding Agreement), as
Buyer, the Lenders or the Administrative Agent determines to be
appropriate: (i) provide Buyer, the Lenders, the Administrative
Agent and any of their respective officers, employees and agents
access to its properties (including properties utilized in
connection with the collection, processing or servicing of the
Transferred Receivables), facilities, advisors and employees
(including officers), (ii) permit Buyer, the Lenders, the
Administrative Agent and any of their respective officers,
employees and agents, to inspect, audit and make extracts from
its books and records, including all Records, (iii) permit Buyer,
the Lenders, the Administrative Agent and their respective
officers, employees and agents, to inspect, review and evaluate
the Transferred Receivables, and (iv) permit Buyer, the Lenders,
the Administrative Agent and their respective officers, employees
and agents to discuss matters relating to the Guarantor's
performance under this Agreement or the affairs, finances and
accounts of the Guarantor with any of their respective officers,
directors, employees, representatives or agents (in each case,
with those Persons having knowledge of such matters) and with its
independent certified public accountants. If an Incipient
Termination Event or a Termination Event shall have occurred and
be continuing, or the Administrative Agent, in good faith,
believes that an Incipient Termination Event or a Termination
Event is imminent, each Guarantor shall provide such access at
all times and without advance notice and shall provide Buyer, the
Lenders, the Administrative Agent with access to its suppliers
and customers. Each Guarantor shall make available to Buyer, the
Lenders, the Administrative Agent and their respective counsel,
as quickly as is possible under the circumstances, originals or
copies of all books and records, including Records, that Buyer,
the Servicer or the Administrative Agent may request.
(b) Communication with Accountants. Each of the Guarantors
authorizes Buyer, the Lenders and the Administrative Agent to
communicate directly with its independent certified public
accountants, and authorizes and shall instruct those accountants
and advisors to disclose and make available to Buyer, the Lenders
and the Administrative Agent any and all financial statements and
other supporting financial documents, schedules and information
relating to the Guarantors (including copies of any issued
management letters) with respect to the business, financial
condition and other affairs of the Guarantors. Each of the
Guarantors agrees to render to Buyer, the Lenders and the
Administrative Agent at the Guarantor's own cost and expense,
such clerical and other assistance as may be reasonably requested
with regard to the foregoing, provided, however, in the absence
of a Termination Event, the Buyer, the Lenders and Administrative
Agent, as applicable, shall give not less than (5) Business Days'
notice to the applicable Guarantor prior to scheduling any
meeting or other material communication with such independent
certified public accountants. Such notice shall contain the
date, time, location and other pertinent logistical information
regarding any such meeting or other material communication , as
well as an agenda for such meeting or other material
communication.
(c) Compliance with Agreements and Applicable Laws. Each
Guarantor shall perform each of its obligations under this
Agreement and the other Related Documents and comply with all
federal, state and local laws and regulations applicable to it,
except to the extent that the failure to so comply, individually
or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(d) Maintenance of Existence and Conduct of Business. Each
Guarantor shall: (i) do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate
existence and its rights and franchises; (ii) continue to conduct
its business substantially as now conducted or as otherwise
permitted hereunder and in accordance with the terms of its
certificate or articles of incorporation, bylaws, operating
agreement or other constitutive document; and (iii) at all times
maintain, preserve and protect all of its assets and properties
used or useful in the conduct of its business, including all
licenses, permits, charters and registrations, and keep the same
in good repair, working order and condition in all material
respects (taking into consideration ordinary wear and tear) and
from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto
consistent with industry practices.
(e) Separate Identity.
(i) The Parent shall, and shall cause each of its Subsidiaries
included in the Parent Group to, maintain corporate, company or
limited partnership, as applicable, records and books of account
separate from those of Buyer.
(ii) The financial statements of the Parent and its consolidated
Subsidiaries shall disclose the effects of the Originator's
transactions under this Agreement in accordance with GAAP and, in
addition, disclose that (A) Buyer's sole business consists of the
purchase or acceptance through capital contribution of the
Receivables from the Originator and the subsequent resale of such
Receivables to the Lender, (B) Buyer is a separate corporate
entity with its own separate creditors who will be entitled, upon
its liquidation, to be satisfied out of Buyer's assets prior to
any value in Buyer becoming available to Buyer's equity holders
and (C) the assets of Buyer are not available to pay creditors of
the Parent, the Originator or any other member of the Parent
Group.
(iii) The resolutions, agreements and other instruments
underlying the transactions described in this Agreement shall be
continuously maintained by the Parent and the Originator as
official records.
(iv) The Parent shall, and shall cause each Subsidiary included
in the Parent Group to, maintain an arm's-length relationship
with Buyer and shall not hold itself out as being liable for the
Debts of Buyer.
(v) The Parent shall, and shall cause each other member of the
Parent Group to, keep its assets and its liabilities wholly
separate from those of Buyer.
(vi) The Parent shall, and shall cause each Subsidiary included
in the Parent Group to, conduct its business solely in its own
name through its duly Authorized Officers or agents and in a
manner designed not to mislead third parties as to the separate
identity of the Buyer.
(vii) The Parent shall not, and shall cause each Subsidiary
included in the Parent Group not to, mislead third parties by
conducting or appearing to conduct business on behalf of Buyer or
expressly or impliedly representing or suggesting that the
Parent, the Originator or any Subsidiary included in the Parent
Group is liable or responsible for the Debts of Buyer or that the
assets of the Parent, the Originator or any Subsidiary included
in the Parent Group are available to pay the creditors of Buyer.
(viii) The Parent shall cause operating expenses and
liabilities of Buyer to be paid from Buyer's own funds.
(ix) The Parent shall at all times have, and cause each
Subsidiary included in the Parent Group at all times to have,
stationery and other business forms and a mailing address and
telephone number separate from those of Buyer.
(x) The Parent shall, and shall cause each Subsidiary included
in the Parent Group to, at all times limit its transactions with
Buyer only to those expressly permitted hereunder or under any
other Related Document.
(xi) The Parent shall, and cause each Subsidiary included in the
Parent Group to, comply with (and cause to be true and correct)
each of the facts and assumptions contained in the opinion of
Brobeck Phleger & Harrison LLP delivered pursuant to the Schedule
of Documents.
(f) ERISA. Each Guarantor shall give Buyer and the
Administrative Agent prompt written notice of any event that
could result in the imposition of a Lien under Section 412 of the
IRC or Section 302 or 4068 of ERISA or the imposition of any
federal, state or local tax Lien on any of the Receivables.
(g) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 2.02(g)(ii), each Guarantor shall pay,
perform and discharge or cause to be paid, performed and
discharged all of its obligations and liabilities, including all
taxes, assessments and governmental charges upon its income and
properties and all lawful claims for labor, materials, supplies
and services (but excluding current liabilities incurred in the
ordinary course of business), promptly when due.
(ii) Each Guarantor may in good faith contest, by appropriate
proceedings, the validity or amount of any charges or claims
described in Section 2.02(g)(i); provided, that (A) adequate
reserves with respect to such contest are maintained on the books
of such Person, in accordance with GAAP, (B) none of the
Transferred Receivables may become subject to a material risk of
forfeiture or loss as a result of such contest, (C) no Lien may
be imposed to secure payment of such charges that is superior to
any of the Liens securing the Originator's obligations under the
Sale and Contribution Agreement and such contest is maintained
and prosecuted continuously and with diligence and operates to
suspend collection or enforcement of such charges, (D) such
Person shall promptly pay or discharge such contested charges or
claims and all additional charges, interest, penalties and
expenses, if any, and shall deliver to Buyer and the
Administrative Agent evidence acceptable to the Buyer and
Administrative Agent of such compliance, payment or discharge, if
such contest is terminated or discontinued adversely to such
Person or the conditions set forth in this Section 2.02(g) are no
longer met, and (E) the Administrative Agent has not advised the
Originator in writing that the Administrative Agent reasonably
believes that nonpayment or nondischarge thereof could reasonably
be expected to have or result in a Material Adverse Effect.
Section 2.03 Negative Covenants of the Guarantors. Each of the
Guarantors covenants and agrees that, without the prior written
consent of Buyer and the Administrative Agent, from and after the
Closing Date and until the Termination Date:
(a) Sale Characterization. No Guarantor shall make statements
or disclosures or prepare any financial statements for any
purpose, including for federal income tax, reporting or
accounting purposes, that shall account for the transactions
contemplated by this Agreement in any manner other than (i) with
respect to the Sale of each Receivable originated by it, as a
true sale or absolute assignment of its full right, title and
ownership interest in such Receivable and (ii) with respect to
the Transfer of each Contributed Receivable under this Agreement,
as a contribution to the capital of Buyer.
(b) Actions Affecting Rights. No Guarantor shall (i) take any
action if such action may interfere with the enforcement of any
rights hereunder or under the other Related Documents, including
rights with respect to the Transferred Receivables; (ii) waive or
alter any rights with respect to the Transferred Receivables (or
any agreement or instrument relating thereto); or (iii) fail to
pay any tax, assessment, charge, fee or other obligation of the
Originator with respect to the Transferred Receivables, or fail
to defend any action, if such failure to pay or defend may
adversely affect the priority or enforceability of the perfected
title of Buyer to and the sole record and beneficial ownership
interest of Buyer in the Transferred Receivables or, prior to
their Transfer hereunder, the Originator's right, title or
interest therein.
(c) ERISA. No Guarantor shall cause or permit to occur an event
that could result in the imposition of a Lien under Section 412
of the IRC or Section 302 or 4068 of ERISA.
(d) Adverse Tax Consequences. Notwithstanding the parties'
express intent that each Transfer shall constitute an absolute
assignment, purchase and sale or capital contribution, as
applicable, of Transferred Receivables and not a loan, and to the
extent that any court may nevertheless determine that any such
Transfer constitutes a loan rather than a sale transaction, and
in addition to but not in derogation of any rights now or
hereafter acquired by Buyer under Section 2.01 of the Sale and
Contribution Agreement, the following provisions shall apply:
None of the Guarantors shall take or permit to be taken any
action (other than with respect to actions taken or to be taken
solely by a Governmental Authority), or fail or neglect to
perform, keep or observe any of its obligations hereunder or
under the other Related Documents, that would have the effect
directly or indirectly of subjecting any payment to Buyer, any
Lender or holders of the Commercial Paper who are residents of
the United States of America to withholding taxation.
(e) No Proceedings. From and after the Closing Date and until
the date one year plus one day following the date on which the
Commercial Paper with the latest maturity has been indefeasibly
paid in full in cash, the Parent shall not, and shall not permit
any Subsidiary to, directly or indirectly, institute or cause to
be instituted against Buyer or Conduit Lender any proceeding of
the type referred to in Sections 9.01(c) and 9.01(d) of the
Funding Agreement.
(f) Commingling. The Guarantors shall not knowingly deposit or
permit the deposit of any funds that do not constitute
Collections of Transferred Receivables into any Lockbox Account
or the Concentration Account, and the Guarantors shall establish
and maintain reasonable precautions to attempt to prevent any
such funds from being deposited in any such accounts.
ARTICLE III
MISCELLANEOUS
Section 3.01 Amendments and Waivers. No amendment or waiver of
any provision of this Agreement, and no consent to any departure
by any of the Guarantors herefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Administrative Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given.
Section 3.02 Addresses for Notices. All notices and other
communications hereunder shall be sent in the manner provided in
Section 8.01 of the Sale and Contribution Agreement, which
provision is incorporated herein by this reference as though
fully set forth herein.
Section 3.03 No Waiver; Remedies. No failure on the part of
any Guaranteed Party to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 3.04 Continuing Guaranty. This Agreement is a
continuing guaranty and shall (a) remain in full force and effect
until the Termination Date has occurred and the payment and
performance in full of the Originator Obligations and the payment
of all other amounts payable under this Agreement, (b) be binding
upon each of the Guarantors, its successors and assigns, and (c)
inure to the benefit of, and be enforceable by, each Guaranteed
Party and its successors, transferees and assigns.
Section 3.05 Severability. Wherever possible, each provision
of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of
such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
Section 3.06 GOVERNING LAW. THIS AGREEMENT AND THE ORIGINATOR
OBLIGATIONS ARISING HEREUNDER SHALL IN ALL RESPECTS, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
CONFLICT OF LAW PROVISIONS THEREOF) AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
[Remainder of Page Intentionally Blank; Next Page is Signature
Page]
IN WITNESS WHEREOF, each of the undersigned parties to
this Guaranty to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
GUARANTORS:
CONSOLIDATED FREIGHTWAYS
CORPORATION
By: /s/Robert E. Wrightson
Name: Robert E. Wrightson
Title: Executive Vice President
and Chief Financial Officer
CF AIRFREIGHT CORPORATION
By: /s/Kerry K. Morgan
Name: Kerry K. Morgan
Title: Vice President and
Treasurer
CF MOVESU.COM INCORPORATED
By: /s/Robert E. Wrightson
Name: Robert E. Wrightson
Title: Vice President and
Controller
REDWOOD SYSTEMS, INC.
By: /s/Kerry K. Morgan
Name: Kerry K. Morgan
Title: Vice President and
Treasurer
LELAND JAMES SERVICE CORPORATION
By: /s/Kerry K. Morgan
Name: Kerry K. Morgan
Title: Vice President and
Treasurer
GUARANTEED PARTIES:
CONSOLIDATED FREIGHTWAYS FUNDING
LLC
By: /s/Kerry K. Morgan
Name: Kerry K. Morgan
Title: Vice President and
Treasurer
GENERAL ELECTRIC CAPITAL
CORPORATION, as Committed Lender
and Administrative Agent
By: /s/Craig Winslow
Name: Craig Winslow
Title: Its Duly Authorized
Signatory
REDWOOD RECEIVABLES CORPORATION, as
Conduit Lender
By:
Name:
Title:
FIRST AMENDMENT TO LETTER OF CREDIT AGREEMENT
THIS FIRST AMENDMENT TO LETTER OF CREDIT AGREEMENT
(this "Amendment"), is made and entered into as of May __, 2001
(the "Effective Date"), by and between CONSOLIDATED FREIGHTWAYS
CORPORATION, a Delaware corporation ("Debtor"), the other credit
parties signatory to the Letter of Credit Agreement (as defined
below) (the "Credit Parties") and GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation ("GE Capital").
