Exhibit 10.17
PARTICIPATION AGREEMENT
Dated as of October 12, 1999
Entered Into By and Among
CONSOLIDATED FREIGHTWAYS
CORPORATION OF DELAWARE
as Lessee,
ABN AMRO BANK N.V.,
not individually, except as expressly
set forth herein, but as Agent
and
The Lessors Listed on
Schedule I Hereto
TABLE OF CONTENTS
Page
ARTICLE I Definitions -1-
ARTICLE II Purchase and Lease of Vehicles -2-
Section 2.1 Fundings; Payment of Purchase Price -2-
Section 2.2 Application of Funds; Sale and Lease of
Vehicles -2-
Section 2.3 Time and Place of Funding -3-
Section 2.4 Assignment Agreement -3-
ARTICLE III Conditions to Effective Date -3-
Section 3.1 Effective Date Notice -3-
Section 3.2 Appraisal -3-
Section 3.3 Participation Agreement -4-
Section 3.4 Assignment Agreement -4-
Section 3.5 Lease -4-
Section 3.6 Financial Reports -5-
Section 3.7 Financing Statements -5-
Section 3.8 Certificates of Title -5-
Section 3.9 Transaction Costs; Fees -5-
Section 3.10 Opinions of Counsel -5-
Section 3.11 Corporate Status and Proceedings -5-
Section 3.12 Consents and Approvals -6-
Section 3.13 Payment of Impositions -6-
Section 3.14 Search Reports -6-
Section 3.15 Insurance -6-
Section 3.16 Proceedings Satisfactory, Etc. -6-
Section 3.17 Absence of Material Adverse Effect. -7-
Section 3.18 Representations and Warranties True;
Absence of Defaults -7-
ARTICLE IV General Provisions -7-
Section 4.1 Nature of Transaction -7-
Section 4.2 Replacements -7-
ARTICLE V Representations and Warranties -8-
Section 5.1 Representations and Warranties of Lessee -8-
Section 5.2 Representations and Warranties of Lessors -13-
Section 5.3 Representations and Warranties of Agent -14-
ARTICLE VI Covenants -15-
Section 6.1 Covenants of Lessee -15-
Section 6.2 Covenants of Agent and Lessors -21-
ARTICLE VII General Indemnities -22-
Section 7.1 Indemnity -22-
Section 7.2 Excessive Use Indemnity -23-
Section 7.3 Increased Capital Costs -23-
Section 7.4 Eurodollar Rate Unlawful -24-
Section 7.5 Funding Losses -24-
Section 7.6 Actions of Affected Lessors -25-
ARTICLE VIII General Tax Indemnity -25-
Section 8.1 General Tax Indemnity -25-
Section 8.2 Contest -26-
Section 8.3 Gross Up -27-
Section 8.4 Tax Returns -27-
Section 8.5 Withholding Tax Exemption -28-
ARTICLE IX Agent -29-
Section 9.1 Appointment and Authorization -29-
Section 9.2 Delegation of Duties -30-
Section 9.3 Liability of the Agent -30-
Section 9.4 Reliance by the Agent -30-
Section 9.5 Notice of Default -31-
Section 9.6 Lessor Credit Decision -31-
Section 9.7 Indemnification of the Agent -32-
Section 9.8 Agent in Individual Capacity -32-
Section 9.9 Successor Agent -32-
ARTICLE X Amendments to Operative Agreements -33-
Section 10.1 Amendments to Operative Agreements With
Consent of Lessors -33-
Section 10.2 Amendments to Operative Agreements Affecting
Agent -34-
ARTICLE XI Miscellaneous -34-
Section 11.1 Survival of Covenants -34-
Section 11.2 Applicable Law -34-
Section 11.3 Distribution and Application of Rents and
Other Payments -34-
Section 11.4 Notices -35-
Section 11.5 Transaction Costs; Other Expenses -36-
Section 11.6 Counterparts -36-
Section 11.7 Severability -37-
Section 11.8 Successors and Assigns; Transfers -37-
Section 11.9 JURY TRIAL -38-
Section 11.10 Captions; Table of Contents -39-
Section 11.11 FINAL AGREEMENT -39-
Section 11.12 No Third-Party Beneficiaries -39-
Section 11.13 Further Assurances -39-
Section 11.14 Reproduction of Documents -39-
Section 11.15 Consideration for Consents to Waivers and
Amendments -40-
Section 11.16 Submission to Jurisdiction -40-
PARTICIPATION AGREEMENT, dated as of October 12, 1999
(this Participation Agreement), is entered into among
CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE, a Delaware
corporation, as Lessee (Lessee), ABN AMRO BANK N.V., a bank
organized under the laws of the Netherlands, not in its
individual capacity, except as otherwise expressly provided
herein, but solely as Agent for the Lessors (the Agent), and the
several Lessors listed on Schedule 1 hereto (together with their
respective permitted successors, assigns and transferees, each a
Lessor and collectively the Lessors).
WHEREAS, the Agent, on behalf of certain financial
institutions, acquired an interest in the Vehicles described on
Schedule I to the Lease pursuant to a Participation Agreement,
dated as of December 22, 1995, as amended, among the Lessee, the
Agent and such financial institutions as Lessors (the Existing
Lessors); and
WHEREAS, on the Effective Date, pursuant to an
assignment agreement (the Assignment Agreement), the Existing
Lessors will assign to the Agent, for the benefit of the Lessors,
and the Agent, on behalf of the Lessors, will purchase and
receive from the Existing Lessors, an interest in the Vehicles
described on Schedule I to the Lease; and
WHEREAS, on the Effective Date, the Agent, on behalf of
the Lessors, will lease such Vehicles to the Lessee and the
Lessee will lease such Vehicles from the Agent, for the benefit
of the Lessors, pursuant to the terms of the Lease substantially
in the form of Exhibit A hereto;
NOW, THEREFORE, in consideration of the mutual terms
and conditions herein contained, the parties hereto agree as
follows:
ARTICLE I
Definitions
Capitalized terms used but not defined herein
(including those used in the foregoing recitals) shall have the
meanings specified in Schedule X hereto unless the context
otherwise requires, which Schedule X shall for all purposes
constitute a part of this Participation Agreement.
ARTICLE II
Purchase and Lease of Vehicles
Section 2.1 Fundings; Payment of Purchase Price.
(a) Subject to the terms and conditions hereinafter
set forth, and in reliance on the representations and warranties
contained herein or made pursuant hereto, upon receipt of the
Effective Date Notice, each Lessor shall transfer to Agent on the
Effective Date an amount equal to the product of the aggregate
Purchase Price of the Vehicles as provided in the Assignment
Agreement, multiplied by such Lessor's Commitment Percentage
(such transfer being referred to herein as the Funding). In no
event shall any Lessor be required to provide funds under this
Participation Agreement in an aggregate amount exceeding such
Lessor's Commitment.
(b) Remittances pursuant to this Section 2.1 shall be
made in immediately available federal funds by wire transfer to
the account of Agent set forth below (or as otherwise specified
by Agent to each Lessor from time to time not less than three
Business Days prior to the date of the requested Funding) and
must be received by Agent by 12:00 noon, New York time on the
Effective Date:
Bank: ABN AMRO Bank N.V.
Section 2.2 Application of Funds; Sale and Lease of
Vehicles. On the Effective Date, upon (a) receipt by Agent of
all amounts to be paid by the Lessors pursuant to Section 2.1,
and (b) satisfaction or waiver of each of the conditions set
forth in Article III, (i) Agent shall purchase, for the benefit
of the Lessors, an interest in the Vehicles to be acquired on the
Effective Date pursuant to the Assignment Agreement, (ii) in
consideration therefor, Agent, on behalf of the Lessors, shall
pay, from the funds made available by the Lessors pursuant to
Section 2.1, an amount equal to the ratable portion of the
Purchase Price for the Vehicles being so sold and purchased in
immediately available federal funds remitted by wire transfer to
the respective account of each respective Existing Lessor as
provided in the Assignment Agreement, and (iii) Agent, on behalf
of the Lessors, shall lease to Lessee the Vehicles so purchased
by Agent and Lessee shall lease from Agent, on behalf of the
Lessors, such Vehicles pursuant to the Lease. Each Lessor shall
hold an undivided interest in the Vehicles equal to such Lessor's
Commitment Percentage.
Section 2.3 Time and Place of Funding. The closing of
the purchase by the Agent, on behalf of the Lessors, of the
Vehicles and the lease by the Agent, on behalf of the Lessors, of
the Vehicles to the Lessee shall take place on the Effective
Date, commencing at 10:00 a.m. San Francisco time, at Shearman &
Sterling, or such other time and place as the parties may agree.
Section 2.4 Assignment Agreement. Each Lessor has
reviewed the Assignment Agreement and authorizes the Agent to
enter into the Assignment Agreement on behalf of such Lessor and,
upon receipt of the Purchase Price from the Lessors, to pay the
Existing Lessors the aggregate Purchase Price for the Vehicles as
provided therein.
ARTICLE III
.
Conditions to Effective Date
The obligation of each Lessor and Agent to perform its
obligations on the Effective Date, and of each Lessor to make its
portion of the Funding, shall be subject to the fulfillment to
the satisfaction of (including, with respect to writings, such
writings being in form and substance reasonably satisfactory to
the addressee or beneficiary thereof), or the waiver in writing
by, each Lessor and Agent of the conditions precedent set forth
in this Article III on or prior to the Effective Date (except
that the obligation of any party hereto shall not be subject to
the performance or compliance of such party or of any of such
party's Affiliates).
Section 3.1 Effective Date Notice. Lessee shall have
delivered to Agent and each Lessor, not later than 10:00 a.m. San
Francisco time not earlier than the tenth (10th) and not later
than the third (3rd) Business Day prior to the proposed Effective
Date, an irrevocable notice (an Effective Date Notice)
substantially in the form of Exhibit B, specifying (i) the
proposed Effective Date and (ii) a representation and warranty
that as of the Effective Date and at all times thereafter, each
Vehicle subject to the Lease will either be (a) used in
interstate commerce, titled in a State with respect to which
Agent and Lessors have a perfected security interest in such
Vehicle and registered in a State which is a party to the
International Registration Plan or (b) used in intrastate
commerce, registered in the State in which it is so used and
titled in a State with respect to which Agent and Lessors have a
perfected security interest in such Vehicle.
Section 3.2 Appraisal. At least one (1) Business Day
prior to the Effective Date, Agent and each Lessor shall have
received an Appraisal to their reasonable satisfaction opining:
(a) that the Appraised Value of the Vehicles is
reasonably expected to be as follows:
Date Value
Sum of Fair Market Value
Vehicles on Effective Date $32,500,000
Vehicles at end of Base Term $24,262,300
Vehicles at end of First Renewal Term $16,014,100
Vehicles at end of Second Renewal Term $11,572,800
(b) that the remaining economic useful life of each
Vehicle is not less than four (4) years;
(c) that the values set forth in clause (a) above
assume an increase for inflation of 2% per annum, and that such
inflation assumption is reasonable.
Section 3.3 Participation Agreement. On or prior to
the Effective Date, each of the Participants shall have received
a fully executed counterpart of this Participation Agreement.
Section 3.4 Assignment Agreement. On the Effective
Date, the Assignment Agreement shall have been executed by the
parties thereto and the Purchase Price paid thereunder by each
other Lessor.
Section 3.5 Lease. On or prior to the Effective Date,
each Participant shall have received a fully executed counterpart
of the Lease, which Lease shall set forth:
(a) in Schedule I thereto, a description of the
Vehicles; and
(b) in Schedule II thereto, (i) a schedule of the
installments of Fixed Rent and the Payment Dates therefor during
the Base Term and each Renewal Term, and the Lease Balance as of
the Effective Date and as of each Payment Date during the Base
Term and each Renewal Term, assuming in each case that all
installments of Fixed Rent due and payable thereunder to and
including such Payment Date have been paid, (iii) the Termination
Percentages, (iv) the Lessee Risk Percentages and (v) the Lessor
Risk Percentages.
An amortization schedule providing for equal monthly installments
of Fixed Rent and Variable Rent over the full three years of the
Lease Term (that is, the Base Term and the two Renewal Terms)
will be prepared using the Interest Rate as determined on the
date of the Effective Date Notice, such that at the end of the
Lease Term the Lease Balance shall be equal to the expected
Appraised Value at such date of the Vehicles subject to the
Lease. The installments of Fixed Rent so determined shall be set
forth in Schedule II to the Lease and shall be payable by Lessee
on the dates and in the amounts set forth in said Schedule II.
The installment of Variable Rent shall vary over the Lease Term,
based upon changes in the applicable Interest Rate. Schedules I
and II to the Lease shall be prepared by Agent, and the items set
forth by Agent in such Schedules shall be conclusive and binding
upon Lessee for all purposes hereunder.
Section 3.6 Financial Reports. At least three (3)
Business Days prior to the Effective Date, Parent shall have
delivered to Agent and Lessors copies of its most recent
financial statements prepared in accordance with GAAP, applied on
a consistent basis throughout the periods covered thereby and on
a basis consistent with prior periods.
Section 3.7 Financing Statements. On or prior to the
Effective Date, Agent shall have received from Lessee duly
executed UCC financing statements identifying Lessee as debtor
and Agent as secured party for the benefit of the Lessors, and
describing the Lease as a secured transaction, and such financing
statements shall have been filed in (a) the jurisdiction in which
Lessee has its principal office, (b) each jurisdiction in which
any Vehicle being delivered on the Effective Date is to be titled
and (c) the jurisdiction in which Lessee is incorporated.
Section 3.8 Certificates of Title. On or prior to the
Effective Date, Agent and each Lessor shall have received a duly
executed certificate from a Responsible Officer of Lessee,
certifying that (a) Lessee has submitted to each applicable motor
vehicle Authority the Certificate of Title or Certificate of
Origin for each Vehicle to be subject to the Lease and, to the
extent not previously effected, together with (i) applications
duly completed by Lessee requesting that such Authority record
the interests of Agent, on behalf of the Lessors, as lienholder
on each such Certificate of Title and (ii) payment of all
applicable fees and charges and (b) as so submitted, such
Certificates of Title do not evidence title, or any interest in
or Lien against title, in any such Vehicle in any Person other
than the Lessee and the Agent.
Section 3.9 Transaction Costs; Fees. On or prior to
the Effective Date, Lessee shall have paid to Agent, for the
benefit of Agent and the Lessors, any Transaction Costs invoiced
and not previously paid. Such payment shall be made by wire
transfer of immediately available funds to the account specified
for Agent in Schedule I.
Section 3.10 Opinions of Counsel. On or prior to the
Effective Date, each Lessor and Agent shall have received the
opinions of (a) ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, as counsel to
Lessee substantially to the effect of the matters set forth in
Exhibit C-1, (b) general counsel to Consolidated Freightways
Corporation, the parent corporation of Lessee, substantially to
the effect of the matters set forth in Exhibit C-2 and (c) Stoel
Rives LLP, as counsel to Lessee substantially to the effect of
the matters set forth in Exhibit C-3. By their execution hereof,
Lessee expressly instructs each such general counsel to execute
and deliver such opinions to Agent and the Lessors.
Section 3.11 Corporate Status and Proceedings. On or
prior to the Effective Date, Agent shall have received:
(a) certificates of existence and good standing with
respect to Lessee from the Secretary of State of the State of its
incorporation, dated no earlier than the 15th day prior to the
Effective Date; and
(b) with respect to Lessee, a certificate from a
Responsible Officer substantially in the form of Exhibit D, dated
the Effective Date, with respect to the Lessees governing
documents, resolutions and incumbent officers, representations
and warranties and absence of defaults.
Section 3.12 Consents and Approvals. On or prior to
the Effective Date, all necessary consents, approvals and
authorizations of, and declarations, registrations and filings
with, Authorities and nongovernmental Persons required to
consummate the transactions contemplated by this Agreement and
the other Operative Agreements shall have been obtained or made
by Lessee and shall be in full force and effect.
Section 3.13 Payment of Impositions. All Impositions
payable on or prior to the Effective Date in connection with the
execution, delivery, recording or filing of any of the Operative
Agreements, in connection with the filing of any of the financing
statements, any applications regarding certificates of title and
any other documents, in connection with the consummation of any
other transactions contemplated hereby or by any of the other
Operative Agreements, shall have been paid in full by Lessee.
Section 3.14 Search Reports. Prior to the Effective
Date, Agent shall have received reports acceptable to Agent and
counsel to the Lessors as to Lessee by the office of the
Secretaries of State and the appropriate county filing or
recording offices (if applicable) of each jurisdiction
contemplated by Section 3.7, each dated as close to the Effective
Date as practicable, in respect of a search of the applicable UCC
files and any indices of Liens maintained by such offices
(including, if applicable, indices of judgment, revenue and tax
liens).
Section 3.15 Insurance. On or prior to the Effective
Date, Agent shall have received (and each Lessor shall have
received a copy of) a current certificate to the effect that
insurance complying with Section 7.1 of the Lease is in full
force and effect, and there shall be no past due premiums in
respect of any such insurance.
Section 3.16 Proceedings Satisfactory, Etc. All
proceedings taken in connection with the Effective Date and all
documents relating thereto shall be reasonably satisfactory to
each Participant and its counsel, and each Participant and its
counsel shall have received copies of such documents as such
Participant or its counsel may reasonably request in connection
therewith, all in form and substance reasonably satisfactory to
such Participant and its counsel.
Section 3.17 Absence of Material Adverse Effect.
Except as disclosed in writing to Agent, since June 30, 1999, no
Material Adverse Effect shall have occurred and be continuing.
Section 3.18 Representations and Warranties True;
Absence of Defaults. Each of the representations and warranties
made by or on behalf of Lessee under the Operative Agreements
shall be true on and as of the Effective Date, and no Default
shall have occurred and be continuing on and as of the Effective
Date.
ARTICLE IV
General Provisions
Section 4.1 Nature of Transaction. It is the intent
of the Participants that: (a) the transaction contemplated
hereby constitutes an operating lease from Agent and Lessors to
Lessee for purposes of the Lessees financial reporting, (b) the
transaction contemplated hereby preserves ownership in the
Vehicles to Lessee for purposes of Federal and state income tax,
bankruptcy and UCC purposes, (c) the Lease grants a security
interest in the Vehicles and the other Collateral to Agent for
the benefit of Agent and the Lessors, and (d) the obligations of
Lessee to pay Fixed Rent and Variable Rent shall be treated as
payments of principal and interest, respectively. Nevertheless,
Lessee acknowledges and agrees that Agent has not made any
representations or warranties concerning the tax, accounting or
legal characteristics of the Operative Agreements and that Lessee
has obtained and relied upon such tax, accounting and legal
advice concerning the Operative Agreements as it deems
appropriate. Except as specifically provided for herein or in
the Lease, Agent, for the benefit of the Lessors, shall retain an
interest in the Vehicles, free and clear of all Liens other than
Permitted Liens, as security for the obligations of Lessee under
the Operative Agreements. Lessee shall not have any right, title
or interest in the Vehicles except as expressly set forth in this
Agreement or in the Lease. Without limiting the foregoing,
Lessee shall be permitted to be named as the record owner of each
Vehicle on the Certificate of Title and the registration issued
for such Vehicle by each applicable Authority so long as Agent is
listed on the same Certificate of Title as having a security
interest in the Vehicle or Lessee has taken such other steps as
may be necessary to perfect Agent's security interest, on behalf
of the Lessors, in such Vehicle. Other than Agent, who will hold
a security interest on behalf of the Lessors, no Person shall be
named on the Certificate of Title of any Vehicle as having a
security interest in such Vehicle.
Section 4.2 Replacements. Lessors hereby agree that
they shall instruct Agent to release a Part or Vehicle from the
Lease and evidence such release by the execution and delivery of
a termination statement release, a release of Lien from the
applicable Certificate of Title and such other documents as may
be required to release the replaced Part or Vehicle from the
Lease and which are in form and substance satisfactory to the
Required Lessors subject to the satisfaction of the conditions
set forth in the Lease with respect to the release of such Part
or Vehicle.
ARTICLE V
Representations and Warranties
Section 5.1 Representations and Warranties of Lessee.
As of the Effective Date, Lessee makes the representations and
warranties set forth in this Section 5.1 to Agent and each
Lessor:
(a) Title. Lessee has record title to each of the
Vehicles or has beneficial title to each such Vehicle with record
title being subject only to the issuance in the ordinary course
of the original Certificate of Title, for which an application
has already been submitted to the appropriate titling Authority,
and each of the Vehicles and all of the other Collateral is free
from all Liens except for Permitted Liens.
(b) Perfection of Security Interests. No filing,
recordation or registration is necessary or advisable in order to
perfect the security interest of Agent, for the benefit of the
Lessors, in the Vehicles and other Collateral referred to in the
foregoing subsection (a) other than (i) the filing or recording
of financing statements under Article 9 of the applicable UCC in
Illinois, New Jersey, Minnesota, Oregon, Texas and California
(the Original States), and the recordation on the Certificate of
Title for each Vehicle with the applicable Authority of the
security interest of Agent on behalf of the Lessors or (ii) in
the case of any Sublease, the delivery to Agent of the chattel
paper original of such Sublease, and upon the actions described
in the foregoing clauses (i) and (ii) the security interests in
the Vehicles and the other Collateral are enforceable, properly
perfected, first-priority Liens, subject only to Permitted Liens;
provided, however, that such actions may not be effective to
perfect such security interest in certain Intellectual Property
Collateral that can only be perfected by filing with the United
States Patent and Trademark Office and certain items described in
clause (e) of the definition of Collateral to the extent such
items are stored in (but not made a part of) a Vehicle and
located from time to time in jurisdictions where no such filing
has been made or to the extent that any such item consists of a
type of collateral in which a security interest cannot be
perfected by taking such actions.
(c) Appraisal Data. The information provided by
Lessee to the Appraiser and forming the basis for the conclusions
set forth in the Appraisal, taken as a whole, was true and
correct in all material respects and did not omit any information
necessary to make the information provided not materially
misleading as of the time provided.
(d) Corporate Existence. Lessee is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware, and Lessee is duly qualified or
licensed and in good standing as a foreign corporation authorized
to do business in each state where, because of the nature of its
activities or properties, such qualification or licensing is
required, except for such jurisdictions where the failure to be
so qualified or licensed would not have a Material Adverse
Effect.
(e) Corporate Authority. Lessee has all requisite
corporate power and authority to execute, deliver, and perform
its respective obligations under each Operative Agreement to
which it is a party.
(f) Authorization; Non-Contravention. The execution
and delivery by Lessee of the Operative Agreements to which it is
a party, and the performance by Lessee of its obligations under
such Operative Agreements, have been duly authorized by all
necessary corporate action (including any necessary stockholder
action) on its part, and do not and will not: (i) violate any
provision of any law, rule or regulation presently in effect
having applicability to Lessee or of any order, writ, judgment,
decree, determination or award presently in effect having
applicability to Lessee, which violation or violations would
have, individually or in the aggregate, a Material Adverse
Effect; (ii) violate any provision of the charter or bylaws of
Lessee; (iii) result in a breach of or constitute a default under
any indenture, loan or credit agreement, or any other agreement
or instrument to which Lessee is a party or by which Lessee or
its properties may be bound or affected, which breaches or
default would have, individually or in the aggregate, a Material
Adverse Effect; or (iv) result in, or require, the creation or
imposition of any Lien of any nature upon or with respect to any
of the properties now owned or hereafter acquired by Lessee
(other than the security interest contemplated by the Lease); and
Lessee is not in default under or in violation of its charter or
by-laws.
(g) Binding Effect. Each of the Operative Agreements
to which Lessee is a party constitutes the legal, valid and
binding obligation of Lessee, enforceable against Lessee, in
accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, arrangement, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors rights generally and by general principles of equity.
(h) Absence of Litigation, etc. Except as disclosed
on Schedule II, there is no litigation (including, without
limitation, derivative actions), arbitration or governmental
proceedings pending or, to the knowledge of Lessee, threatened
against Lessee in which there is a reasonable possibility of an
adverse decision which, if adversely determined, would have a
Material Adverse Effect.
(i) Consents, etc. No authorization, consent,
approval, license or formal exemption from, nor any filing,
declaration or registration with, any Authority, including,
without limitation, the Securities and Exchange Commission, or
with any securities exchange, is or will be required in
connection with the execution and delivery by Lessee of the
Operative Agreements to which it is a party, the performance by
Lessee of its obligations under such Operative Agreements or the
ownership, operation and maintenance of the Vehicles as
contemplated by the Operative Agreements, except as described in
Section 5.1(b).
(j) Location of Offices. The principal place of
business and chief executive office (as such term is used in
Article 9 of the UCC) of Lessee is located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(k) ERISA. Relying upon the accuracy of the
representations in Section 5.2(a) hereof, the execution and
delivery of the Operative Agreements by Lessee will not involve
any prohibited transaction within the meaning of ERISA or Section
4975 of the Code.
