Receivables Purchase Agreement - ABF Freight Systems Inc., Renaissance Asset Funding Corp., and Societe Generale
RECEIVABLES PURCHASE AGREEMENT
Dated as of March 2, 1994
ABF Freight System, Inc. a Delaware corporation (the "Seller"),
Renaissance Asset Funding Corp., a Delaware corporation (the "Issuer"), and
Societe Generale, a French banking corporation acting through its United
States branches or agencies, as agent (the "Agent") for the Investors, agree
as follows:
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I to this Agreement.
References in the Exhibits to "the Agreement" refer to this Agreement, as
amended, modified or supplemented from time to time.
The Seller has Receivables in which it is prepared to sell undivided
fractional ownership interests (referred to herein as Receivable Interests").
The Issuer is prepared to purchase such Receivable Interests on the terms set
forth herein. Accordingly, the parties agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.01. Purchase Facility. (a) On the terms and conditions
hereinafter set forth, the Issuer may, in its sole discretion, purchase
Receivable Interests from the Seller from time to time during the period from
the date hereof to the Facility Termination Date. Under no circumstances
shall the Issuer make any such purchase if after giving effect to such
purchase the aggregate outstanding Capital of Receivable Interests, together
with the aggregate outstanding "Capital" of "Receivable Interests" under the
Alternate Receivables Purchase Agreement, would exceed the Purchase Limit.
(b) The Seller may, upon at least five Business Days' notice to the
Agent, from time to time, reduce in part the unused portion of the Purchase
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Limit; provided that each partial reduction shall be in the amount of at
least $1,000,000 or an integral multiple thereof.
(c) The Agent, on behalf of the Investors which own Receivable
Interests, may have the proceeds of Collections attributable to such
Receivable Interests automatically reinvested pursuant to Section 1.04 in
additional undivided percentage interests in the Pool Receivables by making
an appropriate readjustment of such Receivable Interest until the Agent gives
the Seller the notice provided in Section 2(b)(iv) of Exhibit II to this
Agreement.
SECTION 1.02. Making Purchases. (a) Each purchase shall be made on
at least three Business Days' notice from the Seller to the Agent. Each such
notice of a purchase shall specify (i) the amount requested to be paid to the
Seller (such amount, which shall not be less than $1,000,000, being referred
to herein as the initial "Capital" of the Receivable Interest then being
purchased), (ii) the date of such purchase (which shall be a Business Day),
and (iii) the desired duration of the initial Fixed Period for such Receiv
able Interest. The Agent shall promptly thereafter notify the Seller whether
the Issuer has determined to make a purchase and, if so, whether all of the
terms specified by the Seller are acceptable to the Issuer.
(b) Prior to 12:00 noon New York City time on the date of each such
purchase of a Receivable Interest, the Issuer shall, upon satisfaction of the
applicable conditions set forth in Exhibit II hereto, make available to the
Seller in same day funds, at First National Bank of Fort Smith for the
account of ABF Freight System, Inc., an amount equal to the initial Capital
of such Receivable Interest.
(c) Effective on the date of each purchase pursuant to this Section
1.02 and each reinvestment pursuant to Section 1.04, the Seller hereby sells
and assigns to the Agent, for the benefit of the Investors, an undivided
percentage ownership interest, to the extent of the Receivable Interest then
being purchased, in each Pool Receivable then existing and in the Related
Security and Collections with respect thereto.
SECTION 1.03. Receivable Interest Computation. Each Receivable
Interest shall be initially computed on its date of purchase. Thereafter
until the Termination Date for such Receivable Interest, such Receivable
Interest shall be automatically recomputed (or deemed to be recomputed) on
each day other than a Liquidation Day. Any Receivable Interest, as computed
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(or deemed recomputed) as of the day immediately preceding the Termination
Date for such Receivable Interest, shall thereafter remain constant. Such
Receivable Interest shall become zero when Capital thereof and Yield thereon
shall have been paid in full, all the amounts owed by the Seller hereunder to
the Investors or the Agent are paid in full and the Collection Agent shall
have received the accrued Collection Agent Fee thereon.
SECTION 1.04. Settlement Procedures. (a) Collection of the Pool
Receivables shall be administered by a Collection Agent, in accordance with
the terms of this Agreement and the Collection Agent Agreement. The Seller
shall provide to the Collection Agent (if other than the Seller) on a timely
basis all information needed for such administration, including notice of the
occurrence of any Liquidation Day and current computations of each Receivable
Interest.
(b) The Collection Agent shall, on each day on which Collections of
Pool Receivables are received by it with respect to any Receivable Interest:
(i) set aside and hold in trust (and, at the request of the
Agent, segregate) for the Investors, out of the percentage of such
Collections represented by such Receivable Interest, an amount
equal to the Yield and Collection Agent Fee accrued through such
day for such Receivable Interest and not previously set aside;
(ii) if such day is not a Liquidation Day, reinvest with
the Seller, on behalf of the Investors, the remainder of such
percentage of Collections, to the extent representing a return of
Capital, by recomputation of such Receivable Interest pursuant to
Section 1.03;
(iii) if such day is a Liquidation Day, set aside and
hold in trust (and, at the request of the Agent, segregate) for the
Investors the entire remainder of such percentage of Collections;
provided that if amounts are set aside and held in trust on any
Liquidation Day and thereafter during such Settlement Period, the
conditions set forth in Paragraph 2 of Exhibit II are satisfied or
are waived by the Agent, such previously set aside amounts shall,
to the extent representing a return of Capital, be reinvested in
accordance with the preceding paragraph (ii) on the day of such
subsequent satisfaction or waiver of conditions; and
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(iv) during such times as amounts are required to be
reinvested in accordance with the foregoing paragraph (ii) or the
proviso to paragraph (iii), release to the Seller for its own
account any Collections in excess of such amounts and the amounts
that are required to be set aside pursuant to paragraph (i) above.
(c) The Collection Agent shall deposit into the Investor Account, on
the last day of each Settlement Period for a Receivable Interest, Collections
held for the Investors that relate to such Receivable Interest pursuant to
Section 1.04(b).
(d) Upon receipt of funds deposited into the Investor Account, the
Agent shall distribute them as follows:
(i) if such distribution occurs on a day that is not a
Liquidation Day, first to the Investors in payment in full of all
accrued Yield and then to the Collection Agent in payment in full
of all accrued Collection Agent Fee.
(ii) if such distribution occurs on a Liquidation Day,
first to the Investors in payment in full of all accrued Yield,
second to the Investors in reduction to zero of all Capital, third
to the Investors or the Agent in payment of any other amounts owed
by the Seller hereunder, and fourth to the Collection Agent in
payment in full of all accrued Collection Agent Fee.
After the Capital and Yield and Collection Agent Fee with respect to a
Receivable Interest, and any other amounts payable by the Seller to the
Investors or the Agent hereunder, have been paid in full, all additional
Collections with respect to such Receivable Interest shall be paid to the
Seller for its own account.
(e) For the purposes of this Section 1.04:
(i) if on any day the Outstanding Balance of any Pool
Receivable is reduced or adjusted as a result of any defective,
rejected, returned, repossessed or foreclosed merchandise or
services, or any cash discount or other adjustment made by the
Seller, or any setoff or dispute between the Seller and an Obligor
(including but not limited to any reduction or setoff attributed to
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Receivables generated through a shipment routing involving an
interline carrier), the Seller shall be deemed to have received on
such day a Collection of such Pool Receivable in the amount of such
reduction or adjustment;
(ii) if on any day any of the representations or
warranties in paragraph (h) of Exhibit III is no longer true with
respect to any Pool Receivable, the Seller shall be deemed to have
received on such day a Collection of such Pool Receivable in full;
(iii) except as provided in paragraph (i) or (ii) of this
Section 1.04(e), or as otherwise required by applicable law or the
relevant Contract, all Collections received from an Obligor of any
Receivables shall be applied to the Receivables of such Obligor in
the order of the age of such Receivables, starting with the oldest
such Receivable, unless such Obligor designates its payment for
application to specific Receivables; and
(iv) if and to the extent the Agent or the Investors shall
be required for any reason to pay over to an Obligor any amount
received on its behalf hereunder, such amount shall be deemed not
to have been so received but rather to have been retained by the
Seller and, accordingly, the Agent or the Investors, as the case
may be, shall have a claim against the Seller for such amount,
payable when and to the extent that any distribution from or on
behalf of such Obligor is made in respect thereof.
SECTION 1.05. Fees. The Seller shall pay to the Agent certain fees in
the amounts and on the dates set forth in a separate fee agreement of even
date between the Seller and the Agent.
SECTION 1.06. Payments and Computations, Etc. (a) All amounts to be
paid or deposited by the Seller or the Collection Agent hereunder or under
the Collection Agent Agreement shall be paid or deposited no later than 11:00
A.M. (New York City time) on the day when due in same day funds to the
Investor Account.
(b) The Seller shall, to the extent permitted by law, pay interest on
any amount not paid or deposited by the Seller (whether as Collection Agent
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or otherwise) when due hereunder, at an interest rate per annum equal to 2%
per annum above the Alternate Base Rate, payable on demand.
(c) All computations of interest under subsection (b) above and all
computations of Yield, fees, and other amounts hereunder shall be made on the
basis of a year of 360 days for the actual number of days elapsed. Whenever
any payment or deposit to be made hereunder shall be due on a day other than
a Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation
of such payment or deposit.
SECTION 1.07. Dividing or Combining Receivable Interests. Either the
Seller, on notice to the Agent received at least three Business Days prior to
the last day of any Fixed Period, or the Agent, on notice to the Seller on or
prior to the last day of any Fixed Period, may either (i) divide any
Receivable Interest into two or more Receivable Interests having aggregate
Capital equal to the Capital of such divided Receivable Interest, or (ii) com
bine any two or more Receivable Interests originating on such last day or
having Fixed Periods ending on such last day into a single Receivable
Interest having Capital equal to the aggregate of the Capital of such
Receivable Interests.