W I T N E S E T H:
WHEREAS, Debtor, the Credit Parties and GE Capital are
parties to that certain Letter of Credit Agreement, dated as of
April 27, 2001 (as amended to the date hereof, the "Letter of
Credit Agreement"; capitalized terms used herein and not
otherwise defined herein shall have the meanings given such terms
in the Letter of Credit Agreement), pursuant to which GE Capital
has committed to make certain loans available to Debtor; and
WHEREAS, Debtor, the Credit Parties and GE Capital
desire to modify the Letter of Credit Agreement in certain
respects, all in accordance with and subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the
covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Debtor, the Credit Parties and GE
Capital do hereby agree that all capitalized terms used herein
shall have the meanings ascribed thereto in the Letter of Credit
Agreement (except as otherwise expressly defined or limited
herein) and do hereby further agree as follows:
1. Amendments to the Letter of Credit Agreement. Subject
to the terms and conditions of this Amendment, including without
limitation the fulfillment of the conditions precedent specified
in Section 6 below, the Letter of Credit Agreement is hereby
amended by deleting Schedule 3.19 in its entirety and
substituting, in lieu thereof, the schedule attached hereto as
Attachment A.
2. No Other Amendments. Except for the amendments
expressly set forth and referred to in Section 1 above, the
Letter of Credit Agreement shall remain unchanged and in full
force and effect.
3. Representations and Warranties. To induce GE Capital
to enter into this Amendment, Debtor and each of the other Credit
Parties hereby warrant, represent and covenant to GE Capital
that: (a) this Amendment has been duly authorized, executed and
delivered by Debtor and each Credit Party signatory thereto, (b)
after giving effect to this Amendment, no Termination Event or
Event of Default has occurred and is continuing as of this date,
and (c) after giving effect to this Amendment, all of the
representations and warranties made by Debtor and each Credit
Party in the Letter of Credit Agreement are true and correct in
all material respects on and as of the date of this Amendment
(except to the extent that any such representations or warranties
expressly referred to a specific prior date). Any breach in any
material respect by Debtor or any Credit Party of any of its
representations and warranties contained in this Section 3 shall
be an Event of Default under the Letter of Credit Agreement.
4. Ratification. Debtor and each of the other Credit
Parties hereby ratify and reaffirm each and every term, covenant
and condition set forth in the Letter of Credit Agreement and all
other documents delivered by such company in connection therewith
(including without limitation the other Letter of Credit
Documents to which Debtor or any Credit Party is a party),
effective as of the date hereof.
5. Estoppel. To induce GE Capital to enter into this
Amendment, Debtor and each of the other Credit Parties hereby
acknowledge and agree that, as of the date hereof, there exists
no right of offset, defense or counterclaim in favor of Debtor or
any Credit Party as against GE Capital with respect to the
obligations of Debtor or any Credit Party to GE Capital under the
Letter of Credit Agreement or the other Letter of Credit
Agreement Documents, either with or without giving effect to this
Amendment.
6. Conditions to Effectiveness. This Amendment shall
become effective, upon the Effective Date, subject to the
receipt by the GE Capital of this Amendment, duly executed,
completed and delivered by Debtor and each Credit Party.
7. Reimbursement of Expenses. Debtor and each of the
other Credit Parties hereby agree that Debtor and each of the
other Credit Parties shall reimburse GE Capital on demand for all
costs and expenses (including without limitation attorney's fees)
incurred by GE Capital in connection with the negotiation,
documentation and consummation of this Amendment and the other
documents executed in connection herewith and therewith and the
transactions contemplated hereby and thereby.
8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID STATE.
9. Severability of Provisions. Any provision of this
Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, Debtor
and each of the other Credit Parties hereby waive any provision
of law that renders any provision hereof prohibited or
unenforceable in any respect.
10. Counterparts. This Amendment may be executed in any
number of several counterparts, all of which shall be deemed to
constitute but one original and shall be binding upon all
parties, their successors and permitted assigns.
11. Entire Agreement. The Letter of Credit Agreement as
amended by this Amendment embodies the entire agreement between
the parties hereto relating to the subject matter hereof and
supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
[Remainder of page intentionally blank; next page is
signature page]
IN WITNESS WHEREOF, the parties have caused this Amendment
to be duly executed by their respective officers thereunto duly
authorized, as of the date first above written.
CONSOLIDATED FREIGHTWAYS CORPORATION
By:/s/Robert E. Wrightson
Name:Robert E. Wrightson
Title:Executive Vice President and CFO
GENERAL ELECTRIC CAPITAL CORPORATION
By:/s/Craig Winslow
Name:Craig Winslow
Duly Authorized Signatory
FIRST AMENDMENT TO SECURITIZATION AGREEMENTS
THIS FIRST AMENDMENT TO SECURITIZATION AGREEMENTS (this
"Amendment"), is made and entered into as of May __, 2001 (the
"Effective Date"), by and between CONSOLIDATED FREIGHTWAYS
FUNDING LLC, a Delaware limited liability company (the
"Borrower"), CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE, a
Delaware corporation ("CFCD"; the Borrower and CFCD are referred
to herein individually as a "Company" and collectively as the
"Companies"), REDWOOD RECEIVABLES CORPORATION, a Delaware
corporation ("Redwood"), as Conduit Lender (in such capacity, the
"Conduit Lender"), and GENERAL ELECTRIC CAPITAL CORPORATION, a
New York corporation ("GE Capital"), as Committed Lender (in such
capacity, the "Committed Lender"; together with the Conduit
Lender referred to herein collectively as the "Lenders"), as
Administrative Agent for the Lenders (in such capacity, the
"Administrative Agent"), as Collateral Agent for the Conduit
Lender and the Conduit Lender Secured Parties (in such capacity,
the "Collateral Agent"), as Operating Agent for Redwood (in such
capacity, the "Operating Agent"), and as Liquidity Agent for the
Liquidity Lenders (in such capacity, the "Liquidity Agent").
W I T N E S E T H:
WHEREAS, CFCD and the Borrower are parties to a certain
Receivables Sale and Contribution Agreement, dated as of April
27, 2001 (as amended to the date hereof, the "Sale Agreement";
capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in Annex X to the Sale
Agreement as amended by this Amendment), whereby CFCD has agreed
to sell, contribute or otherwise transfer to the Borrower, and
the Borrower has agreed to purchase or otherwise acquire from
CFCD, all of the right, title and interest of CFCD in the
Receivables; and
WHEREAS, CFCD, the Borrower, the Lenders and the
Administrative Agent, are parties to a certain Servicing
Agreement, dated as of April 27, 2001 (as amended to the date
hereof, the "Servicing Agreement"), whereby the Borrower has
appointed CFCD to service, administer and collect the Transferred
Receivables pursuant to the Funding Agreement (defined below) on
the terms and conditions set forth therein; and
WHEREAS, the Borrower, the Lenders and the Administrative
Agent are parties to a certain Receivables Funding Agreement,
dated as of April 27, 2001 (as amended to the date hereof, the
"Funding Agreement"), pursuant to which, among other things, the
Lenders have agreed, subject to certain terms and conditions, to
make Advances to the Borrower to fund its purchases of the
Receivables; and
WHEREAS, Redwood, GE Capital, as Liquidity Agent, Initial
Liquidity Lender, Collateral Agent and Operating Agent are
parties to a certain Liquidity Loan and Asset Purchase Agreement,
dated as of April 27, 2001 (the "Liquidity Loan Agreement"),
pursuant to which, among other things, the Liquidity Lenders have
agreed, subject to certain terms and conditions, to make
Liquidity Loans to Redwood; and
WHEREAS, in connection with the Funding Agreement, Redwood
and GE Capital in various capacities have entered into that
certain Reimbursement Agreement Supplement dated as of April 27,
2001 (the "Reimbursement Agreement Supplement"; the Liquidity
Loan Agreement, the Sale Agreement, the Servicing Agreement, the
Funding Agreement and the Reimbursement Agreement Supplement,
together with all exhibits and annexes thereto, are referred to
herein collectively as the "Securitization Agreements"); and
WHEREAS, the Companies have requested that certain of the
Securitization Agreements be amended in certain respects, and
Redwood and GE Capital are willing to agree to such amendments
and grant such waivers subject to the terms and conditions of
this Amendment.
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendments of Securitization Agreements. Subject to
the terms and conditions of this Amendment, including without
limitation the fulfillment of the conditions precedent specified
in Section 6 below, the Securitization Agreements shall be
amended as follows:
(A) Amendments to Funding Agreement. The parties
signatory to the Funding Agreement hereby agree that the Funding
Agreement shall be amended as follows:
1.1 Section 2.03(b) of the Funding Agreement is hereby
amended by inserting the word "be" between the words "must" and
"given" in the fourth line of such section.
1.2 In order to renumber and re-letter certain of the
paragraphs set forth therein, Section 6.03 of the Funding
Agreement is hereby deleted in its entirety and the following new
Section 6.03 is substituted in lieu thereof:
Section 6.03. Daily Disbursements From the
Collection Account; Revolving Period. No later than
1:00 p.m. (New York time) on each Business Day during
the Revolving Period, and following the transfers made
pursuant to Section 6.02, the Administrative Agent
shall disburse Collections then on deposit in the
Collection Account and its related subaccounts in the
following priority:
(a) to the Retention Account prior to the
earlier of the Redwood Transfer Date or the date of the
Committed Lender Funding Event, and to the
Administrative Agent on or after the earlier of Redwood
Transfer Date or the date of the Committed Lender
Funding Event:
(i) the amount of any Collection
Account Deficiency deposited pursuant to
Section 6.02(b); and
(ii) an amount equal to the sum of:
(1) Daily Yield;
(2) the Yield Shortfall as of the
close of business on the
immediately preceding Business Day;
(3) the Servicing Fee;
(4) the Servicing Fee Shortfall as
of the close of business on the
immediately preceding Business Day;
(5) the Unused Facility Fee;
(6) the Unused Facility Fee
Shortfall as of the close of
business on the immediately
preceding Business Day;
(7) any Additional Amounts and
Indemnified Amounts then due; and
(b) to the Lenders:
(i) an amount equal to the deposits
made in the Collection Account pursuant to
Section 6.02(a)(iv) and not otherwise
disbursed pursuant to Section 6.03(a)(i), to
be disbursed ratably based on the amounts
owed to the applicable Lenders ;
(ii) an amount equal to (without
duplication) any Funding Excess or Letter of
Credit Exposure Excess to be applied in
reduction of Outstanding Principal Amount, to
the Lenders ratably based on the amount of
their respective Outstanding Principal
Amounts (but payments to the Lenders with
respect to any Letter of Credit Exposure
Excess shall not be made if there are no
Outstanding Principal Amounts at such time);
and
(iii) if, pursuant to a Repayment
Notice, the Borrower has requested a
reduction of the Outstanding Principal Amount
of the Lenders, then to the Lenders, ratably
based on the amount of their respective
Outstanding Principal Amounts, the lesser of
(A) the amount of such requested reduction of
Outstanding Principal Amount and (B) such
balance; and
(c) to the Borrower Account, the balance of
any amounts remaining after making the foregoing
disbursements.
1.3 The form of Borrowing Base Certificate as set forth as
Exhibit 2.03(a) to the Funding Agreement, is hereby deleted in
its entirety, and a new form of Borrowing Base Certificate as set
forth on Attachment A to this Amendment is substituted in lieu
thereof.
1.4 The form of Monthly Report as set forth as Exhibit
3.01(a)(iv) to the Funding Agreement, is hereby deleted in its
entirety, and a new form of Monthly Report as set forth on
Attachment B to this Amendment is substituted in lieu thereof.
1.5 Schedule 4.01(b) to the Funding Agreement, is hereby
deleted in its entirety, and a new form of the schedule as set
forth on Attachment C to this Amendment is substituted in lieu
thereof.
1.6 Schedule 4.01(q) to the Funding Agreement, is hereby
deleted in its entirety, and a new form of the schedule as set
forth on Attachment D to this Amendment is substituted in lieu
thereof.
(B) Amendments to Liquidity Loan Agreement. The parties
signatory to the Liquidity Loan Agreement hereby agree that the
Liquidity Loan Agreement shall be amended as follows:
1.7 The definition of "CFF Collateral Base" set forth in
Section 1.01 of the Liquidity Loan Agreement is hereby amended as
follows:
(a) clause (a) of the definition of "CFF Collateral
Base" is hereby deleted in its entirety and the following new
clause (a) is substituted in lieu thereof:
(a) at the time of making a Liquidity Loan
under Sections 2.02(a) or (b) an amount equal to the
Borrowing Base as reported in the most recent Borrowing
Base Certificate submitted by CFF to the Administrative
Agent pursuant to Sections 2.03(a) and 2.03(b) of the
Funding Agreement immediately prior to such date of
calculation, and
(b) clause (b)(ii) of the definition of "CFF
Collateral Base" is hereby deleted in its entirety and the
following new clause (b)(ii) is substituted in lieu thereof:
(ii) without duplication of amounts
calculated pursuant to clause (v) below, the Redwood
Interest in the Outstanding Balance of those
Receivables that are Eligible Receivables included in
such Borrowing Base that have become Defaulted
Receivables subsequent to the period to which such
Borrowing Base Certificate relates (as such Outstanding
Balance is determined immediately prior to the time
such Receivables become Defaulted Receivables); minus,
(c) clause (b)(v) of the definition of "CFF Collateral
Base" is hereby deleted in its entirety and the following new
clause (b)(v) is substituted in lieu thereof:
(v) without duplication of amounts
calculated pursuant to clause (ii) above, the aggregate
Redwood Interest in the Outstanding Balance of all
Diluted Receivables or Receivables with respect to
which a breach of the representations, warranties or
covenants set forth in Sections 4.01(v), 4.02(d),
4.02(h), 4.03(a), 4.03(b), 4.03(c) or 4.03(e) of the
Sale Agreement shall have occurred and the Originator
shall be obligated to make a payment with respect
thereto under Section 4.04 of the Sale Agreement which
for any reason was not remitted to the Company
subsequent to the period to which such Borrowing Base
relates.
1.8 The definition of "Diluted Receivables" set forth in
Section 1.01 of the Liquidity Loan Agreement is hereby deleted in
its entirety and the following new definition is substituted in
lieu thereof:
"Diluted Receivables" shall mean any Receivable
which is the subject of any net credits, rebates, cash
discounts, volume discounts, cooperative advertising
expenses, customer refunds, disputes, setoffs,
chargebacks, allowances for early payments and other
similar allowances that are reflected on the books of
the Originator and made in accordance with the usual
practices of the Originator thereof; provided, that (a)
Diluted Receivables shall not include any Receivable
which is the subject of any allowances or adjustments
in accordance with the Credit and Collection Policies
made on account of the actual or impending insolvency
of the Obligor thereunder or the Obligor's inability to
pay and (b) Diluted Receivables shall include any
Receivable which is the subject of a Permitted Setoff
Right.
