SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

Exhibit 10.1

 

SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

D ATED AS OF M AY 24, 2005

 

A MONG

 

YELLOW ROADWAY RECEIVABLES FUNDING CORPORATION

AS S ELLER ,

 

FALCON ASSET SECURITIZATION CORPORATION,

BLUE RIDGE ASSET FUNDING CORPORATION,

THREE PILLARS FUNDING LLC

AND

AMSTERDAM FUNDING CORPORATION,

AS C ONDUITS ,

 

USF ASSURANCE CO. LTD.,

AS AN U NCOMMITTED P URCHASER ,

 

THE FINANCIAL INSTITUTIONS PARTY HERETO,

AS C OMMITTED P URCHASERS ,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

AS B LUE R IDGE A GENT AND LC I SSUER ,

 

SUNTRUST CAPITAL MARKETS, INC.,

AS T HREE P ILLARS A GENT ,

 

ABN AMRO BANK N.V.,

AS A MSTERDAM A GENT ,

 

AND

 

JPMORGAN CHASE BANK, N.A.,

AS F ALCON A GENT AND AS A DMINISTRATIVE A GENT

 

 

TABLE OF CONTENTS

 

 

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THIS SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of May 24, 2005 (as amended, restated or otherwise modified from time to time, this “Agreement” ), is by and among:

 

(a)

Yellow Roadway Receivables Funding Corporation, a Delaware corporation (the “Seller” ),

 

(b)

JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA ( “JPMorgan Chase” ), SunTrust Bank ( “SunTrust” ), Wachovia Bank, National Association ( “Wachovia” ), and ABN AMRO Bank, N.V. ( “ABN AMRO” ), as Committed Purchasers,

 

(c)

Falcon Asset Securitization Corporation ( “Falcon” or a “Conduit ”), Three Pillars Funding LLC ( “Three Pillars” or a “Conduit” ), Blue Ridge Asset Funding Corporation ( “Blue Ridge” or a “Conduit” ), and Amsterdam Funding Corporation ( “Amsterdam” or a “Conduit” ),

 

(d)

USF Assurance Co. Ltd., an exempted company incorporated with limited liability under the laws of Bermuda, individually ( “USF Assurance” ) and as agent for itself (together with its successors in such capacity, the “USFA Agent” or a “Co-Agent” ),

 

(e)

JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA, as agent for the Falcon Group (together with its successors in such capacity, the “Falcon Agent” or a “Co-Agent” ), SunTrust Capital Markets, Inc. ( “STCM” ), as agent for the Three Pillars Group (together with its successors in such capacity, the “Three Pillars Agent” or a “Co-Agent” ), Wachovia Bank, National Association, as letter of credit issuer (in such capacity, the “LC Issuer”) and as agent for the Blue Ridge Group (together with its successors in such capacity, the “Blue Ridge Agent” or a “Co-Agent” ), and ABN AMRO Bank, N.A., as agent for the Amsterdam Group (together with its successors in such capacity, the “Amsterdam Agent” or a “Co-Agent” ), and

 

(f)

JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA, as administrative agent for the Groups pursuant to Article IX of this Agreement (together with its successors in such capacity, the “Administrative Agent” ).

 

Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I hereto.

 

PRELIMINARY STATEMENTS

 

The Seller, JPMorgan Chase, Wachovia, SunTrust, Blue Ridge, Three Pillars, Falcon, the Blue Ridge Agent, the Falcon Agent, the Three Pillars Agent and the Administrative Agent are parties to that certain Amended and Restated

 

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Receivables Purchase Agreement dated as of September 10, 2004 (the “Existing Agreement” ).

 

The Seller wishes to increase the facility evidenced by the Existing Agreement, and Amsterdam, ABN AMRO and the Amsterdam Agent wish to become parties thereto.

 

The Seller desires to continue to transfer and assign Purchaser Interests to the Purchasers from time to time. In addition, the Seller may from time to time request the LC Issuer to issue Letters of Credit for which the Seller’s reimbursement obligations will be secured by a pledge of the Seller’s interest in the Receivables and Related Security, and the LC Issuer has agreed, subject to the terms and conditions contained in this Agreement, to issue such Letters of Credit.

 

Each of the Uncommitted Purchasers may, in its absolute and sole discretion, purchase Purchaser Interests from the Seller from time to time.

 

The Committed Purchasers shall, at the request of the Seller, purchase Purchaser Interests from time to time.

 

JPMorgan Chase has been requested and is willing to act as agent on behalf of the Falcon Group, STCM has been requested and is willing to act as agent on behalf of the Three Pillars Group, Wachovia has been requested and is willing to act as LC Issuer and as agent on behalf of the Blue Ridge Group, and ABN AMRO has been requested and is willing to act as agent on behalf of the Amsterdam Group, in accordance with the terms hereof. USF Assurance will act as agent on its own behalf.

 

In addition, JPMorgan Chase has been requested and is willing to act as administrative agent on behalf of the Groups in accordance with the terms hereof.

 

The parties wish to amend and restate the Existing Agreement in its entirety as hereinafter set forth, and accordingly, hereby agree as follows:

 

ARTICLE I

AMOUNTS AND TERMS OF THE PURCHASES

 

Section 1.1. Purchase and Letter of Credit Facility . Upon the terms and subject to the conditions hereof, from time to time on or after the date of this Agreement and prior to the Amortization Date:

 

(a) Purchases of Purchaser Interests . The Seller may request that all Conduit Groups and/or the USFA Group purchase Purchaser Interests offered for sale from time to time by delivering a Purchase Notice to the applicable Co-Agents in accordance with Section 1.2 . Upon receipt of a Purchase Notice from the Seller, each applicable Co-Agent shall determine whether its Uncommitted Purchaser will participate in the Purchase specified in such Purchase Notice, and

 

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(i) in the event that any Conduit elects not to make its Percentage of a Purchase offered to the Conduit Groups, its Co-Agent shall promptly notify the Seller and, unless the Seller cancels the Purchase Notice as to all Conduit Groups, each of such Conduit’s Committed Purchasers severally agrees to make its Ratable Share of the applicable Conduit Group’s Percentage of such Purchase on the terms and subject to the conditions hereof; and

 

(ii) in the event that USF Assurance elects not to participate in a Purchase in which it is invited to participate by Seller, the Purchase Notice shall be automatically cancelled solely as to USF Assurance and the amount of the requested aggregate Purchase Price shall be automatically reduced by the amount the Seller had requested from USF Assurance;

 

provided that (A) at no time may the aggregate Credit Exposure of any Group at any one time outstanding exceed such Group’s Group Limit, (B) at no time may the aggregate Credit Exposure of all Groups exceed (1) the Net Receivables Balance minus (2) the Required Reserve, and (C) at no time may the Credit Exposure of the USFA Group equal or exceed 50% of the aggregate Credit Exposure of all Groups.

 

(b) Issuance of Letters of Credit . The Seller may request that the LC Issuer issue Letters of Credit, and the LC Issuer hereby agrees to issue such Letters of Credit and to renew, extend, increase, decrease or otherwise modify each Letter of Credit ( “Modify,” and each such action a “Modification” ), from time to time upon the request of the Seller; provided that no Letter of Credit shall be issued or Modified by the LC Issuer if, after giving effect thereto, (i) the aggregate Credit Exposure of the Purchasers would exceed the Purchase Limit, (ii) the LC Obligations would exceed the LC Sublimit, or (iii) the Effective Receivable Interest (as most recently computed or recomputed in accordance with Section 1.5 and expressed as a percentage) would exceed 100%; and provided, further, that each Letter of Credit issued pursuant to this Section 1.1(b) shall have a face amount of not less than $1,000,000. No Letter of Credit shall have an original expiry date later than 364 days from the date of issuance or Modification.

 

(c) Reduction of Group Limits . The Seller may, upon prior written notice to each of the Co-Agents giving effect to the Required Notice Period, terminate in whole or reduce in part, ratably among the Groups (and within each Conduit Group, ratably amongst the Committed Purchasers therein), the unused portion of such Group’s Group Limit; provided that (i) each partial reduction of a Group Limit shall be in an amount equal to $10,000,000, (ii) no Group’s Group Limit may be reduced below such Group’s Credit Exposure that will remain outstanding after giving effect to any reduction therein, and (iii) unless all Group Limits and all Credit Exposure will be reduced to zero, after giving effect to such reduction, no Group’s Group Limit will be less than $50,000,000.

 

Section 1.2. Incremental Purchases .

 

(a) Purchase Notices . The Seller shall provide the Co-Agents with at least two (2) Business Days’ prior written notice in a form set forth as Exhibit IX hereto of each Incremental Purchase (each, a “ Purchase Notice ”). Each Purchase Notice shall be subject to Section 4.2 hereof and, except as set forth below, shall be irrevocable and shall specify (i) the date of the

 

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proposed Purchase, (ii) whether USF Assurance is being offered a Purchaser Interest and if so, at what Purchase Price, (iii) whether the Conduit Groups are being offered a Purchaser Interest and if so, the requested aggregate Purchase Price for the Conduit Groups and each Conduit Group’s Percentage thereof (which shall not be less than $1,000,000 per Conduit Group), and (iv) the requested Discount Rate and Tranche Period that will apply in the event that the Committed Purchasers of any Group participate in such Purchase.