SECTION 1.08. Increased Costs. (a) If Societe Generale, the Agent, an
Investor, any entity which enters into a commitment to purchase Receivable
Interests or interests therein, or any of their respective Affiliates (each
an "Affected Person") determines that compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) affects or would affect
the amount of capital required or expected to be maintained by such Affected
Person and such Affected Person determines that the amount of such capital is
increased by or based upon the existence of any commitment to make purchases
of or otherwise to maintain the investment in Pool Receivables or interests
therein related to this Agreement or to the funding thereof or any related
liquidity facility or credit enhancement facility (or any participation
therein) and other commitments of the same type, then, upon demand by such
Affected Person (with a copy to the Agent), the Seller shall immediately pay
to the Agent, for the account of such Affected Person (as a third-party
beneficiary), from time to time as specified by such Affected Person,
additional amounts sufficient to compensate such Affected Person in the light
of such circumstances, to the extent that such Affected Person reasonably
determines such increase in capital to be allocable to the existence of any
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of such commitments. A certificate as to such amounts submitted to the
Seller and the Agent by such Affected Person shall be conclusive and binding
for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
referred to in Section 1.09) in or in the interpretation of any law or
regulation or (ii) compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to an Investor of agreeing to
purchase or purchasing, or maintaining the ownership of Receivable Interests
in respect of which Yield is computed by reference to the Eurodollar Rate,
then, upon demand by such Investor (with a copy to the Agent), the Seller
shall immediately pay to the Agent, for the account of such Investor (as a
third-party beneficiary), from time to time as specified, additional amounts
sufficient to compensate such Investor for such increased costs. A
certificate as to such amounts submitted to the Seller and the Agent by such
Investor shall be conclusive and binding for all purposes, absent manifest
error.
SECTION 1.09. Additional Yield on Receivable Interests Bearing a
Eurodollar Rate. The Seller shall pay to each Investor, so long as such
Investor shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional Yield
on the unpaid Capital of each Receivable Interest of such Investor during
each Fixed Period in respect of which Yield is computed by reference to the
Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all
times during such Fixed Period to the remainder obtained by subtracting (i)
the Eurodollar Rate for such Fixed Period from (ii) the rate obtained by
dividing such Eurodollar Rate referred to in clause (i) above by that
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such
Investor for such Fixed Period, payable on each date on which Yield is
payable on such Receivable Interest. Such additional Yield shall be
determined by such Investor and notified to the Seller through the Agent
within 30 days after any Yield payment is made with respect to which such
additional Yield is requested. A certificate as to such additional Yield
submitted to the Seller and the Agent by such Investor shall be conclusive
and binding for all purposes, absent manifest error.
SECTION 1.10. Requirements of Law. In the event that any requirement
of law or any change therein or in the interpretation or application thereof
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by the relevant governmental authority to an Investor after the date hereof
or compliance by an Investor with any request or directive (whether or not
having the force of law) from any central bank or other governmental
authority:
(i) does or shall subject such Investor to any tax of any kind
whatsoever with respect to this Agreement, any increase in the amount of
Receivable Interests owned by such Investor, or change the basis of
taxation of payments to such Investor on account of Collections, Yield
or any other amounts payable hereunder (excluding taxes imposed on the
income of such Investor, and franchise taxes imposed on such Investor,
by the jurisdiction under the laws of which such Investor is organized
or a political subdivision thereof);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against
assets held by, or deposits or other liabilities in or for the account
of, purchases, advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Investor which are not
otherwise included in the determination of the Eurodollar Rate or the
Alternate Base Rate hereunder; or
(iii) does or shall impose on such Investor any other condition;
and the result of any of the foregoing is to increase the cost to such
Investor of maintaining a Receivable Interest funded by reference to the
Eurodollar Rate or the Alternate Base Rate or to reduce any amount receivable
hereunder funded by reference to the Eurodollar Rate or the Alternate Base
Rate, then, in any such case, the Seller shall pay such Investor, upon its
demand, any additional amounts necessary to compensate such Investor for
such additional cost or reduced amount receivable with regard to such
Investor's Receivable Interest funded by reference to the Eurodollar Rate or
the Alternate Base Rate. All such amounts shall be payable as incurred. A
certificate from such Investor or the Agent, as the case may be, to the
Seller certifying, in reasonably specific detail, the basis for, calculation
of, and amount of such additional costs shall be conclusive in the absence of
manifest error.
SECTION 1.11. Inability to Determine Eurodollar Rate. In the event
that the Agent shall have determined prior to the first day of any Fixed
Period (which determination shall be conclusive and binding upon the parties
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hereto) by reason of circumstances affecting the interbank Eurodollar market,
either (a) dollar deposits in the relevant amounts and for the relevant Fixed
Period are not available, (b) adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Fixed Period or (c) the Eurodollar
Rate determined pursuant hereto does not accurately reflect the cost to the
Investors (as conclusively determined by the Agent) of maintaining Receivable
Interests during such Fixed Period, the Agent shall promptly give telephonic
notice of such determination, confirmed in writing, to the Seller prior to
the first day of such Fixed Period. If such notice is given, the Assignee
Rate applicable to the relevant Receivable Interest shall be determined
without reference to the Eurodollar Rate.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS;
EVENTS OF TERMINATION
SECTION 2.01. Representations and Warranties; Covenants. The Seller
hereby makes the representations and warranties, and hereby agrees to perform
and observe the covenants, set forth in Exhibits III and IV, respectively,
hereto.
SECTION 2.02. Events of Termination. If any of the Events of
Termination set forth in Exhibit V hereto shall occur and be continuing, the
Agent may, by notice to the Seller, take either or both of the following
actions: (x) declare the Facility Termination Date to have occurred (in
which case the Facility Termination Date shall be deemed to have occurred),
and (y) without limiting any right under the Collection Agent Agreement to
replace the Collection Agent, designate another Person to succeed the Seller
as the Collection Agent; provided that, automatically upon the occurrence of
any event (without any requirement for the passage of time or the giving of
notice) described in subsection (g) of Exhibit V, the Facility Termination
Date shall occur. Upon any such declaration or designation or upon any such
automatic termination, the Investors and the Agent shall have, in addition to
the rights and remedies which they may have under this Agreement, all other
rights and remedies provided after default under the UCC and under other
applicable law, which rights and remedies shall be cumulative.
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ARTICLE III
INDEMNIFICATION
SECTION 3.01. Indemnities by the Seller. Without limiting any other
rights that the Agent or the Investors or any of their respective Affiliates
or agents (each, an "Indemnified Party") may have hereunder or under
applicable law, the Seller hereby agrees to indemnify each Indemnified Party
from and against any and all claims, losses and liabilities (including
reasonable attorneys' fees) (all of the foregoing being collectively referred
to as "Indemnified Amounts") arising out of or resulting from this Agreement
or the use of proceeds of purchases or reinvestments or the ownership of
Receivable Interests or in respect of any Receivable or any Contract,
excluding, however, (a) Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of such Indemnified Party,
(b) recourse (except as otherwise specifically provided in this Agreement)
for uncollectible Receivables or (c) any income taxes or franchise taxes
imposed on such Indemnified Party by the jurisdiction under the laws of which
such Indemnified Party is organized or any political subdivision thereof,
arising out of or as a result of this Agreement or the ownership of
Receivable Interests or in respect of any Receivable or any Contract.
Without limiting or being limited by the foregoing, the Seller shall pay on
demand to each Indemnified Party any and all amounts necessary to indemnify
such Indemnified Party from and against any and all Indemnified Amounts
relating to or resulting from any of the following:
(i) the creation of an undivided percentage ownership
interest in any Receivable which purports to be part of the Net
Receivables Pool Balance but which is not at the date of the
creation of such interest an Eligible Receivable or which
thereafter ceases to be an Eligible Receivable;
(ii) reliance on any representation or warranty or
statement made or deemed made by the Seller (or any of its
officers) under or in connection with this Agreement which shall
have been incorrect in any material respect when made;
(iii) the failure by the Seller to comply with any
applicable law, rule or regulation with respect to any Pool
Receivable or the related Contract; or the failure of any Pool
Receivable or the related Contract to conform to any such
applicable law, rule or regulation;
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(iv) the failure to vest in the Investors a perfected
undivided percentage ownership interest, to the extent of each
Receivable Interest, in the Receivables in, or purporting to be in,
the Receivables Pool and the Related Security and Collections in
respect thereof, free and clear of any Adverse Claim;
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other applicable
laws with respect to any Receivables in, or purporting to be in,
the Receivables Pool and the Related Security and Collections in
respect thereof, whether at the time of any purchase or
reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense based on
such Receivable or the related Contract not being a legal, valid
and binding obligation of such Obligor enforceable against it in
accordance with its terms, or any other claim resulting from the
sale of the merchandise or services related to such Receivable or
the furnishing or failure to furnish such merchandise or services
or relating to collection activities with respect to such
Receivable (if such collection activities were performed by the
Seller or any of its Affiliates acting as Collection Agent);
(vii) any failure of the Seller, as Collection Agent or
otherwise, to perform its duties or obligations in accordance with
the provisions hereof or of the Collection Agent Agreement or to
perform its duties or obligations under the Contracts;
(viii) any products liability or other claim arising out of
or in connection with merchandise, insurance or services which are
the subject of any Contract;
(ix) the commingling of Collections of Pool Receivables
at any time with other funds;
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(x) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of purchases or reinvestments
or the ownership of Receivable Interests or in respect of any
Receivable, Related Security or Contract;
(xi) any theft of payments with respect to Pool Receivables
resulting from the Seller's established payment remittance
procedures;
(xii) any failure of payments with respect to Pool
Receivables to be deposited into the Collection Account within
three Business Days after receipt by the Seller; or
(xiii) any claim relating to a Receivable which is generated
through a shipment routing involving an interline carrier.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or consent to any departure by the Seller therefrom shall
be effective unless in a writing signed by the Agent, as agent for the
Investors, and, in the case of any amendment, by the Seller, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of the
Investors or the Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. No material amendment of this
Agreement shall be effective unless a written statement is obtained from Duff
& Phelps Credit Rating Co., Fitch Investors Service, Inc. and Standard &
Poor's Corporation that the rating of the Issuer's commercial paper notes
will not be downgraded or withdrawn solely as a result of such amendment.