1.9 Section 3.01 of the Liquidity Loan Agreement is hereby
amended as follows:
(a) the language appearing in the first five lines of
clause (ii) of Section 3.01(a) is hereby deleted in its entirety
and the following new language is substituted in lieu thereof:
(ii) (A) on or after the Redwood Termination
Date, (B) if the Outstanding Liquidity Loans equal or
exceed the Company Aggregate Principal and no accrued
and unpaid interest or other amount is owed to the
Company pursuant to the Funding Agreement, or (C) if
the Company has commenced foreclosure proceedings, with
respect to the Collateral, in each case, the Company
shall
(b) the following language appearing in the sixth and
seventh lines of clause (b) of Section 3.01 is hereby deleted in
its entirety: "including all of the Company's rights, title,
interests and obligations under the Funding Agreement and the
other Related Documents,".
(C) Amendments to Servicing Agreement. The parties
signatory to the Servicing Agreement hereby agree that the
Servicing Agreement shall be amended as follows:
1.10 The last sentence of Section 2.05 of the Servicing
Agreement is hereby deleted in its entirety and the following new
sentence is substituted in lieu thereof:
On each Settlement Date, the Borrower shall pay to the
Servicer or to the Successor Servicer, as applicable,
the Servicing Fee or the Successor Servicing Fees and
Expenses, respectively, in each case to the extent of
available funds therefor as provided in Sections 6.04
and 6.05 of the Funding Agreement, provided that no
recourse shall be had against any Lender or any
shareholder, employee, officer, director, agent or
incorporator of any Lender for the payment of the
Servicing Fees or the Successor Servicing Fees and
Expenses, respectively, hereunder if no funds are
available for the payment of such fees and expenses as
provided in Sections 6.04 and 6.05 of the Funding
Agreement.
1.11 Section 8.05 of the Servicing Agreement is hereby
deleted in its entirety and the following new Section is
substituted in lieu thereof:
Section 8.05 No Proceedings. The Servicer, the
Successor Servicer and any Sub-Servicer hereby agrees
that, from and after the Closing Date and until the
date one year plus one day following the date on which
the Commercial Paper with the latest maturity has been
indefeasibly paid in full in cash, it will not,
directly or indirectly, institute or cause to be
instituted against the Conduit Lender or the Committed
Lender any proceeding of the type referred to in
Sections 9.01(c) and 9.01(d) of the Funding Agreement.
(D) Amendments to the Sale Agreement. The parties
signatory to the Sale Agreement hereby amend the Sale Agreement
as follows:
1.12 Schedule 4.01(t) to the Sale Agreement is hereby
deleted in its entirety and a new form of the schedule as set
forth on Attachment E to this Amendment is substituted in lieu
thereof.
(E) Amendments to Annex X. The parties signatory to each
of the Funding Agreement, the Sale Agreement, and the Servicing
Agreement hereby agree to amend Annex X to the Funding Agreement,
the Sale Agreement and the Servicing Agreement as follows:
1.13 The definition of the term "Available LOC Percentage"
set forth in Annex X to the Funding Agreement, the Sale Agreement
and the Servicing Agreement is hereby amended by deleting the
reference to "twenty-five percent (25%)" appearing in the first
line thereof and replacing it with "thirty percent (30%)".
1.14 The last sentence of the definition of the term
"Dilution Reserve Ratio" set forth in Annex X to the Funding
Agreement, the Sale Agreement and the Servicing Agreement is
hereby deleted in its entirety, and the following new sentence is
substituted in lieu thereof:
Notwithstanding the foregoing, the Dilution
Reserve Ratio shall be deemed to be 7% if at any time
the above calculation results in a percentage of less
than 7%.
1.15 The definition of the term "Dynamic Advance Discount
Rate" set forth in Annex X to the Funding Agreement, the Sale
Agreement and the Servicing Agreement is hereby deleted in its
entirety, and the following new definition is substituted in lieu
thereof:
"Dynamic Advance Discount Rate" shall mean, as of any
date of determination, the rate equal to (1) 100%,
minus (2) the greater of (a) the sum of (i) the Loss
Reserve Ratio plus (ii) the Dilution Reserve Ratio or
(b) 40%, plus (3) the Available LOC Percentage.
1.16 The definition of "Eligible Receivable" set forth in
Annex X to the Funding Agreement, the Sale Agreement and the
Servicing Agreement is hereby amended as follows:
(a) clause (b) of the definition of "Eligible
Receivable" is hereby amended by adding the following language
immediately prior to the semicolon at the end of said clause:
and the Rating Agency Condition has been satisfied with
respect thereto
(b) clause (q) of the definition of "Eligible
Receivable" is hereby amended by adding the following language
immediately prior to the semicolon at the end of said clause:
and the Rating Agency Condition has been satisfied with
respect thereto
1.17 The definition of the term "In Transit Reserve" set
forth in Annex X to the Funding Agreement, the Sale Agreement and
the Servicing Agreement is hereby deleted in its entirety, and
the following new definition is substituted in lieu thereof:
"In Transit Reserve" shall mean, as at any date of
determination thereof, the aggregate Outstanding
Balance as of such date of all Eligible Receivables
with respect to which (i) any services remain to be
performed by or on behalf of the Originator as a
condition to the payment thereof, or (ii) acceptance by
or any other act of the Obligor thereunder remains to
be performed as a condition to the payment thereof,
provided that the In Transit Reserve shall not include
the Outstanding Balance of any Eligible Receivable to
the extent that such Receivable arises out of the
transportation of goods or merchandise by the
Originator to or for the benefit of an Obligor and such
goods or merchandise have been delivered to such
Obligor or to a destination specified by such Obligor.
1.18 The definition of the term "Loss Reserve Ratio" set
forth in Annex X to the Funding Agreement, the Sale Agreement and
the Servicing Agreement is hereby deleted in its entirety, and
the following new definition is substituted in lieu thereof:
"Loss Reserve Ratio" shall mean, as of any date of
determination, the ratio (expressed as a percentage)
calculated in accordance with the following formula:
2 x ARR x DEFHOR
NRPB
where:
ARR = (i) for any date of determination in any
month that ends during the period
commencing on the Closing Date and
ending on January 31, 2002, the highest
Three Month Aged Receivables Ratio for
the number of Settlement Periods
immediately preceding such date as
specified in the table set forth below
in this definition opposite the
corresponding month in which such date
of determination occurs, and (ii) for
any date of determination in any month
that ends after January 31, 2002, the
highest Three Month Aged Receivables
Ratio during the 12 Settlement Periods
immediately preceding such date.
Month Number of
Settlement
Periods
April 2001 3
May 2001 4
June 2001 5
July 2001 6
August 2001 7
September 2001 8
October 2001 9
November 2001 10
December 2001 11
DEFHOR = the aggregate Billed Amount of
Transferred Receivables originated
during the four Settlement Periods
immediately preceding such date.
NRPB = the Outstanding Balance of Transferred
Receivables as of the last day of the
first Settlement Period immediately
preceding such date.
1.19 In order to re-letter certain of the paragraphs set
forth therein, the definition of the term "Outstanding Principal
Amount" set forth in Annex X to the Funding Agreement, the Sale
Agreement and the Servicing Agreement is hereby deleted in its
entirety, and the following new definition is substituted in lieu
thereof:
"Outstanding Principal Amount" shall mean, as
of any date of determination, the amount equal to (a)
the aggregate Advances made by the Lenders under the
Funding Agreement on or before such date, minus (b) the
aggregate amounts disbursed to any Lender in reduction
of such Advances pursuant to Sections 6.02, 6.03, 6.04
or 6.05 of the Funding Agreement on or before such
date; provided, that references to the Outstanding
Principal Amount of any Lender shall mean an amount
equal to (x) the aggregate Advances made by such Lender
to the Collection Account pursuant to Section
2.04(a)(i) of the Funding Agreement on or before such
date, plus (y) in the case of the Committed Lender
only, any amounts advanced by the Committed Lender to
the Conduit Lender under the LAPA in respect of
Outstanding Principal Amount when purchasing the
Redwood Interest (as defined in the LAPA) minus (z) the
aggregate amounts disbursed to such Lender in reduction
of Outstanding Principal Amount pursuant to Sections
6.02, 6.03, 6.04 or 6.05 of the Funding Agreement on or
before such date.
1.20 The definition of "Three Month Aged Receivables Ratio"
set forth in Annex X to the Funding Agreement, the Sale Agreement
and the Servicing Agreement is hereby deleted in its entirety,
and the following new definition is substituted in lieu thereof:
"Three Month Aged Receivables Ratio" shall mean as
of any date of determination the three month average
(or in the case of any date of Settlement Period ending
in February 2001, the one month average, for any
Settlement Period ending in March 2001, the two month
average and for any Settlement Period ending in April
2001, the three month average) of the following the
ratio (expressed as a percentage):
(a) (i) the sum of the respective
Outstanding Balances of Transferred Receivables with
respect to which any payment, or part thereof,
remaining unpaid for more than 120 but less than 151
days from their respective Billing Dates as of the last
day of the Settlement Period immediately preceding such
date, plus (ii) any Transferred Receivables that have
been written off as uncollectible less than 120 days
from their Billing Date.
to
(b) the aggregate Billed Amount of
Transferred Receivables originated during the fifth
Settlement Period immediately preceding such date.
1.21 The definition of "Unapproved Receivable" set forth in
Annex X to the Funding Agreement, the Sale Agreement and the
Servicing Agreement is hereby amended by adding the following
language immediately prior to the period at the end thereof:
, provided also that the Rating Agency Condition has been
satisfied with respect thereto
(F) Amendments to Reimbursement Agreement Supplement. The
parties signatory to the Reimbursement Agreement Supplement
hereby agree that the Reimbursement Agreement Supplement shall be
amended as follows:
1.22 Annex 1 to the Reimbursement Agreement Supplement is
hereby amended by deleting the reference to "25%" in each place
that it appears in said Annex 1 and in each case replacing it
with "30%".
(G) Amendments to Annex Y. The parties signatory to each
of the Funding Agreement, the Sale Agreement, and the Servicing
Agreement hereby agree to amend Annex Y to the Funding Agreement,
the Sale Agreement and the Servicing Agreement as follows:
1.23 Paragraph 45 is hereby deleted in its entirety and
replaced with the following language:
45. [Intentionally omitted]
2. No Other Amendments. Except for the amendments
expressly set forth and referred to in Section 1 above, the
Securitization Agreements shall remain unchanged and in full
force and effect.
3. Representations and Warranties. Each Company hereby
represents and warrants to the Purchasers and the Administrative
Agent that (a) this Amendment has been duly authorized, executed
and delivered by each Company, (b) after giving effect to this
Amendment, no Termination Event, Incipient Termination Event,
Event of Servicer Termination or Incipient Servicer Termination
Event has occurred and is continuing as of this date, and (c)
after giving effect to this Amendment, all of the representations
and warranties made by each Company in the Securitization
Agreements are true and correct in all material respects on and
as of the date of this Amendment (except to the extent that any
such representations or warranties expressly referred to a
specific prior date). Any breach in any material respect by any
Company of any of its representations and warranties contained in
this Section 3 shall be a Termination Event and an Event of
Servicer Termination for all purposes of the Securitization
Agreements.
4. Ratification. Each Company hereby ratifies and
reaffirms each and every term, covenant and condition set forth
in the Securitization Agreements and all other documents
delivered by such Company in connection therewith (including
without limitation the other Related Documents to which each
Company is a party), effective as of the date hereof.
5. Estoppel. To induce GE Capital and Redwood to enter
into this Amendment, each Company hereby acknowledges and agrees
that, as of the date hereof, there exists no right of offset,
defense or counterclaim in favor of any Company as against GE
Capital or Redwood with respect to the obligations of any Company
to GE Capital or Redwood under the Securitization Agreements or
the other Related Documents, either with or without giving effect
to this Amendment.
6. Conditions to Effectiveness. This Amendment shall
become effective, upon the Effective Date, subject to (i) the
receipt by the Administrative Agent of this Amendment, duly
executed, completed and delivered by each of the Companies,
Redwood and GE Capital in its various capacities; and (ii) the
receipt by the Administrative Agent of written confirmation
from each Rating Agency that the then current rating of the
Commercial Paper shall not be withdrawn or downgraded after
giving effect to this Amendment and the transactions
contemplated hereby.
7. Reimbursement of Expenses. Each Company hereby agrees
that it shall reimburse the Administrative Agent on demand for
all costs and expenses (including without limitation attorney's
fees) incurred by such parties in connection with the
negotiation, documentation and consummation of this Amendment and
the other documents executed in connection herewith and therewith
and the transactions contemplated hereby and thereby.
8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID STATE.
9. Severability of Provisions. Any provision of this
Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, each
Company hereby waives any provision of law that renders any
provision hereof prohibited or unenforceable in any respect.
10. Counterparts. This Amendment may be executed in any
number of several counterparts, all of which shall be deemed to
constitute but one original and shall be binding upon all
parties, their successors and permitted assigns.
11. Entire Agreement. The Securitization Agreements as
amended by this Amendment embody the entire agreement between the
parties hereto relating to the subject matter hereof and
supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
12. Originators' and GE Capital's Capacities. CFCD is
executing and delivering this Amendment both in its capacity as
an Originator under the Sale Agreement and as a Servicer under
the Servicing Agreement, and all references herein to "CFCD"
shall be deemed to include CFCD in both such capacities unless
otherwise expressly indicated. GE Capital is executing and
delivering this Amendment in its various capacities as Committed
Lender, the Administrative Agent, the Collateral Agent, the
Operating Agent and the Liquidity Agent, and all references
herein to "GE Capital" shall be deemed to include it in both such
capacities unless otherwise expressly indicated.
13. Consent to First Amendment to Limited Liability Company
Agreement of Borrower. In accordance with Section 5.03(a) of
the Funding Agreement, the Administrative Agent hereby consents
to the execution, adoption and effectiveness of the First
Amendment to the Limited Liability Company Agreement of Borrower,
dated as of April 24, 2001, between CFCD, as the sole member, and
the Borrower, substantially in the form attached hereto as
Attachment F.
[Remainder of page intentionally blank; next page is
signature page]
IN WITNESS WHEREOF, the parties have caused this Amendment
to be duly executed by their respective officers thereunto duly
authorized, as of the date first above written.