 

(b) Uncommitted Purchasers’ Election Not to Fund . Following receipt of a Purchase Notice applicable to its Group, each of the Co-Agents will determine whether its Uncommitted Purchaser agrees to purchase the offered Purchaser Interest (or, in the case of a Conduit, its Percentage of the Purchaser Interest offered to the Conduit Groups). If a Conduit declines to make its Percentage of a proposed Purchase by the Conduit Groups, the applicable Co-Agent shall promptly advise the Seller of such fact, and the Seller may thereupon cancel the Purchase Notice as to that Conduit Group or, in the absence of such a cancellation, the Incremental Purchase of such Conduit Group’s Percentage of the applicable Purchaser Interest will be made by the Committed Purchasers in such Conduit Group. If USF Assurance declines to participate in a Purchase proposed to be made by it, the Purchase Notice shall automatically be deemed cancelled solely as to USF Assurance.

 

(c) Payment of Purchase Price . On the date of each Incremental Purchase, upon satisfaction of the applicable conditions precedent set forth in Article IV , each Uncommitted Purchaser or Committed Purchaser, as applicable, shall deposit to the Facility Account, in immediately available funds, no later than 12:00 noon (Chicago time), an amount equal to (i) in the case of USF Assurance, the Purchase Price specified in the applicable Purchase Notice for the Purchaser Interest offered to it, (ii) in the case of a Conduit, its Group’s Percentage of the Purchase Price of the Purchaser Interest offered to the Conduit Groups pursuant to such Purchase Notice or (iii) in the case of a Committed Purchaser, such Committed Purchaser’s Pro Rata Share of its Group’s Percentage of the Purchase Price for the Purchaser Interest offered to the Conduit Groups pursuant to such Purchase Notice.

 

(d) Assignment of Purchaser Interests . Seller hereby sells, assigns and transfers to the Administrative Agent, for the benefit of the applicable Purchasers and their permitted assigns, effective on and as of the date of each Purchase, each Purchaser Interest described in the applicable Purchase Notice.

 

Section 1.3. Letters of Credit .

 

(a) Letter of Credit Requests . Subject to Section 1.1 , Seller shall give the LC Issuer and the Co-Agents of the Conduit Groups reasonable prior notice of the proposed date of issuance or Modification of each Letter of Credit (and in no event shall such notice be given later than 12:00 noon (Chicago time) three Business Days prior to such issuance or Modification), by delivering a copy of the Letter of Credit Request provided to it under the Sale Agreement, together with a transmittal letter in substantially the form of Exhibit V hereto, duly completed by Seller. The issuance or Modification by the LC Issuer of any Letter of Credit shall, in addition to the conditions precedent set forth in Article IV , be subject to the conditions precedent that such Letter of Credit shall be reasonably satisfactory to the LC Issuer and that Seller shall have executed and delivered such application agreement and/or such other instruments and

 

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agreements relating to such Letter of Credit as the LC Issuer shall have reasonably requested (each, an “LC Application” ). In no event shall the LC Issuer be obligated to issue a Modification if, on the proposed date of such Modification, the LC Issuer would not be obligated to issue new Letters of Credit if requested or if the beneficiary does not consent to the proposed terms of the Modification. In the event of any conflict between the terms of this Agreement and the terms of any LC Application, the terms of the LC Application shall control.

 

(b) Reimbursement by Seller . Upon receipt from the beneficiary of any Letter of Credit of any demand for payment under such Letter of Credit, the LC Issuer shall notify the Co-Agents and Seller as to the amount to be paid by the LC Issuer as a result of such demand and the proposed payment date (the “LC Payment Date” ). The responsibility of the LC Issuer to Seller shall be only to determine that the documents (including each demand for payment) delivered under each Letter of Credit in connection with such presentment shall be in conformity in all material respects with such Letter of Credit. Seller shall be irrevocably and unconditionally obligated to reimburse the LC Issuer on or before the applicable LC Payment Date for any amounts to be paid by the LC Issuer upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind, either from cash on hand or, subject to the terms and conditions hereof, with the proceeds of a Purchase; provided that Seller shall not hereby be precluded from asserting any claim for direct (but not consequential) damages suffered by Seller to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the LC Issuer or (ii) the LC Issuer’s failure to pay under any Letter of Credit issued by it after the presentation to it of a request strictly complying with the terms and conditions of such Letter of Credit. All such amounts paid by the LC Issuer and remaining unpaid by Seller (whether from cash on hand or with the proceeds of a Purchase made in accordance with this Agreement) shall bear interest ( “Interest” ), payable on each Settlement Date in arrears out of SELLER Collections, for each day until paid at a rate per annum equal to the Default Rate. Regardless of whether the applicable LC Payment Date has occurred, the Co-Agents are hereby irrevocably directed to pay the proceeds of each Purchase made while any Reimbursement Obligation remains outstanding directly to the LC Issuer until all such Reimbursement Obligations, together with all accrued and unpaid interest and LC Fees thereon, are paid in full. Seller’s Reimbursement Obligations and obligation to pay Interest pursuant to this Section 1.3(b) shall be secured by a pledge of the Seller Interest.

 

(c) Obligations Absolute . Seller’s obligations under this Section 1.3 shall be absolute and unconditional under any and all circumstances and irrespective of (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (ii) the existence of any claim, counterclaim, set-off, defense or other right that Seller or any Originator may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the applicable LC Issuer or any other person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; (iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect (provided that such draft, demand, certificate or other document presented pursuant to such Letter of Credit appears on its face to comply with the terms thereof) or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such

 

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Letter of Credit; (iv) any payment by the LC Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit (provided that such draft, demand, certificate or other document presented pursuant to such Letter of Credit appears on its face to comply with the terms thereof); or any payment made by the LC Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under the Bankruptcy Code of the United States, or any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally; (v) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to the departure from any guarantee, for all or any of the obligations of Seller or any Originator in respect of any Letter of Credit; or (vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, Seller of the applicable Originator, provided that Seller shall not hereby be precluded from asserting any claim for direct (but not consequential) damages suffered by Seller to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the LC Issuer or (ii) the LC Issuer’s failure to pay under any Letter of Credit issued by it after the presentation to it of a request strictly complying with the terms and conditions of such Letter of Credit. Seller shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it, and, in the event of any claim of noncompliance with Seller’s instructions or other irregularity, Seller will immediately (and in any event within 5 Business Days) notify the LC Issuer. Seller shall be conclusively deemed to have waived any such claim against the LC Issuer and its correspondents unless such notice is given as aforesaid.

 

(d) Actions of LC Issuer . With respect to any actions taken or omitted in the absence of gross negligence or willful misconduct, the LC Issuer shall be entitled to rely, and shall be fully protected in relying, upon any Letter of Credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the LC Issuer.

 

(e) Participations . By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the LC Issuer or the Committed Purchasers, the LC Issuer hereby grants to each Committed Purchaser, and each Committed Purchaser hereby acquires from the LC Issuer, a participation in such Letter of Credit equal to such Committed Purchaser’s Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Committed Purchaser hereby absolutely and unconditionally agrees to pay to the LC Issuer, such Committed Purchaser’s Percentage of each draw honored by the LC Issuer pursuant to a Letter of Credit and not reimbursed by the Seller on the date due as provided in this Section 1.3(e) , or of any reimbursement payment required to be refunded to the Seller for any reason. Each Committed Purchaser acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and

 

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unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Servicer Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. The Committed Purchasers shall be entitled to receive their ratable shares of any LC Fees and Interest actually collected by the LC Issuer, but in no event shall they be entitled to share in any other fees, commissions, charges or expenses payable to the LC Issuer.

 

(f) LC Issuer Agreements . At any time while any Letter of Credit or Reimbursement Obligation remains outstanding, (i) not later than the third Business Day of each week, the daily activity (set forth by day) in respect of Letters of Credit during the immediately preceding week, including all issuances, extensions, amendments and renewals, all expirations and cancellations and all disbursements and reimbursements, (ii) on or prior to each Business Day on which the LC Issuer expects to issue, amend, renew or extend any Letter of Credit, the date of such issuance, amendment, renewal or extension, and the aggregate face amount of the Letters of Credit to be issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension occurred (and whether the amount thereof changed), it being understood that the LC Issuer shall not permit any issuance, renewal, extension or amendment resulting in an increase in the amount of any Letter of Credit to occur without first obtaining confirmation from the Blue Ridge Agent or the Administrative Agent that it is then permitted under this Agreement, (iii) on each Business Day on which such LC Issuer makes any payment to a beneficiary pursuant to a Letter of Credit, the date and amount of such payment, (iv) on any Business Day on which the Seller fails to reimburse a Reimbursement Obligation required to be reimbursed to the LC Issuer on such day, the date and amount of such failure, and (v) on any other Business Day, such other information as any of the Co-Agents may reasonably request. The LC Issuer shall invoice the Seller for LC Fees no later than the 10th Business Day immediately preceding each Settlement Date described in clause (A) of the definition of “Settlement Date” and shall disburse each Committed Purchaser’s share of LC Fees and Interest received by the LC Issuer within two Business Days after the LC Issuer’s receipt thereof.