SECTION 4.02. Notices, Etc. (a) All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and faxed or delivered, to each party
hereto, at its address set forth under its name on the signature pages hereof
or at such other address as shall be designated by such party in a written
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notice to the other parties hereto. Notices and communications by facsimile
shall be effective when sent (and shall be followed by hard copy sent by
regular mail), and notices and communications sent by other means shall be
effective when received.
(b) The Agent shall furnish Duff & Phelps Credit Rating Co., Fitch
Investors Service, Inc. and Standard & Poor's Corporation with notice of the
occurrence of a Liquidation Day, notice of waiver of the conditions set forth
in Paragraph 2 of Exhibit II, notice of the occurrence of any Event of
Termination under this Agreement, notice of any waiver of an Event of
Termination under this Agreement, notice of any assignment pursuant to
Section 4.03 of this Agreement and notice of an extension of the Facility
Termination Date pursuant to Section 4.09 of this Agreement.
SECTION 4.03. Assignability. (a) This Agreement and the Investors'
rights and obligations herein (including ownership of each Receivable
Interest) shall be assignable by the Investors and their successors and
assigns. Each assignor of a Receivable Interest or any interest therein
shall notify the Agent and the Seller of any such assignment. Each assignor
of a Receivable Interest may, in connection with the assignment or
participation, disclose to the assignee or participant any information,
relating to the Seller or the Receivables, furnished to such assignor by or
on behalf of the Seller or by the Agent.
(b) This Agreement and the rights and obligations of the Agent herein
shall be assignable by the Agent and its successors and assigns.
(c) The Seller may not assign its rights or obligations hereunder or
any interest herein without the prior written consent of the Agent.
(d) Without limiting any other rights that may be available under
applicable law, the rights of the Investors may be enforced through them or
by their agents.
SECTION 4.04. Costs, Expenses and Taxes. (a) In addition to the
rights of indemnification granted under Section 3.01 hereof, the Seller
agrees to pay on demand all costs and expenses in connection with the
preparation, execution, delivery and administration (including periodic
auditing of Receivables) of this Agreement, any asset purchase agreement or
similar agreement relating to the sale or transfer of interests in Receivable
Interests and the other documents and agreements to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket
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expenses of counsel for the Agent, the Issuer and their respective agents
with respect thereto and with respect to advising the Agent, the Issuer and
their respective agents as to their rights and remedies under this Agreement,
and all costs and expenses, if any (including reasonable counsel fees and ex
penses), of the Agent, the Investors and their respective agents, in
connection with the enforcement of this Agreement and the other documents and
agreements to be delivered hereunder.
(b) In addition, the Seller shall pay (i) any and all commissions of
placement agents and commercial paper dealers in respect of commercial paper
notes issued to fund the purchase or maintenance of any Receivable Interest,
(ii) any and all costs and expenses of any issuing and paying agent or other
Person responsible for the administration of the Issuer's commercial paper
program in connection with the preparation, completion, issuance, delivery or
payment of commercial paper notes issued to fund the purchase or maintenance
of any Receivable Interest, and (iii) any and all stamp and other taxes and
fees payable in connection with the execution, delivery, filing and recording
of this Agreement or the other documents or agreements to be delivered
hereunder, and agrees to save each Indemnified Party harmless from and
against any liabilities with respect to or resulting from any delay in paying
or omission to pay such taxes and fees.
(c) The Seller also shall pay on demand all other costs, expenses and
taxes (excluding income taxes) incurred by the Issuer or any stockholder or
agent of the Issuer ("Other Costs"), including the cost of administering the
operations of the Issuer, the cost of auditing the Issuer's books by
certified public accountants, the cost of rating the Issuer's commercial
paper by independent financial rating agencies, the taxes (excluding income
taxes) resulting from the Issuer's operations, and the reasonable fees and
out-of-pocket expenses of counsel for any stockholder or agent of the Issuer
with respect to advising as to rights and remedies under this Agreement, the
enforcement of this Agreement or advising as to matters relating to the
Issuer's operations; provided that the Seller and any other Persons who from
time to time sell receivables or interests therein to the Issuer ("Other
Sellers") each shall be liable for such Other Costs ratably in accordance
with the usage under their respective facilities; and provided further that
if such Other Costs are attributable to the Seller and not attributable to
any Other Seller, the Seller shall be solely liable for such Other Costs.
SECTION 4.05. No Proceedings. Each of the Seller, the Agent, each
Investor, each assignee of a Receivable Interest or any interest therein and
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each entity which enters into a commitment to purchase Receivable Interests
or interests therein hereby agrees that it will not institute against, or
join any other person in instituting against, the Issuer any proceeding of
the type referred to in paragraph (g) of Exhibit V so long as any commercial
paper issued by the Issuer shall be outstanding or there shall not have
elapsed one year plus one day since the last day on which any such commercial
paper shall have been outstanding.
SECTION 4.06. Confidentiality. Unless otherwise required by applicable
law, the Seller, the Agent and the Investors agree to maintain the
confidentiality of this Agreement (and all drafts thereof) in communications
with third parties and otherwise; provided that this Agreement (a) may be
disclosed to third parties to the extent such disclosure is made pursuant to
a written agreement of confidentiality in form and substance reasonably
satisfactory to the parties hereto, (b) may be disclosed to the parties'
legal counsel and auditors if they agree to hold it confidential and (c) may
be filed with the Securities and Exchange Commission as an Exhibit to the
Parent's annual report on Form 10-K.
SECTION 4.07. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the state of New York (without
giving effect to the conflict of laws principles thereof), except to the
extent that the perfection of the interests of the investors in the
receivables or remedies hereunder, in respect thereof, are governed by the
laws of a jurisdiction other than the state of New York.
SECTION 4.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement.
SECTION 4.09. Termination. The then current date set forth in clause
(a) of the definition of Facility Termination Date may be extended for
additional one year periods upon 30 days prior written notice from the Seller
to the Agent. The provisions of Sections 1.08, 1.09, 1.10, 3.01, 4.04, 4.05
and 4.06 shall survive any termination of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER: ABF FREIGHT SYSTEM, INC.
By: _______________________________
Name:
Title:
1000 South 21st Street
Fort Smith, Arkansas 72901
Attention: General Counsel
Tel. No. (501) 785-6130
Facsimile No. (501) 785-6124
<PAGE>
ISSUER: RENAISSANCE ASSET FUNDING CORP.
By: ______________________________
Name:
Title:
c/o Merrill Lynch Money Markets Inc.
Merrill Lynch World Headquarters
World Financial Center--South Tower
225 Liberty Street, 8th Floor
New York, New York 10080-6108
Attention: Gary Carlin
Tel. No. (212) 236-7200
Facsimile No. (212) 236-7584
<PAGE>
AGENT: SOCIETE GENERALE
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
181 West Madison Street, Suite 3400
Chicago, IL 60602
Attention: Migdalia Lagoa
Tel. No. (312) 578-5058
Facsimile No. (312) 578-5099
<PAGE>
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits), the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Adverse Claim" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control
with such Person or is a director or officer of such Person.
"Affiliated Obligor" means any Obligor that is an Affiliate of another
Obligor.
"Aged Receivable Ratio" means, on any date, the average of the ratios
(expressed as a percentage) computed, as of the last day of each of the three
calendar months ended immediately preceding such date or, if such date is the
last day of a calendar month, the three calendar months ended on such last
day, by dividing (i) the aggregate Outstanding Balance of all Pool
Receivables that were Defaulted Receivables on each such day or that would
have been Defaulted Receivables on each such day had they not been written
off the books of the Seller during each such month, reduced by the
Outstanding Balance of all such Pool Receivables that were Defaulted
Receivables on each such day and that remain unpaid for 121 or more days from
the original billing date for such payment, but that have not yet been
written off the Seller's books as uncollectible by (ii) the "Total Revenue"
as defined in the Seller's Monthly Revenue Adjustment Report for the one
month period ending three calendar months prior to the date of the
computation for each such calendar month.
"Alternate Base Rate" means a fluctuating interest rate per annum as
shall be in effect from time to time, which rate shall be at all times equal
to the higher of:
<PAGE>
(a) the rate of interest announced publicly by Societe
Generale in New York from time to time as its prime rate; and
(b) 1% per annum above the Federal Funds Rate.
"Alternate Receivables Purchase Agreement" means the Alternate
Receivables Purchase Agreement, dated as of the date hereof, among the
Seller, Societe Generale and certain other banks, and the Agent, as the same
may, from time to time, be amended, modified or supplemented.
"Assignee Rate" for any Fixed Period for any Receivable Interest means
an interest rate per annum equal to 1 1/2% per annum above the Eurodollar
Rate for such Fixed Period; provided, however, that in the case of
(i) any Fixed Period on or prior to the first day of which an
Investor shall have notified the Agent that the introduction of or
any change in or in the interpretation of any law or regulation
makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Investor to fund
such Receivable Interest at the Assignee Rate set forth above (and
such Investor shall not have subsequently notified the Agent that
such circumstances no longer exist),
(ii) any Fixed Period of one to (and including) 29 days,
(iii) any Fixed Period as to which the Agent does not
receive notice, by no later than 12:00 noon (New York City time) on
the third Business Day preceding the first day of such Fixed
Period, that the related Receivable Interest will not be funded by
issuance of commercial paper, or
(iv) any Fixed Period for a Receivable Interest the
Capital of which allocated to the Investors is less than $500,000,
the "Assignee Rate" for each such Fixed Period shall be an interest rate per
annum equal to the Alternate Base Rate in effect on the first day of such
Fixed Period; provided, further, however, that in the case of any Fixed
Period during which an Event of Termination shall exist, the "Assignee Rate"
for such Fixed Period shall be an interest rate per annum equal to 2% per
annum above the Alternate Base Rate in effect on the first day of such Fixed
Period.
<PAGE>
"Average Maturity" means at any time that period of days equal to the
calendar days outstanding of the Pool Receivables calculated by the
Collection Agent in the then most recent Seller Report; provided if the Agent
shall disagree with any such calculation, the Agent may recalculate such
Average Maturity.
"Business Day" means any day on which (i) banks are not authorized or
required to close in New York City and (ii) if this definition of "Business
Day" is utilized in connection with the Eurodollar Rate, dealings are carried
out in the London interbank market.