CONSOLIDATED FREIGHTWAYS FUNDING LLC
By:/s/Kerry K. Morgan
Name:Kerry K. Morgan
Title:Vice President and Treasurer
CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE
By:/s/Robert E. Wrightson
Name:Robert E. Wrightson
Title:Executive Vice President and CFO
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Lender, Administrative
Agent, Collateral Agent, Operating Agent
and Liquidity Agent
By:/s/Craig Winslow
Name: Craig Winslow
Duly Authorized Signatory
REDWOOD RECEIVABLES CORPORATION, as
Conduit Lender
By:
Name:
Title:
SECOND AMENDMENT TO LETTER OF CREDIT AGREEMENT
THIS SECOND AMENDMENT TO LETTER OF CREDIT AGREEMENT
(this "Amendment"), is made and entered into as of July 19, 2001
(the "Effective Date"), by and between CONSOLIDATED FREIGHTWAYS
CORPORATION, a Delaware corporation ("Debtor"), the other credit
parties signatory to the Letter of Credit Agreement (as defined
below) (the "Credit Parties") and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation ("GE Capital").
W I T N E S E T H:
WHEREAS, Debtor, the Credit Parties and GE
Capital are parties to that certain Letter of Credit Agreement,
dated as of April 27, 2001 (as amended to the date hereof, the
"Letter of Credit Agreement"; capitalized terms used herein and
not otherwise defined herein shall have the meanings given such
terms in the Letter of Credit Agreement), pursuant to which GE
Capital has committed to make certain letters of credit available
to Debtor; and
WHEREAS, Debtor, the Credit Parties and GE Capital
desire to modify the Letter of Credit Agreement in certain
respects and that certain waivers with respect thereto be
granted, all in accordance with and subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the
covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Debtor, the Credit Parties and GE
Capital do hereby agree that all capitalized terms used herein
shall have the meanings ascribed thereto in the Letter of Credit
Agreement (except as otherwise expressly defined or limited
herein) and do hereby further agree as follows:
1. Waivers of Certain Defaults. Subject to the terms and
conditions of this Amendment, including without limitation the
fulfillment of the conditions to effectiveness specified in
Section 7 below, the Creditor hereby waives any Default or Event
of Default under the Letter of Credit Agreement which may have
resulted from the failure of Debtor or any of its Subsidiaries to
comply with the following covenants in the Letter of Credit
Agreement or the Receivables Funding Documents: (i) the Minimum
Fixed Charge Coverage Ratio covenant set forth in paragraph (a)
of Annex 4.02(p) to the Receivables Sale and Contribution
Agreement and paragraph (a) of Annex C to the Letter of Credit
Agreement, in each case for the fiscal quarter ended June 30,
2001; (ii) the Minimum EBITDA covenant set forth in paragraph (c)
of Annex 4.02(p) to the Receivables Sale and Contribution
Agreement and paragraph (c) of Annex C to the Letter of Credit
Agreement, in each case for the fiscal quarter ended June 30,
2001, and (ii) the
covenants in paragraph (f) of Annex 4.02(h) to the Receivables
Sale and Contribution Agreement, paragraph (d) of Annex 5.04 to
the Receivables Servicing Agreement, paragraph (b) of Annex
5.02(a) to the Receivables Funding Agreement and paragraph (f) of
Annex E to the Letter of Credit, in each case to the extent such
covenant required the Debtor or any of its Subsidiaries to
provide any of the Creditor, the Receivables Lenders, the
Receivables Administrative Agent, the Receivables Collateral
Agent, or any other Person with notice of the occurrence of any
of the Defaults or Events of Default described in clauses (i) or
(ii) of this Section 1; provided that the aforesaid waivers
relate solely to the covenants, periods and events specified
above, and nothing in this Amendment is intended, or shall be
construed, to waive any other Default or Event of Default.
2. Amendments to the Letter of Credit Agreement. Subject
to the terms and conditions of this Amendment, including without
limitation the fulfillment of the conditions precedent specified
in Section 7 below, the Letter of Credit Agreement is hereby
amended as follows:
2.1 Section 6.3 of the Letter of Credit Agreement is hereby
amended by deleting clause (m) thereof in its entirety and
substituting in lieu thereof the following clause (m) as follows:
(m) the Term Debt, provided that the entire Net
Proceeds from such Term Debt are immediately upon
receipt by Debtor (i) applied by Debtor to the
repayment of Debtor's outstanding Letter of Credit
Obligations with respect to any outstanding drawings
under Letters of Credit and/or (ii) distributed to the
Receivables Subsidiary for immediate application to the
repayment of the outstanding Receivables Advances.
2.2 Section 6.3 of the Letter of Credit Agreement is hereby
further amended by deleting clause (i) of the proviso which
appears after clause (n) of such section and by substituting in
lieu thereof the following new clause (i):
(i) the Vancouver Secured Debt and the
Additional Secured Debt may not be incurred if the
Term Debt is incurred, the principal amount of the Term
Debt may not exceed $125,000,000 at any one time, and
the aggregate principal amount of the Vancouver Secured
Debt and the Additional Secured Debt may not exceed
$85,000,000 at any one time, and
2.3 Section 8.1 of the Letter of Credit Agreement is hereby
amended by re-lettering existing clause (n) thereof to be clause
(o) and by adding the following new clause (n) to read in its
entirety as follows:
(n) (i) Debtor fails to issue the Term Debt
prior to September 30, 2001, or (ii) the entire gross
cash proceeds received by Debtor in connection with the
issuance of Term Debt are less than $100,000,000, or
(iii) the entire Net Proceeds of the Term Debt are not
immediately upon receipt by Debtor (A)
applied to repay Debtor's outstanding Letter of Credit
Obligations with respect to any outstanding drawings
under Letters of Credit in the manner specified in
Section 1.7 of this Agreement and/or (B) contributed to
the Receivables Subsidiary and, immediately upon
receipt by the Receivables Subsidiary, applied by it to
repay outstanding Receivables Advances; or
2.4 The definition of "Applicable L/C Margin" set forth in
Annex A of the Letter of Credit Agreement is hereby deleted in
its entirety and the following new definition is substituted in
lieu thereof:
"Applicable L/C Margin" shall mean a rate per
annum equal to (i) from the Second Amendment Effective
Date through November 15, 2001, 1.25% and (ii) during
any period thereafter, the Applicable L/C Margin shall
be shall be subject to adjustment (upwards or
downwards) prospectively on a quarterly basis as
determined by Debtor's Fixed Charge Coverage Ratio (as
defined in Annex C to this Agreement) for the Rolling
Period (as defined in Annex C to this Agreement) for
the immediately preceding fiscal quarter of Debtor,
with each such adjustment to be effective on the fifth
(5th) Business Day after Creditor's receipt of Debtor's
quarterly financial statements (or in the case of the
last fiscal quarter of any fiscal year, annual audited
financial statements) and quarterly Compliance
Certificate (as defined in Annex E to this
Agreement)(or in the case of the last fiscal quarter of
any fiscal year, the Debtor's annual Compliance
Certificate) meeting the requirements of Annex E to
this Agreement for each fiscal quarter of Debtor. Each
quarterly adjustment in such Applicable L/C Margin will
be determined by reference to the Fixed Charge Coverage
Ratio of Debtor and its Subsidiaries for the Rolling
Period ending with such fiscal quarter as shown in such
financial statements and Compliance Certificate as
follows:
Fixed Charge Coverage Ratio Applicable L/C
Margin
< 0.40:1.00 2.00%
0.40:1.00 but < 0.60: 1.00 1.50%
0.60:1.0 but < 1.25: 1.00 1.25%
1.25:1.0 but < 1.70: 1.00 1.00%
1.70:1.00 0.75%
If Creditor does not receive delivery of Debtor's
quarterly financial statements (or in the case of the
last fiscal quarter of any fiscal year, annual audited
financial statements) and quarterly Compliance
Certificate (or in the case of the last fiscal quarter
of any fiscal year, the Debtor's annual Compliance
Certificate) in accordance with and by the deadlines
specified in Annex E to this Agreement, such failure
shall (in addition to any other remedy provided in the
Letter of Credit Documents) result in an increase in
such Applicable L/C Margin to the highest rate
specified above until the fifth (5th) Business Day
following the
date on which Creditor receives such financial
statements and Certificate of Compliance (at which time
such adjustment in the Applicable L/C Margin shall
become effective). Notwithstanding the foregoing, on
and at all times during the continuance of a Default or
Event of Default, the Applicable L/C Margin shall be
deemed to be the highest rate specified above until the
fifth (5th) Business Day after the date on which such
Event of Default or Default is waived, cured or
otherwise ceases to exist.
2.5 Annex A to the Letter of Credit Agreement is hereby
amended by adding in alphabetical order the following new defined
term:
"Second Amendment Effective Date" shall mean
July 19, 2001.
2.6 The definition of "Term Debt" set forth in Annex A of
the Letter of Credit Agreement is hereby deleted in its entirety
and the following new definition is substituted in lieu thereof:
"Term Debt" shall mean an Indebtedness of the
Debtor in an original principal amount of not less than
$100,000,000 but not more than $125,000,000 and which
(i) has a final maturity date of no earlier than six
months after the Commitment Termination Date, (ii) has
no scheduled principal reduction prior to six months
after the Commitment Termination Date, (iii) is not
prepaid, redeemed or repurchased prior to six months
after the Commitment Termination Date, (iv) is not
guaranteed by any of Debtor's Subsidiaries and (v) is
not secured by a Lien on any assets (other than real
property) of Debtor or any of its Subsidiaries.
2.7 Annex A to the Letter of Credit Agreement is hereby
amended by adding (in alphabetical order) the following new
defined term:
"Net Proceeds" shall mean, in connection with any
issuance of the Term Debt, the gross proceeds from such
issuance minus reasonable and customary transaction
costs, fees and expenses properly attributable to such
issuance and payable by Debtor in connection therewith
(in each case, paid to non-Affiliates of Debtor)
2.8 Annex C to the Letter of Credit Agreement is hereby
amended by deleting the Minimum Fixed Charge Coverage Ratio
covenant in paragraph (a) thereof in its entirety and replacing
said covenant with the following:
(a) Minimum Fixed Charge Coverage Ratio. Debtor
and its Subsidiaries shall have on a consolidated
basis, as of the end of each Fiscal Quarter set forth
below, a Fixed Charge Coverage Ratio for the Rolling
Period then ended of not less than the following:
Fiscal Quarter Minimum Fixed Charge
Coverage Ratio
Fiscal Quarter ending 0.65 to 1.00
June 30, 2001
Fiscal Quarter ending 0.35 to 1.00
September 30, 2001
Fiscal Quarter ending 0.65 to 1.00
December 31, 2001
Fiscal Quarter ending 0.60 to 1.00
March 31, 2002
Fiscal Quarter ending 1.70 to 1.00
June 30, 2002 and each
Fiscal Quarter
thereafter
2.9 Annex C to the Letter of Credit Agreement is hereby
amended by deleting the Minimum EBITDA covenant in paragraph (c)
thereof in its entirety and replacing said covenant with the
following:
(c) Minimum EBITDA. Debtor and its Subsidiaries
shall have on a consolidated basis for each Fiscal
Quarter set forth below an EBITDA for the Rolling
Period then ended of not less than the following:
Fiscal Quarter Minimum EBITDA
Fiscal Quarter ending $28,500,000
June 30, 2001
Fiscal Quarter ending $17,000,000
September 30, 2001
Fiscal Quarter ending $30,000,000
December 31, 2001
Fiscal Quarter ending $29,000,000
March 31, 2002
Fiscal Quarter ending $65,000,000
June 30, 2002
Fiscal Quarter ending $80,000,000
September 30, 2002 and
for each Fiscal Quarter
thereafter
2.10 Annex C to the Letter of Credit Agreement is hereby
amended by deleting the Maximum Capital Expenditures covenant in
paragraph (d) thereof in its entirety and replacing said covenant
with the following:
(d) Maximum Capital Expenditures. Debtor and its
Subsidiaries shall not make or incur any Capital
Expenditures if, after giving effect thereto, the
aggregate amount of all Capital Expenditures made or
incurred by Debtor and its Subsidiaries during any
period of four (4) consecutive Fiscal Quarters would
exceed the amounts set forth below for such period:
Four Consecutive Fiscal Maximum Capital
Quarters Ending Expenditures
Fiscal Quarter ending $35,000,000
June 30, 2001
Fiscal Quarter ending $30,000,000
September 30, 2001
Fiscal Quarter ending $30,000,000
December 31, 2001
Fiscal Quarter ending $40,000,000
March 31, 2002
Fiscal Quarter ending $40,000,000
June 30, 2002
Fiscal Quarter ending $55,000,000
September 30, 2002 and
for each Fiscal Quarter
thereafter
2.11 Annex C to the Letter of Credit Agreement is hereby
amended by adding the following sentences at the end of the
definition therein of the term "EBITDA":
Solely for purposes of determining compliance with the
Fixed Charge Coverage Ratio and the EBITDA covenants
set forth in paragraphs (a) and (c) above,
respectively, for any Rolling Period that includes the
Fiscal Quarter ended June 30, 2001 (the "Subject Fiscal
Quarter"), EBITDA for the Subject Fiscal Quarter shall
be deemed increased by an amount equal to the
Restructuring Charge (defined below) to the extent and
only to the extent that such Restructuring Charge was
deducted by Debtor from the consolidated net income of
the Debtor and its Subsidiaries for the Subject Fiscal
Quarter in determining such consolidated net income.
As used herein the "Restructuring Charge" shall mean an
amount equal to the lesser of (i) $10,200,000 or (ii)
the actual amount paid or the obligation actually
incurred by Debtor to International Business Machines
Corporation ("IBM") in the Subject Fiscal Quarter as a
result of the discontinuance or termination by the
Debtor or its Affiliates of the Agreement for
Information Technology Services, dated September 1,
1998, by and between Debtor and IBM.
2.12 Annex C to the Letter of Credit Agreement is hereby
amended by deleting the definition therein of the term "Tangible
Net Worth" in its entirety and replacing said definition with the
following:
"Tangible Net Worth" shall mean, with respect to any
Person at any date, the Net Worth of such Person at
such date, (x) excluding, however, from the
determination of the total assets at such date, (a) all
goodwill, capitalized organizational expenses,
capitalized research and development expenses,
trademarks, trade names, copyrights, patents, patent
applications, licenses (excluding software licenses)
and rights in any thereof, and other intangible items
(other than software licenses), (b) all unamortized
debt discount and expense, (c) treasury Stock, and (d)
any write-up in the book value of any asset resulting
from a revaluation thereof, but (y) including any non-
cash valuation reserves for deferred taxes and any
foregone tax benefits provided that such reserves are
established in accordance with Financial Accounting
Standard Number 109 and do not result in an increase in
such Person's future cash tax payments.