(l) Taxes. Lessee has filed or caused to be filed all
United States Federal and all other material tax returns that are
required to be filed by Lessee, and has paid or caused to be paid
all taxes shown to be due and payable on such returns or on any
assessment received by Lessee to the extent that such taxes have
become due and payable except to the extent that taxes due, but
unpaid, are being contested in good faith by Lessee by
appropriate action or proceeding and, to the extent (if any) that
such taxes are not due and payable, has established or caused to
be established reserves that are adequate for the payment thereof
in accordance with GAAP.
(m) Compliance with Laws. The Vehicles, the
properties from which they are operated and serviced and the
current operation thereof and thereon do not violate any laws,
rules, regulations, or orders of any Authorities that are
applicable thereto, including, without limitation, any thereof
relating to matters of occupational safety and health or
Environmental Laws, or motor vehicles or the titling or
registration thereof, except for such violations as would not
have, individually or in the aggregate, a Material Adverse
Effect.
(n) Disclosure. Taken as a whole, neither this
Participation Agreement, nor any offering materials, nor the
other Operative Agreements to which Lessee is or will be a party
nor the other documents and certificates furnished pursuant to
this Participation Agreement to Agent, or the Lessors, in
connection with the transactions contemplated by this
Participation Agreement, contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein, in the
light of the circumstances under which they were made, not
misleading as of the time furnished.
(o) Impositions. No sales, use, excise, transfer or
other tax, fee or imposition shall result from the titling,
registration or delivery of a Vehicle on or before the Effective
Date, except such taxes, fees or impositions that have been paid
in full on or prior to the Effective Date, except with respect to
sales and use taxes owing in connection with a transfer which
shall be paid monthly or quarterly as due and payable.
(p) Certain Vehicle Matters.
(i) Each Vehicle which is to be used in
interstate commerce will be properly registered
pursuant to the International Registration Plan as in
effect in the state in which such Vehicle is titled on
the Effective Date.
(ii) Each Vehicle has a gross weight rating of
more than 16,000 pounds, and none of the Vehicles has
been specially constructed, rebuilt, reconstituted or
assembled.
(iii) Lessee is not in the business of selling
vehicles and the Vehicles do not constitute Ainventory
under any applicable UCC.
(iv) Each Vehicle is manufactured within the
United States of America.
(v) In connection with the submission of each
application to have the Lien of Agent, for the benefit
of the Lessors, listed on each Certificate of Title,
Lessee has submitted sufficient evidence of ownership
of the applicable Vehicle to the relevant motor vehicle
titling Authority.
(q) Registration of Vehicles Used in Intrastate or
Interstate Commerce. Each Vehicle will be, when Lessee takes
possession thereof on the Effective Date and at all times
thereafter or when thereafter subject to the Lease, either
(i) used in interstate commerce, titled in a State with respect
to which Agent and the Lessors have a perfected security interest
in such Vehicle and registered in a State which is a party to the
International Registration Plan or (ii) used in intrastate
commerce, registered in the State in which it is so used and
titled in a State with respect to which Agent and Lessors have a
perfected security interest in such Vehicle.
(r) Holding Company. Lessee is not subject to
regulation as a holding company, an affiliate of a holding
company or a subsidiary company of a holding company within the
meaning of the Public Utility Holding Company Act of 1935, as
amended.
(s) Investment Company Act. Lessee is not an
investment company, an affiliated person of an investment
company, or a promoter or principal underwriter for an investment
company, as such terms are defined the Investment Company Act of
1940, as amended. The consummation of the transactions
contemplated hereby will not violate any provision of such Act or
any rule, regulation or order of the Securities and Exchange
Commission thereunder.
(t) Intellectual Property. To Lessee's knowledge or
as represented in writing by a vendor of the Vehicles which
writing has been provided to Agent, there are no patents, patent
rights, trademarks, service marks, trade names, copyrights,
licenses or other intellectual property rights with respect to
the Vehicles, or proprietary, patented or patentable
modifications or Parts used in connection with the Vehicles, the
unavailability of which would have a material adverse effect on
the current Fair Market Value of the Vehicles.
(u) Subjection to Regulation. Neither Agent nor any
Lessor will, solely by reason of entering into the Operative
Agreements or the consummation and performance of the
transactions contemplated thereby (other than upon the exercise
of remedies under the Lease) (i) be required to qualify to do
business in any jurisdiction, (ii) become subject to ongoing
regulation by any Authority as a company engaged in the business
of Lessee in any jurisdiction or (iii) to the best knowledge of
Lessee, become subject to any other ongoing regulation of its
operations by any Authority (other than any taxing Authority).
(v) Use of Proceeds. The use of the proceeds from the
transaction contemplated by the Operative Agreements will not
violate or result in any violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulations issued
pursuant thereto, including, without limitation, Regulations T, U
and X of the Board of Governors of the Federal Reserve System.
(w) Absence of Defaults. No Default has occurred and
is continuing, and since June 30, 1999 there has occurred no
Material Adverse Effect.
(x) Absence of Casualty. No Casualty has occurred with
respect to the Vehicles.
(y) Insurance. All insurance coverages required by
Section 7.1 of the Lease are in full force and effect and there
are no past due premiums in respect of any such insurance.
(z) Financial Reports. The financial statements
delivered by Parent to Agent pursuant to Section 3.6 will fairly
present the Consolidated financial condition of the Parent and
its Subsidiaries as at such date and the Consolidated results of
the operations of the Parent and its Subsidiaries for the period
ended on such date, all in accordance with generally accepted
accounting principles consistently applied. Since June 30, 1999,
there has been no Material Adverse Change.
(aa) Private Offering. Neither Lessee, nor anyone
acting on behalf of it, has taken or will take any action which
will subject any interest being acquired by the Lessors under the
Operative Agreements to the requirements of Section 5 of the
Securities Act, and, assuming the truth and accuracy of the
representations set forth in Section 5.2(b), the issuance, sale
and delivery of such interests under the circumstances
contemplated by this Agreement do not require the registration of
such interests under the Securities Act or the qualification of
any of the Operative Agreements under the Trust Indenture Act of
1939, as amended.
(bb) Brokers, etc. Lessee has not engaged or
authorized any broker, finder, investment banker or other third
party to act on its behalf, directly or indirectly, as a broker,
finder, investment banker, agent or in any other like capacity in
connection with any of the Operative Agreements or the
transactions contemplated thereby. Lessee shall be responsible
for, and shall indemnify, defend and hold each Lessor harmless
from and against any and all claims, liabilities or demands by
any Person for brokers, finders, investment bankers, arrangers or
agents fees, commissions or other entitlements with respect the
Operative Agreements and the transactions contemplated thereby
(except to the extent arising from a breach of Sections 5.2(c) or
5.3(f)).
(cc) Year 2000 Compliance. Lessee has (i) initiated a
review and assessment of all areas within its and each of its
Subsidiaries business and operations (including those affected by
suppliers, vendors and customers) that could reasonably be
expected to be affected in any material respect by the AYear 2000
Problem (that is, the risk that computer applications used by the
Company or any of its Subsidiaries (or suppliers, vendors and
customers) may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a plan and time line for
addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan substantially in accordance with that
timetable. Based on the foregoing, Lessee reasonably believes
that all computer applications (including those of its suppliers,
vendors and customers) that are material to its or any of its
Subsidiaries business and operations are reasonably expected on a
timely basis to be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 (that
is, Year 2000 Compliant), except to the extent that any failures
to do so singly or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
Section 5.2 Representations and Warranties of Lessors.
Each of Lessors hereby represents and warrants severally but not
jointly to the other Participants as set forth in this Section
5.2.
(a) ERISA. Such Lessor is not and will not be funding
any of its Commitment or performing any of its obligations under
the Operative Agreements with the assets of an employee benefit
plan (as defined in Section 3(3) of ERISA) which is subject to
Title I of ERISA, or a plan (as defined in Section 4975(e)(1) of
the Code).
(b) Investment. The interest being acquired by such
Lessor under the Operative Agreements is being acquired for its
own account, without any view to the distribution thereof or any
interest therein, provided that such Lessor shall be entitled to
assign, transfer or convey its interest in accordance with
Section 11.8.
(c) Brokers, etc. Such Lessor has not engaged or
authorized any broker, finder, investment banker or other third
party to act on its behalf, directly or indirectly, as a broker,
finder, investment banker, agent or in any other like capacity in
connection with any of the Operative Agreements or the
transactions contemplated thereby.
Section 5.3 Representations and Warranties of Agent.
ABN AMRO Bank N.V., in its individual capacity, hereby represents
and warrants to the other Participants as set forth in this
Section 5.3.
(a) Organization and Authority. Agent is a corporation
duly organized and validly existing in good standing under the
laws of the Netherlands and has the corporate power and authority
to enter into and perform its obligations under the Operative
Agreements.
(b) Authorization; Binding Effect. The Operative
Agreements to which Agent is or will be a party have been or will
be, on the date required to be delivered hereby, duly authorized,
executed and delivered by Agent, and this Participation Agreement
is, and such other Operative Agreements are, or, when so executed
and delivered by Agent will be, valid, legal and binding
agreements of Agent, enforceable against Agent in accordance with
their respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, arrangement, moratorium
or other similar laws affecting the enforcement of creditors
rights generally and by general principles of equity.
(c) Non-Contravention. Neither the execution and
delivery by Agent of the Operative Agreements to which it is or
will be a party, either in its individual capacity, as Agent, or
both, nor compliance with the terms and provisions thereof,
conflicts with, results in a breach of, constitutes a default
under (with or without the giving of notice or lapse of time or
both), or violates any of the terms, conditions or provisions of:
(i) the articles of incorporation or by-laws of Agent; (ii) any
bond, debenture, note, mortgage, indenture, agreement, lease or
other instrument to which Agent, either in its individual
capacity, as Agent or both, is now a party or by which it or its
property, either in its individual capacity, as Agent or both, is
bound or affected, where such conflict, breach, default or
violation would be reasonably likely to materially and adversely
affect the ability of Agent, either in its individual capacity,
as Agent or both, to perform its obligations under any Operative
Agreement to which it is or will be a party, either in its
individual capacity, as Agent or both; or (iii) any of the terms,
conditions or provisions of any law, rule, regulation, order,
injunction or decree of any Authority applicable to it in its
individual capacity, as Agent or both, where such conflict,
breach, default or violation would be reasonably likely to
materially and adversely affect the ability of Agent, either in
its individual capacity, as Agent or both, to perform its
obligations under any Operative Agreement to which it is or will
be a party.
(d) Absence of Litigation, etc. There is no
litigation (including, without limitation, derivative actions),
arbitration or governmental proceedings pending or, to the best
knowledge of Agent, threatened against it which would be
reasonably likely to adversely affect Agents ability to perform
its obligations under the Operative Agreements to which it is
party.
(e) Consents, etc. No authorization, consent,
approval, license or formal exemption from, nor any filing,
declaration or registration with, any Authority, is or will be
required in connection with the execution and delivery by Agent
of the Operative Agreements to which it is party or the
performance by Agent of its obligations under such Operative
Agreements.
(f) Brokers, etc. Agent has not engaged or authorized
any broker, finder, investment banker or other third party to act
on its behalf, directly or indirectly, as a broker, finder,
investment banker, agent or in any other like capacity in
connection with any of the Operative Agreements or the
transactions contemplated thereby.
ARTICLE VI
Covenants
Section 6.1 Covenants of Lessee. Lessee, covenants
and agrees with the Lessors and Agent that during the Lease Term,
and, if Lessee has not purchased the Vehicles pursuant to the
Lease, for 90 days thereafter, Lessee shall comply with each of
the following provisions of this Section 6.1.
(a) Corporate Existence, etc. Lessee shall maintain
its corporate existence and its qualification and good standing
in all jurisdictions in which the failure to maintain such
existence and qualification or good standing could reasonably be
expected to have a Material Adverse Effect.
(b) Compliance With Laws. Lessee shall comply , and
cause each of its Subsidiaries to comply, in all material
respects, with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except
to the extent contested in good faith. Without limiting the
foregoing, Lessee shall at all times be responsible for, and
shall comply with, all provisions of any Authority with respect
to the titling and registration of Vehicles.
(c) Mergers, Consolidations or Sales. Lessee shall
not consummate any transaction of merger, reorganization, or
consolidation, or transfer, sell, assign, lease, or otherwise
dispose of all or any part of its property, or wind up, liquidate
or dissolve, or agree to do any of the foregoing, except for (i)
any merger of the Parent or any Subsidiary of the Lessee with and
into the Lessee; (ii) sales or other dispositions of personal
property in the ordinary course of business; (iii) sales of Real
Estate for fair market value in exchange for similar property
complying with Section 1031 of the Code; (iii) sales of accounts
receivable and any related property by Lessee in a receivables
securitization arrangement to a financial institution or a
special purpose vehicle of Lessee, provided, however, that the
aggregate net unrecovered investment in such accounts receivable
and proceeds thereof held by the purchasers thereof under such
accounts receivables securitization arrangement shall not exceed
at any time $75,000,000; and (v) sales or other transfers of
assets by Lessee in any fiscal year with an aggregate book value
not in excess of five percent (5%) of the Consolidated Total
Assets of Parent as of the end of the previous fiscal year.
(d) Liens. Lessee shall not incur or suffer to exist
any Lien on any of the Collateral other than Permitted Liens.
Without limiting the foregoing, Lessee shall not assign or pledge
any of its rights under any Sublease to any Person other than
Agent.
(e) Change of Name or Location. Lessee shall furnish
to Agent notice on or before the 30th day prior to any relocation
of its chief executive office or principal place of business or
the office where it maintains its records concerning the
Collateral, or change of its name, and shall take all actions
contemplated by Section 6.1(f) in connection with any such
relocation.
(f) Perfection and Maintenance of Security Interest.
(i) Lessee, at its expense, shall cause, as soon
as possible, but in any event no later than the 10th
day after any request, financing statements (and
continuation statements with respect thereto) and all
other documents necessary or reasonably requested by
Agent in connection with the establishment and
perfection of the interest of Agent in the Collateral,
to be recorded or filed at the locations contemplated
by Section 3.7, and in such manner, and, at its
expense, shall take, or shall cause to be taken, all
such other action as may be necessary or reasonably
requested by Agent or the Required Lessors in order to
establish, preserve, protect and perfect the rights,
titles and interests of Agent, on behalf of the
Lessors, to the Collateral.
(ii) All Certificates of Title relating to
Vehicles shall indicate the address of Agent, ▇.▇. ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, as the address of the
lienholder thereon, for the benefit of the Lessors.
(iii) Lessee shall, no later than the
Effective Date, have delivered to Agent and each Lessor
a certificate of a Responsible Officer of Lessee
certifying that each such Certificate of Title is in
the possession of Lessee, shows Lessee as owner of
record, and names Agent, on behalf of the Lessors (and
Lessors to the extent permitted under applicable law
and procedure to be so named), on the face of such
Certificates of Title as having a perfected first
security interest in such Vehicles, and reflecting no
other Liens other than Permitted Liens. All
Certificates of Title so held by Lessee shall be
available for inspection by Agent during normal
business hours, and Lessee shall deliver possession of
such Certificates of Title to Agent immediately upon
Agents request therefor.
(iv) Notwithstanding the foregoing, if naming
Agent (and, if permitted as aforesaid, Lessors) as a
secured party on such Certificate or Certificates of
Title as hereinabove contemplated is not adequate to
perfect the first priority security interest of Agent,
for the benefit of the Lessors, then Lessee shall, upon
receipt of Agents request therefor, within the
applicable time period specified above, deliver to
Agent, in addition to the original Certificates of
Title, all such other documents or filings as
reasonably required by Agent or the Required Lessors to
ensure that Agent, on behalf of the Lessors, has a
perfected first priority security interest in such
Vehicles.
Without limiting the foregoing, in the event that any
application for registration of such Lien on the Certificate of
Title to any Vehicle shall be rejected by the applicable
Authority, Lessee shall make such corrections as may be necessary
in order that such registration shall be re-submitted to the
applicable Authority not more than fifteen (15) days following
the initial rejection thereof, and duly completed not more than
sixty (60) days following such re-submission. Following receipt
by Lessee of any Certificate of Title as contemplated by clause
(iv) hereof, Lessee shall not, without the prior written approval
of Agent, change the State of title or the Certificate of Title
of any Vehicle, apply for an additional Certificate of Title for
any Vehicle, or otherwise modify such Certificate of Title. Agent
shall grant such written approval upon Lessees satisfaction of
the provisions of this Section 6.1(f) with respect to the
perfection of Agents security interest, on behalf of the Lessors,
in such Vehicle (or any Replacement Vehicle) and upon receipt by
Agent and each Lessor of an opinion of counsel substantially to
the effect of the matters set forth in Exhibit C-1 with respect
to the jurisdiction in which such Vehicle is to be titled or
registered (to the extent that Agent and Lessors have not
previously received such an opinion of counsel with respect to
such jurisdiction). The security interest of Agent, on behalf of
the Lessors, on any Certificate of Title shall not be removed
therefrom, nor shall any other security interest be noted
thereon, unless and until such Vehicle is to be released from the
Lien created by the Lease in accordance with the applicable
provisions of the Operative Agreements. Lessee shall not,
without the prior written approval of Agent, register any Vehicle
in any manner that would render Section 5.1(q) untrue with
respect to such Vehicle as of any date of determination.
It is expressly understood that to the extent that any
Certificate of Title is in the possession of Lessee, such
possession shall be strictly for the benefit of Agent and solely
in accordance with the provisions of the Operative Agreements.
(g) Periodic Reporting. Lessee shall deliver to Agent
(with copies for each Lessor):
(i) as soon as available and in any event within
45 days after the end of each of the first three
quarters of each fiscal year of the Parent, a
Consolidated balance sheet of the Parent and its
Subsidiaries as of the end of such quarter and
Consolidated statements of income and cash flows of the
Parent and its Subsidiaries for the period commencing
at the end of the previous fiscal year of the Parent
and ending with the end of such quarter, duly certified
(subject to year-end audit adjustments) by a
Responsible Officer of the Parent as having been
prepared in accordance with generally accepted
accounting principles and a certificate of the chief
financial officer of the Parent (in the form of Exhibit
F hereto) as to compliance with the terms of this
Agreement, together with confirmation of the Pricing
Index, and setting forth in reasonable detail the
calculations necessary to demonstrate compliance with
Section 6.1(h), provided that, in the event of any
change in GAAP used in the preparation of such
financial statements, the Lessee shall also provide, if
necessary for the determination of compliance with
Section 6.1(h), a statement of reconciliation
conforming such financial statements to GAAP;
(ii) as soon as available and in any event within
90 days after the end of each fiscal year of the
Parent, a copy of the audited annual report for such
year for the Parent and its Consolidated Subsidiaries,
and a Consolidated balance sheet of the Parent and its
Subsidiaries as of the end of such fiscal year and
Consolidated statements of income and cash flows of the
Parent and its Subsidiaries for such fiscal year, and,
in the case of the audited annual report, accompanied
by an unqualified opinion by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or
other independent public accountants acceptable to the
Required Lessors, together with a certificate of a
Responsible Officer of the Parent (in the form of
Exhibit F hereto) as to compliance with the terms of
this Agreement, together with confirmation of the
Pricing Index, and setting forth in reasonable detail
the calculations necessary to demonstrate compliance
with Section 6.1(h) provided that, in the event of any
change in GAAP used in the preparation of such
financial statements, the Lessee shall also provide, if
necessary for the determination of compliance with
Section 6.1(h), a statement of reconciliation
conforming such financial statements to GAAP; and
(iii) not later than the end of the first
month of each fiscal year of the Parent, annual
forecasts (to include forecasted consolidated balance
sheets, statements of income and expenses and
statements of cash flow) for the Parent, Lessee and
their Subsidiaries as at the end of and for each
quarter of such fiscal year;
(iv) as soon as possible and in any event within
five days after a Responsible Officer obtains knowledge
of the occurrence of each Default continuing on the
date of such statement, a statement of the chief
financial officer of Lessee setting forth details of
such Default and the action which Lessee has taken and
proposes to take with respect thereto;
(v) promptly after the filing thereof, copies of
all material reports and registration statements that
the Parent or any Subsidiary files with the Securities
and Exchange Commission;
(vi) promptly after the sending or filing thereof,
copies of all reports which the Parent sends to any of
its securityholders, and copies of all reports and
registration statements which the Parent or any
Subsidiary files with the Securities and Exchange
Commission or any national securities exchange;
(vii) promptly after the filing thereof, a
copy of any notice of reportable event, within the
meaning of Section 4043 of ERISA, with respect to any
Plan of the Lessee or any Subsidiary unless the 30-day
notice requirement with respect to such event has been
waived by the PBGC;
(viii) promptly after becoming aware of any
Material Adverse Change, a description thereof;
(ix) promptly after receiving notification thereof
from the Index Reference, copies of all notices,
reports or other correspondence regarding any change to
the Pricing Index, including any change in such Pricing
Index or the outlook in respect of such Pricing Index;
and
(x) such other information respecting the
condition or operations, financial or otherwise, of
Lessee or any of its Subsidiaries as any Lessor through
the Agent may from time to time reasonably request.
(h) Financial Tests. Lessee shall:
(i) Leverage Ratio. Maintain, or cause to be
maintained, at all times a ratio of not more than 2.50 to
1.00, determined as of the end of each fiscal quarter, of
Consolidated Funded Indebtedness as of the end of such
fiscal quarter to Consolidated EBITDAR for the four fiscal
quarters ending on such date.
(ii) Tangible Net Worth. Maintain, or cause to be
maintained, at all times a Consolidated Tangible Net Worth
of the Parent, determined as of the end of each fiscal
quarter, of not less than the sum of (i) $205,000,000, plus
(ii) 50% of Consolidated Net Income during the period
commencing June 30, 1999 and ending at the end of such
fiscal quarter (without taking into account any losses) plus
(iii) 100% of the Net Cash Proceeds of all Equity Interests
issued by the Parent during the period commencing June 30,
1999 and ending at the end of such fiscal quarter minus (iv)
an amount, calculated on an after-tax basis, in respect of
charges not in excess of $15,000,000 related to the Tax
Sharing Agreement.
(iii) Fixed Charge Coverage Ratio. Maintain,
or cause to be maintained, at all times a ratio, determined
as at the end of each fiscal quarter for the immediately
preceding four fiscal quarters, of (a) Consolidated EBITDAR
for such fiscal quarters to (b) Consolidated Interest and
Rental Expense for such fiscal quarters of not less than
2.00 to 1.00.
(i) Acceleration of Material Debt. Lessee agrees that
if a Default shall occur, or if an event or condition shall occur
that results in the acceleration of the maturity of Debt of
Lessee or of any Affiliate of Lessee, in either case in amounts
exceeding ten million dollars ($10,000,000), Lessee shall
promptly notify Agent thereof and upon Agents request, Lessee
shall immediately deliver to Agent, Certificates of Title for all
of the Vehicles, duly endorsed by Lessee in blank.
(j) ERISA Events. Promptly upon Lessees becoming
aware of the occurrence of any matter or matters referred to in
the following clauses (i), (ii) and (iii) involving liability
that may reasonably be expected to exceed, individually or in the
aggregate, $25,000,000, Lessee shall notify Agent and each of the
Lessors in writing specifying the nature thereof, what action
Lessee is taking or proposes to take with respect thereto, and,
when known, any action taken by the Internal Revenue Service with
respect thereto: (i) a Reportable Event as such term is defined
in Section 4043 of ERISA unless the 30-day notice requirement
with respect to such event has been waived by the PBGC, (ii) an
Accumulated Funding Deficiency as such term is defined in Section
302 of ERISA, or (iii) a non-exempt Prohibited Transaction, as
such term is defined in Section 4975 of the Code or described in
Section 406 of ERISA, in connection with any Pension Plan (or any
trust created thereunder).
(k) Additional Information. Promptly upon receipt of
a written request from Agent or any Lessor, Lessee shall deliver
to such requesting party such other data and information as from
time to time may be reasonably requested.
(l) Reports to Lessors. Lessee shall, concurrently
with any notice, delivery or other communication required to be
delivered to Agent pursuant to any Operative Agreement, deliver a
copy of such notice, delivery or other communication to each
Lessor at such Lessor's current address.
(m) Acquisitions. Lessee shall not acquire any
business (whether in the form of an acquisition of stock, assets,
debt, or other indebtedness or obligation or a loan, advance,
capital contribution, or subscription), or permit any of its
Subsidiaries to do any of the foregoing, if for any such
transaction the sum of: (i) cash paid by Lessee or such
Subsidiary in connection with such transaction plus (ii) the
amount of obligations issued or assumed by Lessee or such
Subsidiary in connection with such transaction plus (iii) the
aggregate amount of cash paid by Lessee and its Subsidiaries in
connection with all other such acquisitions that are consummated
in the same Fiscal Year as such issuance or assumption, as the
case may be, plus (iv) the aggregate amount of obligations issued
or assumed by Lessee and its Subsidiaries in connection with all
other such acquisitions that are consummated in such Fiscal Year,
is greater than $50,000,000; provided that any business so
acquired shall be engaged in the transportation business and
related businesses.