 

Section 1.4. Allocation of Collections; Reinvestments .

 

(a) Allocation of Collections Between the Purchaser Interests and the Seller’s Interest . On each day during the Revolving Period and the Liquidation Period on which Collections are received, the Servicer shall allocate such Collections ratably to the Purchaser Interests and to the Seller Interest. Collections allocated to the Purchaser Interests shall hereinafter be referred to as “ PURCHASER Collections,” and Collections allocated to the Seller Interest shall hereinafter be referred to as “SELLER Collections.”

 

(b) Payments Due and Turnover of PURCHASER Collections on Settlement Dates . On each Settlement Date, the Servicer shall pay to each of the Co-Agents, for distribution to the Purchasers in its Group, PURCHASER Collections in an amount equal to all Discount, CP Costs, Broken Funding Costs, Servicer Fee, and other fees and other amounts that are then due and owing to the Agents or the Purchasers under the Transaction Documents, together with any required reductions in Aggregate Capital pursuant to Section 1.5 or Section 1.6 (all of the foregoing, collectively, the “Required Amounts” ), and any remaining PURCHASER Collections

 

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may be paid to the Seller. Notwithstanding the foregoing, no provision of this Agreement or any Fee Letter shall require the payment or permit the collection of any amounts hereunder in excess of the maximum permitted by applicable law.

 

(c) Application of PURCHASER Collections During the Revolving Period . Prior to the Liquidation Period, any Collections and/or Deemed Collections received by the Servicer shall be set aside and held in trust by the Servicer for the payment of any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in this Section 1.4(c) . On each day during the Revolving Period which is not a Settlement Date, subject to Section 1.6 and the last sentence of this Section 1.4(c) , PURCHASER Collections shall first be applied to making additional Purchases of undivided interests in Receivables and Related Security, such that after giving effect thereto, the Aggregate Capital outstanding from the Purchasers is equal to the Aggregate Capital outstanding immediately prior to receipt of such PURCHASER Collections (each such Purchase, a “Reinvestment” ) so long as after giving effect to such Reinvestment, the Effective Receivable Interest does not exceed 100%. Each Reinvestment will be presumed to be made ratably amongst all Groups in accordance with their respective amounts of Aggregate Capital outstanding unless USF Assurance delivers written notice to the Seller and the Co-Agents that it does not wish to participate in a Reinvestment, in which case such Reinvestment will be made ratably amongst the Conduit Groups in accordance with their respective Percentages. If on any Settlement Date, there are insufficient PURCHASER Collections to pay all Required Amounts, the next available PURCHASER Collections shall be applied to such payment, and no Reinvestment shall be permitted hereunder until such amount payable has been paid in full.

 

(d) Application of SELLER Collections During the Revolving Period .

 

(i) On each Settlement Date during the Revolving Period, Servicer shall pay to the LC Issuer, SELLER Collections in an amount equal to all accrued and unpaid Interest, LC Fees and other fees, if any, then due and owing pursuant to Section 1.3 or the Fee Letters and the amount of any cash collateral required pursuant to Section 1.5(e) or Section 1.8(b)(iii) .

 

(ii) On each day during the Revolving Period on which any SELLER Collections are received, after payment of any amounts that are then due and owing pursuant to Section 1.4(d)(i) , SELLER Collections shall be applied first, to purchase additional Receivables under the Sale Agreement, such that after giving effect thereto, the Net Receivables Balance is greater than or equal to the Net Receivables Balance immediately prior to receipt of such SELLER Collections, second, to reduction of any accrued and unpaid interest or principal under the Subordinated Notes, and thereafter, paid to Seller for any purpose not inconsistent with the Transaction Documents; and

 

(iii) If, on any such day, a Potential Servicer Default or Servicer Default exists and is continuing or Collection Notices have been delivered pursuant to Section 6.3 , such remaining SELLER Collections shall be paid to, and held in trust for the LC Issuer by, the Seller (or, if the Seller or one of its affiliates is not then acting as Servicer, retained and held in trust by the Servicer) until the next Settlement Date in a segregated account which is subject to a first priority

 

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perfected security interest in favor of the Administrative Agent, for the benefit of the LC Issuer and the Committed Purchasers.

 

(e) Application of Collections During the Liquidation Period . On each day during the Liquidation Period, all Collections shall be allocated to the Receivable Interests ratably and shall be held in trust for the Purchasers and the LC Issuer, as applicable, by Servicer until the next Settlement Date in a segregated account which is subject to a first priority perfected security interest in favor of the Administrative Agent, for the benefit of LC Issuer and the Purchasers. On each Settlement Date during the Liquidation Period, Servicer shall turn over to the Co-Agents and the LC Issuer, as applicable, a sufficient portion of the Collections to pay all Program Fees, Facility Fees, LC Fees, Discount, Interest and CP Costs that are then due and owing, and on each Settlement Date during the Liquidation Period, Servicer shall turn over all remaining Collections to the Co-Agents for distribution in accordance with Section 1.8 .

 

Section 1.5. Computation of Receivable Interest .

 

(a) The Effective Receivable Interest (and the portions thereof comprising the Purchaser Interests and the Pledged Interest) shall be computed as of the last day of each Settlement Period (after giving effect to any payments to be made on the next succeeding Settlement Date pursuant to this Agreement) and on the Amortization Date.

 

(b) In addition to the computations required by Section 1.5(a) :

 

(i) if, on any Business Day during the Revolving Period, the Seller desires the Purchasers to make an Incremental Purchase or desires the LC Issuer to issue, increase or extend a Letter of Credit and the Effective Receivable Interest as reflected on the most recent Monthly Report delivered to the Agents would exceed 100% after giving effect to such proposed Incremental Purchase, Letter of Credit issuance or Letter of Credit increase, the Seller may provide to the Agents, not later than delivery of the Purchase Notice for such Incremental Purchase pursuant to Section 1.2 , a written recomputation of the Effective Receivable Interest reflecting the proposed increase in Aggregate Capital or LC Obligations and changes since the last day of the prior Settlement Period in the Net Receivables Balance and Required Reserve, in which case, the Effective Receivable Interest shall be recomputed as of the date of such recomputation; and

 

(ii) at any time, the Administrative Agent may reasonably require Servicer to provide an updated Monthly Report based on the information then available to Servicer, for purposes of recomputing the Effective Receivable Interest or demonstrating that the Credit Exposure does not exceed the Purchase Limit as of any other date, and Servicer agrees to do so within five (5) Business Days (or three (3) Business Days, if a Servicer Default has occurred and is continuing) after its receipt of the Administrative Agent’s request.

 

(c) On the Reporting Date for each Settlement Period, Servicer shall compute, as of the related Cut-Off Date and based upon the assumptions in the next sentence, (i) the Effective Receivable Interest (and the portions thereof comprised by the Purchaser Interest and the

 

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Pledged Interest), (ii) the amount of the reduction or increase (if any) in the Effective Receivable Interest since the next preceding Cut-Off Date, (iii) the excess (if any) of the Effective Receivable Interest over 100%, and (iv) the excess (if any) of the Credit Exposure over the Purchase Limit. Such calculation shall be based upon the assumptions that (A) the information in the Monthly Report is correct, and (B) PURCHASER Collections will be paid to the Co-Agents, for the benefit of the Purchasers, and SELLER Collections will be paid to the LC Issuer, on the Settlement Date for such Settlement Period, to the extent required by Section 1.4 .

 

(d) If, according to the computations made pursuant to clause (b)(i ) above, (i) the Effective Receivable Interest exceeds 100%, or (ii) the Credit Exposure exceeds the Purchase Limit, then on the Settlement Date for such Settlement Period, Servicer shall first pay to the Co-Agents, for the benefit of the Purchasers in its Group (to the extent of PURCHASER Collections during the related Settlement Period not previously paid to the Co-Agents) and next , only if the excess described above persists, pay to the LC Issuer (to the extent of SELLER Collections during the related Settlement Period not previously paid to the LC Issuer) the amount necessary to reduce the Credit Exposure to the Purchase Limit (and/or, if directed by Seller, held to Cash-Collateralize the LC Obligations in an amount necessary to eliminate any excess Credit Exposure) and reduce the Effective Receivable Interest to 100% or the LC Obligations to the LC Sublimit, as applicable.