2.13 Annex E to the Letter of Credit Agreement is hereby
amended by adding the following new clause (iii) at the end of
paragraph (a) thereof:
, and (iii) a Compliance Certificate (as defined in
paragraph (b) below) showing the calculations used in
determining compliance with each financial covenant set
forth on Annex C as of the end of and for the Rolling
Period (as defined in Annex C) which ends with such
Fiscal Year and a management discussion and analysis
that includes a comparison to budget for such Fiscal
Year and a comparison of performance for such Fiscal
Year to the prior Fiscal Year.
2.13 Annex E to the Letter of Credit Agreement is hereby
amended by deleting the last sentence of paragraph (b) thereof in
its entirety and replacing said sentence with the following:
In addition, the Debtor shall furnish to Creditor,
within forty-five (45) days after the end of each
fiscal quarter (other than the last fiscal quarter of
any fiscal year), (y) a statement in reasonable detail
(each, a "Compliance Certificate") showing
the calculations used in determining compliance with
each financial covenant set forth on Annex C as of the
end of and for the Rolling Period (as defined in Annex
C) which ends with such fiscal quarter and (z) a
management discussion and analysis that includes a
comparison to budget for the fiscal year to date as of
the end of such fiscal quarter and a comparison of
performance for the fiscal year to date as of the end
of that fiscal quarter to the corresponding period in
the prior year.
3. No Other Waivers or Amendments. Except for the waivers
and amendments expressly set forth and referred to in Section 1
and Section 2 above, respectively, the Letter of Credit Agreement
shall remain unchanged and in full force and effect.
4. Representations and Warranties. To induce GE Capital
to enter into this Amendment, Debtor and each of the other Credit
Parties hereby warrant, represent and covenant to GE Capital
that: (a) this Amendment has been duly authorized, executed and
delivered by Debtor and each Credit Party signatory thereto, (b)
after giving effect to this Amendment, no Termination Event or
Event of Default has occurred and is continuing as of this date,
and (c) after giving effect to this Amendment, all of the
representations and warranties made by Debtor and each Credit
Party in the Letter of Credit Agreement are true and correct in
all material respects on and as of the date of this Amendment
(except to the extent that any such representations or warranties
expressly referred to a specific prior date). Any breach in any
material respect by Debtor or any Credit Party of any of its
representations and warranties contained in this Section 4 shall
be an Event of Default under the Letter of Credit Agreement.
5. Ratification. Debtor and each of the other Credit
Parties hereby ratify and reaffirm each and every term, covenant
and condition set forth in the Letter of Credit Agreement and all
other documents delivered by such company in connection therewith
(including without limitation the other Letter of Credit
Documents to which Debtor or any Credit Party is a party),
effective as of the date hereof.
6. Estoppel. To induce GE Capital to enter into this
Amendment, Debtor and each of the other Credit Parties hereby
acknowledge and agree that, as of the date hereof, there exists
no right of offset, defense or counterclaim in favor of Debtor or
any Credit Party as against GE Capital with respect to the
obligations of Debtor or any Credit Party to GE Capital under the
Letter of Credit Agreement or the other Letter of Credit
Agreement Documents, either with or without giving effect to this
Amendment.
7. Conditions to Effectiveness. This Amendment shall
become effective, as of the Effective Date, subject to the
prior or subsequent (i) receipt by the GE Capital of this
Amendment, duly executed, completed and delivered by Debtor and
each Credit Party and (ii) receipt by GE Capital of evidence
satisfactory to it that all conditions precedent to the
effectiveness of the Second Amendment to Securitization
Agreements of even date among the Receivables Subsidiary, CF
Delaware as Servicer, the Receivables Lenders, the Receivables
Administrative Agent and the other parties thereto have been
fulfilled (other than the
effectiveness of this Amendment). GE Capital shall promptly
notify the Credit Parties in writing when the conditions
specified in clauses (i) and (ii) above are satisfied.
8. Reimbursement of Expenses. Debtor and each of the
other Credit Parties hereby agree that Debtor and each of the
other Credit Parties shall reimburse GE Capital on demand for all
costs and expenses (including without limitation attorney's fees)
incurred by GE Capital in
connection with the negotiation, documentation and consummation
of this Amendment and the other documents executed in connection
herewith and therewith and the transactions contemplated hereby
and thereby.
9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID STATE.
10. Severability of Provisions. Any provision of this
Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, Debtor
and each of the other Credit Parties hereby waive any provision
of law that renders any provision hereof prohibited or
unenforceable in any respect.
11. Counterparts. This Amendment may be executed in any
number of several counterparts, all of which shall be deemed to
constitute but one original and shall be binding upon all
parties, their successors and permitted assigns.
12. Entire Agreement. The Letter of Credit Agreement as
amended by this Amendment embodies the entire agreement between
the parties hereto relating to the subject matter hereof and
supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Amendment
to be duly executed by their respective officers thereunto duly
authorized, as of the date first above written.
CONSOLIDATED FREIGHTWAYS CORPORATION
By:/s/Robert E. Wrightson
Name:Robert E. Wrightson
Title:Executive Vice President and CFO
GENERAL ELECTRIC CAPITAL CORPORATION
By:/s/Craig Winslow
Name: Craig Winslow
Duly Authorized Signatory
SECOND AMENDMENT TO SECURITIZATION AGREEMENTS
THIS SECOND AMENDMENT TO SECURITIZATION AGREEMENTS
(this "Amendment"), is made and entered into as of July 19, 2001
(the "Effective Date"), by and between CONSOLIDATED FREIGHTWAYS
FUNDING LLC, a Delaware limited liability company (the
"Borrower"), CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE, a
Delaware corporation ("CFCD"; the Borrower and CFCD are referred
to herein individually as a "Company" and collectively as the
"Companies"), REDWOOD RECEIVABLES CORPORATION, a Delaware
corporation ("Redwood"), as Conduit Lender (in such capacity, the
"Conduit Lender"), and GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation ("GE Capital"), as Committed Lender (in such
capacity, the "Committed Lender"; together with the Conduit
Lender referred to herein collectively as the "Lenders"), as
Administrative Agent for the Lenders (in such capacity, the
"Administrative Agent"), as Collateral Agent for the Conduit
Lender and the Conduit Lender Secured Parties (in such capacity,
the "Collateral Agent"), as Operating Agent for Redwood (in such
capacity, the "Operating Agent"), and as Liquidity Agent for the
Liquidity Lenders (in such capacity, the "Liquidity Agent").
W I T N E S E T H:
WHEREAS, CFCD and the Borrower are parties to a certain
Receivables Sale and Contribution Agreement, dated as of April
27, 2001 (as amended to the date hereof, the "Sale Agreement";
capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in Annex X to the Sale
Agreement as amended by this Amendment), whereby CFCD has agreed
to sell, contribute or otherwise transfer to the Borrower, and
the Borrower has agreed to purchase or otherwise acquire from
CFCD, all of the right, title and interest of CFCD in the
Receivables; and
WHEREAS, CFCD, the Borrower, the Lenders and the
Administrative Agent, are parties to a certain Servicing
Agreement, dated as of April 27, 2001 (as amended to the date
hereof, the "Servicing Agreement"), whereby the Borrower has
appointed CFCD to service, administer and collect the Transferred
Receivables pursuant to the Funding Agreement (defined below) on
the terms and conditions set forth therein; and
WHEREAS, the Borrower, the Lenders and the Administrative
Agent are parties to a certain Receivables Funding Agreement,
dated as of April 27, 2001 (as amended to the date hereof, the
"Funding Agreement"), pursuant to which, among other things, the
Lenders have agreed, subject to certain terms and conditions, to
make Advances to the Borrower to fund its purchases of the
Receivables; and
WHEREAS, Redwood, GE Capital, as Liquidity Agent, Initial
Liquidity Lender, Collateral Agent and Operating Agent are
parties to a certain Liquidity Loan and Asset Purchase Agreement,
dated as of April 27, 2001 (the "Liquidity Loan Agreement"; the
Sale Agreement, the Servicing Agreement, the Funding Agreement
and the Liquidity Loan Agreement Supplement, together with all
exhibits and annexes thereto, are referred to herein collectively
as the "Securitization Agreements"), pursuant to which, among
other things, the Liquidity Lenders have agreed, subject to
certain terms and conditions, to make Liquidity Loans to Redwood;
and
WHEREAS, the Companies have requested that certain of the
Securitization Agreements be amended in certain respects and that
certain waivers be granted, and Redwood and GE Capital are
willing to agree to such amendments and grant such waivers
subject to the terms and conditions of this Amendment.
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Waivers of Certain Events. Subject to the terms and
conditions of this Amendment, including without limitation the
fulfillment of the conditions to effectiveness specified in
Section 7 below, the Lenders, the Administrative Agent, the
Collateral Agent and the Liquidity Agent hereby waive any
Termination Event or Incipient Termination Event under the
Funding Agreement and any Event of Servicer Termination or
Incipient Servicer Termination Event under the Servicing
Agreement which may have resulted from the failure of Parent or
any of its Subsidiaries to comply with the following covenants in
the Securitization Agreements or the Standby Letter of Credit
Agreement: (i) the Minimum Fixed Charge Coverage Ratio covenant
set forth in paragraph (a) of Annex 4.02(p) to the Sale Agreement
and paragraph (a) of Annex C to the Standby Letter of Credit
Agreement, in each case for the fiscal quarter ended June 30,
2001; (ii) the Minimum EBITDA covenant set forth in paragraph (c)
of Annex 4.02(p) to the Sale Agreement and paragraph (c) of Annex
C to the Standby Letter of Credit Agreement, in each case for the
fiscal quarter ended June 30, 2001, and (ii) the covenants in
paragraph (f) of Annex 4.02(h) to the Sale Agreement, paragraph
(d) of Annex 5.04 to the Servicing Agreement, paragraph (b) of
Annex 5.02(a) to the Funding Agreement and paragraph (f) of Annex
E to the Standby Letter of Credit, in each case to the extent
such covenant required the Parent or any of its Subsidiaries to
provide any of the Lenders, the Administrative Agent, the
Collateral Agent, the Standby L/C Creditor or any other Person
with notice of the occurrence of any of the Termination Events,
Incipient Termination Events, Events of Servicer Termination, or
Incipient Servicer Termination Events described in clauses (i) or
(ii) of this Section 1; provided that the aforesaid waivers
relate solely to the covenants, periods and events specified
above, and nothing in this Amendment is intended, or shall be
construed, to waive any other Termination Event, Incipient
Termination Event, Event of Servicer Termination or Incipient
Servicer Termination Event.
2. Amendments of Securitization Agreements. Subject to
the terms and conditions of this Amendment, including without
limitation the fulfillment of the conditions to effectiveness
specified in Section 7 below, the Securitization Agreements shall
be amended as follows:
(A) Amendments to Servicing Agreement. The parties
signatory to the Servicing Agreement hereby agree that the
Servicing Agreement shall be amended as follows:
2.1 Section 6.01(q) of the Servicing Agreement is hereby
deleted in its entirety and the following new Section 6.01(q) is
substituted in lieu thereof:
(q) a default or breach of any of the covenants
set forth in Annex 4.02(p) to the Sale and Contribution
Agreement shall have occurred; or
(B) Amendments to Annex X. The parties signatory to
each of the Funding Agreement, the Sale Agreement, and the
Servicing Agreement hereby agree to amend Annex X to the Funding
Agreement, the Sale Agreement and the Servicing Agreement as
follows:
2.2 The definition of the term "Per Annum Daily Margin" set
forth in Annex X to the Funding Agreement, the Sale Agreement and
the Servicing Agreement is hereby deleted in its entirety, and
the following new definition is substituted in lieu thereof:
"Per Annum Daily Margin" shall mean a rate
per annum equal to:
(a) 2.50% with respect to the Committed Lender's
Outstanding Principal Amount, and
(b) with respect to the Conduit Lender's
Outstanding Principal Amount, (i) from the Second
Amendment Effective Date through November 15, 2001,
1.25% and (ii) during any period thereafter, the Per
Annum Daily Margin shall be subject to adjustment
(upwards or downwards) prospectively on a quarterly
basis as determined by the Fixed Charge Coverage Ratio
(as defined in Annex 4.02(p) to the Sale and
Contribution Agreement) of the Parent and its
Subsidiaries for the Rolling Period (as defined in
Annex 4.02(p) to the Sale and Contribution Agreement)
for the immediately preceding fiscal quarter of the
Parent, with each such adjustment to be effective on
the fifth (5th) Business Day after the Administrative
Agent's receipt of the Parent's quarterly financial
statements (or in the case of the last fiscal quarter
of any fiscal year, annual audited financial
statements) and quarterly Compliance Certificate (as
defined in Annex 4.02(h) to the Sale and Contribution
Agreement) (or in the case of the last fiscal quarter
of any fiscal year, the Parent's annual Compliance
Certificate) meeting the requirements of Annex 4.02(h)
to the Sale and Contribution Agreement for each fiscal
quarter of Parent. Each quarterly adjustment in such
Per Annum Daily Margin will be determined by reference
to the Fixed Charge Coverage Ratio of Parent and its
Subsidiaries for the Rolling Period ending with such
fiscal quarter as shown in such financial statements
and Compliance Certificate as follows:
Fixed Charge Coverage Ratio Per Annum Daily
Margin
< 0.40:1.00 2.00%
0.40:1.00 but < 0.60: 1.00 1.50%
0.60:1.0 but < 1.25: 1.00 1.25%
1.25:1.0 but < 1.70: 1.00 1.00%
1.70:1.00 0.75%
If the Administrative Agent does not receive
delivery of Parent's quarterly financial statements (or
in the case of the last fiscal quarter of any fiscal
year, annual audited financial statements) and
quarterly Compliance Certificate (or in the case of the
last fiscal quarter of any fiscal year, annual
Compliance Certificate) in accordance with and by the
deadlines specified in Annex 4.02(h) to the Sale and
Contribution Agreement, such failure shall (in addition
to any other remedy provided in the Related Documents)
result in an increase in such Per Annum Daily Margin to
the highest rate specified above until the fifth (5th)
Business Day following the date on which the
Administrative Agent receives such financial statements
and Certificate of Compliance (at which time such
adjustment in the Applicable Margin shall become
effective). Notwithstanding the foregoing, on and at
all times during the continuance of a Termination Event
or an Incipient Termination Event, the Per Annum Daily
Margin shall be deemed to be the highest rate specified
above until the fifth (5th) Business Day after the date
on which such Termination Event or Incipient
Termination Event is waived, cured or otherwise ceases
to exist.