(n) Year 2000 Compliance. Lessee will promptly notify
the Agent in the event Lessee discovers or determines that any
computer application (including those of its suppliers, vendors
and customers) that is material to its or any of its Subsidiaries
business and operations will not be Year 2000 Compliant (as
defined in Section 5.1(cc)), except to the extent that any such
failures singly or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
(o) Restricted Investments. Lessee shall not directly
or indirectly declare or make, or incur any liability to make,
any Investment in any Person, except (i) Investments in the
Parent; (ii) Investments that are otherwise permitted under
Section 6.1(m) hereof or Sections 5.02(d) or (g) of the Credit
Agreement; (iii) loans and advances made in the ordinary course
of business to a Subsidiary of Lessee; (iv) loans and advances
made to customers, vendors or employees of Lessee in the ordinary
course of business and (v) Investments in one or more Designated
Entities; provided that (x) no Event of Default has occurred and
is continuing or would result from such Investment in a
Designated Entity and (y) the aggregate net amount of Investments
by Lessee in Designated Entities does not, and would not as a
result of such Investment, exceed 10% of the Consolidated
Tangible Net Worth of the Parent at the date of determination.
Section 6.2 Covenants of Agent and Lessors. Agent, in
its individual capacity, and each of the Lessors, covenants and
agrees with each of the other parties that: (a) it will not
directly or indirectly create, incur, assume or suffer to exist
any Lessor Liens arising by, through or under it on the
Collateral, other than Permitted Lessor Liens; (b) it will, at
its own cost and expense, promptly take such action in its
individual capacity as may be necessary to discharge fully such
Lessor Liens created by it on the Collateral, other than
Permitted Lessor Liens; (c) it will not, except in compliance
with the Operative Agreements, sell, transfer or otherwise
dispose of all or any part of the Vehicles or the other
Collateral; and (d) it will not claim any depreciation with
respect to the Vehicles during the term of the Lease.
ARTICLE VII
General Indemnities
Section 7.1 Indemnity. Whether or not the
transactions contemplated hereby are consummated, to the fullest
extent permitted by applicable law, Lessee waives and releases
any claims now or hereafter existing against the Indemnitees on
account of, and shall indemnify, reimburse and hold the
Indemnitees harmless (subject to Section 8.3) from, any and all
claims by third parties (including, but not limited to, claims
relating to trademark or patent infringement and claims based
upon negligence, strict liability in tort, violation of laws,
including, without limitation, Environmental Laws, statutes,
rules, codes or orders or claims arising out of any loss or
damage to any property or death or injury to any Person), any
losses, damages or obligations owing to third parties, any
penalties, liabilities, demands, suits, judgments or causes of
action, and all legal proceedings (either administrative or
judicial), in each case whether or not the Indemnitee is a party
thereto, and any costs or expenses in connection therewith
(including costs incurred in connection with discovery) or in
connection with the enforcement of this indemnity (including
reasonable attorneys fees and expenses, and fees and expenses of
internal counsel, incurred by the Indemnitees), including, in
each case, matters based on or arising from the negligence of
Indemnitees (subject to the proviso below), which may be imposed
on, incurred by or asserted against the Indemnitees by Persons
other than Lessee (except to the extent arising by or through a
claim of a third party) in any way relating to or arising in any
manner out of:
(a) the registration, purchase, taking or foreclosure
of a security interest in, ownership, delivery, condition, lease,
sublease, assignment, storage, transportation, possession, use,
operation, return or other disposition of any of the Vehicles, or
any defect in any such Vehicle, arising from the material or any
article used therein or from the design, testing or use thereof,
or from any maintenance, service, repair, overhaul or testing of
any such Vehicle regardless of when such defect shall be
discovered, whether or not such Vehicle is in the possession of
Lessee and no matter where it is located; or
(b) this Participation Agreement, any other Operative
Agreement or any document or certificate delivered in connection
therewith, the enforcement hereof or thereof or the consummation
of the transactions contemplated hereby or thereby;
(c) the actual or alleged presence of Hazardous
Materials on any property of the Lessee or any of its
Subsidiaries or any Environmental Action relating in any way to
the Lessee or any of its Subsidiaries;
or in the case of each of clauses (a), (b) and (c) above, any
action taken or omitted by any such Indemnitee under or in
connection with any of the foregoing, including with respect to
any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement or any other Operative Agreement,
whether or not any Indemnitee is a party thereto and whether or
not any such investigation, litigation or proceeding is brought
by any creditor of the Lessee, an Indemnitee or any other Person,
(all of the foregoing, collectively, being the Indemnified
Liabilities); provided that Lessee shall not be obligated to
indemnify an Indemnitee for any such claim, loss, damage,
liability, obligation, penalty, demand or suit to the extent the
same results directly from:
(i) the willful misconduct or gross negligence of such
Indemnitee;
(ii) the incorrectness in any material respect of any
representation or warranty made by such Indemnitee in the
Operative Agreements;
(iii) the creation or existence of a Lessor Lien
attributable to such Indemnitee;
(iv) a disposition by such Indemnitee of any Vehicle
following the purchase of such Vehicle by such Indemnitee
from Agent in a foreclosure sale or any use or operation of
such Vehicle following such disposition (other than use or
operation by Lessee or Sublessee or an Affiliate, agent or
representative of Lessee); or
(v) any Impositions described in Section 8.1 except
any amount necessary under this Section 7.1 to hold the
Indemnitee harmless (subject to Section 8.3) from all
Impositions required to be paid by such Indemnitee with
respect to the receipt or accrual of such indemnity under
the laws of any Authority in the United States;
provided, however, that nothing in the preceding proviso shall be
deemed to exclude or limit any claim that any Indemnitee may have
under any Operative Agreement or applicable laws from Lessee for
breach of its representations, warranties or covenants.
Section 7.2 Excessive Use Indemnity. In the event
that at the end of the Lease Term: (a) Lessee elects the Sale
Option; and (b) after paying to Agent any amounts due under
Section 11.3 of the Lease, Agent does not have sufficient funds
to reduce the Lease Balance to zero, then Lessee shall promptly
pay over to Agent the shortfall unless Lessee delivers a report
from the Appraiser in form and substance satisfactory to the
Required Lessors which establishes that the decline in value in
each Vehicle which was sold pursuant to the Sale Option from that
amount anticipated for such date in the Appraiser's report
delivered with respect to such Vehicle was not due to
extraordinary use, failure to maintain or replace, failure to
use, workmanship or method of installation or removal or any
other cause or condition within the power of Lessee to control or
effect (each an Excessive Use).
Section 7.3 Increased Capital Costs. (a) If any
Lessor determines that, due to either (i) the introduction of or
any change in the interpretation of any law or regulation (in
each case after the date hereof) or (ii) the compliance by that
Lessor with any guideline or request (in each case after the date
hereof) from any central bank or other Authority (whether or not
having the force of law), there shall be any reduction in the
rate of return on it or its parent's capital as a consequence of
the Funding made by such Lessor hereunder to pay its share of the
Purchase Price, then the Lessee shall be liable for, and shall
from time to time, upon demand (with a copy of such demand to be
sent to the Agent), pay to the Agent for the account of such
Lessor, additional amounts as are sufficient to compensate such
Lessor for such increased costs.
(b) If any Lessor determines that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central
bank or other Authority charged with the interpretation or
administration thereof, or (iv) compliance by the Lessor or any
corporation or other entity controlling the Lessor with any
Capital Adequacy Regulation (in each case after the date hereof),
affects or would affect the amount of capital required or
expected to be maintained by the Lessor or any corporation or
other entity controlling the Lessor and (taking into
consideration such Lessor's or such corporation's or other
entity's policies with respect to capital adequacy and such
Lessor's desired return on capital) determines that the amount of
such capital is increased as a consequence of its obligations
hereunder, then, upon demand of such Lessor to the Lessee through
the Agent, the Lessee shall pay to the Lessor, from time to time
as specified by the Lessor, amounts sufficient to yield the
Lessor the same return as if the amount of such capital had not
been increased.
Section 7.4 Eurodollar Rate Unlawful. If any Lessor
shall determine in good faith (which determination shall, upon
notice thereof to Lessee, be conclusive and binding on Lessee)
that any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or
not having the force of law) of any court, central bank regulator
or other Authority makes it unlawful, or the central bank or
other Authority asserts that it is unlawful, for such Lessor to
make, continue or maintain any amount of such Lessors Funding on
a Eurodollar Rate basis, the obligations of such Lessor to make,
continue or maintain any such Funding shall, upon such
determination, forthwith be suspended until such Lessor shall
notify Lessee that the circumstances causing such suspension no
longer exist, and all Variable Rent allocable to such Lessor,
commencing with the Rent Period in which such notice is given,
shall automatically be determined on a Base Rate basis beginning
on the next immediately succeeding Payment Date with respect
thereto or sooner, if required by such law or assertion.
Section 7.5 Funding Losses. Lessee agrees to
reimburse Lessor for any loss or expense incurred (including any
loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lessor
to make, continue or maintain any portion of its Outstanding
Investment as a Eurodollar Rate financing) as a result of (i) the
failure of the transaction contemplated by Article 1 of the Lease
to occur on or before the Effective Date specified in the
Effective Date Notice or (ii) any payment of all or any portion
of the Lease Balance for any reason on a date other than a
Payment Date.
Lessor shall promptly notify Lessee in writing of the amount of
any claim under this Section 7.5, the reason or reasons therefor
and the additional amount required fully to compensate such
Lessor for such loss or expense. Such written notice (which shall
include calculations in reasonable detail) shall, in the absence
of manifest error, be conclusive and binding on Lessee.
Section 7.6 Actions of Affected Lessors. Each Lessor
shall use reasonable efforts (including reasonable efforts to
change the booking office for this transaction) to avoid or
minimize any amounts which might otherwise be payable pursuant to
Section 7.3; provided, however, that such efforts shall not be
deemed by such Lessor, in its sole discretion, to be
disadvantageous to it. In the event that such reasonable efforts
are insufficient to avoid or minimize such amounts that might be
payable pursuant to Section 7.3, then such Lessor (the Affected
Lessor) shall use its reasonable efforts to transfer to any other
Lessor approved by Lessee (which itself is not then an Affected
Lessor) its rights and obligations hereunder. In the event that
the Affected Lessor is unable, or otherwise is unwilling, so to
transfer its rights and obligations, Lessee may designate an
alternate financial institution to purchase the Affected Lessor's
rights and obligations hereunder, at the amount of such Lessor's
Outstanding Investment plus accrued Variable Rent, indemnities,
and other amounts owing to such Lessor and, subject to the
provisions of Sections 7.5 and 11.8, the Affected Lessor shall
transfer its rights and obligations to such alternate financial
institution and such alternate financial institution shall become
a Lessor hereunder.
ARTICLE VIII
General Tax Indemnity
Section 8.1 General Tax Indemnity. Lessee agrees to
pay or reimburse Indemnitees for, and to indemnify and hold
Indemnitees harmless from, all Impositions arising at, or
relating to, any time prior to or during the Lease Term, or upon
any termination of the Lease or prior to, or upon the return of,
the Vehicles to Agent, and levied or imposed upon Indemnitees
directly or otherwise, by any Federal, state or local government
or taxing authority in the United States or by any foreign
country or foreign or international taxing authority upon or with
respect to: (a) the Vehicles or any other Collateral; (b) the
exportation, importation, registration, purchase, ownership,
delivery, condition, lease, sublease, assignment, storage,
transportation, possession, use, operation, maintenance, repair,
return, sale (including to Agent or any Lessee pursuant to the
Operative Agreements), transfer of title or other disposition
thereof; (c) the rentals, receipts, or earnings arising from any
of the Vehicles; or (d) the Lease or any payment made thereunder;
provided that this Section 8.1 shall not apply to:
(i) Impositions which are based upon or measured by the
Indemnitee's net income, or which are expressly in substitution
for, or relieve Indemnitee from, any actual Imposition based upon
or measured by Indemnitee's net income; (ii) Impositions
characterized under local law as franchise, net worth, or
shareholders capital (excluding, however, any value added,
license, property or similar Impositions); and (iii) Impositions
based upon the voluntary transfer, assignment or disposition by
Agent or any Lessor of any interest in any of the Vehicles (other
than a transfer pursuant to the exercise of remedies under the
Operative Agreements, transfers pursuant to the exercise of the
Lessee Purchase Option or Sale Option, a transfer to Lessee or
otherwise pursuant to the Lease). Notwithstanding the foregoing
provisions of this Section 8.1, Lessee shall pay or reimburse,
and indemnify and hold harmless, any Lessor which is not
incorporated under the laws of the United States, or a state
thereof, and which has complied with Section 8.5, from any
deduction or withholding of any United States Federal income tax.
Section 8.2 Contest. Lessee shall pay on or before
the time or times prescribed by law any Impositions (except any
Impositions excluded by Section 8.1); provided, however, that
Lessee shall be under no obligation to pay any such Imposition so
long as the payment of such Imposition is not delinquent or is
being contested by a Permitted Contest. If any claim or claims
is or are made against any Indemnitee solely for any Imposition
which is subject to indemnification as provided in Section 8.1,
Indemnitee shall as soon as practicable, but in no event more
than 20 days after receipt of formal written notice of the
Imposition or proposed Imposition, notify Lessee and if, in the
reasonable opinion of Lessee and (in the case of any Imposition
which may reasonably be expected to exceed $100,000 in the
aggregate) tax counsel acceptable to the Indemnitee, there exists
a reasonable basis to contest such Imposition (and if the
provisos of the definition of Permitted Contest continues to be
satisfied and so long as no Event of Default exists), Lessee at
its expense may, to the extent permitted by applicable law,
contest such imposition, and subsequently may appeal any adverse
determination, in the appropriate administrative and legal
forums; provided that in all other circumstances, upon notice
from Lessee to such Indemnitee that there exists a reasonable
basis to contest any such Imposition (as supported by an opinion
of tax counsel to Lessee reasonably acceptable to the
Indemnitee), the Indemnitee, at Lessee's expense, shall contest
any such Imposition. Lessee shall pay all expenses incurred by
the Indemnitee in contesting any such Imposition (including,
without limitation, all reasonable attorneys' and accountants'
fees, including the allocated costs of internal counsel), upon
demand by the Indemnitee. Lessee shall have the right to
participate in the conduct of any proceedings controlled by the
Indemnitee to the extent that such participation does not
interfere with the Indemnitee's control of such contest and
Lessee shall in all events be kept informed, to the extent
practicable, of material developments relative to such
proceedings. The Indemnitee shall have the right to participate
in the conduct of any proceedings controlled by Lessee and the
Indemnitee shall in all events be kept informed, to the extent
practicable, of material developments relative to such
proceedings. The Indemnitees agree that a contested claim for
which Lessee would be required to make a reimbursement payment
hereunder will not be settled or compromised without Lessee's
prior written consent (which consent shall neither be
unreasonably delayed nor withheld other than in good faith),
unless the provisos of the definition of Permitted Contest would
not continue to be satisfied. Indemnitee shall endeavor to
settle or compromise any such contested claim in accordance with
written instructions received from Lessee provided that:
(x) Lessee on or before the
date the Indemnitee executes a settlement or compromise pays the
contested Imposition to the extent agreed upon or makes an
indemnification payment to the Indemnitee in an amount acceptable
to the Indemnitee; and (y) the settlement or compromise does not,
in the reasonable opinion of the Indemnitee materially adversely
affect the right of such Lessor to receive Rent or the Lease
Balance or any other payment pursuant to the Operative
Agreements, or involve a material risk of sale, forfeiture or
loss of any of the Vehicles or any interest therein or any matter
described in the provisos to the definition of Permitted Contest
The failure of an Indemnitee to timely contest a claim against it
for any Imposition which is subject to indemnification under
Section 8.1 and for which it has an obligation to Lessee to
contest under this Section 8.2 in the manner required by
applicable law or regulations where Lessee has timely requested
that such Indemnitee contest such claim shall relieve Lessee of
their obligations to such Indemnitee under Section 8.1 with
respect to such claim to the extent such failure results in the
loss of an effective contest. If applicable law requires the
payment of a contested Imposition as a condition to, or
regardless of, its being contested, and Lessee chooses to contest
such Imposition or to direct the Indemnitee to contest such
Imposition in accordance with this Section, then Lessee shall
provide the Indemnitee with the funds to pay such Imposition,
such provision of funds to be deemed a non-interest bearing loan
by Lessee to the Indemnitee to be repaid by any recovery of such
Imposition from such contest and any remaining unpaid amount not
recovered to offset Lessee's obligation to indemnify the
Indemnitee for such Imposition. In the event that the Indemnitee
receives a refund (or like adjustment) in respect of any
Imposition for which the Indemnitee has been reimbursed by
Lessee, the Indemnitee shall immediately remit the amount of such
refund (or like adjustment) to Lessee, net of all costs and
expenses incurred by such Indemnitee.
Section 8.3 Gross Up. If an Indemnitee shall not be
entitled to a corresponding and equal deduction with respect to
any payment or Imposition which Lessee is required to pay or
reimburse under Article VII, Section 8.1 or Section 8.2 (each
such payment or reimbursement under Article VII, Section 8.1 or
Section 8.2, an original payment) and which original payment
constitutes income to such Indemnitee, then Lessee shall pay to
such Indemnitee on demand the amount of such original payment on
a gross-up basis such that, after subtracting all Impositions
imposed on such Indemnitee with respect to such original payment
by Lessee (including any Impositions otherwise excluded by
Section 8.1 and assuming for this purpose that such Indemnitee
was subject to taxation at the applicable Federal, state or local
marginal rates used to compute such Indemnitee's tax return for
the year in which such income is taxable), such payments shall be
equal to the original payment to be received (net of any credits,
deductions or other tax benefits then actually recognized that
arise from the payment by such Indemnitee of any amount,
including taxes, for which the payment to be received is made).
Section 8.4 Tax Returns. Except as otherwise provided
in the third sentence below, Lessee shall prepare and file
(whether or not it is a legal obligation of an Indemnitee) all
tax returns or reports that may be required with respect to any
Impositions assessed, charged or imposed on the Vehicles or the
Lease, including, but not limited to sales and use taxes,
property taxes (ad valorem and real property) and any other tax
or charge based upon the ownership, leasing, subleasing, rental,
sale, purchase, possession, use, operation, delivery, return or
other disposition of any of the Vehicles or upon the rentals or
the receipts therefrom (excluding, however, any tax based upon
the net income of an Indemnitee or any tax which is in
substitution for or relief of a tax imposed upon or measured by
the net income of an Indemnitee). Lessee may notify in writing
all applicable Authorities having jurisdiction with respect to
personal property taxes that Lessee is the appropriate party for
receiving notices of (or copies of, if such Authority is required
by law to notify Agent) assessment, appeal and payment with
respect to the Vehicles. If an Indemnitee is obligated by law to
file any such reports or returns, then Lessee shall at least 10
days before the same are due, prepare the same and forward them
to the Indemnitee, as appropriate, with detailed instructions as
to how to comply with all applicable filing requirements,
together with funds in the amount of any payment required
pursuant thereto. Indemnitee shall forward to Lessee at its
address listed in Section 11.4 copies of all assessment and
valuation notices it receives within 10 days of receipt; provided
that Indemnitee's failure to deliver such notices on a timely
basis shall not relieve Lessee of any obligations hereunder. The
Participants agree that neither they nor any corporation
controlled by them, or under common control with them, directly
or indirectly will at any time take any action or fail to take
any action with respect to the filing of any income tax return,
including an amended income tax return, inconsistent with the
intention of the parties expressed in Section 4.1.
Section 8.5 Withholding Tax Exemption.
(a At least five (5) Business Days prior to the first
date on which any Rent is payable hereunder or under any other
Operative Agreement for the account of any Lessor not
incorporated under the laws of the United States or a state
thereof, such Lessor agrees that it will have delivered to Lessee
and Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, certifying in either case that
such Lessor is entitled to receive payments under this Agreement
and the other Operative Agreements without deduction or
withholding of any United States Federal income taxes. Each
Lessor which so delivers a Form 1001 or 4224 further undertakes
to deliver to Lessee and Agent two additional copies of such form
(or a successor form) on or before the date that such form
expires (currently, three successive calendar years for Form 1001
and one calendar year for Form 4224) or becomes obsolete or after
the occurrence of any event requiring a change in the most recent
forms so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by
Lessee or Agent, in each case certifying that such Lessor is
entitled to receive payments under this Agreement and the other
Operative Agreements without deduction or withholding of any
United States Federal income taxes, unless prior to the date on
which any such delivery would otherwise be required any change in
treaty, law or regulation or in the interpretation thereof by the
applicable taxing Authority occurring after such Lessor became a
Lessor hereunder has rendered all such forms inapplicable or has
prevented such Lessor from duly completing and delivering any
such form with respect to it and such Lessor advises Lessee and
Agent that, as a result of such change in treaty, law, regulation
or interpretation, it is not capable of receiving payments
without any withholding of United States Federal income tax.
(b At least five (5) Business Days prior to the first
date on which any Rent is payable hereunder or under any other
Operative Agreement for the account of any Lessor who does not
have a street address in the State of California, such Lessor
agrees that it will have delivered to Lessee and Agent two duly
completed copies of California Form 587 or 590, certifying in
either case that such Lessor is entitled to receive payments
under this Agreement and the other Operative Agreements without
deduction or withholding of any California income taxes. Each
Lessor which so delivers a Form 587 or 590 further undertakes to
deliver to Lessee and Agent two additional copies of such form
(or a successor form) on or before the date that such form
expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent forms so delivered by it
(including, without limitation, any change in residency or
address), and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by Lessee or Agent, in
each case certifying that such Lessor is entitled to receive
payments under this Agreement and the other Operative Agreements
without deduction or withholding of any California income taxes,
unless prior to the date on which any such delivery would
otherwise be required any change in treaty, law or regulation or
in the interpretation thereof by the applicable taxing Authority
occurring after such Lessor became a Lessor hereunder has
rendered all such forms inapplicable or has prevented such Lessor
from duly completing and delivering any such form with respect to
it and such Lessor advises Lessee and Agent that, as a result of
such change in treaty, law, regulation or interpretation, it is
not capable of receiving payments without any withholding of
California income tax.
ARTICLE IX
Agent
Section 9.1 Appointment and Authorization. Each
Lessor hereby irrevocably (subject to Section 9.9) appoints,
designates and authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other
Operative Agreement and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this
Agreement or any other Operative Agreement, together with this
Agreement and each other Operative Agreement and to exercise such
powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Operative Agreement,
together with such powers as are reasonably incidental thereto;
provided, however, that the Agent shall not be required to take
any action that exposes it to personal liability or that is
contrary to this Agreement or applicable law. Notwithstanding
any provision to the contrary contained elsewhere in this
Agreement or in any other Operative Agreement, the Agent shall
not have any duties or responsibilities, except those expressly
set forth herein, nor shall the Agent have or be deemed to have
any fiduciary relationship with any Lessor, and no implied
covenants, functions. responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other
Operative Agreement or otherwise exist against the Agent.
Without limiting the generality of the foregoing sentence, the
use of the term agent in this Agreement with reference to the
Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any
applicable law. Instead, such, term is used merely as a matter
of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting
parties.
Section 9.2 Delegation of Duties. The Agent may
execute any of its duties under this Agreement or any other
Operative Agreement by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.
Section 9.3 Liability of the Agent. None of the Agent-
Related Persons shall (i) be liable for any action taken or to be
taken by any of them under or in connection with this Agreement
or any other Operative Agreement or the transactions contemplated
hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the
Lessors for any recital, statement, representation or warranty
made by the Lessee or any Subsidiary or Affiliate of the Lessee,
or any officer thereof, contained in this Agreement or in any
other Operative Agreement, or in any certificate, report,
statement or other document referred to or provided for in, or
received by the Agent under or in connection with, this Agreement
or any other Operative Agreement, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or
any other Operative Agreement, or for any failure of the Lessee
or any other party to any Operative Agreement to perform its
obligations hereunder or thereunder. No Agent-Related Person
shall be under any obligation to any Lessor to ascertain or to
inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any
other Operative Agreement, or to inspect the properties, books or
records or the Lessee or any of the Lessees Subsidiaries or
Affiliates.