 

(e) If, according to any recomputation of the Effective Receivable Interest pursuant to Section 1.5(b) , (i) the Effective Receivable Interest exceeds 100% or (ii) the Credit Exposure exceeds the Purchase Limit, then on each Business Day on and after each such recomputation, Servicer shall first pay to the Co-Agents, for the benefit of the Purchasers (to the extent of PURCHASER Collections during the current Settlement Period not previously paid to the Co-Agents) and next , only if the excess described above persists, pay to the LC Issuer (to the extent of SELLER Collections during the related Settlement Period not previously paid to the LC Issuer) the amount necessary to reduce the Effective Receivable Interest to 100% or the Credit Exposure to the Purchase Limit, which payment shall be held to Cash-Collateralize the LC Obligations. Notwithstanding payment to the Co-Agents in accordance with this Section 1.5(e) , Discount and CP Costs shall continue to accrue on the full amount of Capital outstanding, and Interest shall continue to accrue on Reimbursement Obligations, until such payment is applied on the next succeeding Settlement Date.

 

Section 1.6. Decreases . The Seller shall provide the Co-Agents with prior written notice in conformity with the Required Notice Period of any reduction requested by the Seller of the Aggregate Capital outstanding (a “ Reduction Notice ”). Such Reduction Notice shall designate (i) the date (the “ Proposed Reduction Date ”) upon which any such reduction of Aggregate Capital shall occur (which date shall give effect to the applicable Required Notice Period), (ii) the amount by which Aggregate Capital shall be reduced (the “ Aggregate Reduction ”), and (iii) whether USF Assurance will participate in such Aggregate Reduction. The Aggregate Reduction shall be applied ratably to the Purchaser Interests of the Conduit Groups (and, if applicable, the USFA Group) in accordance with the amount of Capital owing to each and within each such Group, ratably in accordance with the amount of Capital, if any, owing to each Purchaser in such Group. Only one (1) Reduction Notice shall be outstanding at any time.

 

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Section 1.7. Deemed Collections . Seller shall forthwith deliver to Servicer all Deemed Collections, and Servicer shall hold or distribute such Deemed Collections in accordance with Section 1.8 as if such Deemed Collections had actually been received on the date of such delivery to Servicer.

 

Section 1.8. Order of Application of Collections on Settlement Dates .

 

(a) Upon receipt by any Co-Agent, on behalf of the Purchasers in its Group, on any Settlement Date of PURCHASER Collections, such Co-Agent shall apply them to the items specified in the subclauses below, in the order of priority of such subclauses:

 

(i) to any accrued and unpaid Discount, CP Costs and Broken Fund Costs that are then due and owing, including any previously accrued Discount, CP Costs and Broken Funds Costs which were not paid on the applicable Settlement Date;

 

(ii) to the accrued and unpaid Servicer Fee (if Servicer is not Seller or one of its Affiliates);

 

(iii) to the Facility Fee and the Program Fee accrued during such Settlement Period, plus any previously accrued Facility Fee and Program Fee not paid on a prior Settlement Date;

 

(iv) to the reduction of Aggregate Capital, to the extent such reduction is required under Section 1.5 or Section 1.6 during the Revolving Period and to the extent of remaining PURCHASER Collections during the Liquidation Period;

 

(v) to other accrued and unpaid amounts owing to any of the Purchasers or Agents hereunder;

 

(vi) to the accrued and unpaid Servicer Fee (if Servicer is Seller or its Affiliate); and

 

(vii) during the Revolving Period, to the uses and in the order specified in Section 1.4 ; and

 

(b) Upon receipt by the LC Issuer on any Settlement Date of SELLER Collections, the LC Issuer shall apply them to the items specified in the subclauses below, in the order of priority of such subclauses:

 

(i) to any accrued and unpaid Interest that is then due and owing, including any previously accrued interest which were not paid on its applicable Settlement Date;

 

(ii) to the LC Fees accrued during such Settlement Period, plus any previously accrued LC Fees not paid on a prior Settlement Date (it being understood that the LC Issuer may take up to two Business Days to distribute each Committed Purchaser’s share of any amounts applied to accrued LC Fees);

 

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(iii) to Cash-Collateralize LC Obligations in respect of Letters of Credit then outstanding, beginning with the Letter of Credit with the earliest expiration date, to the extent required under Section 1.5 during the Revolving Period and to the extent of remaining SELLER Collections during the Liquidation Period; and

 

(iv) during the Revolving Period, to the uses and in the order specified in Section 1.4 .

 

Section 1.9. Servicer Fee . To the extent of available Collections in accordance with the priorities set forth in Section 1.8 , on each Settlement Date while any Aggregate Unpaids are outstanding, the Servicer shall be paid a servicing and collection fee (the “Servicer Fee” ) equal to 1.0% per annum (or such other arm’s length fee as may be mutually agreed upon from time to time by the Servicer, the Originators and the Administrative Agent) on the average daily amount of Capital during the calendar month (or portion thereof) then most recently ended. The Servicer Fee shall be computed for actual days elapsed on the basis of a year consisting of 365 days. The Agents hereby consent (which consent may be revoked at any time after the occurrence and during the continuance of a Servicer Default or Potential Servicer Default), to the retention by Servicer of a portion of the PURCHASER Collections equal to the Servicer Fee, in which case no distribution shall be made in respect of the Servicer Fee pursuant to Section 1.8(a)(ii) or ( vi) above; provided , however , that Servicer may not retain the Purchased Percentage of the Servicer Fee unless PURCHASER Collections turned over to the Co-Agents pursuant to Section 1.8 above will be sufficient to pay all obligations of a higher priority as specified in such Section.

 

Section 1.10. Release of Excess Cash Collateral . If on any Settlement Date during the Revolving Period, the balances in the Letter of Credit Collateral Account exceed the amount required by this Agreement, unless a Servicer Default or Potential Servicer Default shall exist and be continuing, the LC Issuer shall release the excess cash collateral to Seller.

 

Section 1.11. Grant of Security Interest . The Seller hereby grants to the Administrative Agent for the ratable benefit of the Purchasers and the LC Issuer, a security interest in all of its right, title and interest, now owned or hereafter acquired, in the Receivables, the Related Security, each Collection Account, the Collections and proceeds thereof to secure payment of the Aggregate Unpaids, including its indemnity obligations under Article VIII and all other obligations owed hereunder to the Agents and the Purchasers. After a Servicer Default, the Administrative Agent, on behalf of the Purchasers and the LC Issuer, shall have, in addition to the rights and remedies it may have under this Agreement, all other rights and remedies provided to a secured creditor after default under the UCC and other applicable law, which rights and remedies shall be cumulative.

 

Section 1.12. Payment Requirements . All amounts to be paid or deposited by the Seller or the Servicer pursuant to any provision of this Agreement shall be paid or deposited in accordance with the terms hereof no later than 12:00 noon (Chicago time) on the day when due in immediately available funds, and if not received before 12:00 noon (Chicago time) shall be deemed to be received on the next succeeding Business Day. If such amounts are payable to the Administrative Agent or a member of the Falcon Group, they shall be paid for its account to the Falcon Agent, at 1 Bank One Plaza, Chicago, Illinois 60670 until otherwise notified by the

 

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Falcon Agent. If such amounts are payable to a member of the Three Pillars Group, they shall be paid for its account to the Three Pillars Agent, at 303 Peachtree Street, Atlanta, GA 30308 until otherwise notified by the Three Pillars Agent. If such amounts are payable to a member of the Blue Ridge Group, they shall be paid for its account to the Blue Ridge Agent, at 301 S. College Street, Charlotte, North Carolina 28288 until otherwise notified by the Blue Ridge Agent. If such amounts are payable to the LC Issuer, they shall be paid to the LC Issuer, at 301 S. College Street, Charlotte, North Carolina 28288 until otherwise notified by the LC Issuer. If such amounts are payable to a member of the Amsterdam Group, they shall be paid for its account to the Amsterdam Agent, at ABN AMRO Bank, N.V., New York, New York, ABA #026009580, Account #671042302550 in the name of Amsterdam Funding Corporation Acct #671042302550, Reference: Yellow Roadway, until otherwise notified by the Amsterdam Agent. In the event the Seller shall fail to pay any amount when due hereunder, upon notice to the Seller, the Administrative Agent may debit the Facility Account for all such amounts due and payable hereunder. All computations of Discount, per annum fees calculated as part of any CP Costs, per annum fees hereunder and under the Fee Letters shall be made on the basis of a year of 360 days for the actual number of days elapsed. If any amount hereunder shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day.

 

Section 1.13. Payments Rescission . No payment of any of the Aggregate Unpaids shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason. The Seller shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to each applicable Co-Agent (for application to the Person or Persons who suffered such rescission, return or refund) or the LC Issuer, as applicable, the full amount thereof, plus, if such amount represented a refund of Capital, CP Costs, Interest or Discount, as applicable, with respect thereto from the date of any such rescission, return or refunding.

 

Section 1.14. Seller Repurchase Option . The Seller shall have the right, by prior written notice to the Agents given in not less than the Required Notice Period, at any time to repurchase from the Purchasers all, but not less than all, of the then outstanding Purchaser Interests. The aggregate purchase price in respect thereof shall be an amount equal to the Aggregate Unpaids through the date of such repurchase, payable in immediately available funds. Such repurchase shall be without representation, warranty or recourse of any kind by, on the part of, or against any Purchaser or any Agent.