2.3 Annex X to the Funding Agreement, the Sale Agreement
and the Servicing Agreement is hereby amended by adding in
alphabetical order the following new defined term:
"Second Amendment Effective Date" shall mean
July 19, 2001.]
(C) Amendments to Sale Agreement. The parties signatory to
the Sale Agreement hereby agree that the Sale Agreement shall be
amended as follows:
2.4 Annex 4.02(p) to the Sale Agreement is hereby amended
by deleting the Minimum Fixed Charge Coverage Ratio covenant in
paragraph (a) thereof in its entirety and replacing said covenant
with the following:
(a) Minimum Fixed Charge Coverage Ratio. The
Parent and its Subsidiaries shall have on a
consolidated basis, as of the end of each fiscal
quarter set forth below, a Fixed Charge Coverage Ratio
for the Rolling Period then ended of not less than the
following:
Fiscal Quarter Minimum Fixed Charge
Coverage Ratio
Fiscal Quarter ending 0.65 to 1.00
June 30, 2001
Fiscal Quarter ending 0.35 to 1.00
September 30, 2001
Fiscal Quarter ending 0.65 to 1.00
December 31, 2001
Fiscal Quarter ending 0.60 to 1.00
March 31, 2002
Fiscal Quarter ending 1.70 to 1.00
June 30, 2002 and each
Fiscal Quarter
thereafter
2.5 Annex 4.02(p) to the Sale Agreement is hereby amended
by deleting the Minimum EBITDA covenant in paragraph (c) thereof
in its entirety and replacing said covenant with the following:
(c) Minimum EBITDA. Parent and its Subsidiaries
shall have on a consolidated basis for each fiscal
quarter set forth below an EBITDA for the Rolling
Period then ended of not less than the following:
Fiscal Quarter Minimum EBITDA
Fiscal Quarter ending $28,500,000
June 30, 2001
Fiscal Quarter ending $17,000,000
September 30, 2001
Fiscal Quarter ending $30,000,000
December 31, 2001
Fiscal Quarter ending $29,000,000
March 31, 2002
Fiscal Quarter ending $65,000,000
June 30, 2002
Fiscal Quarter ending $80,000,000
September 30, 2002 and
for each Fiscal Quarter
thereafter
2.6 Annex 4.02(p) to the Sale Agreement is hereby amended
by deleting the Maximum Capital Expenditures covenant in
paragraph (d) thereof in its entirety and replacing said covenant
with the following:
(d) Maximum Capital Expenditures. Parent and its
Subsidiaries shall not make or incur any Capital
Expenditures if, after giving effect thereto, the
aggregate amount of all Capital Expenditures made or
incurred by Parent and its Subsidiaries during any
period of four (4) consecutive fiscal quarters would
exceed the amounts set forth below for such period:
Four Consecutive Fiscal Maximum Capital
Quarters Ending Expenditures
Fiscal Quarter ending $35,000,000
June 30, 2001
Fiscal Quarter ending $30,000,000
September 30, 2001
Fiscal Quarter ending $30,000,000
December 31, 2001
Fiscal Quarter ending $40,000,000
March 31, 2002
Fiscal Quarter ending $40,000,000
June 30, 2002
Fiscal Quarter ending $55,000,000
September 30, 2002 and
for each Fiscal Quarter
thereafter
2.7 Annex 4.02(p) to the Sale Agreement is hereby amended
by adding the following sentences at the end of the definition
therein of the term "EBITDA":
Solely for purposes of determining compliance with the
Fixed Charge Coverage Ratio and EBITDA covenants set
forth in paragraphs (a) and (c) above, respectively,
for any Rolling Period that includes the fiscal quarter
ended June 30, 2001 (the "Subject Fiscal Quarter"),
EBITDA for the Subject Fiscal Quarter shall be deemed
increased by an amount equal to the Restructuring
Charge (defined below) to the extent and only to the
extent that such Restructuring Charge was deducted by
Parent from the consolidated net income of the Parent
and its Subsidiaries for the Subject Fiscal Quarter in
determining such consolidated net income. As used
herein the "Restructuring Charge" shall mean an amount
equal to the lesser of (i) $10,200,000 or (ii) the
actual amount paid or the obligation actually incurred
by Parent to International Business Machines
Corporation ("IBM") in the Subject Fiscal Quarter as a
result of the discontinuance or termination by the
Debtor or its Affiliates of the Agreement for
Information Technology Services dated September 1,
1998, by and between Parent and IBM.
2.8 Annex 4.02(p) to the Sale Agreement is hereby amended
by deleting the definition therein of the term "Tangible Net
Worth" in its entirety and replacing said definition with the
following:
"Tangible Net Worth" shall mean, with respect to any
Person at any date, the Net Worth of such Person at
such date, (x) excluding, however, from the
determination of the total assets at such date, (a) all
goodwill, capitalized organizational expenses,
capitalized research and development expenses,
trademarks, trade names, copyrights, patents, patent
applications, licenses (excluding software licenses)
and rights in any thereof, and other intangible items
(other than software licenses), (b) all unamortized
debt discount and expense, (c) treasury Stock, and (d)
any write-up in the book value of any asset resulting
from a revaluation thereof, but (y) including any non-
cash evaluation reserves for deferred taxes and any
foregone tax benefits provided that such reserves are
established in accordance with Financial Accounting
Standard Number 109 and do not result in an increase in
such Person's future cash tax payments.
2.9 Annex 4.02(h) to the Sale Agreement is hereby amended
by adding the following new clause (iii) at the end of paragraph
(a) thereof:
, and (iii) a Compliance Certificate (as defined in
paragraph (b) below) showing the calculations used in
determining compliance with each financial covenant set
forth on Annex 4.02(p) as of the end of and for the
Rolling Period (as defined in Annex 4.02(p)) which ends
with such fiscal year and a management discussion and
analysis that includes a comparison to budget for such
fiscal year and a comparison of performance for such
fiscal year to the prior fiscal year.
2.10 Annex 4.02(h) to the Sale Agreement is hereby amended
by deleting the last sentence of paragraph (b) thereof in its
entirety and replacing said sentence with the following:
In addition, the Originator shall furnish to the
Administrative Agent and the Collateral Agent, within
forty-five (45) days after the end of each fiscal
quarter (other than the last fiscal quarter of any
fiscal year), (y) a statement in reasonable detail
(each, a "Compliance Certificate") showing the
calculations used in determining compliance with each
financial covenant set forth on Annex 4.02(p) as of the
end of and for the Rolling Period (as defined in Annex
4.02(p)) which ends with such fiscal quarter and (z) a
management discussion and analysis that includes a
comparison to budget for the fiscal year to date as of
the end of such fiscal quarter and a comparison of
performance for the fiscal year to date as of the end
of that fiscal quarter to the corresponding period in
the prior year.
3. No Other Waivers or Amendments. Except for the waivers
and amendments expressly set forth and referred to in Section 1
and Section 2 above, respectively, the Securitization Agreements
shall remain unchanged and in full force and effect.
4. Representations and Warranties. Each Company hereby
represents and warrants to the Purchasers and the Administrative
Agent that (a) this Amendment has been duly authorized, executed
and delivered by such Company, (b) after giving effect to this
Amendment, no Termination Event, Incipient Termination Event,
Event of Servicer Termination or Incipient Servicer Termination
Event in respect of such Company has occurred and is continuing
as of this date, and (c) after giving effect to this Amendment,
all of the representations and warranties made by such Company in
the Securitization Agreements are true and correct in all
material respects on and as of the date of this Amendment (except
to the extent that any such representations or warranties
expressly referred to a specific prior date). Any breach in any
material respect by any Company of any of its representations and
warranties contained in this Section 4 shall be a Termination
Event and an Event of Servicer Termination for all purposes of
the Securitization Agreements.
5. Ratification. Each Company hereby ratifies and
reaffirms each and every term, covenant and condition set forth
in the Securitization Agreements and all other documents
delivered by such Company in connection therewith (including
without limitation the other Related Documents to which each
Company is a party), effective as of the date hereof.
6. Estoppel. To induce GE Capital and Redwood to enter
into this Amendment, each Company hereby acknowledges and agrees
that, as of the date hereof, there exists no right of offset,
defense or counterclaim in favor of any Company as against GE
Capital or Redwood with respect to the obligations of any Company
to GE Capital or Redwood under the Securitization Agreements or
the other Related Documents, either with or without giving effect
to this Amendment.
7. Conditions to Effectiveness. This Amendment shall
become effective, as of the Effective Date, subject to the
prior or subsequent (i) receipt by the Administrative Agent of
this Amendment, duly executed, completed and delivered by each
of the Companies, Redwood and GE Capital in its various
capacities; (ii) receipt by the Administrative Agent of written
confirmation from each Rating Agency that the then current
rating of the Commercial Paper shall not be withdrawn or
downgraded after giving effect to this Amendment and the
transactions contemplated hereby, (iii) receipt by the
Administrative Agent of evidence satisfactory to it that all
conditions precedent to the effectiveness of the Second
Amendment to Letter of Credit Agreement of even date between
the Debtor, the other Credit Parties party thereto and the
Standby L/C Creditor have been fulfilled (other than the
effectiveness of this Amendment), and (iv) receipt by the
Administrative Agent for the account of Redwood of an amendment
fee in the amount of $500,000, which fee shall be non-
refundable and fully earned upon payment thereof by the
Borrower. The Administrative Agent shall promptly notify the
Companies in writing when the conditions specified in clauses
(i), (ii) and (iii) above are satisfied.
8. Reimbursement of Expenses. Each Company hereby agrees
that it shall reimburse the Administrative Agent on demand for
all costs and expenses (including without limitation attorney's
fees) incurred by such parties in connection with the
negotiation, documentation and consummation of this Amendment and
the other documents executed in connection herewith and therewith
and the transactions contemplated hereby and thereby.
9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID STATE.
10. Severability of Provisions. Any provision of this
Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, each
Company hereby waives any provision of law that renders any
provision hereof prohibited or unenforceable in any respect.
11. Counterparts. This Amendment may be executed in any
number of several counterparts, all of which shall be deemed to
constitute but one original and shall be binding upon all
parties, their successors and permitted assigns.
12. Entire Agreement. The Securitization Agreements as
amended by this Amendment embody the entire agreement between the
parties hereto relating to the subject matter hereof and
supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
13. Originators' and GE Capital's Capacities. CFCD is
executing and delivering this Amendment both in its capacity as
an Originator under the Sale Agreement and as a Servicer under
the Servicing Agreement, and all references herein to "CFCD"
shall be deemed to include CFCD in both such capacities unless
otherwise expressly indicated. GE Capital is executing and
delivering this Amendment in its various capacities as Committed
Lender, the Administrative Agent, the Collateral Agent, the
Operating Agent and the Liquidity Agent, and all references
herein to "GE Capital" shall be deemed to include it in both such
capacities unless otherwise expressly indicated.
IN WITNESS WHEREOF, the parties have caused this Amendment
to be duly executed by their respective officers thereunto duly
authorized, as of the date first above written.
CONSOLIDATED FREIGHTWAYS FUNDING LLC
By:/s/Kerry K. Morgan
Name:Kerry K. Morgan
Title:Vice President and Treasurer
CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE
By:/s/Robert E. Wrightson
Name:Robert E. Wrightson
Title:Executive Vice President and CFO
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Lender, Administrative
Agent, Collateral Agent, Operating Agent
and Liquidity Agent
By:/s/Craig Winslow
Name: Craig Winslow
Duly Authorized Signatory
REDWOOD RECEIVABLES CORPORATION, as
Conduit Lender
By:
Name:
Title:
THIRD AMENDMENT TO LETTER OF CREDIT AGREEMENT
THIS THIRD AMENDMENT TO LETTER OF CREDIT AGREEMENT
(this "Amendment"), is made and entered into as of August 13,
2001 (the "Effective Date"), by and between CONSOLIDATED
FREIGHTWAYS CORPORATION, a Delaware corporation ("Debtor"), the
other credit parties signatory to the Letter of Credit Agreement
(as defined below) (the "Credit Parties") and GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation ("GE Capital").
W I T N E S S E T H:
WHEREAS, Debtor, the Credit Parties and GE Capital are
parties to that certain Letter of Credit Agreement, dated as of
April 27, 2001 (as amended to the date hereof, the "Letter of
Credit Agreement"; capitalized terms used herein and not
otherwise defined herein shall have the meanings given such terms
in the Letter of Credit Agreement), pursuant to which GE Capital
has committed to make certain letters of credit available to
Debtor; and
WHEREAS, Debtor, the Credit Parties and GE Capital
desire to modify the Letter of Credit Agreement in certain
respects be in accordance with and subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the
covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Debtor, the Credit Parties and GE
Capital do hereby agree that all capitalized terms used herein
shall have the meanings ascribed thereto in the Letter of Credit
Agreement (except as otherwise expressly defined or limited
herein) and do hereby further agree as follows:
1. Amendments to the Letter of Credit Agreement.
Subject to the terms and conditions of this Amendment, including
without limitation the fulfillment of the conditions precedent
specified in Section 6 below, the Letter of Credit Agreement is
hereby amended as follows:
1.1 Section 1.1(a) of the Letter of Credit Agreement
is hereby amended by deleting the reference to the phrase "the
outstanding Letter of Credit Exposure" that appears at the end of
the first sentence of such section and by substituting in lieu
thereof a reference to the phrase "the aggregate outstanding
principal balance of the Reimbursement Obligations for any and
all payments made by Creditor on or pursuant to any and all
Letter of Credit Obligations".
1.2 Section 6.3 of the Letter of Credit Agreement is
hereby amended by deleting clause (m) in the first sentence
thereof in its entirety and substituting in lieu thereof the
following clause (m) as follows:
(m) the Term Debt and the Sale-Leaseback Debt,
provided that the entire Net Proceeds from each
of the Term Debt and the Sale-Leaseback Debt are
immediately upon receipt by Debtor (i) applied by
Debtor to the repayment of Debtor's outstanding
Letter of Credit Obligations with respect to any
outstanding drawings under Letters of Credit
and/or (ii) distributed to the Receivables
Subsidiary for immediate application to the
repayment of the outstanding Receivables
Advances.