Section 9.4 Reliance by the Agent. (a) The Agent
shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, instrument, telegram, facsimile,
telex, telecopier or telephone message, statement or other
document or writing or conversation 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 (including counsel to the Lessee), independent
accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any
action under this Agreement or any other Operative Agreement
unless it shall first receive such advice or concurrence of the
Required Lessors as it deems appropriate and, if it so requests,
it shall first be indemnified to its satisfaction by the Lessors
against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other
Operative Agreement in accordance with a request or consent of
the Required Lessors and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the
Lessors.
(b) Without limiting the generality of the foregoing, the
Agent (i) makes no warranty or representation to any Lessor and
shall not be responsible to any Lessor for any statements,
warranties or representations (whether written or oral) made in
or in connection with any Operative Agreement; (ii) shall not
have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this
Agreement on the part of the Lessee or to inspect the property
(including the books and records) of the Lessee; and (iii) shall
not be responsible to any Lessor for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of
any Operative Agreement or any other instrument or document
furnished pursuant hereto.
Section 9.5 Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default, except with respect to defaults in the payment of Rent
to be paid to the Agent for the account of the Lessors, unless
the Agent shall have received written notice from a Lessor or the
Lessee referring to this Agreement, describing such Default and
stating that such notice is a notice of default. The Agent will
notify the Lessors of its receipt of any such notice. The Agent
shall take such action with respect to such Default as may be
permitted in accordance with Section 8.2 or Section 8.3 of the
Lease.
Section 9.6 Lessor Credit Decision. Each Lessor
acknowledges that none of the Agent-Related Persons has made any
representation or warranty to it, and that no act by the Agent
hereinafter taken, including any review of the affairs of the
Lessee and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any
Lessor. Each Lessor represents to the Agent that it has,
independently and without reliance upon any Agent-Related Person
and based on the financial statements referred to in Section 3.6
and such other documents, and information as it has deemed
appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other
condition and creditworthiness of the Lessee and its
Subsidiaries, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Lessee
hereunder. Each Lessor also represents that it will,
independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Operative Agreements, and to
make such investigations as it deems necessary to inform itself
as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Lessee. Except
for notices, reports and other documents expressly herein
required to be furnished to the Lessors by the Agent, the Agent
shall have no duty or responsibility to provide any Lessor with
any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Lessee which may come into the possession
of any of the Agent-Related Persons.
Section 9.7 Indemnification of the Agent. (a) Whether
or not the transactions contemplated hereby are consummated, each
Lessor shall indemnify upon demand the Agent-Related Persons (to
the extent not reimbursed by or on behalf of the Lessee and
without limiting the obligation of the Lessee to do so), pro
rata, from and against any and all Indemnified Liabilities;
provided, however, that no Lessor shall be liable for the payment
to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence
or willful misconduct as found in a final, non-appealable
judgment by a court of competent jurisdiction. Without
limitation of the foregoing, each Lessor shall reimburse the
Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the
Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this
Agreement, any other Operative Agreement, or any document
contemplated by or referred to herein, to the extent that the
Agent is not reimbursed for such expenses by or on behalf of the
Lessee.
(b) In the case of any investigation, litigation or
proceeding giving rise to any Agent's Indemnified Liabilities,
this Section 9.7 applies whether any such investigation,
litigation or proceeding is brought by the Agent, any Lessor or a
third party. Without prejudice to the survival of any other
agreement of any Lessor hereunder, the agreement, obligations and
undertaking of each Lessor contained in this Section 9.7 shall
survive the payment in full of all payments of Rent and all other
amounts payable hereunder and under the other Operative
Agreements and the resignation or replacement of the Agent.
Section 9.8 Agent in Individual Capacity. ABN AMRO
and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in
and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Lessee and its
Affiliates as though ABN AMRO were not the Agent hereunder and
without notice to or consent of the other Lessors. The Lessors
acknowledge that, pursuant to such activities, ABN AMRO or its
Affiliates may receive information regarding the Lessee and its
Affiliates (including information that may be subject to
confidentiality obligations in favor of the Lessee or such
Affiliates) and acknowledge that the Agent shall not be under any
obligation to provide such information to them. In its capacity
as a Lessor, ABN AMRO shall have the same rights and powers under
this Agreement as any other Lessor and may exercise the same as
though it were not the Agent.
Section 9.9 Successor Agent. The Agent may, and at the
request of the Required Lessors shall, resign as the Agent upon
30 days' notice to the Lessors. If the Agent resigns under this
Agreement, the Required Lessors shall appoint from among the
Lessors a successor Agent for the Lessors which successor Agent
shall be approved by the Lessee. If no successor Agent is
appointed prior to the effective date of the resignation of the
Agent, the Agent may appoint, after consulting with the Lessors
and the Lessee, a successor Agent from among the Lessors. Upon
the acceptance of its appointment as successor Agent hereunder,
such successor Agent shall succeed to all the rights, powers,
discretion, privileges and duties of the retiring Agent and the
term Agent shall mean such successor Agent and the retiring
Agent's appointment, powers and duties as the Agent shall be
terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article IX and Sections 7.1 and
11.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Agent under this
Agreement. If no successor Agent has accepted appointment as the
successor Agent by the date which is 30 days following the
retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the
Lessors shall perform all of the duties of the Agent hereunder
until such time, if any, as the Required Lessors appoint a
successor Agent as provided for above.
ARTICLE X
Amendments to Operative Agreements
Section 10.1 Amendments to Operative Agreements With
Consent of Lessors. This Participation Agreement and each of the
other Operative Agreements shall be changed, waived, discharged
or terminated with respect to Lessee and each Lessor upon the
ratification in writing of such change, waiver, discharge or
termination by Lessee and the Required Lessors, in which case
such change, waiver, discharge or termination shall be effective
as to each Lessor and Lessee; provided no such change, waiver,
discharge or termination shall, without the written ratification
of each Lessor:
(i modify any of the provisions of this Section
10.1 or Article III, change the definitions of
Commitment, Commitment Percentage, Total Commitment, or
Required Lessors or modify or waive any provision of an
Operative Agreement requiring action by the foregoing,
or release any Collateral (except as otherwise
specifically provided in any Operative Agreement);
(ii modify, amend, waive or-supplement any of the
provisions of Articles III, VII, VIII (except as
otherwise expressly provided in Section 9.4 hereof), X
or XI, Sections 13.9 or 13.10 of the Lease or Section
11.3 hereof, provided that the Required Lessors may
waive an Event of Default other than a Payment Default;
(iii reduce, modify, amend or waive any
indemnities in favor of any Participant, whether
pursuant to Articles VII or VIII or otherwise (except
that any Person may consent to any reduction,
modification, amendment or waiver of any indemnity
payable to it);
(iv modify, postpone, reduce or forgive, in whole
or in part, any Rent payment (other than pursuant to
the terms of any Operative Agreement), Lease Balance,
Termination Value, Lessor Risk Amount, Lessee Risk
Amount, interest or, subject to clause (iii) above, any
other amount payable under the Lease or Participation
Agreement, or modify the definition or method of
calculation of any Rent payment (other than pursuant to
the terms of any Operative Agreement), Lease Balance,
Termination Value, Lessor Risk Amount, Lessee Risk
Amount or other amount payable hereunder;
(v consent to any assignment of the Lease
releasing the Lessee from its obligations in respect of
the payments due pursuant to the Operative Agreements
or changing the absolute and unconditional character of
such obligations; or
(vi permit the creation of any Lien on the
Collateral or any part thereof except as contemplated
in the Operative Agreements, or deprive any Lessor of
the benefit of the security interest in the Collateral
granted by Lessee.
Section 10.2 Amendments to Operative Agreements
Affecting Agent. Without the prior written consent of Agent, no
amendment of, supplement to, or waiver or modification of, any
Operative Agreement shall adversely affect Agent's rights or
immunities or modify or increase the duties or obligations of
Agent with respect to any Operative Agreement.
ARTICLE XI
Miscellaneous
Section 11.1 Survival of Covenants. All claims
pertaining to the representations, warranties, covenants or
indemnities of the Participants shall survive the termination of
the Lease to the extent such claims arose out of events occurring
or conditions existing prior to any such termination. Without
limiting the foregoing, the provisions of Article VII and Article
VIII hereof shall survive the termination of the Lease.
Section 11.2 Applicable Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of California.
Section 11.3 Distribution and Application of Rents and
Other Payments. Except as otherwise specifically provided for in
the Lease or in Articles VII and VIII hereof, all amounts of
money received or realized by Agent pursuant to the Lease which
are to be distributed to the Lessors (after payment of accrued
but unpaid fees and expenses and indemnification payments payable
to Agent in its capacity as Agent that remain unpaid for 30 days
or more) shall be distributed to each Lessor pro rata, in
accordance with each Lessors Outstanding Investment and without
preference or priority of any Lessor over another; provided,
however, that in the case such moneys are insufficient to pay in
full the whole amount due, owing and unpaid, then application
shall be made in the manner set forth in Section 8.4 of the
Lease. All payments to the Lessors shall be made in accordance
with Section 3.2 of the Lease.
Section 11.4 Notices. All notices, demands,
declarations, consents, directions, approvals, instructions,
requests and other communications required or permitted by the
terms hereof shall be in writing and shall be deemed to have been
duly given when delivered personally, by facsimile (and
confirmed, which confirmation may be mechanical), nationally
recognized overnight courier or otherwise actually received or 5
Business Days after being deposited in the United States mail
certified, postage prepaid.
If to the Lessors, to their respective addresses set
forth on Schedule I hereto or, in the case of all parties, at
such other place as any such party may designate by notice given
in accordance with this Section 11.4.
Section 11.5 Transaction Costs; Other Expenses. (a)
Lessee shall, whether or not the transactions contemplated hereby
are consummated, pay or reimburse all reasonable fees and
expenses of counsel for the Agent (including in its capacity as
the Agent) promptly after demand in connection with the
development, preparation, delivery, administration and execution
of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any other
Operative Agreement and any other documents prepared in
connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including
reasonable Attorney Costs incurred by ABN AMRO (including in its
capacity as the Agent) with respect thereto; and
(b) The Lessee shall pay or reimburse the Agent and each
Lessor within five Business Days after demand for all costs and
expenses (including Attorney Costs) incurred by them in
connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or
any other Operative Agreement during the existence of an Event of
Default (including in connection with any workout or
restructuring, and including in any insolvency proceeding,
bankruptcy proceeding, liquidation, winding up, reorganization,
receivership, arrangement, adjustment, protection, relief of
debtors or appellate proceeding (collectively, an Insolvency
Proceeding)).
(c) Without prejudice to the survival of any other
agreement of the Lessee hereunder, the agreements and obligations
of the Lessee contained in Sections 7.1, 7.3, 7.4, 7.5, Article
VIII and Section 11.5 shall survive the payment in full of Rent
and all other amounts payable hereunder.
Section 11.6 Counterparts. This Agreement may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 11.7 Severability. Whenever possible, each
provision of this Participation Agreement shall be interpreted in
such manner as to be effective and valid under applicable law;
but if any provision of this Participation Agreement shall be
prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Participation Agreement.
Section 11.8 Successors and Assigns; Transfers. This
Participation Agreement shall be binding upon the parties hereto
and their respective successors and assigns, and shall inure to
the benefit of the parties hereto and their respective successors
and permitted assigns. Lessee may not assign any of its rights
and obligations under any Operative Agreement except as expressly
provided in the Operative Agreements.
No Lessor shall assign, convey or otherwise transfer
(including pursuant to a participation) all or any portion of its
right, title or interest in, to or under any of the Operative
Agreements, any Collateral and its interest in the Vehicles,
except that without the prior written consent of Agent or Lessee
(x) any bank or similar financial or commercial lending
institution may pledge its interest in the ordinary course of its
business without the consent of Lessee or Agent, provided, that
no transfer upon a foreclosure pursuant to such a pledge may
occur unless the other provisions of this Section are complied
with, (y) any Lessor may transfer all or any portion of its
interest to any other existing Lessor and (z) any Lessor may
transfer any or all of such right, title and interest upon the
satisfaction of each of the following conditions:
(a Required Notice and Effective Date. Any
Lessor desiring to effect a transfer of its interest hereunder
shall give written notice of each such proposed transfer to
Lessee and Agent at least ten (10) days prior to such proposed
transfer, setting forth the name of such proposed transferee, the
percentage or interest to be retained by such Lessor, if any, and
the date on which such transfer is proposed to become effective.
All reasonable out-of-pocket costs incurred by Agent in
connection with any such disposition by a Lessor under this
Section 11.8 shall be borne by such Lessor, unless such transfer
is being made pursuant to Section 7.6, in which case such costs
shall be borne by Lessee. In the event of a transfer under this
Section 11.8, any expenses incurred by the transferee in
connection with its review of the Operative Agreements and its
investigation of the transactions contemplated thereby shall be
borne by such transferee or the relevant Lessor, as they may
determine, but shall not be considered costs and expenses which
Lessee are obligated to pay or reimburse under Section 11.5,
unless such transfer is being made pursuant to Section 7.6.
(b Assumption of Obligations. Any transferee
pursuant to this Section 11.8 shall have executed and delivered
to Agent a letter substantially in the form attached hereto as
Exhibit E (the Investor's Letter), and thereupon the obligations
of the transferring Lessor under the Operative Agreements shall
be proportionately released and reduced to the extent of such
transfer. Upon any such transfer as above provided, the
transferee shall be deemed to be bound by all obligations
(whether or not yet accrued) under, and to have become a party
to, all Operative Agreements to which its transferor was a party,
shall be deemed the pertinent Lessor for all purposes of the
Operative Agreements and shall be deemed to have made that
portion of the payments pursuant to the Participation Agreement
previously made or deemed to have been made by the transferor
represented by the interest being conveyed; and each reference
herein and in the other Operative Agreements to the pertinent
Lessor shall thereafter be deemed a reference to the transferee,
to the extent of such transfer, for all purposes. Upon any such
transfer, Agent shall deliver to each Lessor and Lessee a new
Schedule I to this Participation Agreement, revised to reflect
the relevant information for such new Lessor and the Commitment
of such new Lessor (and the revised Commitment of the transferor
Lessor if it shall not have transferred its entire interest).
(c Employee Benefit Plans. No Lessor may make
any such assignment, conveyance or transfer to or in connection
with any arrangement or understanding in any way involving any
employee benefit plan (or its related trust), as defined in
Section 3(3) of ERISA, or with the assets of any such plan (or
its related trust), as defined in Section 4975(e)(1) of the Code
(other than a governmental plan, as defined in Section 3(32) of
ERISA), with respect to which Lessee or such Lessor or any of
their Affiliates is a party in interest within the meaning of
ERISA or a disqualified person within the meaning of the Code.
(d Amount of Commitment. Unless Lessee shall
consent to otherwise, no Lessor may make any such assignment,
conveyance or transfer if, as a consequence thereof, the
transferor (if such Lessor retains any part of its Commitment) or
transferee Lessor would have an Outstanding Investment of less
than $5,000,000.
(e Representations and Warranties.
Notwithstanding anything to the contrary set forth above, no
Lessor may assign, convey or transfer its interest to any Person,
unless such Person shall have delivered to Agent and Lessee a
certificate confirming the accuracy of the representations and
warranties set forth in Section 5.2 with respect to such Person
(other than as such representation or warranty relates to the
execution and delivery of Operative Agreements).
(f Financial Condition. Any transferee pursuant
to this Section 11.8 shall be a financial institution having
combined capital and surplus of at least $100,000,000.
Each transferee of a Lessor pursuant to this Section
11.8 shall be entitled to the benefits of Sections 7.3, 7.4 and
7.5; provided that no such transferee shall be entitled to
receive any greater amount pursuant to such Sections than the
transferor Lessor would have been entitled to receive in respect
of the amount of the Commitment transferred by such transferor
Lessor to such transferee if such transfer had not occurred.
Section 11.9 JURY TRIAL. EACH OF THE PARTIES HERETO
WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS PARTICIPATION AGREEMENT
OR ANY OTHER OPERATIVE AGREEMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR
ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
PARTICIPATION AGREEMENT OR ANY OPERATIVE AGREEMENT AND AGREE THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
Section 11.10 Captions; Table of Contents. Section
captions and the table of contents used in this Participation
Agreement (including the exhibits and schedules) are for
convenience of reference only and shall not affect the
construction of this Participation Agreement.
Section 11.11 FINAL AGREEMENT. THIS PARTICIPATION
AGREEMENT, TOGETHER WITH THE OTHER OPERATIVE AGREEMENTS,
REPRESENT THE ENTIRE FINAL AGREEMENT BETWEEN THE PARTIES WITH
RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND IN THE OTHER
OPERATIVE AGREEMENTS. THIS PARTICIPATION AGREEMENT CANNOT BE
NOTIFIED, SUPPLEMENTED, AMENDED, RESCINDED OR CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
Section 11.12 No Third-Party Beneficiaries. Nothing
in this Participation Agreement or the other Operative Agreements
shall be deemed to create any right in any Person not a party
hereto or thereto (other than the permitted successors and
assigns of Lessors, Agent and Lessee), and such agreements shall
not be construed in any respect to be a contract in whole or in
part for the benefit of any third party except as aforesaid.
Section 11.13 Further Assurances. Lessee, at its
expense, will promptly and duly execute and deliver all such
documents and take such further action as may be necessary or
appropriate in order to effect the intent or purpose of this
Participation Agreement and the other Operative Agreements and to
establish and protect the rights and remedies created or intended
to be created in favor of the Lessors and Agent for the benefit
of the Lessors, including, without limitation, if requested by
Required Lessors at the expense of Lessee, the recording or
filing of any Operative Agreement or any other document in
accordance with the laws of the appropriate jurisdictions.
Section 11.14 Reproduction of Documents. This
Participation Agreement, all documents constituting Schedules or
Exhibits hereto, and all documents relating hereto received by a
party hereto, including, without limitation: (a) consents,
waivers and modifications that may hereafter be executed; (b) the
Certificates of Title and all other documents received by the
Lessors or Agent in connection with the receipt and/or
acquisition of the Vehicles; and (c) financial statements,
certificates, and other information previously or hereafter
furnished to Agent or any Lessor may be reproduced by the party
receiving the same by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process.
Each of the Participants agrees and stipulates that, to the
extent permitted by law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such
party in the regular course of business) and that, to the extent
permitted by law, any enlargement, facsimile, or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section 11.15 Consideration for Consents to Waivers
and Amendments. Lessee hereby agrees that it will not, and that
it will not permit any of its Affiliates to, offer or give any
consideration or benefit of any kind whatsoever to any Lessor in
connection with, in exchange for, or as an inducement to, such
Lessors consent to any waiver in respect of, any modification or
amendment of, any supplement to, or any other consent or approval
under, any Operative Agreement unless such consideration or
benefit is offered ratably to all Lessors.
Section 11.16 Submission to Jurisdiction. (a) Each
of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive
jurisdictions of any California State court or federal court of
the United States of America sitting in San Francisco, and any
appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and
determined in any such California State court or, to the extent
permitted by law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or
proceeding relating to this Agreement in the courts of any
jurisdiction.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any California
State or federal court sitting in San Francisco. Each of the
parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be executed and delivered as of the
date first above written.
CONSOLIDATED FREIGHTWAYS
CORPORATION OF DELAWARE, as Lessee
By
Name:
Title:
ABN AMRO BANK N.V.,
not
individually, but solely as Agent
for the Lessors
By
Name:
Title:
By
Name:
Title:
LESSORS:
ABN AMRO BANK N.V.
By
Name:
Title:
By
Name:
Title:
BANK ONE, NA (Main Office Chicago),
as Lessor
By
Name:
Title:
UNION BANK OF CALIFORNIA, N.A., as
Lessor
By
Name:
Title:
CREDIT AGRICOLE INDOSUEZ, as Lessor
By
Name:
Title:
FIRST UNION NATIONAL BANK, as Lessor
By
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION, as
Lessor
By
Name:
Title:
BANK POLSKA KASA OPIEKI S.A.,
as Lessor
By
Name:
Title:
By
Name:
Title:
TABLE OF CONTENTS
Page
ARTICLE I Delivery and Acceptance -1-
Section 1.1 Transfer, Acceptance and Lease of Vehicles -1-
Section 1.2 Acceptance Procedure -1-
ARTICLE II Lease Term -2-
Section 2.1 Lease Term -2-
Section 2.2 Lease Renewal -2-
ARTICLE III Rent; Other Economic Provisions -2-
Section 3.1 Rent Payments -2-
Section 3.2 Place and Manner of Payment -2-
Section 3.3 Net Lease -3-
ARTICLE IV Agreements by Lessee; Warranties -4-
Section 4.1 Inspection and Approval -4-
Section 4.2 Warranty -4-
Section 4.3 Warranty Disclaimer -4-
Section 4.4 Quiet Enjoyment -4-
ARTICLE V Possession, Assignment, Use and Maintenance of
Vehicles -5-
Section 5.1 Restriction on Lessee's Possession and Use -5-
Section 5.2 Subleases -5-
Section 5.3 Maintenance -6-
Section 5.4 Repair, Replacement and Substitution -7-
Section 5.5 Alterations, Modifications and Additions;
Removable Parts -8-
Section 5.6 Inspection of Collateral -9-
ARTICLE VI Risk of Loss; Replacement; Waiver and Indemnity -9-
Section 6.1 Casualty -9-
Section 6.2 Casualty Proceeds -10-
ARTICLE VII Insurance -10-
Section 7.1 Required Coverages -10-
Section 7.2 Delivery of Insurance Certificates -11-
ARTICLE VIII Default -11-
Section 8.1 Events of Default -11-
Section 8.2 Remedies -14-
Section 8.3 Additional Remedies -15-
Section 8.4 Right to Perform Lessees Agreements -15-
Section 8.5 Proceeds of Sale; Deficiency -16-
Section 8.6 Limitation of Remedies -16-
ARTICLE IX Return of Vehicles -17-
ARTICLE X Early Termination -17-
Section 10.1 Early Termination as to All Vehicles -17-
Section 10.2 Early Termination as to a Vehicle -18-
ARTICLE XI Lease Termination -18-
Section 11.1 Options -18-
Section 11.2 Lessee Purchase Option -19-
Section 11.3 Sale Option -19-
ARTICLE XII Ownership, Grant of Security Interest to Lessor
and Further Assurances -20-
Section 12.1 Grant of Security Interest -20-
Section 12.2 Retention of Proceeds in the Case of Default -21-
Section 12.3 Attorney-in-Fact -21-
Section 12.4 Release of Liens -22-
ARTICLE XIII Miscellaneous -22-
Section 13.1 No Waiver -22-
Section 13.2 Survival of Covenants -22-
Section 13.3 APPLICABLE LAW -22-
Section 13.4 Effect and Modification of Lease -22-
Section 13.5 Notices -23-
Section 13.6 Counterparts -23-
Section 13.7 Severability -23-
Section 13.8 Successors and Assigns: Benefit of Agreement -23-
Section 13.9 Assignment by Agent -23-
Section 13.10 Assignment by Lessee -23-
Section 13.11 Jury Trial -23-
Section 13.12 Section Headings: Table of Contents -24-
Section 13.13 Final Agreement -24-
Section 13.14 Timeliness of Performance -24-
LEASE INTENDED AS SECURITY (as amended, modified,
restated or supplemented from time to time, this Lease) dated as
of October 12, 1999 between CONSOLIDATED FREIGHTWAYS CORPORATION
OF DELAWARE, a Delaware corporation, as Lessee (Lessee), with its
principal office at Menlo Park, California, and ABN AMRO BANK
N.V., a bank organized under the laws of the Netherlands, not in
its individual capacity, but solely in its capacity as agent
(Agent) for the benefit of the Lessors.
WHEREAS, pursuant to the terms and conditions set forth
herein and in that certain Participation Agreement, dated as of
October 12, 1999 (the Participation Agreement), by and among
Lessee, Agent and the Lessors named therein, the Participants
have agreed that Agent, on behalf of the Lessors, will lease to
Lessee and Lessee will lease from Agent, on behalf of the
Lessors, certain personal property described in Schedule I hereto
and replacements thereto;
WHEREAS, capitalized terms used but not otherwise
defined herein (including those used in the foregoing recitals)
shall have the meanings specified in Schedule X to the
Participation Agreement, unless the context otherwise requires;
WHEREAS, to secure Lessees obligations under this Lease
and the other Operative Agreements, Lessee will grant to Agent,
on behalf of the Lessors, a security interest in the Collateral.
NOW, THEREFORE, for good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
Delivery and Acceptance
Section 1.1 Transfer, Acceptance and Lease of
Vehicles. On the date hereof (a) Agent, on behalf of Lessors,
hereby agrees to lease the Vehicles to Lessee under this Lease,
and (b) Lessee hereby agrees, expressly for the direct benefit of
Agent and the Lessors, to lease from Agent hereunder, for the
Lease Term, the Vehicles and confirms acceptance of delivery and
lease from Agent of the Vehicles.