"Capital" of any Receivable Interest means the original amount paid to
the Seller for such Receivable Interest at the time of its purchase by the
Issuer pursuant to the Agreement, or such amount divided or combined in
accordance with Section 1.07, in each case reduced from time to time by
Collections distributed on account of such Capital pursuant to Section
1.04(d); provided that if such Capital shall have been reduced by any
distribution and thereafter all or a portion of such distribution is
rescinded or must otherwise be returned for any reason, such Capital shall be
increased by the amount of such rescinded or returned distribution, as though
it had not been made.
"Collection Account" means the account (account number 1002155)
maintained at First National Bank of Fort Smith into which will be deposited
Collections of Pool Receivables.
"Collection Account Agreement" means an agreement, in substantially the
form of Annex B, between the Seller and First National Bank of Fort Smith.
"Collection Agent" means at any time the Person then authorized
pursuant to the Collection Agent Agreement to administer and collect Pool
Receivables.
"Collection Agent Agreement" means an agreement between the Seller and
the Agent (and, if the Seller does not act as Collection Agent, consented to
by the Collection Agent), in form and substance satisfactory to them,
governing the appointment and responsibilities of the Collection Agent as to
administration and collection of the Pool Receivables, and requiring the
Collection Agent to perform its obligations set forth in the Agreement.
<PAGE>
"Collection Agent Fee" shall mean the collection agent fee referred to
in the Collection Agent Agreement.
"Collection Agent Fee Reserve" for any Receivable Interest at any time
means the sum of (i) the unpaid Collection Agent Fee relating to such
Receivable Interest accrued to such time, plus (ii) an amount equal to (a)
the aggregate Pool Receivables relating to such Receivable Interest on such
date multiplied by (b) the product of (x) the percentage per annum at which
the Collection Agent Fee is accruing on such date and (y) a fraction having
the sum of the Average Maturity plus the Collection Delay Period (each as in
effect at such date) as its numerator and 360 as its denominator.
"Collection Delay Period" means 10 days or such other number of days as
the Agent may select upon three Business Days' notice to the Seller.
"Collections" means, with respect to any Receivable, (a) all funds
which are received by the Seller or the Collection Agent in payment of any
amounts owed in respect of such Receivable (including, without limitation,
purchase price, finance charges, interest and all other charges), or applied
to amounts owed in respect of such Receivable (including, without limitation,
insurance payments and net proceeds of the sale or other disposition of
repossessed goods or other collateral or property of the related Obligor or
any other party directly or indirectly liable for the payment of such
Receivable and available to be applied thereon), (b) all Collections deemed
to have been received pursuant to Section 1.04 and (c) all other proceeds of
such Receivable.
"Contract" means an agreement between the Seller and any Obligor,
pursuant to or under which such Obligor shall be obligated to make payments
to the Seller for services from time to time.
"Credit and Collection Policy" means those receivables credit and
collection policies and practices of the Seller in effect on the date of the
Agreement and described in Schedule I hereto, as modified in compliance with
the Agreement.
"Debt" means (without duplication), at any time and with respect to any
Person, (i) indebtedness of such Person for borrowed money (whether by loan
or the issuance and sale of debt securities) or for the deferred purchase
price of property and services purchased (other than amounts constituting
trade
<PAGE>
payables or bank drafts (payable within 120 days) arising in the ordinary
course), (ii) indebtedness of others which such Person has directly or
indirectly assumed or guaranteed or otherwise provided credit support
therefor; (iii) indebtedness of others secured by a lien on assets of such
Person, whether or not such Person shall have assumed such indebtedness;
(iv) obligations of such Person in respect of letters of credit, acceptance
facilities, or drafts or similar instruments issued or accepted by banks and
other financial institutions for the account of such Person (other than trade
payables or bank drafts (payable within 120 days) arising in the ordinary
course); (v) obligations of such Person under capital leases; and (vi)
liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"Defaulted Receivable" means a Receivable:
(i) as to which any payment, or part thereof, remains unpaid
for 91 days from the original billing date for such payment;
(ii) as to which the Obligor thereof or any other Person
obligated thereon or owning any Related Security in respect thereof
has taken any action, or suffered any event to occur, of the type
described in paragraph (g) of Exhibit V; or
(iii) which, consistent with the Credit and Collection
Policy, would be written off the Seller's books as uncollectible.
"Delinquency Ratio" means on any date, the average of the ratios
(expressed as a percentage) computed as of the last day of each of the three
calendar months ended immediately preceding such date by dividing (i) the
aggregate Outstanding Balance of all Pool Receivables that were Delinquent
Receivables on such day by (ii) the Outstanding Balance of Pool Receivables
reduced by the Outstanding Balance of such Pool Receivables that have become
Defaulted Receivables.
"Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and:
(i) as to which any payment, or part thereof, remains unpaid
for 61 days from the original billing date for such payment; or
<PAGE>
(ii) which, consistent with the Credit and Collection
Policy, would be classified as delinquent by the Seller.
"Designated Obligor" means, at any time, each Obligor; provided,
however, that any Obligor shall cease to be a Designated Obligor upon notice
by the Agent to the Seller.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which is a United States resident, is not
an Affiliate of any of the parties hereto, and is not a government
or a governmental subdivision or agency;
(ii) the Obligor of which, at the time of the initial
creation of an interest therein under the Agreement, is a
Designated Obligor and is not the Obligor of any Defaulted
Receivables which in the aggregate constitute 25% or more of the
aggregate Outstanding Balance of all Receivables of such Obligor;
(iii) which is not a Defaulted Receivable or which, at the
time of the initial creation of an interest therein under the
Agreement, is not a Delinquent Receivable; or
(iv) which, according to the Contract related thereto, is
required to be paid in full within 30 days of the original billing
date therefor;
(v) which is an "account," or "general intangible" within
the meaning of the UCC of the applicable jurisdictions governing
the perfection of the interest created by a Receivable Interest;
(vi) which is denominated and payable only in United
States dollars in the United States;
(vii) which is generated in the ordinary course of the
Seller's business;
(viii) which is not generated through a shipment routing
involving an interline carrier;
<PAGE>
(ix) which arises under a Contract (a) which is
substantially in the form of the form of contract or the form of
invoice (in the case of any open account agreement) previously
approved by the Agent; (b) which, together with such Receivable, is
in full force and effect and constitutes the legal, valid and
binding obligation of the Obligor of such Receivable to pay a
determinable amount; (c) the terms of which do not require the
consent of the Obligor to sell or assign; and (d) which is not
subject to any dispute, offset, counterclaim or defense whatsoever
(except the potential discharge in bankruptcy of such Obligor);
(x) which, together with the Contract related thereto,
does not contravene in any material respect any laws, rules or
regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to usury, consumer protection,
truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and
with respect to which no party to the Contract related thereto is
in violation of any such law, rule or regulation in any material
respect;
(xi) which (a) satisfies all applicable requirements of
the Credit and Collection Policy and (b) complies with such other
criteria and requirements (other than those relating to the
collectibility of such Receivable) as the Agent may from time to
time specify to the Seller upon 30 days' notice; and
(xii) as to which, at or prior to the time of the initial
creation of an interest therein under the Agreement, the Agent has
not notified the Seller that such Receivable (or class of
Receivables) is no longer acceptable for purchase by the Issuer
hereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
<PAGE>
"Eurodollar Rate" means, for any Fixed Period, an interest rate per
annum (expressed as a decimal and rounded upwards, if necessary, to the
nearest one hundredth of a percentage point) equal to the offered rate per
annum for deposits in U.S. dollars in a principal amount of not less than
$1,000,000 for such Fixed Period as of 11:00 A.M., London time, two Business
Days before the first day of such Fixed Period, which appears on the display
designated as "Page 3750" on the Telerate Service (or such other page as may
replace "Page 3750" on that service for the purpose of displaying London
interbank offered rates of major banks) (the "Telerate LIBO Page"); provided
that if on any Business Day on which the Eurodollar Rate is to be determined,
no offered rate appears on the Telerate LIBO Page, the Agent will request the
principal London office of each of Societe Generale and Chemical Bank (the
"Eurodollar Reference Banks"), to provide the Agent with its quotation at
approximately 11:00 A.M., London time, on such date of the rate per annum it
offers to prime banks in the London interbank market for deposits in U.S.
dollars for the requested Fixed Period in an amount substantially equal to
the Capital associated with such Fixed Period and, if these two quotations
are provided, the Eurodollar Rate shall be equal to the average (rounded
upwards, if necessary, to the nearest one hundredth of a percentage point) of
such rates; if the Eurodollar Reference Banks do not furnish timely
information to the Agent for determining the Eurodollar Rate, then the
Eurodollar Rate shall be considered to be the Alternate Base Rate for such
Fixed Period.
"Eurodollar Rate Reserve Percentage" of any Investor for any Fixed
Period in respect of which Yield is computed by reference to the Eurodollar
Rate means the reserve percentage applicable two Business Days before the
first day of such Fixed Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) (or
if more than one such percentage shall be applicable, the daily average of
such percentages for those days in such Fixed Period during which any such
percentage shall be so applicable) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Investor with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurocurrency Liabilities is
determined) having a term equal to such Fixed Period.
"Event of Termination" has the meaning specified in Exhibit V.
<PAGE>
"Facility Termination Date" means the earliest of (a) March 2, 1997 or
(b) the date determined pursuant to Section 2.02 or (c) the date the Purchase
Limit reduces to zero pursuant to Section 1.01(b) or (d) the Business Day
which the Seller so designates by notice to the Agent at least 60 days in
advance for such Receivable Interest. The date set forth in clause (a) above
may be extended pursuant to Section 4.09 of the Agreement.
"Federal Funds Rate" means, with respect to any day, the rate set forth
in H.15(519) for that day opposite the caption "Federal Funds (Effective)".
If on any date of determination, such rate is not published in H.15(519),
such rate will be the rate set forth in Composite 3:30 P.M. Quotations for
U.S. Government Securities for that day under the caption "Federal
Funds/Effective Rate". If on any date of determination, the appropriate rate
is not published in either H.15(519) or Composite 3:30 P.M. Quotations for
U.S. Government Securities, such rate will be the arithmetic mean of the
rates for the last transaction in overnight Federal funds arranged by three
leading brokers of Federal funds transactions in New York City prior to 9:00
a.m., New York City time, on that day.