1.3 Section 6.3 of the Letter of Credit Agreement is
hereby further amended by deleting the proviso which appears at
the end of clause (n) in the first sentence of such Section and
by substituting in lieu thereof the following new proviso:
,provided that (i) the aggregate outstanding
principal amount of the Term Debt, the Sale-
Leaseback Debt (which for purposes hereof shall
be the imputed principal amount thereof), the
Vancouver Secured Debt and the Additional Secured
Debt may not exceed $125,000,000 (or, in the
event that the Vancouver Property is leased by
Debtor or its Subsidiaries, plus the excess of
the capitalized value of such lease over the Net
Proceeds of such lease) at any one time, and (ii)
each of the Vancouver Secured Debt, the
Additional Secured Debt, the Sale-Leaseback Debt
and the Term Debt may only be incurred if, at the
time of and after giving effect to the incurrence
of any such Indebtedness, (A) no Default or Event
of Default shall exist, and (B) the Debtor shall
be in compliance with the minimum Fixed Charge
Coverage Ratio covenant set forth in part (a) of
Annex C for the Adjusted Rolling Period (defined
below) as determined on a pro forma basis such
that (I) the subject Indebtedness to be incurred
shall be deemed to have been incurred on the
first day of such Adjusted Rolling Period, (II)
EBITDA, cash taxes and Fixed Charges of the
Debtor and its Subsidiaries for the Testing
Quarter (defined below) shall be determined based
upon financial projections of the Debtor
delivered to Creditor on or immediately prior to
the date of incurrence of such Indebtedness,
which projections Debtor believes to be
reasonable and fair in light of current
conditions and current facts known to Debtor and
as of the date of delivery of such projections
reflect Debtor's good faith and reasonable
estimates of the future financial performance of
Debtor and its Subsidiaries for the Testing
Quarter after giving effect to such Indebtedness
on a pro forma basis, and (III) such projections
and the assumptions used in preparing the same
are subject to approval by the Creditor and such
approval shall not be unreasonably withheld or
delayed.
1.4 Section 6.7 of the Letter of Credit Agreement is
hereby amended by deleting clauses (d) and (e) thereof in their
entireties and substituting in lieu thereof the following clauses
(d) and (e), respectively:
(d) Liens on the Vancouver Property securing the
Vancouver Secured Debt, provided that on or
before the attachment of such Liens, Debtor has
delivered to Creditor a mortgagee waiver (or a
landlord waiver if the Vancouver Secured Debt
constitutes a Capital Lease Obligation), duly
executed by the applicable mortgagee (or landlord
if the Vancouver Secured Debt constitutes a
Capital Lease Obligation), and in form and
substance reasonably satisfactory to Creditor,
and provided that such Liens shall not attach to
any of the Collateral; (e) Liens (whether by
conventional mortgage or sale-leaseback or
otherwise) on any real estate or equipment owned
by any Credit Party securing the Additional
Secured Debt provided that such Liens do not
attach to any of the Collateral, and Liens
(whether by conventional mortgage or sale-
leaseback or otherwise) on any real estate owned
by the Debtor securing the Term Debt or the Sale-
Leaseback Debt provided that such Liens attach
only to the real estate that is the subject of
such transaction.
1.5 Section 6.8 of the Letter of Credit Agreement is
hereby amended by deleting the word "and" immediately preceding
clause (g) in the first sentence thereof and by adding the
following at the end of the first sentence thereof:
, and (h) the sales or transfers of real property
in connection with the issuance of any Sale-
Leaseback Debt, provided that the aggregate net
book value of all such real property shall not
exceed $50,000,000.
Section 6.8 of the Letter of Credit Agreement is hereby further
amended by replacing the phrase "clauses (d) through (g)" in the
second sentence thereof with the phrase "clauses (d) through
(h)".
.
1.6 Section 6.18 of the Letter of Credit Agreement is
hereby deleted in it entirety and the following new Section 6.18
is substituted in lieu thereof:
6.18 Term Debt and Sale-Leaseback Debt.
Except for regularly scheduled lease payments on
any Sale-Leaseback Debt, no Credit Party shall
make any payment or prepayment (partial or full)
of principal of any of the Term Debt or the Sale-
Leaseback Debt, Debtor shall not redeem or
repurchase any of the Term Debt or the Sale-
Leaseback Debt or establish a sinking fund or the
equivalent for the Term Debt or the Sale-Leaseback
Debt, and the scheduled maturity date of the Term
Debt or the Sale-Leaseback Debt shall not be
accelerated.
1.7 Section 8.1 of the Letter of Credit Agreement is
hereby amended by deleting clause (n) thereof in its entirety and
substituting in lieu thereof the following clause (n) as follows:
(n) (i) Debtor fails to receive prior to October
15, 2001 at least $50, 000,000 in aggregate Net
Proceeds from its incurrence of any or all of the
Sale-Leaseback Debt, the Term Debt, the Vancouver
Secured Debt or the Additional Secured Debt, or
(ii) the entire Net Proceeds of any of the Sale-
Leaseback Debt, the Term Debt, the Vancouver
Secured Debt and the Additional Secured Debt are
not immediately upon receipt by Debtor (A)
applied to repay Debtor's outstanding Letter of
Credit Obligations with respect to any
outstanding drawings under Letters of Credit in
the manner specified in Section 1.7 of this
Agreement and/or (B) contributed to the
Receivables Subsidiary and, immediately upon
receipt by the Receivables Subsidiary, applied by
it to repay outstanding Receivables Advances; or
1.8 Annex A to the Letter of Credit Agreement is
hereby amended by deleting the word "and" immediately preceding
clause (i) at the end of the definition therein of the term
"Indebtedness" and by adding the following at the end of such
definition:
and (j) the Sale-Leaseback Debt, the Term Debt,
the Vancouver Secured Debt and the Additional Secured Debt.
1.9 The definition of the term "Net Proceeds" set
forth in Annex A of the Letter of Credit Agreement (as such
definition was added by the Second Amendment to Letter of Credit
Agreement dated as of July 19, 2001 by and among the Debtor, the
Credit Parties and GE Capital) is hereby deleted in its entirety
and the following new definition of such term is substituted in
lieu thereof:
"Net Proceeds" shall mean, in connection with
any incurrence of the Vancouver Secured Debt, the
Additional Secured Debt, the Term Debt or the Sale-
Leaseback Debt, the gross cash proceeds received
by the Debtor or its Subsidiaries from such
transaction minus reasonable and customary
transaction costs, fees and expenses properly
attributable to such transaction and payable by
Debtor or its Subsidiaries in connection therewith
(in each case, paid to non-Affiliates of Debtor).
1.10 The definition of the term "Pledged Entity Value"
set forth in Annex A to the Letter of Credit Agreement is hereby
deleted in its entirety and the following new definition of such
term is substituted in lieu thereof:
"Pledged Entity Value" shall mean, as of any
date of determination, the amount equal to:
(a) (i) the Pledged Entity Asset Base as of
such date multiplied by the Advance Discount
Rate as of such date, less, without
duplication, (ii) the sum (without
duplication) of the Discount Reserve, the
Dilution Reserve, the Permitted Encumbrance
Reserve, the Payroll Reserve and the Letter
of Credit Fee Reserve as of such date, minus
(b) Pledged Entity Adjusted Debt as of such
date.
Notwithstanding the foregoing, at any time that
the principal amount of the Pledged Entity
Adjusted Debt equals or exceeds $200,000,000, the
Pledged Entity Value shall be deemed to be Zero
Dollars ($0) for purposes of this Agreement.
1.11 The definition of the term "Term Debt" set forth
in Annex A of the Letter of Credit Agreement is hereby deleted in
its entirety and the following new definition of such term is
substituted in lieu thereof:
"Term Debt" shall mean an Indebtedness of the
Debtor which (i) has a final maturity date of no
earlier than six months after the Commitment
Termination Date, (ii) has no scheduled principal
reduction prior to six months after the Commitment
Termination Date, (iii) is not prepaid, redeemed
or repurchased prior to six months after the
Commitment Termination Date, (iv) is not
guaranteed by any of Debtor's Subsidiaries and (v)
is not secured by a Lien on any assets (other than
real property) of Debtor or any of its
Subsidiaries.
1.12 The definition of the term "Vancouver Secured
Debt" set forth in Annex A to the Letter of Credit Agreement is
hereby deleted in its entirety and the following new definition
of such term is substituted in lieu thereof:
"Vancouver Secured Debt" shall mean an
Indebtedness of the Debtor or any of the
Subsidiary Guarantors that either (a)(i) is in an
aggregate principal amount of not more than
$25,000,000 at any one time and (ii) is secured
only by a Lien permitted under Section 6.7(d) of
the Agreement, or (b) is a Capital Lease
Obligation or other lease obligation with respect
to the Vancouver Property with an implied
principal amount of not more than $25,000,000
(plus the excess of the capitalized value of such
lease over the Net Proceeds of such lease) at any
one time.
1.13 Annex A to the Letter of Credit Agreement is
hereby amended by adding (in alphabetical order) the following
new defined terms:
"Payroll Reserve" shall have the meaning
assigned to such term in the Receivables Funding
Agreement.
"real property" and "real estate" shall be
used interchangeably herein and shall include
land and any buildings and fixtures located
thereon.
"Sale-Leaseback Debt" shall mean any
indebtedness incurred in any transaction or
transactions in which the Debtor sells or
transfers any of its real property and thereafter
leases or rents such property or other property
which the Debtor intends to use for substantially
the same purpose as the property being sold or
transferred and which transaction (i) has a final
maturity date of no earlier than six months after
the Commitment Termination Date, (ii) except for
regularly scheduled lease payments on any Sale-
Leaseback Debt, has no scheduled principal payment
prior to six months after the Commitment
Termination Date, (iii) is not prepaid, redeemed,
or repurchased prior to six months after the
Commitment Termination Date, (iv) is not
guaranteed by any of the Debtor's Subsidiaries,
and (v) is not secured by a Lien on any assets of
the Debtor or any of its Subsidiaries (other than
the real property that is the subject of such
transaction).
1.14 The definition of the term "Fixed Charges" in
Annex C to the Letter of Credit Agreement shall be deleted in its
entirety and the following new definition of such term shall be
substituted in lieu thereof:
"Fixed Charges" shall mean, with respect to
any Person for any fiscal period, the aggregate
of, without duplication, (a) all Interest Expense
and Lease Expense paid or accrued during such
period, plus (b) all regularly scheduled payments
of principal or implied principal with respect to
Indebtedness (including any lease payments by any
Person in respect of any Capital Leases, any Sale-
Leaseback Debt or any Vancouver Secured Debt) due
or made during such period, plus (c) all
Restricted Payments made during such period (other
than Permitted Stock Repurchases covered by
Section 6.14(vii)), plus (d) any cash payments
made by such Person in connection with any
Permitted Acquisitions.
.
2. No Other Amendments. Except for the amendments
expressly set forth and referred to in Section 1 above, the
Letter of Credit Agreement shall remain unchanged and in full
force and effect.
3. Representations and Warranties. To induce GE
Capital to enter into this Amendment, Debtor and each of the
other Credit Parties hereby warrant, represent and covenant to GE
Capital that: (a) this Amendment has been duly authorized,
executed and delivered by Debtor and each Credit Party signatory
thereto, (b) after giving effect to this Amendment, no
Termination Event or Event of Default has occurred and is
continuing as of this date, and (c) after giving effect to this
Amendment, all of the representations and warranties made by
Debtor and each Credit Party in the Letter of Credit Agreement
are true and correct in all material respects on and as of the
date of this Amendment (except to the extent that any such
representations or warranties expressly referred to a specific
prior date). Any breach in any material respect by Debtor or any
Credit Party of any of its representations and warranties
contained in this Section 3 shall be an Event of Default under
the Letter of Credit Agreement.
4. Ratification. Debtor and each of the other Credit
Parties hereby ratify and reaffirm each and every term, covenant
and condition set forth in the Letter of Credit Agreement and all
other documents delivered by such company in connection therewith
(including without limitation the other Letter of Credit
Documents to which Debtor or any Credit Party is a party),
effective as of the date hereof.
5. Estoppel. To induce GE Capital to enter into this
Amendment, Debtor and each of the other Credit Parties hereby
acknowledge and agree that, as of the date hereof, there exists
no right of offset, defense or counterclaim in favor of Debtor or
any Credit Party as against GE Capital with respect to the
obligations of Debtor or any Credit Party to GE Capital under the
Letter of Credit Agreement or the other Letter of Credit
Agreement Documents, either with or without giving effect to this
Amendment.
6. Conditions to Effectiveness. This Amendment
shall become effective, as of the Effective Date, subject to
the prior or subsequent (i) receipt by the GE Capital of this
Amendment, duly executed, completed and delivered by Debtor and
each Credit Party and (ii) receipt by GE Capital of evidence
satisfactory to it that all conditions precedent to the
effectiveness of the Third Amendment to Securitization
Agreements of even date among the Receivables Subsidiary, CF
Delaware as Servicer, the Receivables Lenders, the Receivables
Administrative Agent and the other parties thereto have been
fulfilled (other than the effectiveness of this Amendment). GE
Capital shall promptly notify the Credit Parties in writing
when the conditions specified in clauses (i) and (ii) above are
satisfied.
7. Reimbursement of Expenses. Debtor and each of the
other Credit Parties hereby agree that Debtor and each of the
other Credit Parties shall reimburse GE Capital on demand for all
costs and expenses (including without limitation attorney's fees)
incurred by GE Capital in connection with the negotiation,
documentation and consummation of this Amendment and the other
documents executed in connection herewith and therewith and the
transactions contemplated hereby and thereby.
8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID
STATE.
9. Severability of Provisions. Any provision of this
Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, Debtor
and each of the other Credit Parties hereby waive any provision
of law that renders any provision hereof prohibited or
unenforceable in any respect.
10. Counterparts. This Amendment may be executed in
any number of several counterparts, all of which shall be deemed
to constitute but one original and shall be binding upon all
parties, their successors and permitted assigns.
11. Entire Agreement. The Letter of Credit Agreement
as amended by this Amendment embodies the entire agreement
between the parties hereto relating to the subject matter hereof
and supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this
Amendment to be duly executed by their respective officers
thereunto duly authorized, as of the date first above written.