Section 1.2 Acceptance Procedure. Agent hereby
authorizes one or more employees of Lessee, as the authorized
representative or representatives of Agent, to accept delivery of
the Vehicles identified on Schedule I hereto. Lessee hereby
agrees that such acceptance of delivery by such authorized
representative or representatives shall, without further act,
constitute the irrevocable acceptance by Lessee of the Vehicles
which are the subject thereof for all purposes of this Lease and
the other Operative Agreements on the terms set forth therein and
herein.
ARTICLE II
Lease Term
Section 2.1 Lease Term. Unless earlier terminated, the
term of this Lease shall consist of (a) a base period, commencing
on and including the Effective Date and ending on but excluding
the first anniversary thereof (the Base Term) and (b) any
exercised Renewal Terms (collectively, the Lease Term).
Section 2.2 Lease Renewal. Lessee may elect to renew
this Lease for up to two successive one-year renewal terms with
respect to all, but not less than all, of the Vehicles (each, a
Renewal Term) as provided in Article XI.
ARTICLE III
Rent; Other Economic Provisions
Section 3.1 Rent Payments. Lessee shall pay to Agent,
for the benefit of the Lessors, the amounts of Base Rent or
Renewal Rent, as applicable, determined in accordance with this
Section 3.1. Scheduled installments of Base Rent and Renewal
Rent may be adjusted pursuant to Section 6.1. All computations
of interest pursuant to the Operative Agreements shall be made on
the basis of the actual number of days elapsed in a 360-day year.
(a) Base Rent. On each Payment Date during the Base
Term, Lessee shall pay to Agent, for the benefit of the Lessors,
Base Rent consisting of the amount of Fixed Rent set forth
opposite the applicable Payment Date on Schedule II hereto and
Variable Rent accrued on the Lease Balance during the Rent Period
ended on such Payment Date.
(b) Renewal Rent. On each Payment Date during any
Renewal Term in effect, Lessee shall pay to Agent, for the
benefit of the Lessors, Renewal Rent consisting of the amount of
Fixed Rent set forth opposite the applicable Payment Date on
Schedule II hereto and Variable Rent accrued on the Lease Balance
during the Rent Period ended on such Payment Date.
Section 3.2 Place and Manner of Payment. Rent and all
other sums due to Agent or any Lessor hereunder shall be paid in
immediately available funds and if payable to Agent, to the
Agent's Account, and if payable to a Lessor at its Eurodollar
Office or such other office of Lessor as it may from time to time
specify to Lessee in a notice pursuant to this Lease. All such
payments shall be received by Agent or Lessor, as applicable, not
later than 11:00 a.m., San Francisco time, on the date due; funds
received after such time shall for all purposes under the
Operative Agreements be deemed to have been received on the next
succeeding Business Day. Any payments received by Agent not
later than 11:00 a.m. San Francisco time, shall be paid by Agent
to the Lessors in immediately available funds no later than 2:00
p.m. San Francisco time on the same day and any payments received
by Agent from or on behalf of Lessee after 11:00 a.m. San
Francisco time, shall be paid to Lessors as soon after receipt as
practicable, but not later than 1:00 p.m. San Francisco time on
the next succeeding Business Day. Lessee shall pay to Agent, for
the benefit of the Lessors, or to a Lessor in the case of
payments to a Lessor, on demand, interest at the rate per annum
which is 2% above the Interest Rate in effect from time to time
on any overdue amount of Rent, or any other payment due under
this Lease and (to the extent permitted by applicable law)
interest from the date due (not taking into account any grace
period) until payment is made.
Section 3.3 Net Lease. This Lease is a net lease and
Lessees obligation to pay all Rent, indemnities and other amounts
payable hereunder shall be absolute and unconditional under any
and all circumstances and, without limiting the generality of the
foregoing, Lessee shall not be entitled to any abatement or
reduction of Rent or any setoff against Rent, indemnity or other
amount, whether arising by reason of any past, present or future
claims of any nature by Lessee against Agent or any Lessor, or
otherwise. Except as otherwise expressly provided herein, this
Lease shall not terminate, nor shall the obligations of Lessee be
otherwise affected: (a) by reason of any defect in, damage to,
or loss of possession or use, obsolescence or destruction, of any
or all of the Vehicles, however caused; or (b) by the taking or
requisitioning of any or all of the Vehicles by condemnation or
otherwise; or (c) by the invalidity or unenforceability or lack
of due authorization by Lessor or Lessee or other infirmity of
this Lease; or (d) by lack of power or authority of Agent to
enter into this Lease or any other Operative Agreement; or (e) by
the attachment of any Lien of any third party to any Vehicle; or
(f) by any prohibition or restriction of or interference with
Lessees use of any or all of the Vehicles by any Person; or
(g) by the insolvency of or the commencement by or against Lessor
of any bankruptcy, reorganization or similar proceeding; or
(h) by any other cause, whether similar or dissimilar to the
foregoing, any present or future law to the contrary
notwithstanding. It is the intention of the parties that all
Rent, indemnities and other amounts payable by Lessee hereunder
shall be payable in all events in the manner and at the times
herein provided unless Lessees obligations in respect thereof
have been terminated or modified pursuant to the express
provisions of this Lease. To the extent permitted by applicable
law, Lessee hereby waives any and all rights which it may now
have or which may at any time be conferred upon it, by statute or
otherwise, to terminate, cancel, quit or surrender this Lease, in
whole or in part, except strictly in accordance with the express
terms hereof. Each rental, indemnity or other payment made by
Lessee hereunder shall be final, and Lessee shall not seek to
recover (except as expressly provided in this Lease) all or any
part of such payment from Lessor for any reason whatsoever.
Without affecting Lessees obligation to pay Rent, or other
amounts payable hereunder, Lessee may seek damages for a breach
by Agent or any Lessor of its obligations under this Lease or the
Participation Agreement.
ARTICLE IV
Agreements by Lessee; Warranties
Section 4.1 Inspection and Approval. Lessee hereby
acknowledges and confirms that it has inspected and approved the
Vehicles for all purposes hereof and the other Operative
Agreements and, as between the Lessors and Lessee, such Vehicles
comply in all material respects with the specifications for such
Vehicles, are in good working order, repair, condition and
appearance, and without defect therein with respect to design,
manufacture, conditions, operation and fitness for use or in any
other respect, whether or not discoverable by Lessee as of the
date hereof.
Section 4.2 Warranty. Lessee hereby represents and
warrants that no event which would constitute a Casualty under
the Lease has occurred with respect to the Vehicles as of the
date hereof. Lessee hereby reaffirms each of the representations
and warranties set forth in Section 5.1 of the Participation
Agreement as if made on the date hereof, including that the
Vehicles are free and clear of all Liens other than Permitted
Liens.
Section 4.3 Warranty Disclaimer. LESSEE ACKNOWLEDGES
AND AGREES THAT: (a) EACH OF THE VEHICLES IS LEASED AS-IS AND
WHERE-IS; (b) EACH OF THE VEHICLES LEASED BY IT IS OF A SIZE,
DESIGN, CAPACITY AND MANUFACTURE SELECTED BY LESSEE; (c) LESSEE
IS SATISFIED THAT THE SAME IS SUITABLE FOR ITS PURPOSES;
(d) LESSOR IS NOT A MANUFACTURER THEREOF OR A DEALER IN PROPERTY
OF SUCH KIND; AND (e) LESSOR HAS NOT MADE NOR SHALL IT BE DEEMED
TO HAVE MADE: (i) ANY REPRESENTATION OR WARRANTY OR COVENANT
WITH RESPECT TO THE TITLE, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, CONDITION, QUALITY, DESCRIPTION, DURABILITY
OR SUITABILITY OF ANY VEHICLE IN ANY RESPECT OR IN CONNECTION
WITH OR FOR THE PURPOSES AND USES OF LESSEE; OR (ii) ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY VEHICLE.
Section 4.4 Quiet Enjoyment. In the absence of an
Event of Default, neither any Lessor nor the Agent nor any Person
acting by, through or under any of such Persons, shall take any
actions to interfere with Lessees quiet enjoyment of the Vehicles
during the Lease Term.
ARTICLE V
Possession, Assignment, Use and
Maintenance of Vehicles
Section 5.1 Restriction on Lessees Possession and Use.
Lessee shall not nor shall Lessee permit any Sublessee to
(a) use, operate, maintain or store any Vehicle or any portion
thereof: (i) except in accordance with Section 5.3; or (ii) in
violation of any applicable insurance policy or law or regulation
of any Authority; (b) except as permitted by Section 6.1, abandon
any Vehicle; (c) except as permitted by Section 5.2 or for the
temporary loan of Vehicles to other carriers pursuant to
interchange agreements in the ordinary course of business,
sublease or assign, without the prior written consent of Agent,
any Vehicle or permit the operation thereof by anyone other than
Lessee; (d) except as set forth in Section 5.2, sell, assign or
transfer any of its rights hereunder or in any Vehicle, or
directly or indirectly create, incur or suffer to exist any Lien,
on any of its rights hereunder or in any Vehicle, except for
Permitted Liens; (e) unless the security interest of the Agent is
noted in the certificate of title in the new jurisdiction and
Lessee notifies Agent within three business days of any retitling
in any jurisdiction other than any of the Original States, permit
any Vehicle to be titled in any jurisdiction other than the
jurisdiction in which it was titled on the Effective Date, except
as permitted under Section 6.1(f) of the Participation Agreement;
and (f) use, operate, maintain or store any Vehicle or any
portion thereof outside of the United States except that Lessee
may (and may permit any Sublessee to) use, maintain and operate
any Vehicle outside of the United States on trips to and from a
point of embarkation located within the United States. Lessee
will defend the transfer of the Vehicles by Lessee to Agent, for
the benefit of the Lessors or Agent against the claims or demands
of all Persons (other than Lessor Liens).
Section 5.2 Subleases. So long as no Event of Default
shall have occurred and be continuing, Lessee may sublease one or
more Vehicles (i) to a wholly-owned Subsidiary of Lessee without
the prior written consent of Lessors and (ii) to any other
corporation organized under the laws of the United States or any
State thereof with the prior written consent of each of the
Lessors, which consent shall not be unreasonably withheld;
provided, that any Sublease entered into pursuant to this Section
5.2 shall satisfy each of the following conditions:
(a) such Sublease shall automatically expire upon the
termination of this Lease and shall be expressly subordinate and
subject to this Lease and the Liens created hereunder;
(b) such Sublease shall be in writing and shall
expressly prohibit any further assignment, sublease or transfer;
(c) such Sublease shall not contain a purchase option
in favor of the Sublessee or any other provision pursuant to
which the Sublessee may obtain record or beneficial title to the
Vehicle leased thereunder from Lessee of such Vehicle;
(d) such Sublease shall prohibit the Sublessee from
making any alterations or modifications to the Vehicle that would
violate this Lease;
(e) such Sublease shall require the Sublessee to
maintain the Vehicle in accordance with Section 5.3;
(f) on or before execution and delivery of such
Sublease, Lessee shall execute and deliver to Agent a security
agreement, in a form approved by Agent, whereby Lessee grants to
Agent, for the benefit of the Lessors, a security interest in all
of Lessees rights, title and interest in, to and under such
Sublease, as Collateral for Lessees obligations under the
Operative Agreements. Such Sublease shall provide that such
sublessee shall make all payments under such Sublease directly to
Agent, at an account specified by Agent, upon the occurrence of
any of the events specified in Section 6.1(i) of the
Participation Agreement. In connection therewith, Lessee shall
deliver to Agent an executed original counterpart of such
Sublease upon the execution and delivery thereof, marked as the
sole original execution counterpart for Uniform Commercial Code
purposes, and Lessee shall, at its own cost and expense, do any
further act and execute, acknowledge, deliver, file, register and
record any further documents which Agent may reasonably request
in order to create, perfect, preserve and protect Agent's and
Lessor's security interest in such Sublease. Any payments
received by Agent from Sublessee pursuant to this Section shall
be credited to those amounts owing by Lessee under the Lease;
(g) Lessee shall not, without Agent's prior written
consent, permit or consent to any renewal or extension of a
Sublease at any time when an Event of Default has occurred and is
continuing;
(h) Lessee shall notify Agent and each Lessor in
writing not less than 30 days prior to entering into any
Sublease, which notice shall include (i) a description of the
Vehicle or Vehicles to be leased thereunder, and (ii) the street
address, city, county and State where such Vehicle or Vehicles
will be located during the term of such Sublease, and Lessee
shall provide copies of each Sublease to Agent upon request,
provided that if such Sublease will require that the Vehicle be
titled or registered in a different jurisdiction, then Lessee
must comply with Section 6.1(f) of the Participation Agreement in
connection with such titling and registration.
The liability of Lessee with respect to this Lease and each of
the other Operative Agreements shall not be altered or affected
in any way by the existence of any Sublease.
Section 5.3 Maintenance. At all times during the term
of this Lease, Lessee shall at its expense or shall cause each
Sublessee to: (a) maintain, manage and monitor the Vehicles in
compliance in all material respects with all applicable
requirements of law, Authority and/or insurance policies;
(b) maintain each Vehicle (or cause each Vehicle to be
maintained) in as good operating order, repair and condition as
it was on the date such Vehicles became subject to this Lease
(assuming that, as of such date, each such Vehicle was in good
operating order, repair and condition), ordinary wear and tear
excepted; (c) maintain, manage and monitor the Vehicles in
accordance with the terms of all applicable contracts (including,
without limitation, service contracts and insurance contracts) in
a manner consistent with Lessees customary practices; and
(d) conduct all scheduled maintenance of the Vehicles in
conformity with Lessees maintenance procedures then in effect for
similar equipment owned or leased by Lessee, and applicable
warranty guidelines. Lessee shall in any event maintain the
Vehicles (or cause the Vehicles to be maintained) in at least as
good a condition as comparable equipment owned or leased by
Lessee or any of its Subsidiaries. Lessee will maintain or cause
to be maintained, and shall permit Agent and Lessors to inspect,
any records, logs and other materials required by any Authority
having jurisdiction to be maintained or filed in respect of any
Vehicle.
Section 5.4 Repair, Replacement and Substitution.
(a) As soon as practicable after a Partial Casualty to
a Vehicle, Lessee shall repair and rebuild the affected portions
of such Vehicle (or cause such affected portions to be repaired
and rebuilt) to the condition required to be maintained by
Section 5.3. In the event that any Part which may from time to
time be incorporated or installed in or attached to any Vehicle
becomes at any time worn out, damaged or permanently rendered
unfit for use for any reason whatsoever (unless such event
constitutes a Casualty, in which event the provisions of Section
6.1 hereof shall apply), Lessee, at its own cost and expense,
will promptly replace, or cause to be replaced, such Part with a
replacement Part (a Replacement Part) in accordance with Lessees
customary practices, but in any event subject to Section 5.3. In
addition, Lessee may, at its own cost and expense, remove in the
ordinary course of maintenance, service, repair, overhaul or
testing, any Part, whether or not worn out, destroyed, seized,
confiscated, damaged beyond repair or permanently rendered unfit
for use; provided, that Lessee will, at its own cost and expense,
replace such Part with a Replacement Part as promptly as is
commercially reasonable. All Replacement Parts shall be free and
clear of all Liens (other than Permitted Liens) and shall be in
as good operating condition as, and shall have a value and
utility at least equal to, the Parts replaced, assuming such
replaced Parts and the Vehicles were in the condition and repair
required to be maintained by the terms of Section 5.3. Any Part
at any time removed from any Vehicle shall remain the property of
Agent, for the benefit of the Lessors (subject to this Lease), no
matter where located, until such time as such Part shall be
replaced by a Part which has been incorporated or installed in or
attached to such Vehicle and which meets the requirements for a
Replacement Part specified above. Immediately upon any
Replacement Part becoming incorporated or installed in or
attached to any such Vehicle as above provided, without further
act: (i) title to the replaced Part (the Replaced Part) shall
thereupon vest in Lessee of such Vehicle, free and clear of all
rights of Agent, for the benefit of the Lessors, and shall no
longer be deemed a Part hereunder; (ii) such Replacement Part
shall thereupon vest in Agent, as provided in Section 12.1 (in
the same manner as the underlying Vehicle); and (iii) such
Replacement Part shall become subject to this Lease and the
security interest created hereunder, and shall be deemed part of
such Vehicle for all purposes hereof to the same extent as the
Parts incorporated or installed in or attached to such Vehicle on
the date such Vehicle became subject to this Lease.
(b) Upon the satisfaction of the conditions specified
in Section 5.4(a), and the Replacement Part becoming subject to
this Lease and the security interest created hereunder, Agent, on
behalf of the Lessors, shall execute and deliver to Lessee such
documents as may be reasonably necessary to release the Replaced
Part from the terms and scope of this Lease (but without
representations or warranties, except that the Replaced Part is
free and clear of all Lessor Liens), in such form as may be
reasonably requested by Lessee and are in form and substance
satisfactory to the Required Lessors, all at the expense of
Lessee.
Section 5.5 Alterations, Modifications and Additions;
Removable Parts.
(a) Except as provided in Sections 5.3 and 5.4, Lessee
shall not remove, replace or alter any Vehicle or affix or place
any accessory, equipment or device on any Vehicle (such actions
shall be hereafter referred to collectively as alter) if such
removal, replacement, alteration or addition would materially
impair the originally intended function or use or materially
reduce the value or useful life of such Vehicle; provided, that
Lessee, at its own expense, will make, or cause to be made, any
alteration improvement, modification or addition to or in respect
of any Vehicle that may be necessary, from time to time, to
comply in all material respects with any applicable law,
governmental rule or regulation or any provision of any insurance
policy required to be maintained under Section 7.1 (any Parts
being used to comply with this provision shall be hereafter
referred to as Mandatory Parts). All Parts affixed to or
installed as a part of any Vehicle, excluding temporary
replacements, shall thereupon become subject to the security
interest under this Lease. If no Event of Default shall exist,
Lessee may remove, at its expense, any Part at any time during
the term of this Lease (such Part, a Removable Part) (i) which is
in addition to, and not in replacement of or substitution for,
any Part originally incorporated or installed in or attached to a
Vehicle on the date such item became subject to this Lease or any
Part in replacement of or substitution for any such Part
originally incorporated or installed or attached to such Vehicle;
(ii) which is not a Mandatory Part; and (iii) which can be
removed from any Vehicle without causing damage to such Vehicle
or diminishing or impairing the value, utility or condition which
such Vehicle would have had at such time had such addition not
occurred; provided, that: (x) such removal will not materially
impair the value, use or useful life which the Vehicle would have
had at such time had such Part not been affixed or placed to or
on such Vehicle; and (y) such Part is not necessary for the
continued normal use of such Vehicle. Lessee shall repair all
damage to any Vehicle resulting from any alteration so as to
restore such Vehicle to the condition in which it existed prior
to such alteration (ordinary wear and tear excepted). Neither
Agent nor any Lessor shall have any obligation to pay for or to
reimburse Lessee for any alteration required or permitted by this
Section 5.5.
(b) As provided in Section 4.1 of the Participation
Agreement and Section 12.1 of this Lease, all Parts incorporated
or installed in or attached or added to any Vehicle as the result
of alterations, modifications or additions under this Section
5.5, except Removable Parts, shall, without further act, vest in
Agent, for the benefit of the Lessors, to secure Lessees
performance of its obligations under the Operative Agreements, in
the manner provided in clause (ii) of Section 5.4(a) and the
other applicable provisions of Section 5.4 shall apply with
respect to such Parts. Upon the removal by Lessee of any
Removable Part as provided herein, such Removable Part shall no
longer be deemed part of the Vehicle from which it was removed.
Any Removable Part not removed by Lessee as provided herein prior
to the end of the Lease Term shall become the property of Lessor
at such time.
Section 5.6 Inspection of Collateral. Agent, the
Lessors and each of their agents and representatives shall have
the right at all reasonable times, upon reasonable notice, to
inspect any Collateral, including without limitation any
Certificate of Title or documentation related to the Collateral.
Lessee shall maintain: any Certificate of Title, microfiche
containing Vehicle registration documents and executed blank
powers of attorney enabling the Agent to reregister the Vehicles,
each of them to be maintained in Lessees records in a separate
file entitled AABN AMRO Documentation.
ARTICLE VI
Risk of Loss; Replacement; Waiver and Indemnity
Section 6.1 Casualty. Upon a Casualty, Lessee shall
give prompt written notice thereof (a ACasualty Notice) to Agent,
which notice shall specify whether Lessee will:
(a) repay a portion of the Lease Balance equal to the
Casualty Amount together with all Variable Rent accrued on such
portion of the Lease Balance to the date of payment, which
repayment shall be made no later than the next scheduled Payment
Date occurring after such Casualty or, if such Casualty occurs
during the last 5 Business Days of a Rent Period, then no later
than the second Payment Date occurring after such Casualty,
provided that in any event such repayment shall be made no later
than the last day of the Lease Term (the ACasualty Settlement
Date); or
(b) replace the Vehicle with respect to which the
Casualty has occurred pursuant to the provisions of Section 5.4
(treating such Vehicle, for these purposes, in the same manner as
a Part, and with such Vehicle to have the Allocated Value of the
Vehicle it replaced), provided that upon the occurrence and
during the continuance of a Default, Lessee shall be obligated,
at the option of the Required Lessors, to make the payments
referred to in clause (a) above and shall not be entitled to
exercise any right or election of replacement as set forth in
this clause (b).
If Lessee has elected, or is required, to pay the
Casualty Amount pursuant to clause (a) above, Lessee shall
continue to make all payments of Rent due hereunder until and
including the Casualty Settlement Date. Upon payment of the
Casualty Amount in respect of any Vehicle suffering a Casualty on
such Casualty Settlement Date, the remaining scheduled payments
of Fixed Rent, if any, shall each be reduced by an amount equal
to the product of the scheduled amount of such Fixed Rent prior
to the receipt of such payment by Agent multiplied by the
Allocation Fraction of the Vehicle suffering such Casualty.
Section 6.2 Casualty Proceeds. All proceeds of any
casualty insurance or condemnation proceeds (Casualty Proceeds)
paid or payable to Lessee or any Affiliate of Lessee by reason of
a Casualty or Partial Casualty to a Vehicle shall be deposited
into a deposit account established by Agent, for the benefit of
the Lessors, (the Deposit Account), unless Lessee shall have
already complied with the applicable provisions of Section 5.4 or
6.1 with respect to such Casualty or Partial Casualty. Any
Casualty Proceeds paid to Agent with respect to a Vehicle
suffering a Casualty or a Partial Casualty shall also be
deposited in the Deposit Account. Any moneys in the Deposit
Account attributable to a Casualty or Partial Casualty shall be
remitted promptly to Lessee after Lessees full compliance with
Section 6.1 or Section 5.4, as applicable. Notwithstanding the
foregoing provisions of this Section 6.2, and provided that no
Default consisting of an event described in Section 8.1 (a) or
(g) or an Event of Default shall exist, if the aggregate amount
of Casualty Proceeds at any one time outstanding is $250,000 or
less, then Lessee may receive such Casualty Proceeds directly,
without delivery to Agent; provided, that such Casualty Proceeds
are applied in accordance with the requirements of Section 6.1 or
Section 5.4, as applicable. Notwithstanding any Casualty, all of
Lessee's obligations under this Lease (including its obligation
to make all payments of Rent as they become due) shall continue
unabated and in full force and effect as provided in this Lease.
Without limiting the foregoing, Lessees obligations under Section
5.4 shall not be affected by the amount of any Casualty Proceeds
received by Lessee.
ARTICLE VII
Insurance
Section 7.1 Required Coverages. At its own expense,
Lessee will maintain the following insurance coverages:
(a) primary automobile and general liability insurance
of not less than $3,000,000 per occurrence, with excess coverages
of not less than $5,000,000 per occurrence and $95,000,000 in the
aggregate, in each case naming Agent and Lessors as additional
insureds; and
(b) insurance against all risks of loss or physical
damage to the Vehicles in a primary amount of not less than
$250,000 per occurrence and excess all risk coverage on the
Vehicles in a blanket amount of not less than $100,000,000, which
insurance shall name Agent and Lessors as the sole loss payees.
So long as an insurer which is an Affiliate of Lessee (the
Insurer) shall (i) maintain its good standing as an insurer,
(ii) be financially sound in the reasonable judgment of the
Required Lessors and (iii) be in compliance with all applicable
regulatory requirements, Lessee may obtain primary insurance
coverage from the Insurer, with retained liability for physical
damage to the Vehicles and for liability coverage required under
clause (a) above, which retained liability amounts, in both such
cases, shall be in amounts not greater than amounts customary for
similarly situated companies operating comparable equipment in
the same industry as Lessee. Lessee shall obtain its excess
insurance and, if Insurer does not meet the criteria set forth in
the preceding sentence or is no longer providing Lessees
insurance, its primary insurance, from financially responsible
companies selected by Lessee and having an A.M. Best rating of
AA@ or better or otherwise acceptable to the Required Lessors.