"Fixed Period" means with respect to any Receivable Interest:
(a) initially the period commencing on the date of purchase
of such Receivable Interest and ending such number of days as the
Seller shall select and the Agent shall approve pursuant to Sec
tion 1.02, up to 180 days from such date; and
(b) thereafter each period commencing on the last day of the
immediately preceding Fixed Period for such Receivable Interest and
ending such number of days (not to exceed 180 days) as the Seller
shall select and the Agent shall approve on notice by the Seller
received by the Agent (including notice by telephone, confirmed in
writing) not later than 11:00 A.M. (New York City time) on such
last day, except that if the Agent shall not have received such
notice or approved such period on or before 11:00 A.M. (New York
City time) on such last day, such period shall be one day;
provided that
<PAGE>
(i) any Fixed Period in respect of which Yield is computed by
reference to the Assignee Rate shall be a period from one to and
including 29 days, or a period of one, two or three months, as the
Seller may select as provided above;
(ii) any Fixed Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day (provided, however, if
Yield in respect of such Fixed Period is computed by reference to
the Eurodollar Rate, and such Fixed Period would otherwise end on a
day which is not a Business Day, and there is no subsequent
Business Day in the same calendar month as such day, such Fixed
Period shall end on the next preceding Business Day);
(iii) in the case of any Fixed Period of one day, (A) if
such Fixed Period is the initial Fixed Period for a Receivable
Interest, such Fixed Period shall be the day of purchase of such
Receivable Interest; (B) any subsequently occurring Fixed Period
which is one day shall, if the immediately preceding Fixed Period
is more than one day, be the last day of such immediately preceding
Fixed Period, and, if the immediately preceding Fixed Period is one
day, be the day next following such immediately preceding Fixed
Period; and (C) if such Fixed Period occurs on a day immediately
preceding a day which is not a Business Day, such Fixed Period
shall be extended to the next succeeding Business Day; and
(iv) in the case of any Fixed Period for any Receivable Interest
which commences before the Termination Date for such Receivable Interest and
would otherwise end on a date occurring after such Termination Date, such
Fixed Period shall end on such Termination Date and the duration of each
Fixed Period which commences on or after the Termination Date for such
Receivable Interest shall be of such duration as shall be selected by the
Agent.
"Investment Grade" means, with respect to any entity's long-term
public senior securities, a rating of at least BBB- by Standard & Poor's
Corporation or BBB- by Duff & Phelps Credit Rating Co. or BBB- by Fitch
Investors Service, Inc.; provided, that if such entity's long-term public
senior securities are rated by more than one of the rating agencies set
forth above,
<PAGE>
then each rating agency which rates such securities shall have given them a
rating at least equal to the categories specified above.
"Investor"means the Issuer and all other owners by assignment or
otherwise of a Receivable Interest or any interest therein and, to the extent
of the undivided interests so purchased, shall include any participants.
"Investor Account" means the special account (account number
322-2-66495) maintained at the office of Chemical Bank in New York for the
benefit of the Investors.
"Investor Rate" for any Fixed Period for any Receivable
Interest means, to the extent the Issuer funds such Receivable Interest for
such Fixed Period by issuing commercial paper, the rate (or if more than one
rate, the weighted average of the rates) at which commercial paper notes of
the Issuer having a term equal to such Fixed Period and to be issued to fund
such Receivable Interest may be sold by any placement agent or commercial
paper dealer selected by the Agent on behalf of the Issuer, as agreed between
each such agent or dealer and the Agent and notified by the Agent to the
Collection Agent; provided if the rate (or rates) as agreed between any such
agent or dealer and the Agent with regard to any Fixed Period for any
Receivable Interest is a discount rate (or rates), then such rate shall be
the rate (or if more than one rate, the weighted average of the rates)
resulting from converting such discount rate (or rates) to an interest-
bearing equivalent rate per annum.
"Issuer" means Renaissance Asset Funding Corp. and any successor or
assign of the Issuer that is a receivables investment company which in the
ordinary course of its business issues commercial paper or other securities
to fund its acquisition and maintenance of receivables.
"Liquidation Day" means, for any Receivable Interest, (i) each day
during a Settlement Period for such Receivable Interest on which the conditions
set forth in paragraph 2 of Exhibit II are not satisfied, and (ii) each day
which occurs on or after the Termination Date for such Receivable Interest.
"Liquidation Fee" means, for any Fixed Period during which a Liquidation
Day occurs, the amount, if any, by which (i) the additional Yield (calculated
without taking into account any Liquidation Fee or any shortened duration
of such Fixed Period pursuant to clause (iv) of the definition thereof)
which would have accrued during such Fixed Period on the reductions of
<PAGE>
Capital of the Receivable Interest relating to such Fixed Period had such
reductions remained as Capital, exceeds (ii) the income, if any, received by
the Investors' investing the proceeds of such reductions of Capital.
"Loss Horizon Ratio" means, on any date the ratio (expressed as a
percentage) computed as of the last day of each calendar month by dividing (i)
the sum of the "Total Revenues" as defined in the Seller's Monthly Revenue
Adjustment Report for each of the preceding three calendar months by
(ii) the Net Receivables Pool Balance on such day.
"Loss Percentage" means, for any Receivable Interest on any date, the
greater of (a) 10.0% or (b) the product of 2.25, the highest Aged Receivable
Ratio during the previous twelve months and the Loss Horizon Ratio on such
date.
"Loss Reserve" means, for any
Receivable Interest on any date, an amount equal to
LP x (C + YR)
where:
LP = the Loss Percentage for such Receivable Interest
on such date.
C = the Capital of such Receivable Interest at the
close of business of the Collection Agent on such
date.
YR = the Yield Reserve for such Receivable Interest on
such date.
"Monthly Revenue Adjustment Report" means a report, in
substantially the form of Annex F, furnished by the Seller to the Agent.
"Net Receivables Pool Balance" means at any time the Outstanding
Balance of Eligible Receivables then in the Receivables Pool (i) reduced by
the aggregate amount by which the Outstanding Balance of Eligible Receivables of
each Obligor then in the Receivables Pool exceeds the product of (a) the
Normal Concentration Percentage for such Obligor multiplied by (b) the
<PAGE>
Outstanding Balance of the Eligible Receivables then in the Receivables Pool
and (ii) increased by the sum of (a) an amount equal to the lesser of (x)
2.5% of the Outstanding Balance of all Eligible Receivables then in the
Receivables Pool and (y) the Outstanding Balance of all Receivables which are
generated through a shipment routing involving an interline carrier and (b)
an amount equal to the lesser of (x) 10% of the Outstanding Balance of all
Eligible Receivables then in the Receivables Pool and (y) an amount equal to
the Outstanding Balance of all Receivables which would otherwise be Eligible
Receivables but which are required to be paid in full within 31 to 60 days of
the original billing date therefor.
"Normal Concentration Percentage" for any Obligor means at any
time 2%, provided that in the case of an Obligor with any Affiliated Obligor,
the Normal Concentration Percentage shall be calculated as if such Obligor and
such Affiliated Obligor are one Obligor.
"Obligor" means a Person obligated to make payments pursuant to a Contract.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Parent" means Arkansas Best Corporation, a Delaware corporation.
"Parent Undertaking Agreement" means an agreement substantially
in the form of Annex D hereto.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political subdivision
or agency thereof.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Purchase Limit" means $55,000,000, as such amount may be
reduced pursuant to Section 1.01. References to the unused portion of the
Purchase Limit shall mean, at any time, the Purchase Limit, as then reduced
pursuant to Section 1.01(b) or pursuant to the next sentence, minus the sum
of the then outstanding Capital of Receivable Interests under the Agreement
and the then outstanding "Capital" of "Receivable Interests"
<PAGE>
under the Alternate Receivables Purchase Agreement. Furthermore, on each day
on which the Seller reduces the unused portion of (or terminates) the
"Commitment" under the Alternate Receivables Purchase Agreement, the Purchase
Limit automatically shall reduce by the same amount (or so terminate).
"Receivable" means the indebtedness of any Obligor under a Contract, and
includes the right to payment of any interest or finance charges and other
obligations of such Obligor with respect thereto.
"Receivable Interest" means, at any time, an undivided percentage
ownership interest in (i) all then outstanding Pool Receivables arising prior to
the time of the most recent computation or recomputation of such undivided
percentage interest pursuant to Section 1.03, (ii) all Related Security with
respect to such Pool Receivables, and (iii) all Collections with respect to,
and other proceeds of, such Pool Receivables and Related Security. Such
undivided percentage interest shall be computed as
C + YR + LR + CAFR
------------------
NRPB
where: C = the Capital of such Receivable Interest at the
time of computation.
YR = the Yield Reserve of such Receivable Interest at
the time of computation.
LR = the Loss Reserve of such Receivable Interest at
the time of computation.
CAFR = the Collection Agent Fee Reserve of such
Receivable Interest at the time
of computation.
NRPB = the Net Receivables Pool Balance at the
time of computation.
Each Receivable Interest shall be determined from time to time pursuant to
the provisions of Section 1.03.
<PAGE>
"Receivables Pool" means at any time the aggregation of each then
outstanding Receivable in respect of which the Obligor is a Designated
Obligor at such time or was a Designated Obligor on the date of the initial
creation of an interest in such Receivable under the Agreement or the
Alternate Receivables Purchase Agreement.
"Related Security" means with respect to any Receivable:
(i) all security interests or liens and property subject thereto
from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with all financing statements signed by an Obligor describing any
collateral securing such Receivable; and
(ii) all guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the Contract
related to such Receivable or otherwise.
"Seller Report" means a report, in substantially the form of
Annex A hereto (with such changes as the Agent may request from time to
time), furnished bythe Collection Agent to the Agent pursuant to the
Collection Agent Agreement.
"Settlement Period" for any Receivable Interest means each period
commencing on the first day and ending on the last day of each Fixed Period
for such Receivable Interest and, on and after the Termination Date for such
Receivable Interest, such period (including, without limitation, a period of
one day) as shall be selected from time to time by the Agent or, in the
absence of any such selection, each period of thirty days from the last day
of the immediately preceding Settlement Period.