 

ARTICLE II

CP COSTS AND DISCOUNT

 

Section 2.1. Conduit Funding .

 

(a) CP Costs . The Seller shall pay CP Costs with respect to the Capital associated with each Purchaser Interest of a Conduit for each day that any Capital in respect of such Purchaser Interest is outstanding; provided, however, that from and after the occurrence of a Servicer Default, the Seller shall pay Discount at the Default Rate with respect to each such Purchaser Interest. Each Purchaser

 

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Interest funded by a Pool-Funded Conduit substantially with Pooled Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon the percentage share the Capital in respect of such Purchaser Interest represents in relation to all assets held by such Pool-Funded Conduit and funded substantially with Pooled Commercial Paper.

 

(b) CP Costs Payments . On each Settlement Date, the Seller shall pay to each Co-Agent (for the benefit of such Co-Agent’s Uncommitted Purchaser) an aggregate amount equal to all accrued and unpaid CP Costs in respect of the Capital associated with all Purchaser Interests of such Uncommitted Purchaser for the immediately preceding Accrual Period in accordance with Section 1.4(b) .

 

(c) Calculation of CP Costs . On the 10th Business Day immediately preceding each Settlement Date, each Conduit shall calculate the aggregate amount of CP Costs (or, as applicable, Discount at the Default Rate) owing to it for the applicable Accrual Period and shall notify the Seller of such aggregate amount.

 

Section 2.2. Committed Purchaser Funding .

 

(a) Committed Purchaser Funding . Each Receivable Interest of the Committed Purchasers in a Group shall accrue Discount for each day during its Tranche Period at the LIBOR Rate, the Base Rate or, from and after the occurrence of a Servicer Default and during the continuance thereof, the Default Rate in accordance with the terms and conditions hereof. Until the Seller gives notice to the applicable Co-Agent of another Discount Rate in accordance with Section 2.2(c) , the initial Discount Rate for any Receivable Interest transferred to the Committed Purchasers in a Conduit Group pursuant to the terms and conditions hereof, and the new Discount Rate for any Terminating Tranche, shall be the Base Rate and the applicable Tranche Period shall be a period of one Business Day commencing on the day requested in the Purchase Notice or on the last day of a Terminating Tranche, as applicable. If the Committed Purchasers, if any, in a Group acquire by assignment from the applicable Conduit any Receivable Interest pursuant to a Liquidity Agreement, the applicable Co-Agent shall promptly notify Seller of such fact and each Receivable Interest so assigned shall each be deemed to have a new Tranche Period commencing on the date of any such assignment.

 

(b) Discount Payments . On the Settlement Date for each Receivable Interest of the Committed Purchasers in a Group, the Seller shall pay to the applicable Co-Agent (for the benefit of such Purchasers) an aggregate amount equal to the accrued and unpaid Discount for the entire Tranche Period of each such Purchaser Interest in accordance with Section 1.4(b) .

 

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(c) Selection and Continuation of Tranche Periods .

 

(i) With consultation from (and approval by) the applicable Co-Agent, the Seller shall from time to time request Tranche Periods for the Purchaser Interests of the Committed Purchasers in each Conduit Group, provided that , if at any time the Committed Purchasers in a Group shall have a Purchaser Interest, the Seller shall always request Tranche Periods such that at least one Tranche Period shall end on each date specified in clause (A) of the definition of Settlement Date.

 

(ii) The Seller or the applicable Co-Agent may, effective on the last day of a Tranche Period (the “ Terminating Tranche ”) for any Receivable Interest, divide any such Receivable Interest into multiple Receivable Interests or combine any such Receivable Interest with one or more other Receivable Interests which either have a Terminating Tranche ending on such day or are newly created on such day, provided that in no event may a Receivable Interest of a Conduit be combined with a Receivable Interest of its Committed Purchasers.

 

(d) Committed Purchaser Discount Rates . Prior to the occurrence and continuance of a Servicer Default, the Seller may select the LIBOR Rate or the Base Rate for each Receivable Interest of the Committed Purchasers in any Group. The Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3) Business Days prior to the expiration of any Terminating Tranche with respect to which the LIBOR Rate is being requested as a new Discount Rate and (ii) at least one (1) Business Day prior to the expiration of any Terminating Tranche with respect to which the Base Rate is being requested as a new Discount Rate, give the applicable Co-Agent irrevocable notice of the new Discount Rate for the Purchaser Interest associated with such Terminating Tranche. From and after the occurrence of a Servicer Default and during the continuance thereof, all Purchaser Interests shall accrue Discount at the Default Rate.

 

(e) Suspension of the LIBOR Rate . If any Committed Purchaser notifies its Co-Agent that it has determined that funding its Pro Rata Share of the Purchaser Interests of the Committed Purchasers in such Group at a LIBOR Rate would violate any applicable law, rule, regulation, or directive of any governmental or regulatory authority, whether or not having the force of law, or that (i) deposits of a type and maturity appropriate to match fund its Receivable Interests at such LIBOR Rate are not available or (ii) such LIBOR Rate does not accurately reflect the cost of acquiring or maintaining a Receivable Interest at such LIBOR Rate, then such Co-Agent shall suspend the availability of such LIBOR Rate from its Group and require the Seller to select the Base Rate for any Receivable Interest of the Committed Purchasers in its Group that has been accruing Discount at such LIBOR Rate.

 

(f) Calculation of Discount . On the 10th Business Day immediately preceding each Settlement Date for each Receivable Interest of the Committed Purchasers in a Group, the applicable Co-Agent shall calculate the aggregate

 

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amount of Discount for the applicable Tranche Period and shall notify the Seller of such aggregate amount, if any.

 

(g) Liquidity Agreement Fundings . The parties hereto acknowledge that each of the Conduits may assign all or any portion of its Purchaser Interests to the Committed Purchasers in its Group at any time pursuant to the applicable Liquidity Agreement to finance or refinance the necessary portion of its Purchaser Interests through a funding under such Liquidity Agreement to the extent available. The fundings under the Liquidity Agreements will accrue Discount in accordance with this Section 2.2 . Regardless of whether a funding of Purchaser Interests by the Committed Purchasers in a Group constitutes the direct purchase of a Purchaser Interest hereunder, an assignment under a Liquidity Agreement of a Purchaser Interest originally funded by a Conduit or the sale of one or more participations or other interests under a Liquidity Agreement in such a Purchaser Interest, each Committed Purchaser participating in a funding of a Purchaser Interest pursuant to a Liquidity Agreement shall have the rights and obligations of a “Purchaser” hereunder with the same force and effect as if it had directly purchased such Purchaser Interest directly from Seller hereunder.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1. Seller Representations and Warranties . The Seller hereby represents and warrants to the Agents and the Purchasers that:

 

(a) Corporate Existence and Power . The Seller is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted, except for such licenses, authorization, consents and approvals the failure to obtain any of which would not have a Material Adverse Effect.

 

(b) No Conflict . The execution, delivery and performance by the Seller of this Agreement and each other Transaction Document, and the Seller’s use of the proceeds of Purchases made hereunder, are within its corporate or banking association powers, have been duly authorized by all necessary corporate or banking association action, do not breach or violate (i) its certificate or articles of incorporation or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of the Seller or its Subsidiaries (except created hereunder); and no transaction contemplated hereby requires compliance with any bulk sales act or similar law. This Agreement and each other Transaction Document has been duly authorized, executed and delivered by the Seller.

 

(c) Governmental Authorization . Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing

 

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with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Seller of the Transaction Documents.

 

(d) Binding Effect . The Transaction Documents constitute the legal, valid and binding obligations of the Seller enforceable against the Seller in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally.

 

(e) Accuracy of Information . All information heretofore furnished by the Seller or any of its Affiliates to the Agents or the Purchasers for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by the Seller or any of its Affiliates to the Purchasers will be, true and accurate in every material respect, on the date such information is stated or certified and does not and will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

 

(f) Use of Proceeds . No proceeds of any Purchase hereunder will be used (i) for a purpose which violates, or would be inconsistent with, Regulation T, U or X promulgated by the Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security in any transaction which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended.

 

(g) Title to Receivables . Each Receivable has been purchased by the Seller from the applicable Originator in accordance with the terms of the Sale Agreement, and the Seller has thereby irrevocably obtained all legal and equitable title to, and has the legal right to sell and encumber, such Receivable, its Collections and the Related Security. Each such Receivable has been transferred to the Seller free and clear of any Adverse Claim. Without limiting the foregoing, there has been duly filed all financing statements or other similar instruments or documents necessary under the UCC of all appropriate jurisdictions (or any comparable law) to perfect the Seller’s ownership interest in such Receivable.