Such insurance shall (i) name Agent and Lessors as
additional insured parties thereunder as specified above (without
any representation or warranty by, or obligation upon, Agent or
any Lessor) as their respective interests may appear,
(ii) contain the agreement by the Insurer that any loss
thereunder shall be payable to Agent and Lessors notwithstanding
any action,-inaction or breach of representation or warranty by
Lessee or any other Person having an interest in any Vehicle
(including, without limitation, Agent or any Lessor),
(iii) provide that there shall be no recourse against Agent or
any Lessor for payment of premiums or other amounts with respect
thereto, (iv) provide that Insurer shall give Agent and each
Lessor at least 30 days prior written notice of cancellation,
lapse or reduction of limits, (v) be primary with respect to any
other insurance carried by or available to Agent and the Lessors,
(vi) provide that the insurer shall waive any right of
subrogation, setoff, counterclaim, or other deduction, whether by
attachment or otherwise, against Agent or any Lessor, and
(vii) contain a cross-liability clause providing for coverage of
Agent and each Lessor as if separate policies had been issued to
each of them, provided, however, that such provision shall not
increase the total limits of liability over those specified
herein. Lessee will notify Agent and Lessors promptly of any
policy cancellation, reduction in policy limits, modification or
amendment.
Section 7.2 Delivery of Insurance Certificates. On or
before the Effective Date, Lessee shall deliver to Agent
certificates of insurance satisfactory to Agent and Lessors
evidencing the existence of all insurance required to be
maintained hereunder and setting forth the respective coverages,
limits of liability, carrier, policy number and period of
coverage. Thereafter, throughout the Lease Term, at the time
each of Lessees insurance policies is renewed (but in no event
less frequently than once each year), Lessee shall deliver to
Agent and each Lessor certificates of insurance evidencing that
all insurance required by Section 7.1 to be maintained by Lessee
with respect to the Vehicles is in effect.
ARTICLE VIII
Default
Section 8.1 Events of Default. The following shall
constitute events of default (each an AEvent of Default)
hereunder (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or
pursuant to or in compliance with any judgment, decree or order
of any court or any order, rule or regulation of any Authority):
(a) any payment of Rent, or any other payment payable
by Lessee hereunder or by Lessee under any other Operative
Agreement (including without limitation, any amount payable
pursuant to Article VII or VIII of the Participation Agreement)
shall not be paid when due, and such payment shall be overdue for
a period of three Business Days;
(b) any representation or warranty made by or on
behalf of Lessee contained in any Operative Agreement or in any
certificate, letter or other writing or instrument furnished or
delivered to Agent or Lessors, pursuant thereto shall at any time
prove to have been incorrect in any material respect when made,
deemed made or reaffirmed, as the case may be;
(c) Lessee shall default in the performance or
observance of any term, covenant, condition or agreement on its
part to be performed or observed under Article XI or Section
13.10 of this Lease or under Section 6.1(c) or (f) of the
Participation Agreement (except to the extent that Section 13.10
incorporates Section 5.2, in which case clause (e) of this
Section 8.1 shall apply);
(d) Lessee shall default in any material respect in
the performance or observance of any term, covenant, condition or
agreement on its part to be performed or observed under Section
7.1;
(e) Lessee shall default in any material respect in
the performance or observance of any other term, covenant,
condition or agreement on its part to be performed or observed
hereunder or under any other Operative Agreement (and not
constituting an Event of Default under any other clause of this
Section 8.1), and such default shall continue unremedied for a
period of 30 days after the earlier to occur of (i) written
notice thereof by Agent or any Lessor to Lessee or (ii) Lessee
has Actual Knowledge thereof;
(f) (i) Lessee shall generally fail to pay, or admit
in writing its inability to pay, its debts as they become due, or
shall voluntarily commence any case or proceeding or file any
petition under any bankruptcy, insolvency or similar law or
seeking dissolution, liquidation or reorganization or the
appointment of a receiver, agent, custodian or liquidator for
itself or a substantial portion of its property, assets or
business or to effect a plan or other arrangement with its
creditors, or shall file any answer admitting the jurisdiction of
the court and the material allegations of any involuntary
petition filed against it in any bankruptcy, insolvency or
similar case or proceeding, or shall be adjudicated bankrupt, or
shall make a general assignment for the benefit of creditors, or
shall consent to, or acquiesce in the appointment of, a receiver,
agent, custodian or liquidator for itself or a substantial
portion of its property, assets or business; or (ii) corporate
action shall be taken by Lessee for the purpose of effectuating
any of the foregoing;
(g) involuntary proceedings or an involuntary petition
shall be commenced or filed against Lessee under any bankruptcy,
insolvency or similar law or seeking the dissolution, liquidation
or reorganization of Lessee or the appointment of a receiver,
agent, custodian or liquidator for Lessee or of a substantial
part of the property, assets or business of Lessee, or any writ,
judgment, warrant of attachment, execution or similar process
shall be issued or levied against a substantial part of the
property, assets or business of Lessee, and such proceedings or
petition shall not be dismissed or stayed, or such writ,
judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded, within 60 days
after commencement, filing or levy, as the case may be;
(h) (a) any ERISA Event shall have occurred with
respect to a Plan which has resulted or could reasonably be
expected to result in liability of the Lessee under Title IV of
ERISA to the Plan or the PBGC in an aggregate amount in excess of
$25,000,000; or (b) the Lessee or any ERISA Affiliate shall fail
to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan
in an aggregate amount in excess of $25,000,000;
(i) any Operative Agreement or the security interest
granted under this Lease shall (except in accordance with its
terms), in whole or in part, terminate, cease to be effective or
cease to be the legally valid, binding and enforceable obligation
of Lessee or any Affiliate, directly or indirectly, contest in
any manner in any court the effectiveness, validity, binding
nature or enforceability thereof; or the security interest
securing Lessees obligations under the Operative Agreements
shall, in whole or in part, cease to be a perfected first
priority security interest;
(j) there shall have occurred any event of default
(after giving effect to any applicable grace or cure period) in
the performance or observance of any obligation or condition with
respect to any Debt owing by or guaranteed by Lessee having an
aggregate principal amount in excess of $10,000,000 the effect of
which is to cause the acceleration of the maturity of such
indebtedness prior to its expressed or stated maturity or the
acceleration of such guarantee; or
(k) a final judgment or final judgments for the
payment of money are entered by a court or courts of competent
jurisdiction against Lessee, and such judgment or judgments
remain undischarged or unstayed for a period (during which
execution shall not be effectively stayed) of 30 days; provided,
that the aggregate of all such judgments exceeds $10,000,000 over
the amount provided by insurance in respect of such judgments.
Section 8.2 Remedies. If any Event of Default has
occurred and is continuing, Agent may exercise in any order one
or more or all of the remedies set forth in this Section 8.2 (it
being understood that no remedy herein conferred is intended to
be exclusive of any other remedy or remedies, but each and every
remedy shall be cumulative and shall be in addition to every
other remedy given herein or now or hereafter existing at law or
in equity or by statute):
(a) Agent may proceed by appropriate court action or
actions, either at law or in equity, to enforce performance by
Lessee of the applicable covenants of this Lease or to recover
damages for the breach thereof;
(b) Agent may by notice in writing to Lessee terminate
this Lease, but Lessee shall remain liable as hereinafter
provided; and Agent may, at its option, do any one or more of the
following: (i) declare the Lease Balance, all accrued Variable
Rent, all other amounts then payable by Lessee under this Lease
and the other Operative Agreements to be immediately due and
payable, and recover any other damages and expenses (including
the costs and expenses described in Article VII and Section 11.5
of the Participation Agreement) in addition thereto which Agent
or any Lessor shall have sustained by reason of such Event of
Default; (ii) enforce the security interest given hereunder
pursuant to the Uniform Commercial Code or any other law;
(iii) enter upon the premises where any Vehicle may be and either
remove such Vehicle, with any damage to the improvements on such
premises to be borne by Lessee (except to the extent such damage
is due to the willful misconduct or gross negligence of Agent or
its representatives), or take possession of such Vehicle; and
(iv) require Lessee to return the Vehicles as provided in Article
IX; or
(c) Agent may require Lessee immediately to purchase
the Vehicles for an aggregate purchase price equal to the
applicable Termination Value as of the most recent Payment Date.
Lessee shall also pay to Agent (i) all accrued unpaid Rent
payable on or prior to such Payment Date; (ii) the pro rata
Variable Rent from the most recent Payment Date to the date of
such purchase; and (iii) all other fees and expenses and other
amounts then due and payable pursuant to this Lease and the other
Operative Agreements.
Notwithstanding the foregoing, upon the occurrence of
any Event of Default described in subsections (a) through (e) and
(h) through (k) of Section 8.1, and upon notice by the Agent to
Lessee that the Agent seeks to pursue any of the remedies
described in Section 8.2, Lessee may, within one (1) Business Day
from the receipt of such notice, elect to purchase all of the
Vehicles for an amount equal to the applicable Termination Value
as of the most recent Payment Date. Lessee shall also pay to
Agent (i) all accrued unpaid Rent payable on or prior to such
Payment Date; (ii) the pro rata Variable Rent from the most
recent Payment Date to the date of such purchase; and (iii) all
other fees and expenses and other amounts then due and payable
pursuant to this Lease and the other Operative Agreements. The
purchase of all Vehicles by Lessee pursuant to the preceding two
sentences shall be in immediately available funds within three
(3) Business Days from the date of Lessees election to purchase
the Vehicles.
Notwithstanding the foregoing, upon the occurrence of
any Event of Default described in subsection (f) or (g) of
Section 8.1, Lessee shall automatically and immediately be
required to purchase all of the Vehicles for an amount equal to
the applicable Termination Value as of the most recent Payment
Date. Lessee shall also pay to Agent (i) all accrued unpaid Rent
payable on or prior to such Payment Date; (ii) the pro rata
Variable Rent from the most recent Payment Date to the date of
such purchase; and (iii) all other fees and expenses and other
amounts then due and payable pursuant to this Lease and the other
Operative Agreements.
Except for notices expressly otherwise provided for in
the Operative Agreements, Lessee hereby waives presentment,
demand, protest and notice of any kind including, without
limitation, notices of default, notice of acceleration and notice
of intent to accelerate.
Section 8.3 Additional Remedies. In addition to the
remedies set forth in Section 8.2, if any Event of Default shall
occur, the Agent (at the direction of the Required Lessors) may,
but is not required to, sell the Collateral in one or more sales.
Lessor may purchase all or any part of the Collateral at such
sale. Lessee acknowledges that sales for cash or on credit to a
wholesaler, retailer or user of such Collateral, at a public or
private auction, are all commercially reasonable. Any notice
required by law of intended disposition by the Agent shall be
deemed reasonable and properly given if given at least 10 days
before such disposition.
Section 8.4 Proceeds of Sale; Deficiency. All
payments received and amounts held or realized by the Agent at
any time when an Event of Default shall have occurred and be
continuing and after, pursuant to Section 8.2, the Lease Balance
shall have been accelerated or Lessee is required to purchase the
Vehicles, as well as all payments or amounts then held or
thereafter received by the Agent shall be distributed forthwith
upon receipt by the Agent in the following order of priority:
first: (i) so much of such payments or amounts
as shall be required to reimburse first the Agent and
then any Lessor for any tax (other than any income tax
payable on interest and on fees and other compensation
of the Agent), expense or other amount owed to the
Agent or any Lessor in connection with the collection
or distribution of such payments or amounts to the
extent not previously reimbursed by Lessee (including,
without limitation, the expenses of any sale, taking or
other proceeding, expenses in connection with realizing
on any of the Collateral, reasonable attorneys' fees
and expenses (including the allocated costs of internal
counsel), court costs and any other reasonable
expenditures incurred or reasonable expenditures or
advances made by the Agent or any Lessor in the
protection, exercise or enforcement of any right, power
or remedy upon such Event of Default whether pursuant
to Section 8.2 or otherwise) shall be so applied by the
Agent first to itself and then to such Lessors; and
(ii) so much of such payments or amounts as shall be
required to pay the reasonable fees and compensation of
the Agent in connection with acting as Agent not
previously paid by Lessee, shall be distributed to the
Agent;
second: so much of such payments or amounts
except those specified in clause third below, which
under the terms of this Lease and the other Operative
Agreements have accrued, including, without limitation,
such amounts as shall be required to reimburse the then
existing or prior Lessors for payments made by them to
Agent pursuant to Section 9.7 of the Participation
Agreement (to the extent not previously reimbursed);
third: so much of such payments or amounts
remaining as shall be required to pay in full, in the
following order of application, (a) all accrued unpaid
Variable Rent (including, to the extent permitted by
applicable law, interest on interest) and (b) the
aggregate unpaid Lease Balance, and in case the
aggregate amount so to be distributed shall be
insufficient to pay any of the foregoing in full all as
aforesaid then, ratably to the Lessors in accordance
with their respective Commitment Percentages; and
fourth: so much of such payments or amounts as
shall remain shall be distributed to Lessee.
Section 8.5 Right to Perform Lessee's Agreements. If
Lessee fails to perform any of its agreements contained herein or
in any other Operative Agreement within the time period specified
therefor, whether or not an Event of Default has occurred and is
continuing, Agent, upon written instructions from Required
Lessors and receipt by Agent of indemnification satisfactory to
it, and, upon 3 Business Days prior notice to Lessee, may perform
such agreement and the fees and expenses incurred by Agent (or
one or more Lessors) in connection with such performance together
with interest thereon shall be payable by Lessee upon demand.
Interest on fees and expenses so incurred by Agent (or one or
more Lessors) shall accrue at the rate provided in Section 3.2
for overdue payments.
Section 8.6 Limitation of Remedies. Notwithstanding
any provision of the preceding sections of this Article VIII, if
any Event of Default has occurred and is continuing solely
because of a Material Adverse Effect Cross-Acceleration, then the
Lessors' remedies under this Article VIII shall be limited to the
aggregate Lessee Risk Amount. In such event, the Agent on behalf
of the Lessors shall have the right to require the Lessee to
relinquish all of its right, title and interest in and to the
Vehicles to the Agent on behalf of the Lessors in accordance with
the procedures set forth in Article IX hereof, and the Lessee
shall pay to the Agent on behalf of the Lessors the aggregate
Lessee Risk Amount. In the event of any sale of the Vehicles by
the Agent on behalf of the Lessors in such circumstances, any
excess of the amount realized upon such sale of the Vehicles over
the Lease Balance shall be distributed in accordance with the
terms of Section 8.4 hereof.
ARTICLE IX
Return of Vehicles
If Agent has terminated this Lease pursuant to Section
8.2, and Lessee has not elected to purchase the Vehicles pursuant
to Articles X or XI, Lessee shall (a) maintain (or cause to be
maintained) the Vehicles in the condition required by Section
5.3, store the Vehicles without cost to Agent or any Lessor and
keep all of the Vehicles insured in accordance with Article VII,
and (b) upon such termination forthwith package and deliver
exclusive possession of such Vehicles to Agent, for the benefit
of the Lessors, at a location designated by Agent, together with
a copy of an inventory list of the Vehicles then subject to the
Lease, all then current plans, specifications and operating,
maintenance and repair manuals relating to the Vehicles that have
been received or prepared by Lessee, appropriately protected and
in the condition required by Section 5.3 (and in any event in
condition to be placed in immediate service), to Agent. This
Article IX shall survive termination of this Lease.
ARTICLE X
Early Termination
Section 10.1 Early Termination as to All Vehicles. On
any scheduled Payment Date Lessee may, at its option, upon at
least 30 days advance written notice from Lessee to Agent and the
Lessors, purchase all, but not less than all, of the Vehicles in
immediately available funds in an amount equal to the applicable
Termination Value as of such Payment Date. Lessee shall also pay
to Agent (i) all accrued unpaid Rent payable on or prior to such
Payment Date and (ii) all other fees and expenses and other
amounts then due and payable pursuant to this Lease and the other
Operative Agreements. Upon the indefeasible payment of such sums
by Lessee in accordance with the provisions of the preceding
sentence, the obligation of Lessee to pay Rent hereunder shall
cease, the term of this Lease shall end on the date of such
payment and Agent, on behalf of Lessors, shall execute and
deliver to Lessee such documents as may be reasonably required to
release the Vehicles from the terms and scope of this Lease
(without representations or warranties, except that the Vehicles
are free and clear of Lessor Liens), in such form as may be
reasonably requested by Lessee, all at Lessees sole cost and
expense.
Section 10.2 Early Termination as to a Vehicle.
Lessee may, at its option, at any time and from time to time,
purchase any Vehicle for an amount equal to the Casualty Amount
of such Vehicle, together with all accrued but unpaid Variable
Rent on the portion of the Lease Balance represented by such
Casualty Amount, whereupon Agent shall transfer its interest in
such Vehicle to Lessee in accordance with the last two sentences
of Section 12.1; provided, however, that Lessee shall not have
such option to purchase a Vehicle pursuant to this Section 10.2,
if as a result of such purchase, all Vehicles theretofore
purchased under this Section 10.2 together with the Vehicle to be
purchased would have an aggregate purchase price in excess of
$4,000,000 during each of the Base Term and any exercised Renewal
Term.
ARTICLE XI
Lease Termination
Section 11.1 Options. Not later than 90 days prior to
the last day of the Base Term or any Renewal Term then in effect,
Lessee shall, by delivery of written notice to Agent (except in
the case of clause (a)), exercise one of the following options:
(a) unless Lessee delivers written notice to the
contrary, except in the case of the last Renewal Term, renew this
Lease with respect to all, but not less than all, of the Vehicles
then subject hereto for an additional one year Renewal Term (the
Renewal Option) on the terms and conditions set forth herein and
the other Operative Agreements; or
(b) purchase in immediately available funds in an
amount equal to the applicable Termination Value all, but not
less than all, of the Vehicles then subject to this Lease on the
last day of the Base Term or Renewal Term then in effect with
respect to which such option is exercised, on the terms and
conditions set forth in Section 11.2 (the Lessee Purchase
Option); or
(c) sell on behalf of the Lessors to a purchaser or
purchasers not in any way affiliated with Lessee all, but not
less than all, of the Vehicles then subject to this Lease on the
last day of the Base Term or of any Renewal Term then in effect
with respect to which such option is exercised, on the terms and
conditions set forth in Section 11.3 (the Sale Option).
Lessee's election of the Lessee Purchase Option will be
irrevocable at the time made, but if Lessee fails to make a
timely election, Lessee will be deemed, in the case of the Lease
Term and each Renewal Term then in effect (other than the last
Renewal Term) to have irrevocably elected the Renewal Option and,
in the case of the last Renewal Term, Lessee will be deemed to
have irrevocably elected the Lessee Purchase Option. In
addition, the Sale Option shall automatically be revoked if there
exists a Default at anytime after the Sale Option is properly
elected and Agent shall be entitled to exercise all rights and
remedies provided in Article VIII. Lessee may not elect the Sale
Option if there exists on the date the election is made a
Default.
Section 11.2 Lessee Purchase Option. If Lessee elects
the Lessee Purchase Option, then on the Termination Date, Lessee
shall purchase all (but not less than all) of the Vehicles for an
amount equal to the applicable Termination Value. Lessee shall
also pay to Agent all accrued unpaid Rent and all other amounts,
if any then due and owing hereunder. Upon the indefeasible
payment of such sums by Lessee in accordance with the provisions
of the preceding sentence, the obligation of Lessee to pay Rent
hereunder shall cease, the term of this Lease shall end on the
date of such payment and Agent, on behalf of Lessors, shall
execute and deliver to Lessee such documents as may be reasonably
required to release the Vehicles from the terms and scope of this
Lease (without representations or warranties, except that the
Vehicles are free and clear of Lessor Liens), in such form as may
be reasonably requested by Lessee, all at Lessees sole cost and
expense.
Section 11.3 Sale Option. If Lessee elects the Sale
Option, then during the period prior to the Termination Date,
Lessee, as agent for Agent and Lessors and at no expense to Agent
and Lessors, shall use its commercial best efforts to obtain bids
for the purchase in immediately available funds on the
Termination Date of the Vehicles from prospective purchasers
which are unaffiliated with Lessee and are financially capable of
purchasing the Vehicles (Qualified Purchasers). The Agent may
also, if it so desires, seek to obtain such bids. All bids
received by Lessee or Agent, within five Business Days after
receipt thereof, shall be certified to the other in writing
setting forth the name and address of the party submitting each
such bid and the amount and terms thereof.
If any bid is received from a Qualified Purchaser for
an amount in excess of the Lessor Risk Amount, or if Agent agrees
in its sole and absolute discretion to accept a bid for less than
the Lessor Risk Amount, then on the Termination Date (i) the
Vehicles shall be sold on an as-is, where-is basis (without
recourse to or warranty from Agent and Lessors, except that the
Vehicles are free of Lessor Liens), to the bidder, which is a
Qualified Purchaser, selected by Lessee after consultation with
Agent (the Purchaser), provided, however, that Lessee may not
reject the highest bidder if the next highest bid is not at least
equal to the Lessor Risk Amount; (ii) Lessee shall make the
Vehicles available to the Purchaser in the same manner and in the
same condition and otherwise in accordance with this Lease as if
delivery were made to Agent pursuant to Article IX, (iii) such
Purchaser shall pay the sale proceeds in immediately available
funds to Agent for the benefit of Lessors, (iv) Lessee shall pay
to Agent, for the benefit of the Lessors, in immediately
available funds (x) all accrued unpaid Rent and all other
amounts, if any then due and owing under this Lease, and (y) an
amount equal to the excess, if any, of (A) the Termination Value
as of the Termination Date over (B) the sale proceeds (but in no
event shall such amount payable by Lessee under this clause
(y) exceed the applicable Lessee Risk Amount), (v) Agent shall
pay to Lessee in immediately available funds an amount equal to
the excess, if any, of (A) the sale proceeds over (B) the
Termination Value as of the Termination Date, (vi) title to the
Vehicles shall be transferred to such Purchaser free and clear of
Lessor Liens, and (vii) Agent, on behalf of Lessors, shall
execute and deliver to Purchaser such documents as may be
reasonably required to release the Vehicles from the terms and
scope of this Lease (without representations or warranties,
except that the Vehicles are free and clear of Lessor Liens), in
such form as may be reasonably requested by Purchaser.
If (x) Agent does not receive any bid in excess of the
applicable Lessor Risk Amount from a Qualified Purchaser or Agent
does not accept any bids received for less than the Lessor Risk
Amount prior to the Termination Date or (y) the proposed sale to
the Purchaser is not consummated prior to the Termination Date,
Lessee shall have the option to purchase the Vehicles by paying
to Agent within ten (10) Business Days of the Termination Date,
in immediately available funds an amount equal to the applicable
Termination Value as of the Termination Date. Lessee shall also
pay to Agent (i) all accrued unpaid Rent payable on the
Termination Date; (ii) the pro rata Variable Rent from the
Termination Date to the date of such purchase; and (iii) all
other fees and expenses and other amounts then due and payable
pursuant to this Lease and the other Operative Agreements. If
Lessee does not so elect to purchase the Vehicles pursuant to the
immediately preceding sentence, Lessee shall pay to Agent an
amount equal to the Lessee Risk Amount, Agent shall retain title
to the Vehicles (or, if at such time Lessee holds title to the
Vehicles, Lessee shall transfer title to Vehicles to Agent,
without recourse, representations or warranties, except that the
Vehicles are free and clear of Lessor Liens) and Lessee shall
return the Vehicles to Agent in accordance with Article IX.