"Termination Date" for any Receivable Interest means the earliest of
(i) the Business Day which the Agent so designates by notice to the Seller at
least one Business Day in advance for such Receivable Interest and
(ii) the Facility Termination Date.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
<PAGE>
"Yield" means:
(i) for each Receivable Interest for any Fixed Period to the
extent the Issuer will be funding such Receivable Interest during
such Fixed Period through the issuance of commercial paper,
IR x C x ED+ LF
---------------
360
(ii) for each Receivable Interest for any Fixed Period to the
extent the Investors will not be funding such Receivable Interest during
such Fixed Period through the issuance of commercial paper,
AR x C x ED + LF
-----------------
360
where:
AR = the Assignee Rate for such Receivable Interest
for such Fixed Period
C = the Capital of such Receivable Interest
during such Fixed Period
IR = the Investor Rate for such Receivable
Interest for such Fixed Period
ED = the actual number of days
elapsed during such Fixed Period
LF = the Liquidation Fee, if such Receivable
Interest for such Fixed Period;
provided that no provision of the Agreement shall require the payment or
permit the collection of Yield in excess of the maximum permitted by
applicable law; and provided further that Yield for any Receivable
Interest shall not be considered paid by any distribution to the extent
that at any time all or a portion of such distribution is rescinded or must
otherwise be returned for any reason.
<PAGE>
"Yield Reserve" for any Receivable Interest at any time means the
sum of (i) the Liquidation Yield at such time for such Receivable Interest,
and (ii) the then accrued and unpaid Yield for such Receivable Interest. For
purposes of this definition,
(a) "Liquidation Yield" means, for any Receivable Interest on any
date, an amount equal to the Rate Variance Factor on such date multiplied
by the product of (i) the Capital of such Receivable Interest on such date
and (ii) the product of (a) the Alternate Base Rate for such Receivable
Interest for a 30-day Fixed Period deemed to commence on such date and
(b) a fraction having the sum of the Average Maturity plus the Collection
Delay Period (each as in effect at such date) as its numerator and 360
as its denominator; and
(b) "Rate Variance Factor" means a number greater than one that
reflects the potential variance in selected interest rates over a period
of time designated by the Agent, as computed by the Collection Agent
each month and set forth in the Seller Report in accordance with the
provisions thereof; provided that the factors used in computing the
"Rate Variance Factor" may be changed from time to time upon at least
five days' prior notice to the Collection Agent.
- - - - - -
Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State of New
York, and not specifically defined herein, are used herein as defined
in such Article 9.
<PAGE>
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The initial purchase of
a Receivable Interest under the Agreement is subject to the conditions
precedent that the Agent shall have received on or before the date of such
purchase the following, each (unless otherwise indicated) dated such date, in
form and substance satisfactory to the Agent:
(a) Certified copies of the resolutions of the Board of Directors of
the Seller approving the Agreement and certified copies of all documents
evidencing other necessary corporate action and governmental approvals, if
any, with respect to the Agreement.
(b) Certified copies of the resolutions of the Board of Directors of
the Parent approving the Parent Undertaking Agreement and certified copies of
all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Parent Undertaking Agreement.
(c) A certificate of the Secretary or Assistant Secretary of the
Seller certifying the names and true signatures of the officers of the Seller
authorized to sign the Agreement and the other documents to be delivered by
it hereunder.
(d) A certificate of the Secretary or Assistant Secretary of the
Parent certifying the names and true signatures of the officers thereof
authorized to sign the Parent Undertaking Agreement.
(e) Acknowledgment copies, or time stamped receipt copies of proper
financing statements, duly filed on or before the date of such initial
purchase under the UCC of all jurisdictions that the Agent may deem necessary
or desirable in order to perfect the ownership interests contemplated by the
Agreement.
(f) Acknowledgment copies, or time stamped receipt copies of proper
financing statements, if any, necessary to release all security interests and
other rights of any Person in the Receivables, Contracts or Related Security
previously granted by the Seller.
<PAGE>
(g) Completed requests for information, dated on or before the date
of such initial purchase, listing the financing statements referred to in sub
section (e) above and all other effective financing statements filed in the
jurisdictions referred to in subsection (e) above that name the Seller as
debtor, together with copies of such other financing statements (none of
which shall cover any Receivables, Contracts or Related Security).
(h) A favorable opinion of Richard F. Cooper, Esq., in house counsel
for the Seller, substantially in the form of Annex C hereto and as to such
other matters as the Agent may reasonably request.
(i) A favorable opinion of Richard F. Cooper, Esq., in house counsel
for the Parent, substantially in the form of Annex E hereto and as to such
other matters as the Agent may reasonably request.
(j) The Collection Agent Agreement.
(k) The fee agreement referred to in Section 1.05, together with
payment of all fees referred to therein which are due and payable on such
date.
(l) The Parent Undertaking Agreement, duly executed by the Parent.
(m) Satisfactory results of a review and audit of the Seller's
collection, operating and reporting systems, Credit and Collection Policy,
historical receivables data and accounts.
(n) A copy of the executed Collection Account Agreement.
(o) A listing by invoice, on computer tape, of all Pool Receivables.
2. Conditions Precedent to All Purchases and Reinvestments. Each
purchase (including the initial purchase) and each reinvestment shall be
subject to the further conditions precedent that
(a) in the case of each purchase, the Collection Agent shall have
delivered to the Agent on or prior to such purchase, in form and substance
satisfactory to the Agent, a completed Seller Report as of the previous month
<PAGE>
end, dated within three days prior to the date of such purchase together
with a summary of all Pool Receivables (and, if requested by the Agent,
a listing by invoice or by Obligor), and such additional information
as may reasonably be requested by the Agent,
(b) on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):
(i) The representations and warranties contained in Exhibit III
are correct on and as of the date of such purchase or reinvestment as
though made on and as of such date,
(ii) No event has occurred and is continuing, or would result
from such purchase or reinvestment, that constitutes an Event of
Termination or that would constitute an Event of Termination but for the
requirement that notice be given or time elapse or both,
(iii) All of the Parent's long-term public debt securities, if
any, and convertible preferred securities are rated Investment Grade;
provided that if the Parent does not have any such rated securities
outstanding, the Agent has determined, in its sole discretion, that if
the Parent did have such securities, that they would receive at least
such a rating,
(iv) The Agent shall not have given the Seller at least one
Business Day's notice that the Investors have terminated the
reinvestment of Collections in Receivable Interests, and
(c) the Agent shall have received such other approvals, opinions or
documents as it may reasonably request.
<PAGE>
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants as follows:
(a) The Seller is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware, and is duly qualified to do
business, and is in good standing, in every jurisdiction where the nature of
its business requires it to be so qualified.
(b) The execution, delivery and performance by the Seller of the
Agreement and the other documents to be delivered by it thereunder, including
the Seller's use of the proceeds of purchases and reinvestments, (i) are
within the Seller's corporate powers, (ii) have been duly authorized by all
necessary corporate action, (iii) do not contravene (1) the Seller's charter
or by-laws, (2) any law, rule or regulation applicable to the Seller, (3) any
contractual restriction binding on or affecting the Seller or its property or
(4) any order, writ, judgment, award, injunction or decree binding on or
affecting the Seller or its property, and (iv) do not result in or require
the creation of any lien, security interest or other charge or encumbrance
upon or with respect to any of its properties. The Agreement has been duly
executed and delivered by the Seller.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Seller of the Agreement or
any other document to be delivered thereunder.
(d) The Agreement constitutes the legal, valid and binding obligation
of the Seller enforceable against the Seller in accordance with its terms.
(e) The balance sheets of the Seller and its subsidiaries as at
December 31, 1992, and the related statements of income and retained earnings
of the Seller and its subsidiaries for the fiscal year then ended, copies of
which have been furnished to the Agent, fairly present the financial
condition of the Seller and its subsidiaries as at such date and the results
of the operations of the Seller and its subsidiaries for the period ended on
such date, all in accordance with generally accepted accounting principles
consistently applied, and since
<PAGE>
December 31, 1992 there has been no material adverse change in the business,
operations, property or financial or other condition of the Seller.
(f) There is no pending or threatened action or proceeding affecting
the Seller or any of its subsidiaries before any court, governmental agency
or arbitrator which may materially adversely affect the financial condition
or operations of the Seller or any of its subsidiaries or the ability of the
Seller to perform its obligations under the Agreement, or which purports to
affect the legality, validity or enforceability of the Agreement.
(g) No proceeds of any purchase or reinvestment will be used to
acquire any equity security of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934.
(h) The Seller is the legal and beneficial owner of the Pool
Receivables and Related Security free and clear of any Adverse Claim; upon
each purchase or reinvestment, the Investors shall acquire a valid and
perfected first priority undivided percentage ownership interest to the
extent of the pertinent Receivable Interest in each Pool Receivable then
existing or thereafter arising and in the Related Security and Collections
with respect thereto. No effective financing statement or other instrument
similar in effect covering any Contract or any Pool Receivable or the Related
Security or Collections with respect thereto is on file in any recording
office, except those filed in favor of the Agent relating to the Agreement.
(i) Each Seller Report (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied
by the Seller or an Affiliate), information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by
or on behalf of the Seller to the Agent or the Investors in connection with
the Agreement is or will be accurate in all material respects as of its date
or (except as otherwise disclosed to the Agent or the Investors, as the case
may be, at such time) as of the date so furnished, and no such document
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they were
made, not misleading.
(j) The principal place of business and chief executive office of the
Seller and the office where the Seller keeps its records concerning the Pool
Receivables are located at the address or addresses referred to in para
graph (b) of Exhibit IV.
<PAGE>
EXHIBIT IV
COVENANTS
Covenants of the Seller. Until the latest of the Facility Termination
Date, the date on which no Capital of or Yield on any Receivable Interest
shall be outstanding or the date all other amounts owed by the Seller
hereunder to the Investors or the Agent shall be paid in full:
(a) Compliance with Laws, Etc. The Seller will comply in all material
respects with all applicable laws, rules, regulations and orders and preserve
and maintain its corporate existence, rights, franchises, qualifications, and
privileges except to the extent that the failure so to comply with such laws,
rules and regulations or the failure so to preserve and maintain such
existence, rights, franchises, qualifications, and privileges would not
materially adversely affect the collectibility of the Receivables Pool or the
ability of the Seller to perform its obligations under the Agreement or the
Collection Agent Agreement.