 

(h) Good Title; Perfection . (i) Immediately prior to each Purchase or Reinvestment hereunder, each Receivable, together with the Related Security, is owned by the Seller free and clear of any Adverse Claim; (ii) when the Purchasers makes a Purchase or Reinvestment, they shall have acquired and shall at all times thereafter continuously maintain a valid and perfected first priority undivided percentage ownership interest to the extent of the Purchaser Interests in each Receivable and the Related Security and Collections with respect thereto, free and clear of any Adverse Claim; (iii) when the LC Issuer issues a Letter of Credit, the Administrative Agent, on behalf of the LC Issuer, shall have a continuous valid and perfected first priority security interest to the extent of the Pledged Interest in each Receivable and the Related Security and Collections with respect thereto, free and clear of any Adverse Claim; and (iv) no financing statement or other instrument similar in effect covering all or any interest in any Receivable or the Related Security or Collections with respect thereto is on file in any recording office except such as may be filed (1) in favor of the applicable Originator in accordance with the Contracts, (2) in favor of Seller in connection with the Sale Agreement, or (3) in favor of the Administrative Agent in accordance with this Agreement.

 

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(i) Places of Business . The principal places of business and chief executive office of the Seller and the offices where the Seller keeps all its Records are located at the address(es) listed on Exhibit II or such other locations notified to the Administrative Agent in accordance with Section 5.2(a) in jurisdictions where all action required by Section 5.2(a) has been taken and completed. The Seller’s Federal Employer Identification Number and Organizational Identification Number are correctly set forth on Exhibit II.

 

(j) Collection Banks; etc . Except as otherwise notified to the Administrative Agent in accordance with Section 5.2(b) :

 

(i) the Seller has instructed, or has caused each Originator to instruct, all Obligors to pay all Collections directly to a segregated lock-box identified on Exhibit III hereto,

 

(ii) in the case of all proceeds remitted to any such lock-box which is now or hereafter established, such proceeds will be deposited directly by the applicable Collection Bank into a concentration account or a depository account listed on Exhibit III,

 

(iii) the names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts of the Seller at each Collection Bank, are listed on Exhibit III, and

 

(iv) each lock-box and Collection Account to which Collections are remitted shall be subject to a Collection Account Agreement that is then in full force and effect.

 

In the case of lock-boxes and Collection Accounts identified on Exhibit III which were established by an Originator or by any Person other than the Seller, exclusive dominion and control thereof has been transferred to the Seller. The Seller has not granted to any Person, other than the Administrative Agent as contemplated by this Agreement, dominion and control of any lock-box or Collection Account, or the right to take dominion and control of any lock-box or Collection Account at a future time or upon the occurrence of a future event.

 

(k) Material Adverse Effect . Since December 31, 2004, no event has occurred which would have a Material Adverse Effect.

 

(l) Names . In the past five years, the Seller has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement.

 

(m) Actions, Suits . There are no actions, suits or proceedings pending, or to the best of the Seller’s knowledge, threatened, against or affecting the Seller or any Originator, or any of the respective properties of the Seller or any Originator, in or before any court, arbitrator or other body, which are reasonably likely to (i) adversely affect the collectibility of a material portion of the Receivables, (ii) materially adversely affect the financial condition of the Seller or any Originator, or (iii) materially adversely affect the ability of the Seller or any Originator to perform its obligations under the Transaction Documents. Neither the Seller nor any Originator is in default with respect to any order of any court, arbitrator or governmental body.

 

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(n) Credit and Collection Policies . With respect to each Receivable, each of the applicable Originator, the Seller and the Servicer has complied in all material respects with the Credit and Collection Policy.

 

(o) Payments to the Applicable Originator . With respect to each Receivable transferred to the Seller, the Seller has given reasonably equivalent value to the applicable Originator in consideration for such transfer of such Receivable and the Related Security with respect thereto under the Sale Agreement and such transfer was not made for or on account of an antecedent debt. No transfer by an Originator of any Receivable is or may be voidable under any Section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101 et seq .), as amended.

 

(p) Ownership of the Seller . Yellow Roadway Corporation owns, directly or indirectly, 100% of the issued and outstanding capital stock of the Seller. Such capital stock is validly issued, fully paid and nonassessable and there are no options, warrants or other rights to acquire securities of the Seller.

 

(q) Not an Investment Company . The Seller is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended from time to time, or any successor statute.

 

(r) Purpose . The Seller has determined that, from a business viewpoint, the purchase of Receivables and related interests from the Originators under the Sale Agreement, and the sale of Purchaser Interests to the Purchasers and the other transactions contemplated herein, are in the best interest of the Seller.

 

(s) Net Receivables Balance . Both before and after giving effect to each Incremental Purchase and Reinvestment, the Net Receivables Balance equals or exceeds the sum of (i) the product of the Net Receivables Balance multiplied by the Aggregate Reserve Percentage, and by (ii) the aggregate Capital outstanding.

 

Section 3.2. Committed Purchaser Representations and Warranties . Each Committed Purchaser hereby represents and warrants to its applicable Co-Agent and Conduit that:

 

(a) Existence and Power . Such Committed Purchaser is a corporation or a banking association duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has all corporate power to perform its obligations hereunder.

 

(b) No Conflict . The execution, delivery and performance by such Committed Purchaser of this Agreement are within its corporate powers, have been duly authorized by all necessary corporate action, do not breach or violate (i) its certificate or articles of incorporation or association or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on its assets. This Agreement has been duly authorized, executed and delivered by such Committed Purchaser.

 

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(c) Governmental Authorization . No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by such Committed Purchaser of this Agreement.

 

(d) Binding Effect . This Agreement constitutes the legal, valid and binding obligation of such Committed Purchaser enforceable against such Committed Purchaser in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally.

 

Section 3.3. USF Assurance Representations and Warranties . USF Assurance hereby represents and warrants to the Agents and the Purchasers that:

 

(a) Existence and Power . USF Assurance is an exempted company incorporated with limited liability duly organized, validly existing and in good standing under the laws of Bermuda, and has all corporate power and authority and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is now conducted, except where failure to obtain such license, authorization, consent or approval would not reasonably be expected to have a material adverse effect on (i) its ability to perform its obligations under, or the enforceability of, any Transaction document to which it is a party, (ii) its business or financial condition, (iii) the interests of the Agents or any of the other Purchasers under any Transaction document to which it is a party or (iv) the enforceability or collectibility of any Receivable not due to the creditworthiness of the Obligors.

 

(b) No Conflict . The execution, delivery and performance by USF Assurance of this Agreement are within its corporate powers, have been duly authorized by all necessary corporate action, do not breach or violate (i) its memorandum of association or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on its assets.

 

(c) Governmental Authorization . No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by USF Assurance of this Agreement or any other Transaction Document to which it is a party other than those that have been obtained.

 

(d) Binding Effect . This Agreement has been duly authorized, executed and delivered by USF Assurance and constitutes the legal, valid and binding obligation of USF Assurance enforceable against it in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws of general application relating to or limiting creditors’ rights generally.

 

ARTICLE IV

CONDITIONS OF PURCHASES

 

Section 4.1. Conditions Precedent to Initial Purchase . Effectiveness of the amendment and restatement of the Existing Agreement and the initial Purchase of a Receivable Interest under this Agreement are subject to the conditions precedent that (a) the Administrative

 

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Agent or the Amsterdam Agent shall have received on or before the date of such Purchase those documents listed on Schedule A hereto, and (b) each of the Agents and the LC Issuer shall have been paid all fees required to be paid on such date pursuant to the terms of the applicable Fee Letter.

 

Section 4.2. Conditions Precedent to All Credit Events . Each Credit Event shall be subject to the further conditions precedent that:

 

(a) the Servicer shall have delivered to the Agents on or prior to the date of such Credit Event, in form and substance satisfactory to the Agents, all Monthly Reports as and when due under Section 6.5 ;

 

(b) on the date of each such Credit Event, the following statements shall be true both before and after giving effect to such Credit Event (and acceptance of the proceeds of the applicable Incremental Purchase or Reinvestment or issuance of a Letter of Credit shall be deemed a representation and warranty by the Seller that such statements are then true):

 

(i) the representations and warranties set forth in Section 3.1 are correct on and as of the date of such Credit Event as though made on and as of such date; provided, however, that the representation and warranty set forth in Section 3.1(k) need only be true and correct as of the date of the initial Credit Event hereunder;

 

(ii) no event has occurred, or would result from such Credit Event, that will constitute a Servicer Default, and no event has occurred and is continuing, or would result from such Credit Event, that would constitute a Potential Servicer Default; and

 

(iii) the Stated Liquidity Termination Date shall not have occurred, the aggregate Credit Exposure shall not exceed the Purchase Limit and the Effective Receivable Interest shall not exceed 100%; and

 

(iv) if there are any Purchasers (other than USF Assurance) that hold Receivable Interests at such time or will hold Receivable Interests after giving effect to such Credit Event, the aggregate amount of such other Purchasers’ Capital shall at least equal 50% of the Aggregate Capital after giving effect to such Credit Event.