CONSOLIDATED FREIGHTWAYS CORPORATION
By: /s/Robert E. Wrightson
Name:Robert E. Wrightson
Title:Executive Vice President and CFO
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/Craig Winslow
Name:Craig Winslow
Title: Duly Authorized Signatory
CONSENT OF GUARANTORS
Each of the undersigned Guarantors hereby: (i) consents
to the execution, delivery and performance of the within and
foregoing Third Amendment to Letter of Credit Agreement as well
as the execution, delivery and performance of the First Amendment
to Letter of Credit Agreement, dated as of May 23, 2001, between
Debtor and GE Capital and the Second Amendment to Letter of
Credit Agreement, dated as of July 19, 2001, between such parties
and (ii) ratifies and reaffirms each and every term, covenant and
condition set forth in the Letter of Credit Documents to which it
is a party.
IN WITNESS WHEREOF, the Guarantors have caused this
Consent to be duly executed by their respective officers
thereunto duly authorized, all as of the date first above
written.
CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE
By:/s/Robert E. Wrightson
Name:Robert E. Wrightson
Title:Executive Vice President and CFO
CF AIRFREIGHT CORPORATION
By:/s/Kerry K. Morgan
Name:Kerry K Morgan
Title:Vice President and Treasurer
CF MOVESU.COM INCORPORATED
By:/s/Kerry K. Morgan
Name:Kerry K Morgan
Title:Vice President and Treasurer
REDWOOD SYSTEMS, INC.
By:/s/Kerry K. Morgan
Name:Kerry K Morgan
Title:Vice President and Treasurer
LELAND JAMES SERVICE CORPORATION
By:/s/Kerry K. Morgan
Name:Kerry K Morgan
Title:Vice President and Treasurer
THIRD AMENDMENT TO SECURITIZATION AGREEMENTS
THIS THIRD AMENDMENT TO SECURITIZATION AGREEMENTS (this
"Amendment"), is made and entered into as of August 13, 2001 (the
"Effective Date"), by and between CONSOLIDATED FREIGHTWAYS
FUNDING LLC, a Delaware limited liability company (the
"Borrower"), CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE, a
Delaware corporation ("CFCD"; the Borrower and CFCD are referred
to herein individually as a "Company" and collectively as the
"Companies"), REDWOOD RECEIVABLES CORPORATION, a Delaware
corporation ("Redwood"), as Conduit Lender (in such capacity, the
"Conduit Lender"), and GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation ("GE Capital"), as Committed Lender (in such
capacity, the "Committed Lender"; together with the Conduit
Lender referred to herein collectively as the "Lenders"), as
Administrative Agent for the Lenders (in such capacity, the
"Administrative Agent"), as Collateral Agent for the Conduit
Lender and the Conduit Lender Secured Parties (in such capacity,
the "Collateral Agent"), as Operating Agent for Redwood (in such
capacity, the "Operating Agent"), and as Liquidity Agent for the
Liquidity Lenders (in such capacity, the "Liquidity Agent").
W I T N E S S E T H:
WHEREAS, CFCD and the Borrower are parties to a certain
Receivables Sale and Contribution Agreement, dated as of April
27, 2001 (as amended to the date hereof, the "Sale Agreement";
capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in Annex X to the Sale
Agreement as amended by this Amendment), whereby CFCD has agreed
to sell, contribute or otherwise transfer to the Borrower, and
the Borrower has agreed to purchase or otherwise acquire from
CFCD, all of the right, title and interest of CFCD in the
Receivables; and
WHEREAS, CFCD, the Borrower, the Lenders and the
Administrative Agent, are parties to a certain Servicing
Agreement, dated as of April 27, 2001 (as amended to the date
hereof, the "Servicing Agreement"), whereby the Borrower has
appointed CFCD to service, administer and collect the Transferred
Receivables pursuant to the Funding Agreement (defined below) on
the terms and conditions set forth therein; and
WHEREAS, the Borrower, the Lenders and the
Administrative Agent are parties to a certain Receivables Funding
Agreement, dated as of April 27, 2001 (as amended to the date
hereof, the "Funding Agreement"), pursuant to which, among other
things, the Lenders have agreed, subject to certain terms and
conditions, to make Advances to the Borrower to fund its
purchases of the Receivables; and
WHEREAS, Redwood, GE Capital, as Liquidity Agent,
Initial Liquidity Lender, Collateral Agent and Operating Agent
are parties to a certain Liquidity Loan and Asset Purchase
Agreement, dated as of April 27, 2001 (the "Liquidity Loan
Agreement"; the Sale Agreement, the Servicing Agreement, the
Funding Agreement and the Liquidity Loan Agreement Supplement,
together with all exhibits and annexes thereto, are referred to
herein collectively as the "Securitization Agreements"), pursuant
to which, among other things, the Liquidity Lenders have agreed,
subject to certain terms and conditions, to make Liquidity Loans
to Redwood; and
WHEREAS, the Companies have requested that certain of
the Securitization Agreements be amended in certain respects, and
Redwood and GE Capital are willing to agree to such amendment
subject to the terms and conditions of this Amendment.
NOW THEREFORE, in consideration of the premises and
mutual covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendments of Securitization Agreements. Subject
to the terms and conditions of this Amendment, including without
limitation the fulfillment of the conditions to effectiveness
specified in Section 6 below, the Securitization Agreements shall
be amended as follows:
1.1 The definition of the term "Availability" set
forth in Annex X to the Funding Agreement, the Sale Agreement and
the Servicing Agreement is hereby deleted in its entirety and the
following new definition of such term is substituted in lieu
thereof:
"Availability" shall mean, as of any date of
determination, the amount equal to the lesser of:
(a)(i) the Borrowing Base multiplied by the Advance
Discount Rate minus (ii) the sum (without duplication)
of the Discount Reserve, the Dilution Reserve , the
Permitted Encumbrance Reserve, and the Payroll
Reserve, and (b) the Maximum Facility Amount.
1.2 The definition of the term "Debt" set forth in
Annex X to the Funding Agreement, the Sale Agreement, and the
Servicing Agreement is hereby amended by deleting the word "and"
immediately preceding clause (i) at the end of such definition
and by adding the following at the end of such definition:
and (j) the Sale-Leaseback Debt, the Term Debt, the
Vancouver Secured Debt and the Additional Term Debt (as
such terms are defined in the Standby Letter of Credit
Agreement).
1.3 The definition of the term "Fixed Charges" set
forth in Annex 4.02(p) to the Sale Agreement is hereby deleted in
its entirety and the following new definition of such term is
substituted in lieu thereof:
"Fixed Charges" shall mean, with respect to any
Person for any fiscal period, the aggregate of, without
duplication, (a) all Interest Expense and Lease Expense
paid or accrued during such period, plus (b) all
regularly scheduled payments of principal and implied
principal with respect to Debt (including any lease
payments by any Person in respect of any Capital
Leases, any Sale-Leaseback Debt and any Vancouver
Secured Debt as such terms are defined in the Standby
Letter of Credit Agreement) due or made during such
period, plus (c) all Restricted Payments made during
such period (other than Permitted Stock Repurchases
covered by Section 6.14(vii) of the Standby Letter of
Credit Agreement), plus (d) any cash payments made by
such Person in connection with any Permitted
Acquisitions.
1.4 Annex X to the Funding Agreement, the Sale
Agreement and the Servicing Agreement is hereby further amended
by adding (in alphabetical order) the following new defined
terms:
"Additional Parent Debt" shall mean, as of any
date of determination, any or all of the Sale-Leaseback
Debt, the Term Debt, the Vancouver Secured Debt and the
Additional Secured Debt (as such terms are defined in
the Standby Letter of Credit Agreement) outstanding as
of such date.
"Net Proceeds" shall have the meaning given such
term in the Standby Letter of Credit Agreement.
"Payroll Reserve" shall mean (i) at all times
during the period from the Third Amendment Effective
Date through October 14, 2001, an amount equal to
$5,000,000 and (ii) at all times during the period from
and after October 15, 2001, an amount equal to
$15,000,000; provided that the amount of the Payroll
Reserve specified in clause (ii) above shall be subject
to reduction in accordance with the following terms and
conditions: (x) such amount shall be reduced by
$5,000,000 from and after the date after the Third
Amendment Effective Date that the Parent and its
Subsidiaries have received not less than $100,000,000
in Net Proceeds of the Additional Parent Debt; (y) such
amount shall be reduced by an additional $5,000,000
from and after the date that after the Third Amendment
Effective Date the Parent and its Subsidiaries have
received not less than $100,000,000 in Net Proceeds of
the Additional Parent Debt and the Parent has
provided, at all times as it may be required to do so
under the Standby Letter of Credit Agreement, the
Standby L/C Creditor during a period of 90 consecutive
days with Pledged Entity Valuation Certificates (as
defined in the Standby Letter of Credit Agreement)
establishing that the Excess Liquidity (as defined in
the Standby Letter of Credit Agreement) as of the date
of each such certificate was not less than $40,000,000;
and (z) such amount shall be reduced by an additional
$5,000,000 from and after the date that the
Administrative Agent has received from the Parent
quarterly or annual financial statements meeting the
requirements of Annex 4.02(h) of the Sale Agreement in
respect of any fiscal quarter or year of the Parent and
its Subsidiaries ending on or after December 31, 2001
establishing that the Parent and its Subsidiaries have
on a consolidated basis EBITDA (as defined in Annex
4.02(p) to the Sale Agreement) for the Rolling Period
(as defined in Annex 4.02(p) to the Sale Agreement)
then ended of not less than $60,000,000. The
imposition, reduction or elimination of the Payroll
Reserve is not intended to modify or impair the
Administrative Agent's discretion to impose additional
reserves with respect to the unpaid employee payroll of
the Parent and its Subsidiaries under clause (iv) of
the definition of the term "Reserves" herein.
"Third Amendment Effective Date" shall mean August
13, 2001.
2. No Other Amendments. Except for the amendments
expressly set forth and referred to in Section 1 above, the
Securitization Agreements shall remain unchanged and in full
force and effect.
3. Representations and Warranties. Each Company
hereby represents and warrants to the Purchasers and the
Administrative Agent that (a) this Amendment has been duly
authorized, executed and delivered by such Company, (b) after
giving effect to this Amendment, no Termination Event, Incipient
Termination Event, Event of Servicer Termination or Incipient
Servicer Termination Event in respect of such Company has
occurred and is continuing as of this date, and (c) after giving
effect to this Amendment, all of the representations and
warranties made by such Company in the Securitization Agreements
are true and correct in all material respects on and as of the
date of this Amendment (except to the extent that any such
representations or warranties expressly referred to a specific
prior date). Any breach in any material respect by any Company
of any of its representations and warranties contained in this
Section 3 shall be a Termination Event and an Event of Servicer
Termination for all purposes of the Securitization Agreements.
4. Ratification. Each Company hereby ratifies and
reaffirms each and every term, covenant and condition set forth
in the Securitization Agreements and all other documents
delivered by such Company in connection therewith (including
without limitation the other Related Documents to which each
Company is a party), effective as of the date hereof.
5. Estoppel. To induce GE Capital and Redwood to
enter into this Amendment, each Company hereby acknowledges and
agrees that, as of the date hereof, there exists no right of
offset, defense or counterclaim in favor of any Company as
against GE Capital or Redwood with respect to the obligations of
any Company to GE Capital or Redwood under the Securitization
Agreements or the other Related Documents, either with or without
giving effect to this Amendment.
6. Conditions to Effectiveness. This Amendment
shall become effective, as of the Effective Date, subject to
the prior or subsequent (i) receipt by the Administrative Agent
of this Amendment, duly executed, completed and delivered by
each of the Companies, Redwood and GE Capital in its various
capacities; (ii) receipt by the Administrative Agent of
evidence satisfactory to it that all conditions precedent to
the effectiveness of the Third Amendment to Letter of Credit
Agreement of even date between the Debtor, the other Credit
Parties party thereto and the Standby L/C Creditor have been
fulfilled (other than the effectiveness of this Amendment), and
(iii) receipt by the Administrative Agent for the account of
Redwood of an amendment fee in the amount of $100,000, which
fee shall be non-refundable and fully earned upon payment
thereof by the Borrower. The Administrative Agent shall
promptly notify the Companies in writing when the conditions
specified in clauses (i), (ii) and (iii) above are satisfied.
7. Reimbursement of Expenses. Each Company hereby
agrees that it shall reimburse the Administrative Agent on demand
for all costs and expenses (including without limitation
attorney's fees) incurred by such parties in connection with the
negotiation, documentation and consummation of this Amendment and
the other documents executed in connection herewith and therewith
and the transactions contemplated hereby and thereby.
8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID
STATE.
9. Severability of Provisions. Any provision of this
Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, each
Company hereby waives any provision of law that renders any
provision hereof prohibited or unenforceable in any respect.
10. Counterparts. This Amendment may be executed in
any number of several counterparts, all of which shall be deemed
to constitute but one original and shall be binding upon all
parties, their successors and permitted assigns.
11. Entire Agreement. The Securitization Agreements
as amended by this Amendment embody the entire agreement between
the parties hereto relating to the subject matter hereof and
supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
12. Originators' and GE Capital's Capacities. CFCD is
executing and delivering this Amendment both in its capacity as
an Originator under the Sale Agreement and as a Servicer under
the Servicing Agreement, and all references herein to "CFCD"
shall be deemed to include CFCD in both such capacities unless
otherwise expressly indicated. GE Capital is executing and
delivering this Amendment in its various capacities as Committed
Lender, the Administrative Agent, the Collateral Agent, the
Operating Agent and the Liquidity Agent, and all references
herein to "GE Capital" shall be deemed to include it in both such
capacities unless otherwise expressly indicated.
IN WITNESS WHEREOF, the parties have caused this Amendment
to be duly executed by their respective officers thereunto duly
authorized, as of the date first above written.
CONSOLIDATED FREIGHTWAYS FUNDING LLC
By:/s/Kerry K. Morgan
Name:Kerry K. Morgan
Title:Vice President and Treasurer
CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE
By:/s/Robert E. Wrightson
Name:Robert E. Wrightson
Title:Executive Vice President and CFO
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Lender, Administrative
Agent, Collateral Agent, Operating Agent
and Liquidity Agent
By/s/Craig Winslow
Name:Craig Winslow
Title: Duly Authorized Signatory
REDWOOD RECEIVABLES CORPORATION, as
Conduit Lender
By:/s/Brian Schwinn
Name:Brian Schwinn
Title:Assistant Secretary