(b) Offices, Records and Books of Account. The Seller will keep its
principal place of business and chief executive office and the office where
it keeps its records concerning the Pool Receivables at the address of the
Seller set forth under its name on the signature page to the Agreement or,
upon 30 days' prior written notice to the Agent, at any other locations in
jurisdictions where all actions reasonably requested by the Agent to protect
and perfect the interest in the Pool Receivables have been taken and
completed. The Seller also will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Pool Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for
the collection of all Pool Receivables (including, without limitation,
records adequate to permit the daily identification of each Pool Receivable
and all Collections of and adjustments to each existing Pool Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. The Seller will, at its expense, timely and fully perform
and comply with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the Pool
Receivables, and timely and
<PAGE>
fully comply in all material respects with the Credit and Collection Policy
in regard to each Pool Receivable and the related Contract.
(d) Sales, Liens, Etc. The Seller will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or create or suffer to exist
any Adverse Claim upon or with respect to, the Seller's undivided interest in
any Pool Receivable, Related Security, related Contract or Collections, or
upon or with respect to any account to which any Collections of any Pool
Receivable are sent, or assign any right to receive income in respect
thereof.
(e) Extension or Amendment of Receivables. Except as provided in the
Collection Agent Agreement, the Seller will not extend the maturity or adjust
the Outstanding Balance or otherwise modify the terms of any Pool Receivable,
or amend, modify or waive any term or condition of any Contract related
thereto.
(f) Change in Business or Credit and Collection Policy. The Seller
will not make any change in the character of its business or in the Credit
and Collection Policy that would, in either case, adversely affect the
collectibility of the Receivables Pool or the ability of the Seller to
perform its obligations under the Agreement or the Collection Agent
Agreement. The Seller shall not make any other change without the prior
written consent of the Agent and the Seller shall notify the Agent ten
Business Days in advance of any such proposed change in the Credit and
Collection Policy.
(g) Audits. The Seller will, from time to time during regular
business hours as requested by the Agent, permit the Agent, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of the Seller relating to
Pool Receivables and the Related Security, including, without limitation, the
related Contracts, and (ii) to visit the offices and properties of the Seller
for the purpose of examining such materials described in clause (i) above,
and to discuss matters relating to Pool Receivables and the Related Security
or the Seller's performance hereunder or under the Contracts with any of the
officers or employees of the Seller having knowledge of such matters.
(h) Change in Payment Instructions to Obligors. The Seller will not
make any change in its instructions to Obligors regarding payments to be
<PAGE>
made directly to the Seller or payments to be made directly to the Collection
Account without the prior written consent of the Agent.
(i) Deposits to Collection Account. Except as otherwise provided in
the Credit and Collection Policy, the Seller will cause each of the Seller's
terminal managers to deposit all Collections of Pool Receivables received
with the Seller's local bank within one Business Day after receipt. The
Seller will deposit or cause to be deposited, such Collections of Pool
Receivables into the Collection Account within two Business Days after the
deposit into such local bank accounts.
(j) Marking of Records. At the request of the Agent, the Seller will
mark, at its expense, its master data processing records evidencing Pool
Receivables and related Contracts with a legend evidencing that Receivable
Interests related to such Pool Receivables and related Contracts have been
sold in accordance with the Agreement.
(k) Reporting Requirements. The Seller will provide to the Agent (in
multiple copies, if requested by the Agent) the following:
(i) as soon as available and in any event within 45 days after
the end of the first three quarters of each fiscal year of the Parent
and of the Seller, a copy of the Parent's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission certified by the chief
financial officer of the Parent, a balance sheet of the Seller as of the
end of such quarter, and a statement of income and retained earnings of
the Seller for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, certified by the chief
financial officer of the Seller;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Seller a balance sheet of the
Seller for such year and a statement of income and retained earnings of
the Seller for such year audited by Ernst & Young or other independent
public accountants acceptable to the Agent;
(iii) as soon as possible and in any event within five days
after the occurrence of each Event of Termination or event which, with
the giving of notice or lapse of time, or both, would constitute an
Event of Termination, a statement of the chief financial officer of the
<PAGE>
Seller setting forth details of such Event of Termination or event and
the action that the Seller has taken and proposes to take with respect
thereto;
(iv) promptly after the sending or filing thereof, copies of
all reports that the Seller sends to any of its security holders, and
copies of all reports and registration statements that the Seller or any
subsidiary files with the Securities and Exchange Commission or any
national securities exchange;
(v) promptly after the filing or receiving thereof, copies of
all reports and notices that the Seller or any Affiliate files under
ERISA with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or that the Seller or any
Affiliate receives from any of the foregoing or from any multiemployer
plan (within the meaning of Section 4001(a)(3) of ERISA) to which the
Seller or any Affiliate is or was, within the preceding five years, a
contributing employer, in each case in respect of the assessment of
withdrawal liability or an event or condition which could, in the
aggregate, result in the imposition of liability on the Seller and/or
any such Affiliate in excess of $1,000,000;
(vi) at least ten Business Days prior to any change in the
Seller's name, a notice setting forth the new name and the effective
date thereof;
(vii) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of the Seller or any of
its subsidiaries as the Agent may from time to time reasonably request;
(viii) promptly after the Seller obtains knowledge thereof,
notice of any litigation, investigation or proceeding which may exist at
any time between the Seller and any governmental authority or any other
third party which, if not cured or if adversely determined, as the case
may be, would have a material adverse effect on the business,
operations, property or financial or other condition of the Seller; and
(ix) promptly after the occurrence thereof, notice of a
material adverse change in the business, operations, property or
financial or other condition of the Seller.
<PAGE>
EXHIBIT V
EVENTS OF TERMINATION
Each of the following shall be an "Event of Termination":
(a) The Collection Agent (if the Seller or any of its Affiliates)
(i) shall fail to perform or observe any term, covenant or agreement under
the Agreement or under the Collection Agent Agreement (other than as referred
to in clause (ii) of this paragraph (a)) and such failure shall remain
unremedied for three Business Days or (ii) shall fail to make when due any
payment or deposit to be made by it under the Agreement or the Collection
Agent Agreement; or
(b) The Seller shall fail (i) to transfer to the Agent when requested
any rights, pursuant to the Agreement or the Collection Agent Agreement,
which the Seller then has as Collection Agent, or (ii) to make any payment
required under Section 1.04; or
(c) Any representation or warranty made or deemed made by the Seller
or the Parent (or any of its their respective officers) under or in
connection with the Agreement or the Parent Undertaking Agreement or any
information or report delivered by the Seller pursuant to the Agreement or
the Parent pursuant to the Parent Undertaking Agreement shall prove to have
been incorrect or untrue in any material respect when made or deemed made or
delivered; or
(d) The Seller shall fail to perform or observe any other term,
covenant or agreement contained in the Agreement on its part to be performed
or observed and any such failure shall remain unremedied for 10 days after
written notice thereof shall have been given to the Seller by the Agent (or,
with respect to a failure to deliver the Seller Report pursuant to the
Agreement or the Collection Agent Agreement, as the case may be, such failure
shall remain unremedied for five days, without a requirement for notice); or
(e) The Seller or any of its subsidiaries or the Parent shall fail to
pay any principal of or premium or interest on any of its Debt which is
outstanding in a principal amount of at least $5,000,000, individually, or
when aggregated with all such Debt so in default when the same becomes due
and payable (whether by scheduled maturity, required prepayment,
<PAGE>
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other event shall occur or condition shall
exist under any agreement or instrument relating to Debt which is outstanding
in a principal amount of at least $5,000,000 individually or when aggregated
with all such Debt so in default and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the
effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity
thereof; or
(f) Any purchase or any reinvestment pursuant to the Agreement shall
for any reason (other than pursuant to the terms hereof) cease to create, or
any Receivable Interest shall for any reason cease to be, a valid and
perfected first priority undivided percentage ownership interest to the
extent of the pertinent Receivable Interest in each applicable Pool
Receivable and the Related Security and Collections with respect thereto; or
(g) The Seller or any of its subsidiaries or the Parent shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Seller or any of its subsidiaries or the Parent
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its property
and, in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property) shall
occur; or the Seller or any of its subsidiaries or the Parent shall take any
corporate action to authorize any of the actions set forth above in this
paragraph (g); or
<PAGE>
(h) As of the last day of any calendar month, either the Aged
Receivable Ratio shall exceed 4.0% or the Delinquency Ratio shall exceed
6.75%; or
(i) The Net Receivables Pool Balance shall for a period of five
consecutive Business Days be less than 115% of the sum of the aggregate
outstanding Capital of all Receivable Interests and the aggregate outstanding
"Capital" of all "Receivable Interests" under the Alternate Receivables
Purchase Agreement; or
(j) The sum of the numerators of all Receivable Interests plus the sum
of the numerators of all "Receivable Interests" under the Alternate
Receivables Purchase Agreement shall for a period of five consecutive
Business Days be greater than 95% of the Net Receivables Pool Balance; or
(k) There shall have occurred any material adverse change in the
business, operations, property or financial or other condition of the Seller
or the Parent since December 31, 1992; or there shall have occurred any event
which may materially adversely affect the collectibility of the Receivables
Pool or the ability of the Seller to collect Pool Receivables or otherwise
perform its obligations under the Agreement or the Collection Agent
Agreement; or
(l) The Parent Undertaking Agreement shall cease to be in full force
and effect or the Parent shall fail to perform or observe any term, covenant
or agreement contained in the Parent Undertaking Agreement on its part to be
performed or observed and any such failure shall remain unremedied for ten
days after written notice thereof shall have been given by the Agent to the
Seller; or
(m) Any of the Parent's long-term public debt securities or
convertible preferred securities are rated less than Investment Grade (or if
the Parent does not have any such rated securities outstanding, the Agent has
determined, in its sole discretion, that if the Parent did have such
securities, they would receive a less than Investment Grade rating).