 

(c) the Administrative Agent shall have received such other approvals, opinions or documents as any Agent may reasonably request.

 

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ARTICLE V

COVENANTS

 

Section 5.1. Affirmative Covenants of Seller . Until the date on which the Aggregate Unpaids have been indefeasibly paid in full, the Seller hereby covenants, individually and in its capacity as Servicer, that:

 

(a) Financial Reporting . The Seller will maintain a system of accounting established and administered in accordance with generally accepted accounting principles, and furnish to the Co-Agents:

 

(i) Annual Reporting . Within 90 days after the close of each of its fiscal years, financial statements for such fiscal year certified in a manner reasonably acceptable to the Administrative Agent by the Chief Financial Officer of the Seller, together with the financial statements of Yellow Roadway Corporation required under Section 4.1(a)(i) of the Sale Agreement.

 

(ii) Quarterly Reporting . Within 45 days after the close of the first three quarterly periods of each of its fiscal years, balance sheets as at the close of each such period and statements of income and retained earnings and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, all certified by its Chief Financial Officer, together with the financial statements of Yellow Roadway Corporation required under Section 4.1(a)(ii) of the Sale Agreement.

 

(iii) Compliance Certificate . Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit IV signed by the Seller’s Chief Financial Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be, together with the certificate of Yellow Roadway Corporation required under Section 4.1(a)(iii) of the Sale Agreement.

 

(iv) Copies of Notices, Etc. under Sale Agreement and Other Transaction Documents . Forthwith upon its receipt of any notice, request for consent, financial statements of Yellow Roadway Corporation, certification, report or other communication under or in connection with any Transaction Document from any Person other than one of the Agents or Purchasers, copies of the same.

 

(v) Change in Credit and Collection Policy . At least 30 days prior to the effectiveness of any material change in or amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice indicating such change or amendment.

 

(vi) Other Information . Such other information (including non-financial information) as any Agent or Purchaser may from time to time reasonably request.

 

(vii) Electronic Information . In lieu of the physical delivery of any of the foregoing, or any other information required hereunder, Seller may deliver to the Agents an electronic copy of the applicable document or information, or a link, on the world wide web, to the applicable web page where the required document or information may be obtained without charge.

 

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(b) Notices . The Seller will notify the Agents in writing of any of the following immediately upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

 

(i) Servicer Defaults or Potential Servicer Defaults . The occurrence of each Servicer Default or each Potential Servicer Default, by a statement of the Chief Financial Officer of the Seller;

 

(ii) Judgment . The entry of any judgment or decree against the Seller;

 

(iii) Litigation . The institution of any litigation, arbitration proceeding or governmental proceeding against the Seller or to which the Seller becomes party;

 

(iv) Termination Date under Sale Agreement . The declaration by any Originator of the “Termination Date” under the Sale Agreement;

 

(v) Downgrade . Any downgrade in the rating of any Indebtedness of the Seller, any Originator or Yellow Roadway Corporation by Standard & Poor’s or by Moody’s Investors Service, Inc., setting forth the Indebtedness affected and the nature of such change; and

 

(vi) Labor Strike, Walkout, Lockout or Slowdown . The commencement or threat of any labor strike, walkout, lockout or concerted labor slowdown against Yellow Roadway Corporation or any of its Affiliates which prevents, or could reasonably be likely to prevent, pick-ups, shipments and/or deliveries by any Originator, and which could reasonably be expected to have a Material Adverse Effect (collectively, “Labor Actions” ).

 

(c) Compliance with Laws . The Seller will comply in all material respects with all applicable laws, rules, regulations, orders writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to comply would not have a Material Adverse Effect.

 

(d) Audits . The Seller will furnish to the Agents from time to time such information with respect to it and the Receivables as any Agent may reasonably request. The Seller shall, from time to time during regular business hours as requested by any Agent upon reasonable notice, permit the Agents and their joint audit designee (and shall cause the Originators to permit the Agents and their joint audit designee) (i) to examine and make copies of and abstracts from all Records in the possession or under the control of the Seller or an Originator relating to Receivables and the Related Security, including, without limitation, the related Invoices, and (ii) to visit the offices and properties of the Seller and the Originators for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to the Seller’s or any Originator’s financial condition or the Receivables and the Related Security or the Seller’s performance hereunder, or any Originator’s performance under any of the other Transaction Documents, or the Seller’s or any Originator’s performance under the Invoices with any of the officers or employees of the Seller or any Originator having knowledge of such matters.

 

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(e) Keeping and Marking of Records and Books .

 

(i) The Seller will, and will cause the Originators to, maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable). The Seller will, and will cause the Originators to, give the Agents notice of any material change in the administrative and operating procedures referred to in the previous sentence.

 

(ii) The Seller will, and will cause each of the Originators to, (a) on or prior to the date hereof, mark its master data processing records and other books and records relating to the Receivables with a legend, reasonably acceptable to the Administrative Agent, describing the Receivable Interests and (b) upon the request of the Administrative Agent: (A) mark each Invoice with a legend describing the Receivable Interests and (B) deliver to the Administrative Agent all Invoices (including, without limitation, all multiple originals of any such Invoice) relating to the Receivables.

 

(f) Compliance with Invoices and Credit and Collection Policy . The Seller will, and will cause the Originators to, timely and fully (i) perform and comply with all provisions, covenants and other promises required to be observed by it under the Invoices (other than bills of lading) related to the Receivables, and (ii) comply in all material respects with any bills of lading included in the Invoices and with the Credit and Collection Policy. The Seller will, and will cause the Originators to, pay when due any taxes payable in connection with the Receivables.

 

(g) Purchase of Receivables from an Originator . With respect to each Receivable purchased under the Sale Agreement, the Seller shall (or shall cause the applicable Originator to) take all actions necessary to vest legal and equitable title to such Receivable and the Related Security irrevocably in the Seller, including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC of all appropriate jurisdictions (or any comparable law) to perfect the Seller’s interest in such Receivable and such other action to perfect, protect or more fully evidence the interest of the Seller as the Administrative Agent may reasonably request.

 

(h) Ownership Interest . The Seller shall take all necessary action to establish and maintain a valid and perfected first priority undivided percentage ownership interest in the Receivables and the Related Security and Collections with respect thereto, to the full extent contemplated herein, in favor of the Agents and the Purchasers, including, without limitation, taking such action to perfect, protect or more fully evidence the interest of the Administrative Agent on behalf of the Groups hereunder as any Agent may reasonably request.

 

(i) Payment to the Applicable Originator . With respect to each Receivable purchased by the Seller from an Originator, such sale shall be effected under, and in strict

 

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compliance with the terms of, the Sale Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to the applicable Originator in respect of the purchase price for such Receivable.

 

(j) Performance and Enforcement of Sale Agreement . The Seller shall timely perform the obligations required to be performed by the Seller, and shall vigorously enforce the rights and remedies accorded to the Seller, under the Sale Agreement. The Seller shall take all actions to perfect and enforce its rights and interests (and the rights and interests of the Administrative Agent, on behalf of the Groups, as assignee of the Seller) under the Sale Agreement as the Administrative Agent may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Sale Agreement.

 

(k) Purchasers’ Reliance . The Seller acknowledges that the Agents, the LC Issuer and the Purchasers are entering into the transactions contemplated by this Agreement in reliance upon the Seller’s identity as a legal entity that is separate from each of the Originators, Yellow Roadway Corporation and all Affiliates of any of them. Therefore, from and after the date of execution and delivery of this Agreement, the Seller shall take all reasonable steps including, without limitation, all steps that the LC Issuer or any Agent may from time to time reasonably request to maintain the Seller’s identity as a separate legal entity and to make it manifest to third parties that the Seller is an entity with assets and liabilities distinct from those of the Originators and any Affiliates thereof and not just a division of one of the Originators. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, the Seller shall:

 

(i) conduct its own business in its own name and require that all full-time employees of the Seller, if any, identify themselves as such and not as employees of an Originator (including, without limitation, by means of providing appropriate employees with business or identification cards identifying such employees as the Seller’s employees);

 

(ii) compensate all employees, consultants and agents directly, from the Seller’s bank accounts, for services provided to the Seller by such employees, consultants and agents and, to the extent any employee, consultant or agent of the Seller is also an employee, consultant or agent of an Originator, allocate the compensation of such employee, consultant or agent between the Seller and such Originator on a basis which reflects the services rendered to the Seller and such Originator;

 

(iii) clearly identify its offices (by signage or otherwise) as its offices and, if such office is located in the offices of an Originator, the Seller shall lease such office at a fair market rent;

 

(iv) have a separate telephone number, which will be answered only in its name and separate stationery, invoices and checks in its own name;

 

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(v) conduct all transactions with each Originator (including, without limitation, any delegation of its obligations hereunder as Servicer) strictly on an arm’s-length basis, allocate all overhead expenses (including, without limitation, telephone and other utility charges) for items shared between the Seller and such Originator on the basis of actual use to the extent practicable and, to the extent such allocation is not practicable, on a basis reasonably related to actual use;