ARTICLE XII
Ownership, Grant of Security
Interest to Lessor and Further Assurances
Section 12.1 Grant of Security Interest. Lessee
hereby assigns, grants and pledges to Agent, for the benefit of
the Lessors, a security interest in all of Lessee's right, title
and interest, whether now or hereafter existing or acquired, in
the Collateral, to secure the payment and performance of all
obligations of Lessee now or hereafter existing under this Lease
or any other Operative Agreement. Lessee shall, at its expense,
do any further act and execute, acknowledge, deliver, file,
register and record any further documents which Agent or any
Lessor may reasonably request in order to protect its title to
and perfected security interest in the Collateral, subject to no
Liens other than Permitted Liens, and Agents rights and benefits
under this Lease. Lessee shall promptly and duly execute and
deliver to Agent such documents and assurances and take such
further action as Agent or any Lessor may from time to time
reasonably request in order to carry out more effectively the
intent and purpose of this Lease and the other Operative
Agreements, to establish and protect the rights and remedies
created or intended to be created in favor of Agent hereunder and
thereunder, and to establish, perfect and maintain the right,
title and interest of Agent, for the benefit of the Lessors, in
and to the Vehicles, subject to no Lien other than Permitted
Liens, or of such financing statements or fixture filings or
other documents with respect hereto as Agent or any Lessor may
from time to time reasonably request, and Lessee agrees to
execute and deliver promptly such of the foregoing financing
statements and fixture filings or other documents as may require
execution by Lessee. Without limiting the foregoing, on and
after the date Lessee elects or is deemed to have elected the
Lessee Purchase Option or the Sale Option, Agent shall have the
unconditional right to demand the execution and delivery by
Lessee of bills of sale with respect to the Vehicles leased by
Lessee or such documentation as may be necessary to cause title
to the Vehicles to be recorded in the name of Agent, for the
benefit of the Lessors. To the extent permitted by applicable
laws, Lessee hereby authorizes any such financing statements and
other documents to be filed without the necessity of the
signature of Lessee, if Lessee has failed to sign any such
instrument within 10 days after request therefor by Agent or any
Lessor. Upon Lessee's request, Agent shall at such time as all
of the obligations of Lessee under this Lease or any other
Operative Agreements have been indefeasibly paid or performed in
full (other than Lessee's contingent obligations, if any, under
Articles VII and VIII of the Participation Agreement), execute
and deliver termination statements and other appropriate
documentation reasonably requested by Lessee, all at Lessee's
expense, to evidence Agent's release of its security interest in
the Collateral. At such time, Agent shall execute and deliver to
Lessee such documents as may be reasonably necessary (without
representations or warranties, except that the Vehicles are free
and clear of Lessor Liens) to release Agent's security interest
in the Vehicles. Any such sale of the Vehicles to either Lessee
or a third party shall be on an AS-IS, WHERE-IS basis (without
representations or warranties, except that the Vehicles are free
and clear of Lessor Liens).
Section 12.2 Retention of Proceeds in the Case of
Default. If Lessee would be entitled to any amount (including
any Casualty Proceeds or Partial Casualty Proceeds) but for the
existence of any Default, Agent shall hold such amount as part of
the Collateral and shall be entitled to apply such amounts
against any amounts due hereunder; provided, that Agent shall
distribute such amount or transfer such Vehicle in accordance
with the other terms of this Lease if and when no Default exists.
Section 12.3 Attorney-in-Fact. Lessee hereby
irrevocably appoints Agent as Lessees attorney-in-fact, with full
authority in the place and stead of Lessee and in the name of
Lessee or otherwise, from time to time in Agent's discretion,
upon the occurrence and during the continuance of an Event of
Default, to take any action (including any action that Lessee is
entitled to take) and to execute any instrument which Agent or
the Required Lessors may deem necessary or advisable to
accomplish the purposes of this Lease (subject to any limitations
set forth in the Operative Agreements), including, without
limitation:
(a) to ask, demand, collect, ▇▇▇ for, recover,
compromise, receive and give acquittance and receipts for money
due and to become due under or in connection with the Collateral;
(b) to receive, endorse and collect any drafts or
other instruments, documents and chattel paper in connection with
the foregoing clause (a);
(c) to file any claim or take any action or institute
any proceedings which Agent may deem to be necessary or advisable
for the collection thereof or to enforce compliance with the
terms and conditions of any Collateral; and
(d) to perform any affirmative obligations of Lessee
hereunder.
Lessee hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section 12.3 is irrevocable and
coupled with an interest.
Section 12.4 Release of Liens. Upon the replacement
or substitution of any Vehicle or Part or Sublease, or the
payment of all amounts required pursuant to Section 6.1 in
connection with a Casualty, in each case in compliance with the
applicable provisions of the Lease, such Vehicle or Part or
Sublease shall be released from the security interest created
hereunder as provided in Section 5.4(b).
ARTICLE XIII
Miscellaneous
Section 13.1 No Waiver. No delay or omission in the
exercise of any right, power or remedy accruing to Agent and/or
the Lessors upon any breach or default of Lessee hereunder shall
impair any such right, power or remedy, nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence
therein or of or in any similar breach or default thereafter
occurring, nor shall any single or partial exercise of any right,
power or remedy preclude other or further exercise thereof, or
the exercise of any other right, power or remedy, nor shall any
waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on
the part of Agent or the Lessors of any breach or default under
this Lease must be specifically set forth in writing and must
satisfy the requirements set forth in Article X of the
Participation Agreement with respect to approval by Agent or the
Lessors.
Section 13.2 Survival of Covenants. All claims
pertaining to the representations, warranties and covenants of
Lessee under Articles II, III, IV, V, VI, VII, X, XI and XIII
shall survive the termination of this Lease to the extent such
claims arose out of events occurring or conditions existing prior
to any such termination.
Section 13.3 APPLICABLE LAW. THIS LEASE SHALL BE
GOVERNED BY AND CONSTRUED UNDER THE LAWS OF CALIFORNIA, WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF.
Section 13.4 Effect and Modification of Lease. No
variation, modification, amendment or waiver of this Lease,
including any schedules or exhibits hereto, or any other
Operative Agreement to which Agent or any Lessor is a party shall
be valid unless the same shall have been entered into in
accordance with Article X of the Participation Agreement.
Section 13.5 Notices. All notices, demands, requests,
consents, approvals and other instruments hereunder shall be in
writing and shall be deemed to have been properly given if given
as provided for in Section 11.4 of the Participation Agreement.
Section 13.6 Counterparts. This Lease has been
executed in several counterparts. One counterpart has been
prominently marked Agent's Copy. Only the counterpart marked
Agent's Copy shall evidence a monetary obligation of or shall be
deemed to be an original or to be chattel paper for purposes of
the Uniform Commercial Code, and such copy shall be held by
Agent.
Section 13.7 Severability. Whenever possible, each
provision of this Lease shall be interpreted in such manner as to
be effective and valid under applicable law but if any provision
of this Lease shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Lease.
Section 13.8 Successors and Assigns: Benefit of
Agreement. This Lease shall be binding upon each of the parties
hereto and, subject to Sections 13.9 and 13.10 hereof, its
respective successors and assigns, and shall inure to the benefit
of each of the parties hereto and its respective successors and
permitted assigns.
It is expressly understood and agreed that Agent is
entering into this Lease for the benefit of the Lessors, who are
third party beneficiaries of this Lease.
Section 13.9 Assignment by Agent. Agent shall not
sell, assign, transfer or otherwise dispose of its rights or
delegate its obligations under this Lease to any other Person
except as permitted or required by the Participation Agreement.
Section 13.10 Assignment by Lessee. Lessee shall not
sell, assign, transfer or otherwise dispose of its rights or
delegate its obligations under this Lease to any other Person,
except as permitted or required by Section 5.2 hereof or the
Participation Agreement.
Section 13.11 Jury Trial. EACH OF THE PARTIES HERETO
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS LEASE OR ANY RELATED
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS LEASE OR ANY RELATED DOCUMENT
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
Section 13.12 Section Headings: Table of Contents.
Section headings and the table of contents used in this Lease
(including the schedule) are for convenience of reference only
and shall not affect the construction of this Lease.
Section 13.13 Final Agreement. THIS LEASE, TOGETHER
WITH THE OTHER OPERATIVE AGREEMENTS, REPRESENTS THE ENTIRE FINAL
AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED BY THE LEASE AND THE OTHER OPERATIVE AGREEMENTS.
THIS LEASE CANNOT BE MODIFIED, SUPPLEMENTED, AMENDED, RESCINDED
OR CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES, EXCEPT BY AN
INSTRUMENT IN WRITING SIGNED BY THE PARTIES HERETO IN ACCORDANCE
WITH THE TERMS OF THE PARTICIPATION AGREEMENT. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 13.14 Timeliness of Performance. The
provisions of Articles VIII and XI pertaining to the delivery of
notice and the performance of certain events on dates required by
Articles VIII and XI are to be strictly adhered to by the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Lease to be executed and delivered as of the date first above
written.
CONSOLIDATED FREIGHTWAYS
CORPORATION OF DELAWARE, as
Lessee
By
Name:
Title:
ABN AMRO BANK N.V.,
not individually but solely as
Agent for the Lessors
By
Name:
Title:
By
Name:
Title:
SCHEDULE X
TO
PARTICIPATION AGREEMENT
DEFINITIONS
The following terms shall have the following meanings
for all purposes, and such meanings shall be equally applicable
both to the singular and plural forms of the terms defined. Any
agreement, document or instrument defined or referred to in this
Schedule X shall include each amendment, modification or
supplement thereto including each waiver and consent that may
(pursuant to the Operative Agreements) be effective from time to
time, except as otherwise expressly indicated. The definition of
any person herein shall include its successors and permitted
assigns. Reference to schedules and exhibits in this Schedule X
shall mean Schedules and Exhibits attached to the Participation
Agreement, except as otherwise indicated.
Actual Knowledge shall mean, as to any matter with
respect to any Person, the actual knowledge of such matter by a
Responsible Officer of such Person and shall include, without
limitation, receipt of a notice of such matter by any such
Responsible Officer.
Affected Lessor shall have the meaning provided in
Section 7.6 of the Participation Agreement.
Affiliate shall mean, as to any Person, any other
Person that, directly or indirectly, controls, is controlled by
or is under common control with such Person or is a director or
officer of such Person. No Person shall be considered an
Affiliate of Agent unless such Person directly or indirectly
through one or more intermediaries controls, is controlled by, or
is under common control with, Agent solely in its capacity as
agent under the Lease.
Agent shall have the meaning provided in the preamble
of the Lease.
Agent Fees shall mean all fees payable to the Agent as
agreed in a letter between the Agent and the Lessee dated August
20, 1999 and accepted by the Lessee as of August 24, 1999.
Agent-Related Persons means ABN AMRO and any successor
Agent arising under Section 9.9 of the Participation Agreement,
together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
Agent's Account shall mean the account of the Agent
maintained by the Agent at ABN AMRO Bank N.V. with its office in
New York, New York, ABA No. ▇▇▇▇▇▇▇▇▇, F/O ABN AMRO Bank -
Chicago CPU, ACCT no. 650-001-1789-41, Ref: CPU00197211 -
Consolidated Freightways.
Allocation Fraction of any Vehicle shall mean, with
respect to the Lease, a fraction, the numerator of which is the
Allocated Value of such Vehicle set forth on Schedule I to the
Lease (or, if applicable, as provided in Section 6.1(b) of the
Lease) and the denominator of which is the aggregate Allocated
Value of all of the Vehicles set forth on Schedule I to the Lease
(or, if applicable, as provided in Section 6.1(b) of the Lease)
then subject to the Lease, including such Vehicle.
Alter shall have the meaning provided in Section 5.5(a)
of the Lease.
Applicable Margin shall mean, as of any date of
determination, a percentage per annum determined as set forth on
Schedule III to the Lease.
Appraisal shall mean the appraisal of the Vehicles from
an Appraiser received pursuant to the terms of the Lease.
Appraised Value shall mean, with respect to any Vehicle
as of any date of determination, the fair market value of such
Vehicle as set forth on the Appraisal therefor.
Appraiser shall mean Valuation Research Corporation or
such other Person as is selected by the Lessee and Agent.
Assignment Agreement shall have the meaning provided in
the preamble to the Participation Agreement.
Assumption Agreement shall have the meaning provided in
Section 6.1(c) of the Participation Agreement.
Attorney Costs means and includes all reasonable fees
and services of any law firm or other external counsel.
Authority shall mean any: (a) Federal, state, local or
(if any Vehicle or any component thereof has been moved outside
of the United States) foreign, tribunal, legislative body,
governmental subdivision, administrative agency or other
governmental authority; or (b) arbitrator or panel of
arbitrators, in the case of each of clause (a) and (b) having or
exercising jurisdiction over Lessee, Agent, or any Vehicle (or
any component thereof).
Base Rate means, for any period, a fluctuating interest
rate per annum as shall be in effect from time to time which rate
per annum shall at all times be equal to the higher of: (a) the
rate of interest announced publicly by the Agent at its office in
Chicago, Illinois, from time to time, as its prime or base rate;
and (b) 2 of one percent per annum above the Federal Funds Rate.
Any change in the prime or base rate announced by the Agent shall
take effect at the opening of business on the day specified in
the public announcement of such change. Such prime or base rate
is determined as a means of pricing credit extensions to some
customers and is not directly related to any external rate of
interest or index, nor necessarily the lowest rate of interest
charged at any given time for any particular class of customers.
Base Rent shall mean all installments of Fixed Rent and
Variable Rent due and payable by Lessee on each Payment Date
during the Base Term.
Base Term shall have the meaning provided in Section
2.1 of the Lease.
Business Day shall mean any day on which:
(a) banks are not required or authorized by law
to close in New York, Chicago or San Francisco; and
(b) solely with respect to determinations of
Variable Rent determined on the basis of the Eurodollar
Rate, dealings in Dollars are carried on in the London
Interbank market.
Capital Adequacy Regulation means any guideline,
request or directive of any central bank or other Authority, or
any other law, rule or regulation, whether or not having the
force of law, in each case, regarding capital adequacy of any
Lessor or of any corporation controlling a Lessor.
Capital Lease means any lease of Property by the Parent
or any of its Subsidiaries which, in accordance with GAAP, is or
should be capitalized on the Parent's or such Subsidiary's
balance sheet, as the case may be, or for which the amount of the
asset and liability thereunder, if so capitalized, should be
disclosed in a footnote to such balance sheet.
Cash Equivalents means: (a) direct obligations of the
Government of the United States or any agency or instrumentality
thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States,
(b) money market funds with assets in excess of $1,000,000,000,
(c) certificates of deposit (CD's), bankers acceptances,
eurodollar CD's or Yankee CD's with (i) U.S. commercial banks
with capital of at least $200,000,000 and a senior long-term
dollar denominated debt rating of at least A by ▇▇▇▇▇'▇ and S&P
or (ii) foreign commercial banks with assets of at least
$1,000,000,000 and a ▇▇▇▇▇▇▇▇ Bankwatch rating of at least TBW-1,
(d) eurodollar time deposits with the Nassau or Cayman offshore
branches of U.S. commercial banks with capital of at least
$200,000,000 and a senior long-term dollar denominated debt
rating of at least A by ▇▇▇▇▇'▇ and S&P, (e) commercial paper
rated at least P2 by ▇▇▇▇▇'▇ and A2 by S&P, (f) medium term,
fixed or floating rate notes in offerings of at least
$100,000,000 with a maximum tenor of five years, issued by U.S.
corporations with a senior long-term dollar denominated debt
rating of at least A by ▇▇▇▇▇'▇ and S&P, and (g) repurchase
agreements, provided that (w) the market value of the collateral
securing any such repurchase agreement must be equal to at least
102% of the repurchase value plus accrued interest, (x) the
collateral (A) has a maturity of three years or less, (B) is
issued by the Government of the United States or any agency or
instrumentality thereof or U.S. commercial banks with capital of
at least $200,000,000 and a senior long-term dollar denominated
debt rating of at least A by ▇▇▇▇▇'▇ and S&P and (C) has pricing
information that is available on the Bloomberg Reporting Service,
(y) must be executed with primary dealers listed by the New York
Federal Reserve Board and rated at least P1 by ▇▇▇▇▇'▇ and A1 by
S&P, and (z) such collateral must be delivered to Lessee's
custodian.
Casualty shall mean any of the following events in
respect of any Vehicle: (a) the loss of such Vehicle or the use
thereof due to theft, disappearance, destruction, damage beyond
repair or rendition of such Vehicle permanently unfit for normal
use for any reason whatsoever in the business judgment of Lessee;
(b) any damage to such Vehicle which results in an insurance
settlement with respect to such Vehicle on the basis of a total
loss; (c) the permanent condemnation, confiscation or seizure of,
or requisition of title to or use of, such Vehicle; (d) as a
result of any rule, regulation, order or other action by any
Authority, the use of such Vehicle in the normal course of
business shall have been prohibited, directly or indirectly, for
a period of six consecutive months, unless Lessee, prior to the
expiration of such six-month period, shall have undertaken and
shall be diligently carrying forward all steps which are
necessary or desirable to permit the normal use of such Vehicle
by the Lessee thereof or, in any event, if use of such Vehicle
shall have been prohibited, directly or indirectly, for a period
of twelve consecutive months; or (e) the operation or location of
such Vehicle, while under requisition for use by any Authority,
in any area excluded from coverage by any insurance policy then
in effect with respect to such Vehicle required by the terms of
Section 7.1 of the Lease, if Lessee shall be unable to obtain
indemnity in lieu thereof from such Authority; provided that for
the purpose of the foregoing clause (e), if such Vehicle shall be
returned to Lessee prior to the Casualty Settlement Date in such
condition that a Casualty would not otherwise be deemed to exist
with respect thereto, then such event shall, at the option of
Lessee, not constitute a Casualty.
Casualty Amount of any Vehicle shall mean, with respect
to any Casualty, an amount equal to the product of (a) the Lease
Balance on the date of such Casualty and (b) the Allocation
Fraction of such Vehicle.
Casualty Notice shall have the meaning provided in
Section 6.1 of the Lease.
Casualty Proceeds shall have the meaning provided in
Section 6.2 of the Lease.
Casualty Settlement Date shall have the meaning
provided in Section 6.1(a) of the Lease.
Certificate of Title shall mean a certificate of title,
certificate of ownership, manufacturer's certificate of origin or
any similar equivalent instrument issued by any applicable
Authority evidencing title, or an interest in title, to a
Vehicle.
Charges shall mean (a) freight, installation and other
similar costs with respect to any Vehicle and (b) applicable
sales, use or similar taxes imposed upon any Vehicle.
CNF shall mean CNF Transportation, Inc., a Delaware
corporation.
CNF Note means any promissory note payable by the
Parent to CNF under the Tax Sharing Agreement and any substitute,
replacement or refinancing of any such promissory note, whether
such substitute, replacement or refinanced promissory note is to
CNF or other Persons; provided that the Parent's obligations
under any such promissory note are subordinated to its
obligations under the Affiliate Guaranty and that the terms and
conditions of such subordination may not be amended, supplemented
or otherwise modified after the date hereof in a manner adverse
to the interests of any of the Lessors.
Code shall mean the Internal Revenue Code of 1986, as
amended.
Collateral shall mean all of Lessees right, title and
interest in and to each of the following, whether now existing or
hereafter arising or acquired, and wherever located:
(a) the Vehicles and the Intellectual Property
Collateral;
(b) the Subleases;
(c) all contracts necessary to purchase, operate
and maintain the Vehicles, including all warranties;
(d) any rebate, offset or other similar rights
under a purchase order, invoice or purchase agreement with
any manufacturer of any Vehicle;
(e) all books, manuals, logs, records, writings,
data bases, information and other property relating to, used
or useful in connection with, evidencing, embodying or
incorporating any of the foregoing; and
(f) all products, accessions and proceeds of and
from any and all of the foregoing Collateral (including
proceeds which constitute property of the types described in
subsections (a), (b), (c), (d) and (e) above and, to the
extent not otherwise included, all payments under insurance
(whether or not Lessor is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss
or damage to or otherwise with respect to any of the
foregoing Collateral.
Commitment(s) for each Lessor shall mean the amount set
forth in Schedule I to the Participation Agreement across from
the name of such Lessor.
Commitment Percentage shall mean, with respect to each
Lessor, the quotient (expressed as a percentage) of such Lessors
Commitment divided by the Total Commitment.
Consolidated refers to the consolidation of accounts in
accordance with GAAP.
Consolidated EBIT shall mean, for any period, the sum
of (i) Consolidated Net Income of the Parent and its
Subsidiaries, before total interest expense (whether cash or non-
cash) and provisions for taxes based on income, and determined
without giving effect to any extraordinary gains or losses but
giving effect to gains or losses from sales of assets sold in the
ordinary course of business plus (ii) an amount not in excess of
$15,000,000 related to charges in connection with the Tax Sharing
Agreement plus (iii) any non-cash charge incurred by the Parent
and its Subsidiaries for the issuance of common shares under the
Parent's restricted stock plan.
Consolidated EBITDAR shall mean, for any period,
Consolidated EBIT, adjusted by adding thereto the amount of all
expenses for depreciation, amortization and Consolidated Rental
Expenses that were deducted in determining Consolidated EBIT for
such period.
Consolidated Funded Indebtedness means, for any period,
without duplication, the sum of (a) all short term Debt of the
Parent and its Consolidated Subsidiaries (including the current
maturities of long-term Debt) plus (b) all long-term Debt of the
Parent and its Consolidated Subsidiaries, including obligations
in respect of Capitalized Leases plus (c) the present value
(using a discount rate of 10% per annum) of future payments under
operating leases of the Parent and its Consolidated Subsidiaries
with initial or remaining non-cancellable lease terms in excess
of one year plus (d) the undrawn amount of all standby letters of
credit issued for the account of the Parent and its Consolidated
Subsidiaries, including any unpaid reimbursement obligations
thereunder minus (e) in the event that the CNF Note is
outstanding as of any date of determination, an amount equal to
the lesser of (i) $40,000,000 and (ii) the outstanding principal
amount of the CNF Note.
Consolidated Interest and Rental Expense means, for any
period, total interest expense (including amounts properly
attributable to interest with respect to Capital Leases in
accordance with GAAP, letter of credit costs, and amortization of
debt discount and debt issuance costs) and Consolidated Rental
Expense of the Parent and its Consolidated Subsidiaries for such
period with respect to all outstanding Debt of the Parent and its
Consolidated Subsidiaries, including without limitation all
commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing
and net costs or benefits under interest rate protection
agreements.
Consolidated Net Income means, for any period, the net
income of the Parent and its Consolidated Subsidiaries for such
period determined in accordance with GAAP provided, however, that
if the Parent shall have acquired the assets and business of any
Person or any substantial part of the assets and business of any
Person, any revenues and expenses properly attributable to such
assets and business or part thereof prior to the date of such
acquisition shall not be included in Consolidated Net Income.
Consolidated Rental Expense means lease payments by the
Parent and its Consolidated Subsidiaries under all leases
having an initial non-cancellable lease term in excess of
one year.
Consolidated Stockholders' Equity means, with respect
to any Person at any date, the Consolidated stockholders' equity
of such Person, excluding any amounts attributable to mandatorily
redeemable preferred stock.
Consolidated Subsidiary shall mean, at any date, any
subsidiary or other entity the accounts of which would be
consolidated with those of Lessee in its Consolidated financial
statements if such statements were prepared as of such date.
Consolidated Tangible Net Worth means, for any Person
at any date, the Consolidated Stockholders' Equity of such Person
and its Consolidated Subsidiaries less goodwill and intangibles
determined on a consolidated basis in accordance with GAAP.
Consolidated Total Assets means, as of any date, the
Consolidated total assets of the Parent and its Subsidiaries as
of such date.
Credit Agreement means the Credit Agreement dated as of
October 12, 1999 by and among the Lessee, the Lender Parties
party thereto and ABN AMRO BANK N.V., as agent for the Lender
Parties, as amended, modified or supplemented from time to time
in accordance with its terms.
Debt of any Person means, without duplication: (a) all
obligations and liabilities of such Person in respect of borrowed
money, (b) all obligations and liabilities of such Person in
respect of Hedging Contracts, (c) all obligations and liabilities
at any time owing by Lessee, Parent or any of their Subsidiaries
to Agent and/or any Lessor hereunder or under any other Operative
Agreement, (d) all obligations and liabilities of such Person
secured by any Lien on the Property of such Person, even though
such Person shall not have assumed or become liable for the
payment thereof; provided, however, that all such obligations and
liabilities which are limited in recourse to such Property shall
be included in Debt only to the extent of the book value of such
Property as would be shown on a balance sheet of such Person
prepared in accordance with GAAP, (e) all obligations or
liabilities created or arising under any Capital Lease or
conditional sale or other title retention agreement with respect
to Property used or acquired by a Person, even if the rights and
remedies of the lessor, seller or lender thereunder are limited
to repossession of such Property; provided, however, that all
such obligations and liabilities which are limited in recourse to
such Property shall be included in Debt only to the extent of the
book value of such Property as would be shown on a balance sheet
of such Person prepared in accordance with GAAP, (f) all
obligations and liabilities under any Guaranty of the foregoing.
Default shall mean any Event of Default or any event or
condition that would constitute an Event of Default but for the
requirement that notice be given or time elapse or both.
Deposit Account shall have the meaning provided in
Section 6.2 of the Lease.
Designated Entity means any entity identified by Lessee
to the Agent in a written notice delivered prior to the
respective Investment in accordance with Section 11.4 of the
Participation Agreement.
Dollar and the sign $ mean lawful money of the United
States.
Effective Date shall mean the date when the conditions
set forth in Section 3.1 of the Participation Agreement have been
satisfied or waived as provided therein.
Effective Date Notice shall mean a notice in the form
of Exhibit B to the Participation Agreement.
Environmental Action means any action, suit, demand,
demand letter, claim, notice of non-compliance or violation,
notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement relating in any
way to any violation of an Environmental Law or arising from
alleged injury or threat of injury to health, safety or the
environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and
(b) by any governmental or regulatory authority or any third
party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
Environmental Law shall mean any federal, state, local
or foreign statute, law, ordinance, rule, regulation, code,
order, judgment, decree or judicial or agency interpretation,
policy or guidance that has the force or effect of law relating
to pollution or protection of the environment, health, safety or
natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.
Equity Interests means, with respect to any Person, all
of the shares of capital stock of (or other ownership or profit
interests in) such Person, all of the warrants, options or other
rights for the purchase or other acquisition from such Person of
shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into
or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person
of such shares (or such other interests), and all of the other
ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein),
whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.
ERISA shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder..
ERISA Event means (a) (i) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA,
with respect to any Plan unless the 30-day notice requirement
with respect to such event has been waived by the PBGC, or (ii)
the requirements of subsection (1) of Section 4043(b) of ERISA
are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described
in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of
ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days but only if the PBGC has not waived
the requirements of Section 4043(b) of ERISA with respect to a
contributing sponsor; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to terminate such
Plan in a distress termination pursuant to Section 4041(a)(2) of
ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of the Lessee or any ERISA Affiliate in
the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by the Lessee or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions for the imposition of a lien under Section 302(f) of
ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a
Plan pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of
a trustee to administer, a Plan.
Eurodollar Office means, with respect to any Lessor,
the office of such Lessor specified as its Eurodollar Office
opposite its name on Schedule I to the Participation Agreement or
in the Investor's Letter pursuant to which it becomes a Lessor or
such other office of such Lessor as such Lessor may from time to
time specify to the Lessee and the Agent.
Eurodollar Rate means, for any Rent Period, an interest
rate per annum (rounded upward to the nearest 1/100th of 1%)
equal to the rate for deposits in Dollars for the period
commencing on the first day of such Rent Period and ending on the
last day of such Rent Period which appears on Telerate Page 3750
as of 11:00 A.M., London time, two Business Days prior to the
beginning of such Rent Period. If at least two rates appear on
such Telerate Page for such Rent Period, the Eurodollar Rate
shall be the arithmetic mean of such rates. If the AEurodollar
Rate cannot be determined in accordance with the immediately
preceding sentences with respect to any Rent Period, the
Eurodollar Rate with respect to each day during such Rent Period
shall be determined by reference to such other publicly available
service for displaying eurodollar rates as may be agreed upon by
the Agent and the Lessee or, in the absence of such agreement,
the Eurodollar Rate shall instead be the rate per annum equal to
the arithmetic mean (rounded upwards to the nearest 1/100th of
1%) of the respective rates notified to the Agent by each of the
Reference Lessors as the rate at which such Reference Lessor is
offered Dollar deposits at or about 11:00 A.M., San Francisco
time, two Business Days prior to the beginning of such Rent
Period in the interbank eurodollar market where the eurodollar
and foreign currency and exchange operations in respect of its
Eurodollar Loans are then being conducted for delivery on the
first day of such Rent Period for the number of days comprised
therein and in an amount comparable to the Lease Balance.
Event of Default shall have the meaning provided in
Section 8.1 of the Lease.
Federal Funds Rate means, for any day, the rate set
forth in the weekly statistical release designated as H.15(519),
or any successor publication, published by the Federal Reserve
Bank of New York (including any such successor, AH.15(519)) for
such day opposite the caption AFederal Funds (Effective); or, if
for any relevant day such rate is not yet published in H.15(519),
the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 P.M.
Quotations for U.S. Government Securities, or any successor
publication, published by the Federal Reserve Bank of New York
(including any such successor, the Composite 3:30 P.M. Quotation)
for such day under the caption Federal Funds Effective Rate. If
on any relevant day the appropriate rate for such day is not yet
published in either H.15(519) or the Composite 3:30 P.M.
Quotations, the rate for such day will be the arithmetic mean of
the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 A.M. (New York City time) on that day by
each of three leading brokers of Federal funds transactions in
New York City selected by the Agent.
Fixed Rent shall mean, for each Payment Date during the
Base Term and each Renewal Term, that portion of the installment
of Rent payable on such Payment Date set forth under the heading
Fixed Rent Payment on Schedule II to the Lease.
Funding shall have the meaning assigned to that term in
Section 2.1 of the Participation Agreement.
GAAP shall mean generally accepted accounting
principles in the United States of America in effect from time to
time, applied on a consistent basis both as to classification of
items and amounts.
Guaranty means, with respect to any Person, all
obligations of such Person which in any manner directly or
indirectly guarantee or assure, or in effect guarantee or assure,
the payment or performance of any indebtedness, dividend or other
obligations of any other Person (the Aguaranteed obligations), or
assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including, without
limitation, any such obligations incurred through an agreement,
contingent or otherwise: (a) to purchase the guaranteed
obligations or any property constituting security therefor, (b)
to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other
balance sheet condition, or (c) to lease property or to purchase
any debt or equity securities or other property or services, but
excluding the endorsement for collection of checks received in
the ordinary course of business.
Hazardous Materials means (a) petroleum and petroleum
products, byproducts or breakdown products, radioactive
materials, asbestos-containing materials, polychlorinated
biphenyls and radon gas and (b) any other chemicals, materials or
substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental
Law.
Hedging Contract means any interest rate swap
agreement, currency swap agreement, commodities swap agreement,
equity option or put arrangement, cap, floor or collar agreement,
insurance relating to the respective risk protection or other
similar agreement or arrangement designed to provide such risk
protection.
Impositions shall mean all fees (including, but not
limited to, license, documentation, recording or registration
fees) and taxes (including but not limited to all income, sales,
use, lease, sublease, gross receipts, personal property,
occupational, value added or other taxes, levies, imposts,
duties, assessments, charges or withholdings of any nature
whatsoever), together with any penalties, fines or additions to
tax or interest thereon.
Indemnified Liabilities shall have the meaning
specified in Section 7.1 of the Participation Agreement.
Indemnitee(s) shall mean Agent in both its individual
and agent capacity, the Lessors, any Affiliate of any of them and
any assignee, officer, director, employee, attorney or agent of
any of them.
Index Reference shall have the meaning specified in
Schedule III to the Lease.
Insolvency Proceeding shall have the meaning specified
in Section 11.5(b) of the Participation Agreement.
Intellectual Property Collateral shall mean:
(a) all software programs (including both source
code, object code and all related applications and data
files), whether now owned, licensed or leased or hereafter
acquired by Lessee, designed for use on any computers and
electronic data processing hardware constituting part of and
not readily removable from the Vehicles and necessary for
the operation and maintenance of the Vehicles; provided that
with respect to any licensed or leased software program the
foregoing shall be included in Intellectual Property
Collateral only to the extent that a grant of a security
interest is not prohibited by the terms of the license or
lease;
(b) all firmware associated therewith;
(c) all documentation (including flow charts,
logic diagrams, manuals, guides and specifications) with
respect to such hardware, software and firmware described in
the preceding clauses (a) and (b); and
(d) all rights with respect to all of the
foregoing, including, without limitation, any and all
copyrights, licenses, options, warranties, service
contracts, program services, test rights, maintenance
rights, support rights, improvement rights, renewal rights
and indemnifications and any substitutions, replacements,
additions or model conversions of any of the foregoing.
Interest Rate means, with respect to any Rent Period,
the rate per annum equal to the sum of the Eurodollar Rate for
such Rent Period plus the Applicable Margin, provided that if the
Eurodollar Rate is not available for any reason as provided in
the Participation Agreement, then as provided therein the
Interest Rate shall be the rate per annum equal to the sum of the
Base Rate in effect from time to time during such Rent Period
plus the Applicable Margin.
International Registration Plan shall mean the
reciprocity agreement among various states, including Oregon and
Illinois, and Canadian provinces, pursuant to which fleets of
motor vehicles used in interstate commerce are registered and
licensed for operation within and among the signatory states and
provinces.
interstate or intrastate shall refer to interstate or
intrastate activity, as appropriate, within the United States.
Investment in any Person, means any loan or advance to
such Person, any purchase or other acquisition of any capital
stock or other ownership or profit interest, warrants, rights,
options, obligations or other securities of such Person, any
capital contribution to such Person or any other investment in
such Person, and any Guaranty in respect of obligations of such
Person.
Investor's Letter shall have the meaning provided in
Section 11.8(b) of the Participation Agreement.
Lease shall mean that certain Lease Intended as
Security, dated as of October 12, 1999 by and between Agent and
Lessee, substantially in the form of Exhibit A to the
Participation Agreement, as amended, modified or supplemented
from time to time in accordance with the Participation Agreement.
Lease Balance shall mean, as of any determination date,
the aggregate Purchase Price of all of the Vehicles, minus all
amounts of Fixed Rent actually paid to the date of determination
and all Reduction Amounts actually paid to the date of
determination.
Lease Term shall have the meaning provided in Section
2.1 of the Lease.
Lessee shall mean Consolidated Freightways Corporation
of Delaware, a Delaware corporation.
Lessee Purchase Option shall have the meaning provided
in Section 11.1(b) of the Lease.
Lessee Risk Amount shall mean, on any date, an amount
equal to the product of (i) the percentage (expressed as a
decimal) set forth opposite such date under the heading ALessee
Risk Percentage on Schedule II to the Lease times (ii) the
aggregate Purchase Price of all Vehicles.
Lessee Risk Percentage shall mean the applicable
percentage set forth under the heading Lessee Risk Percentage on
Schedule II to the Lease.
Lessor Liens shall mean, on any date, Liens or other
conveyances resulting from any act of or claim against Agent in
its individual capacity (or any Person claiming by, through or
under Agent in its individual capacity) or any Lessor, in each
case arising out of any event or condition not related to the
exercise of such Person's rights or the performance of its duties
expressly provided under any Operative Agreement.
Lessor Risk Amount shall mean, on any date, an amount
equal to the product of (i) the percentage (expressed as a
decimal) set forth opposite such date under the heading ALessor
Risk Percentage on Schedule II to the Lease times (ii) the
aggregate Purchase Price of all Vehicles.
Lessor Risk Percentage shall mean the applicable
percentage set forth under the heading Lessor Risk Percentage on
Schedule II to the Lease.
Lessors shall mean each of the Persons identified as a
Lessor in Schedule I to the Participation Agreement and those
Persons to whom the interests in the Lease and the Collateral
shall have been transferred or assigned from time to time in
accordance with the provisions of the Lease and the Participation
Agreement.
Lien shall mean: (a) any interest in property securing
an obligation owed to, or a claim by, a Person other than the
owner of such property, whether such interest is based on common
law, statute, or contract, and including without limitation, a
security interest, charge, claim, or lien arising from a
mortgage, deed of trust, encumbrance, pledge, hypothecation,
assignment, deposit arrangement, agreement, security agreement,
conditional sale or trust receipt or a lease, consignment or
bailment for security purposes (but excluding any lease,
consignment or bailment which is not for security purposes) and
(b) to the extent not included in clause (a), any reservation,
exception, encroachment, easement, right-of-way, covenant,
condition, restriction, lease or other title exception or
encumbrance affecting property.
Material Adverse Effect shall mean a material adverse
effect on (a) the business, condition (financial or otherwise),
operations, performance or properties of Lessee or the Parent and
its Subsidiaries taken as a whole, (b) the legality, validity,
binding effect, or enforceability of any Operative Agreement or
(c) the ability of Lessee to perform its obligations in any
material respect under any Operative Agreement.
Material Adverse Effect Cross-Acceleration shall mean
that a default has occurred under Section 8.1(j) of the Lease as
a result of the acceleration of Debt of the Lessee (or of an
Affiliate of the Lessee) to any Lessor or group of Lessors
because of the acceleration of that Debt either (i) as a result
of an Event of Default under Section 6.01(l) of the Credit
Agreement (without any other Event of Default under the Credit
Agreement) or (ii) under any similar provision of any other
agreement to which the Lessee or an Affiliate of the Lessee is a
party as obligor and any Lessor or group of Lessors is a party as
obligee or obligees (without any other default under such other
agreement).
Moodys means Moodys Investors Service, Inc.
Multiemployer Plan shall have the meaning assigned to
the term multiemployer plan in Section 3(37) of ERISA.
Net Cash Proceeds means, with respect to the sale or
issuance of any Equity Interests in any Person, the aggregate
amount of cash received from time to time (whether as initial
consideration or through payment of deferred consideration) by or
on behalf of such Person for its own account in connection with
any such transaction, after deducting therefrom (without
duplication) only reasonable and customary underwriting fees and
discounts, legal fees, accounting fees and other similar fees and
reasonable and customary printing expenses and, to the extent,
but only to the extent, that the amounts so deducted are actually
paid (i) at the time of the receipt of such cash or (ii) if
later, within 30 days after the consummation of such transaction
(based on such Person's reasonable estimate of the aggregate
amount of all such discounts, fees, costs and expenses therefor
at the time of the consummation of such transaction); provided,
however, that, notwithstanding any of the foregoing provisions of
this definition, (A) any and all amounts so deducted by any such
Person pursuant to this definition shall be properly attributable
to the transaction that are the subject thereof and shall be
payable solely to one or more Persons that are not Affiliates of
the Lessee or any Affiliate of the Lessee and (B) if, at the time
any of the discounts, fees, costs, or expenses, referred to in
this definition are actually paid or otherwise satisfied, the
reserve therefor or the amount otherwise retained by such Person
for the payment or satisfaction thereof exceeds the amount so
paid or otherwise satisfied, then the amount of such excess
reserve or retained amount, as the case may be, shall constitute
▇▇▇▇ ▇▇▇▇ Proceeds@ on and as of the date of such payment or
other satisfaction for all purposes of this definition.
Operative Agreement(s) shall mean the Participation
Agreement, the Lease, the Effective Date Notice, the Subleases,
any Assumption Agreement, each Certificate of Title and each UCC
financing statement filed or to be filed from time to time with
respect to the security interests created pursuant to the Lease.
Original States has the meaning provided in Section
5.1(b) of the Participation Agreement.
Outstanding Investment of any Lessor as of any date of
determination shall mean the aggregate amount funded by such
Lessor pursuant to Section 2.1 of the Participation Agreement,
reduced by all Fixed Rent paid to Agent for the account of such
Lessor and all Reduction Amounts paid to Agent for the account of
such Lessor.
Parent means Consolidated Freightways Corporation, a
Delaware corporation.
Part(s) shall mean all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment of
whatever nature that may from time to time be incorporated or
installed in or attached to any Vehicle.
Partial Casualty shall mean any loss, damage,
destruction, taking by eminent domain, loss of use or theft of
any portion of a Vehicle or the rendition of any Vehicle unfit
for normal use for any reason whatsoever in the business judgment
of Lessee, in each case which does not constitute a Casualty.
Participant(s) shall mean any or all of the parties to
the Participation Agreement.
Participation Agreement shall mean the Participation
Agreement, dated as of October 12, 1999, entered into between
Lessee, Agent and Lessors, as amended, modified or supplemented
from time to time in accordance with its terms.
Payment Date shall mean (i) the respective dates
specified on Schedule II to the Lease for Fixed Rent ; provided,
however, that if any such date is not a Business Day, then such
Payment Date shall occur on the next following Business Day and
(ii) the last day of each Rent Period for Variable Rent.
Payment Default shall mean an Event of Default
described in Section 8.1(a) of the Lease.
PBGC shall mean the Pension Benefit Guaranty
Corporation or any successor.
Pension Plan shall mean, with respect to any Person, a
pension plan as such term is defined in Section 3(2) of ERISA
which is subject to Title IV of ERISA and as to which such Person
may have any liability or contingent liability, including, but
not limited to, liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to
be a contributing sponsor under Section 4069 of ERISA.
Permitted Contest shall mean actions taken by a Person
to contest in good faith, by appropriate proceedings initiated
timely and diligently prosecuted, the legality, validity or
applicability to the Vehicles or any interest therein of any
Person of: (a) any law, regulation, rule, judgment, order, or
other legal provision or judicial or administrative requirements;
(b) any term or condition of, or any revocation or amendment of,
or other proceeding relating to, any authorization or other
consent, approval or other action by any Authority; or (c) any
Lien or Imposition; provided that the initiation and prosecution
of such contest would not: (i) result in, or materially increase
the risk of, the imposition of any criminal liability on any
Indemnitee; (ii) materially and adversely affect the security
interests created by the Lease or the right, title or interest of
Agent or any Lessor in or to any of the Vehicles or the right of
Agent to receive payment of Rent or the Lease Balance or any
interest therein; or (iii) materially and adversely affect the
fair market value, utility or remaining useful life of the
Vehicles or any interest therein or the continued economic
operation thereof; and provided further that in any event
adequate reserves in accordance with GAAP are maintained against
any adverse determination of such contest.
Permitted Lessor Liens shall mean Lessor Liens: (a) for
Taxes of Agent or a Lessor either not yet due or being challenged
by a Permitted Contest; (b) arising out of judgments or awards
against Agent or a Lessor with respect to which at the time an
appeal or proceeding for review is being prosecuted by a
Permitted Contest; and (c) arising out of Liens arising
voluntarily in the ordinary course of business of Agent or a
Lessor for amounts the payment of which is either not delinquent
or is being contested by a Permitted Contest.
Permitted Liens shall mean: (i) any rights in favor of
Lessors under the Operative Agreements and any rights of any
Persons entitled to use of the Collateral in accordance with
Section 5.2 of the Lease; (ii) any Lien, (including, without
limitation, Liens of landlords, carriers, warehousemen, mechanics
or materialmen) in favor of any Person securing payment of the
price of goods or services provided in the ordinary course of
business for amounts the payment of which is not overdue or is
being contested in good faith by appropriate proceedings promptly
initiated and diligently prosecuted, so long as such proceedings
do not involve any reasonable danger of sale, forfeiture or loss
of all or any material part of the Collateral and do not
materially adversely affect any Lien created in favor of Lessor
under the Lease; (iii) any Lessor Lien or any Lien arising out of
any breach by any Lessor of its obligations under the Operative
Agreements; (iv) any Lien for current taxes, assessments or other
governmental charges which are not delinquent or the validity of
which is being contested by a Permitted Contest; (v) attachments,
judgments and other similar Liens arising in connection with
court proceedings, provided the execution or other enforcement of
such Liens is effectively stayed and the claims secured hereby
are being contested in good faith and by appropriate proceedings;
(vi) reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases,
zoning and land use restrictions and other similar title
exceptions or encumbrances affecting real property that were not
incurred in connection with the incurrence of indebtedness, so
long as such Liens do not involve a reasonable danger of sale,
forfeiture or loss of all or any material portion of the
Collateral and do not materially adversely affect any Lien
created in favor of Lessor under the Lease; and (vii) any Lien
incurred in the ordinary course of business to secure performance
of statutory obligations.
Person shall mean an individual, partnership,
corporation (including a business trust), joint stock company,
trust, unincorporated association, joint venture, limited
liability company or other entity, or a government or any
political subdivision or agency thereof.
Plan shall mean an employee benefit plan as defined in
section 3(3) of ERISA.
Pricing Index shall have the meaning specified in
Schedule III to the Lease.
Purchase Price shall mean, for the Vehicles, the
purchase price provided in the Assignment Agreement.
Real Estate means all of the present and future
interests of any Person, as owner, lessee, or otherwise, in real
property, including, without limitation, any interest arising
from an option to purchase or lease any such real property.
Reduction Amount shall mean amounts paid by Lessee to
Agent, for the benefit of the Lessors, for the purchase of any
Vehicle pursuant to Section 6.1 or 6.2 of the Lease, provided
that Reduction Amounts shall not include any Rent, Charges or any
costs, expenses or taxes to be paid by Lessee in connection with
any such purchase, sale or transfer.
Reference Lessors means ABN AMRO Bank N.V. and Bank
One, NA or such other Lessors as may be agreed by the Lessee and
the Agent from time to time.
Related Person shall mean, with respect to any Person,
any trade or business (whether or not incorporated) which,
together with such Person, is under common control as described
in section 414 of the Code.
Renewal Option shall have the meaning provided in
Section 11.1(a) of the Lease.
Renewal Rent shall mean all payments of Fixed Rent and
Variable Rent due and payable by Lessee on each Payment Date
during the applicable Renewal Term.
Renewal Term shall have the meaning provided in Section
2.2 of the Lease.
Rent shall mean Base Rent and/or Renewal Rent, as the
context may require.
Rent Period shall mean the period beginning on the
first day of the Lease Term and ending on (but excluding) the
date which numerically corresponds to such date one month
thereafter and each consecutive one-month period thereafter, with
each such period ending on the date which numerically corresponds
to the date on which such period commenced; provided, however,
that (a) if such Rent Period would otherwise end on a day which
is not a Business Day, then such Rent Period would otherwise end
on a day which is not a Business Day, then such Rent Period shall
end on the next following Business Day, unless (solely for
purposes of determining Rent Periods in connection with
calculating Variable Rent on a Eurodollar Rate basis) such next
following Business Day is the first Business Day of a calendar
month, in which case such Rent Period shall end on the Business
Day immediately preceding such numerically corresponding day, and
(b) no Rent Period may end later than the last day of the Lease
Term.
Replaced Part shall have the meaning provided in
Section 5.4(a) of the Lease.
Replacement Part shall have the meaning provided in
Section 5.4(a) of the Lease.
Replacement Vehicle shall mean any Vehicle duly
substituted for another Vehicle in accordance with the provisions
of the Operative Agreements, as contemplated by Sections 6.1 and
6.2 of the Lease.
Reportable Event shall mean a Areportable event
described in Section 4043(b) of ERISA and the regulations
thereunder.
Required Lessors shall mean, at a particular time, the
holders of at least 51% of the Outstanding Investment.
Responsible Officer of a Person shall mean the chief
financial officer, treasurer or controller of the respective
Person.
S&P means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
Sale Option shall have the meaning provided in Section
11.1(c) of the Lease.
Schedule X shall mean this Schedule to the
Participation Agreement.
Securities Act shall mean the Securities Act of 1933,
as amended, or any successor Federal statute, and the rules and
regulations of the Securities and Exchange Commission promulgated
thereunder, all as the same shall be in effect from time to time.
Sublease shall mean a sublease of Vehicles entered into
in accordance with Section 5.2 of the Lease.
Sublessee shall mean the lessees or sublessee under any
Sublease.
Subsidiary of any Person means any corporation,
partnership, joint venture, limited liability company, trust or
estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest
in the capital or profits of such limited liability company,
partnership or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned
or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other
Subsidiaries; provided that the term Subsidiary shall not include
any Designated Entity that would otherwise have constituted a
Subsidiary hereunder.
Synthetic Lease means a lease and related documents
entered into in connection with the financing of equipment which
qualifies as an operating lease for accounting purposes but which
permits the lessee to be treated as the owner of the equipment
for tax purposes.
Tax Sharing Agreement means that certain Tax Sharing
Agreement dated December 2, 1996 between the Parent and CNF, as
it may be amended from time to time.
Termination Date shall mean the date on which the Lease
Term ends pursuant to (a) Article VIII of the Lease relating to
termination as a result of an Event of Default, (b) Article X of
the Lease relating to early termination, or (c) Section 11.1 of
the Lease relating to the exercise of Lessee Purchase Option or
Sale Option.
Termination Percentage shall mean the applicable
percentage set forth under the heading Termination Percentage on
Schedule II to the Lease.
Termination Value shall mean, at any date, an amount
equal to the product of (i) the percentage (expressed as a
decimal) set forth opposite such date under the heading
Termination Percentage on Schedule II to the Lease times (ii) the
aggregate Purchase Price of all Vehicles.
Total Commitment shall mean the total of the
Commitments of the Lessors set forth on Schedule I to the
Participation Agreement.
Transaction Costs shall mean, without duplication,
(i) a fee in respect of legal fees of Shearman &
Sterling reasonably incurred on behalf of Agent through
the Effective Date in connection with the negotiation,
execution and delivery of the Operative Agreements, and
the transactions contemplated thereby, and the
reasonable out-of-pocket expenses of Shearman &
Sterling in connection with the foregoing;
(ii) the fees and expenses of the Appraiser;
(iii) the Agent Fees; and
(iv) all costs of lien searches and
perfection of a first priority security interest in the
Vehicles.
UCC@ shall mean the Uniform Commercial Code, as in
effect from time to time in any applicable jurisdiction.
Variable Rent shall mean, with respect to each Rent
Period, an amount equal to interest accrued on the Lease Balance
outstanding during such period at the Interest Rate.
Vehicle shall mean each tractor listed on Schedule I to
the Lease, and any substitutions therefor, replacements thereof
and additions thereto from time to time pursuant to the Operative
Agreements.
Welfare Plan shall mean, with respect to any Person, a
welfare plan as such term is defined in Section 3(1) of ERISA to
which such Person or any Related Person to such Person may have
any liability or contingent liability.