 

(vi) at all times have at least two members of its Board of Directors (each, an “Independent Director” ) who are not at such time, and have not have been at any time during the preceding five years (A) a director, officer, employee or Affiliate of Yellow Roadway Corporation or any of its subsidiaries or affiliates, or (B) the beneficial owner at the time of such individual’s appointment as an Independent Director or at any time thereafter while serving as an Independent Director, of five percent (5%) of the outstanding common shares of Yellow Roadway Corporation having general voting rights; provided, however, that a director who otherwise meets the description of Independent Director as set forth herein shall not be disqualified from serving as an Independent Director of the Seller if he or she is also a director of another corporation that is an Affiliate of Yellow Roadway Corporation with a certificate of incorporation substantially similar to the certificate of incorporation of the Seller;

 

(vii) observe all corporate formalities as a distinct entity, and ensure that all corporate actions relating to (A) the selection, maintenance or replacement of the Independent Directors, (B) the dissolution or liquidation of the Seller or (C) the initiation of participation in, acquiescence in or consent to any bankruptcy, insolvency, reorganization or similar proceeding involving the Seller, are duly authorized by unanimous vote of its Board of Directors (including the Independent Directors);

 

(viii) maintain the Seller’s books and records separate from those of the Originators and otherwise readily identifiable as its own assets rather than assets of an Originator;

 

(ix) prepare its financial statements separately from those of the Originators and insure that any consolidated financial statements of the Originators or any Affiliate thereof that include the Seller and which are filed with the Securities and Exchange Commission or any other governmental agency have notes clearly stating that the Seller is a separate corporate entity and that its assets will be available first and foremost to satisfy the claims of the creditors of the Seller;

 

(x) except as herein specifically otherwise provided, not commingle funds or other assets of the Seller with those of the Originators and not maintain bank accounts or other depository accounts to which any Originator is an account party, into which any Originator makes deposits or from which any Originator has the power to make withdrawals;

 

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(xi) pay its own expenses and debts out of its own funds, to the extent sufficient funds are lawfully available, and in any event, not permit any Originator to pay any of the Seller’s operating expenses (except pursuant to allocation arrangements that comply with the requirements of this Section 5.1(k) or to pay any debt of Seller);

 

(xii) not permit the Seller to be named as an insured on the insurance policy covering the property of any Originator or enter into an agreement with the holder of such policy whereby in the event of a loss in connection with such property, proceeds are paid to the Seller; and

 

(xiii) take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by Fulbright & Jaworski L.L.P., as counsel for the Seller, in connection with the closing or initial Credit Event under this Agreement and relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times.

 

(l) Collections . The Seller shall instruct all Obligors, or cause the Originators to instruct, all Obligors to pay all Collections directly to a segregated lock-box or other Collection Account listed on Exhibit III, each of which is subject to a Collection Account Agreement. In the case of payments remitted to any such lock-box, the Seller shall cause all proceeds from such lock-box to be deposited directly by a Collection Bank into a Collection Account listed on Exhibit III, which is subject to a Collection Account Agreement. The Seller shall maintain exclusive dominion and control (subject to the terms of this Agreement) to each such Collection Account. In the case of any Collections received by the Seller or any Originator, the Seller shall remit (or shall cause such Originator to remit) such Collections to a Collection Account not later than the Business Day immediately following the date of receipt of such Collections, and, at all times prior to such remittance, the Seller shall itself hold (or, if applicable, shall cause such Originator to hold) such Collections in trust, for the exclusive benefit of the Purchasers and the Agents. In the case of any remittances received by the Seller in any such Collection Account that shall have been identified, to the satisfaction of the Servicer, to not constitute Collections or other proceeds of the Receivables or the Related Security, the Seller shall promptly remit such items to the Person identified to it as being the owner of such remittances. From and after the date the Administrative Agent (at the direction of any Co-Agent) delivers to any of the Collection Banks a Collection Notice pursuant to Section 6.3 , any Agent may request that the Seller, and the Seller thereupon promptly shall and shall direct the Originators to, direct all Obligors on Receivables to remit all payments thereon to a new depositary account (the “New Concentration Account” ) specified by the Administrative Agent and, at all times thereafter the Seller shall not deposit or otherwise credit, and shall not permit any Originator or any other Person to deposit or otherwise credit to the New Concentration Account any cash or payment item other than Collections. Alternatively, the Administrative Agent may request that the Seller, and the Seller thereupon promptly shall, direct all Persons then making remittances to any Collection Account listed on Exhibit III which remittances are not payments on Receivables to deliver such remittances to a location other than an account listed on Exhibit III.

 

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(m) Minimum Net Worth . The Seller shall at all times maintain total assets which exceed its total liabilities by not less than 3% of the Purchase Limit at such time.

 

Section 5.2. Negative Covenants of Seller . Until the date on which the Aggregate Unpaids have been indefeasibly paid in full, the Seller hereby covenants, individually and in its capacity as Servicer, that:

 

(a) Name Change, Offices, Records and Books of Accounts . The Seller will not change its name, identity or corporate structure (within the meaning of Section 9-402(7) of any applicable enactment of the UCC) or relocate its chief executive office or any office where Records are kept unless it shall have: (i) given the Administrative Agent at least 45 days prior notice thereof and (ii) delivered to the Administrative Agent all financing statements, instruments and other documents requested by the Administrative Agent in connection with such change or relocation.

 

(b) Change in Payment Instructions to Obligors . The Seller will not add or terminate any bank as a Collection Bank from those listed in Exhibit III, or make any change in its instructions to Obligors regarding payments to be made to the Seller or payments to be made to any lock-box, Collection Account or Collection Bank, unless the Administrative Agent shall have received, at least fifteen (15) Business Days before the proposed effective date therefor:

 

(i) written notice of such addition, termination or change, and

 

(ii) with respect to the addition of a lock-box, Collection Account or Collection Bank, an executed account agreement and an executed Collection Account Agreement from such Collection Bank relating thereto;

 

provided, however, that the Seller may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing lock-box or Collection Account that is subject to a Collection Account Agreement then in effect.

 

(c) Modifications to Invoices and Credit and Collection Policy . The Seller will not make any change to the Credit and Collection Policy which would be reasonably likely to adversely affect the collectibility of any material portion of the Receivables or decrease the credit quality of any newly created Receivables. Except as provided in Section 6.2(c) , the Seller, acting as Servicer or otherwise, will not extend, amend or otherwise modify the terms of any Receivable or any Invoice related thereto other than in accordance with the Credit and Collection Policy.

 

(d) Sales, Liens, Etc . The Seller shall not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to any Receivable, Related Security or Collections, or upon or with respect to any Invoice under which any Receivable arises, or any lock-box or Collection Account or assign any right to receive income in respect thereof (other than, in each case, the creation of the interests therein in favor of the Administrative Agent and the Purchasers provided for herein), and the Seller shall defend the right, title and interest of the Agents and the Purchasers in, to and under

 

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any of the foregoing property, against all claims of third parties claiming through or under the Seller or any Originator.

 

(e) Nature of Business; Other Agreements; Other Indebtedness . The Seller shall not engage in any business or activity of any kind or enter into any transaction or indenture, mortgage, instrument, agreement, contract, lease or other undertaking other than the transactions contemplated and authorized by this Agreement and the Sale Agreement. Without limiting the generality of the foregoing, the Seller shall not create, incur, guarantee, assume or suffer to exist any indebtedness or other liabilities, whether direct or contingent, other than:

 

(i) as a result of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business,

 

(ii) the incurrence of obligations under this Agreement,

 

(iii) the incurrence of obligations, as expressly contemplated in the Sale Agreement, to make payment to the applicable Originator thereunder for the purchase of Receivables from such Originator under the Sale Agreement, and

 

(iv) the incurrence of operating expenses in the ordinary course of business of the type otherwise contemplated in Section 5.1(k) of this Agreement.

 

In the event the Seller shall at any time borrow a “Subordinated Loan” under the Sale Agreement, the obligations of the Seller in connection therewith shall be subordinated to the obligations of the Seller to the Purchasers and the Agents under this Agreement, on such terms as shall be satisfactory to the Administrative Agent. Seller shall not pay any debt or expense of any Originator and shall not hold itself or its credit out as being available to pay, and shall not guarantee or secure with Seller’s assets the payment of, any debt or expense of any Originator.

 

(f) Amendments to Sale Agreement . The Seller shall not, without the prior written consent of the Agents:

 

(i) cancel or terminate the Sale Agreement,

 

(ii) give any consent to or waiver of (or take any action having the same effect on) any provision of the Sale Agreement,

 

(iii) waive any default, action, omission or breach under the Sale Agreement, or otherwise grant any indulgence thereunder, or

 

(iv) amend, supplement or otherwise modify any of the terms of the Sale Agreement.

 

(g) Amendments to Corporate Documents . The Seller shall not amend its Certificate of Incorporation or By-Laws in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 5.1(k) of this Agreement.

 

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(h) Merger . The Seller shall not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the