<PAGE>
ALTERNATE RECEIVABLES PURCHASE AGREEMENT
Dated as of March 2, 1994
ABF Freight System, Inc., a Delaware corporation (the "Seller"),
Societe Generale, a French banking corporation acting through its United
States branches or agencies ("Societe Generale"), and Societe Generale, as
agent (the "Agent") for the Banks, agree as follows:
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I to this Agreement.
References in the Exhibits to "the Agreement" refer to this Agreement, as
amended, modified or supplemented from time to time.
The Seller has Receivables in which it is prepared to sell undivided
fractional ownership interests (referred to herein as "Receivable
Interests"). The Banks are prepared to purchase such Receivable Interests on
the terms set forth herein. Accordingly, the parties agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.01. Commitment. (a) On the terms and conditions
hereinafter set forth, the Banks shall, ratably in accordance with their
respective Bank Commitments, purchase Receivable Interests from the Seller
from time to time during the period from the date hereof to the Commitment
Termination Date. Under no circumstances shall the Banks be obligated to
make any such purchase if, after giving effect to such purchase, the
aggregate outstanding Capital of Receivable Interests, together with the
aggregate outstanding "Capital" of "Receivable Interests" under the
Receivables Purchase Agreement, would exceed the Total Commitment.
(b) The Seller may, upon at least five Business Days' notice to the
Agent from time to time, reduce in part the unused portion of the Total
<PAGE>
Commitment; provided that each partial reduction shall be in the amount of at
least $1,000,000 or an integral multiple thereof.
(c) The Agent, on behalf of the Banks which own Receivable Interests,
shall have the proceeds of Collections attributable to such Receivable
Interests automatically reinvested pursuant to Section 1.04 in additional
undivided percentage interests in the Pool Receivables by making an
appropriate readjustment of such Receivable Interests until the Commitment
Termination Date.
SECTION 1.02. Making Purchases. (a) Each purchase shall be made on
at least three Business Days' notice from the Seller to the Agent. Each such
notice of a purchase shall specify (i) the amount requested to be paid to the
Seller (such amount, which shall not be less than $1,000,000, being referred
to herein as the initial "Capital" of the Receivable Interest then being
purchased), (ii) the date of such purchase (which shall be a Business Day)
and (iii) the desired duration of the initial Fixed Period for such Receiv
able Interest. The Agent shall notify the Seller whether the desired
duration of the initial Fixed Period for the Receivable Interest to be
purchased is acceptable, and the Agent shall promptly notify the Banks of the
proposed purchase. Such notice of purchase shall be sent by telecopier,
telex or cable to all Banks concurrently and shall specify the date of such
purchase, each Bank's Percentage multiplied by the aggregate amount of
Capital of the Receivable Interest being purchased, the Fixed Period for such
Receivable Interest and whether Yield for the Fixed Period for such
Receivable Interest is calculated based on the Eurodollar Rate (which may be
selected only if such notice is given at least two Business Days prior to the
purchase date) or the Alternate Base Rate.
(b) Prior to 12:00 noon New York City time, on the date of each such
purchase of a Receivable Interest, the Banks, ratably in accordance with
their respective Bank Commitments, shall, upon satisfaction of the applicable
conditions set forth in Exhibit II hereto, make available to the Agent the
amount of their respective purchases by deposit of the applicable amount in
immediately available funds to the Agent's Account and, after receipt by the
Agent of such funds, the Agent will cause such funds to be made available to
the Seller in immediately available funds at First National Bank of Fort
Smith for the account of ABF Freight System, Inc.
(c) Effective on the date of each purchase pursuant to this Section
1.02 and each reinvestment pursuant to Section 1.04, the Seller hereby sells
<PAGE>
and assigns to the Agent, for the benefit of the Banks, an undivided
percentage ownership interest, to the extent of the Receivable Interest then
being purchased, in each Pool Receivable then existing and in the Related
Security and Collections with respect thereto.
(d) Notwithstanding the foregoing, a Bank shall not be obligated to
make purchases under this Section 1.02 at any time in an amount which would
exceed such Bank's Bank Commitment less (in the case of any Bank other than
Societe Generale) the "Capital" (as defined therein) of any "Percentage
Interests" purchased by such Bank under the Liquidity Asset Purchase
Agreement. Each Bank's obligation shall be several, such that the failure of
any Bank to make available to the Seller any funds in connection with any
purchase shall not relieve any other Bank of its obligation, if any,
hereunder to make funds available on the date of such purchase, but no Bank
shall be responsible for the failure of any other Bank to make funds
available in connection with any purchase.
SECTIONS 1.03 through 1.04. Incorporation by Reference. Each of
Sections 1.03 through 1.04 of the Receivables Purchase Agreement is hereby
incorporated herein by this reference, except that each reference therein to
the "Investors" or the "Investor Account" shall be deemed to be a reference
to the Banks and the Agent's Account, respectively.
SECTION 1.05. Fees. The Seller shall pay to the Agent certain fees in
the amounts and on the dates set forth in a separate fee agreement of even
date between the Seller and the Agent.
SECTIONS 1.06 through 1.07. Incorporation by Reference. Each of
Sections 1.06 through 1.07 of the Receivables Purchase Agreement is hereby
incorporated herein by this reference.
SECTION 1.08. Increased Costs. (a) If any Bank or any Affiliate of
any Bank (each an "Affected Person") determines that compliance with any law
or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by
such Affected Person and such Affected Person determines that the amount of
such capital is increased by or based upon the existence of any commitment to
make purchases of or otherwise to maintain the investment in Pool Receivables
or interests therein, hereunder or under any commitments to the Investors
related to this Agreement or to the funding thereof and other commitments of
<PAGE>
the same type, then, upon demand by such Affected Person (with a copy to the
Agent), the Seller shall immediately pay to the Agent, for the account of
such Affected Person (as a third-party beneficiary), from time to time as
specified by such Affected Person, additional amounts sufficient to
compensate such Affected Person in the light of such circumstances, to the
extent that such Affected Person reasonably determines such increase in
capital to be allocable to the existence of any of such commitments. A
certificate as to such amounts submitted to the Seller and the Agent by such
Affected Person shall be conclusive and binding for all purposes, absent
manifest error.
(b) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
referred to in Section 1.09) in or in the interpretation of any law or
regulation or (ii) compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Bank of agreeing to
purchase or purchasing, or maintaining the ownership of Receivable Interests
in respect of which Yield is computed by reference to the Eurodollar Rate,
then, upon demand by such Bank (with a copy to the Agent), the Seller shall
immediately pay to the Agent, for the account of such Bank (as a third-party
beneficiary), from time to time as specified by such Bank, additional amounts
sufficient to compensate such Bank for such increased costs. A certificate
as to such amounts submitted to the Seller and the Agent by such Bank shall
be conclusive and binding for all purposes, absent manifest error.
SECTION 1.09. Additional Yield on Receivable Interests Bearing a
Eurodollar Rate. The Seller shall pay to any Bank, so long as such Bank
shall be required under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional Yield on the
unpaid Capital of each Receivable Interest of such Bank during each Fixed
Period in respect of which Yield is computed by reference to the Eurodollar
Rate, for such Fixed Period, at a rate per annum equal at all times during
such Fixed Period to the remainder obtained by subtracting (i) the Eurodollar
Rate for such Fixed Period from (ii) the rate obtained by dividing such
Eurodollar Rate referred to in clause (i) above by that percentage equal to
100% minus the Eurodollar Rate Reserve Percentage of such Bank for such Fixed
Period, payable on each date on which Yield is payable on such Receivable
Interest. Such additional Yield shall be determined by such Bank and
notified to the Seller through the Agent within 30 days after any Yield
payment is made with respect to which such additional Yield is requested. A
<PAGE>
certificate as to such additional Yield submitted to the Seller and the Agent
by such Bank shall be conclusive and binding for all purposes, absent
manifest error.
SECTIONS 1.10 through 1.11. Incorporation by Reference. Each of Sec
tions 1.10 and 1.11 of the Receivables Purchase Agreement is hereby
incorporated herein by this reference, except that each reference therein to
the "Investors" shall be deemed to be a reference to the Banks.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS;
EVENTS OF TERMINATION
SECTION 2.01. Representations and Warranties; Covenants. The Seller
hereby makes the representations and warranties, and hereby agrees to perform
and observe the covenants, set forth in Exhibits III and IV, respectively,
hereto.
SECTION 2.02. Events of Termination. If any of the Events of
Termination set forth in Exhibit V hereto shall occur and be continuing, the
Agent may, by notice to the Seller, take either or both of the following
actions: (x) declare the Total Commitment to be terminated (in which case
the Commitment Termination Date shall be deemed to have occurred), and
(y) without limiting any right under the Collection Agent Agreement to
replace the Collection Agent, designate another Person to succeed the Seller
as the Collection Agent; provided that, automatically upon the occurrence of
any event (without any requirement for the passage of time or the giving of
notice) described in subsection (g) of Exhibit V, the Commitment Termination
Date shall occur. Upon any such declaration or designation or upon any such
automatic termination, the Banks and the Agent shall have, in addition to the
rights and remedies which they may have under this Agreement, all other
rights and remedies provided after default under the UCC and under other
applicable law, which rights and remedies shall be cumulative.
<PAGE>
ARTICLE III
INDEMNIFICATION
SECTION 3.01. Indemnities by the Seller. Without limiting any other
rights that the Banks or the Agent or any of their respective Affiliates or
agents (each, an "Indemnified Party") may have hereunder or under applicable
law, the Seller hereby agrees to indemnify each Indemnified Party from and
against any and all claims, losses and liabilities (including reasonable
attorneys' fees) (all of the foregoing being collectively referred to as
"Indemnified Amounts") arising out of or resulting from this Agreement or the
use of proceeds of purchases or reinvestments or the ownership of Receivable
Interests or in respect of any Receivable or any Contract, excluding,
however, (a) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified Party, (b)
recourse (except as otherwise specifically provided in this Agreement) for
uncollectible Receivables or (c) any income taxes or franchise taxes imposed
on such Indemnified Party by the jurisdiction under the laws of which such
Indemnified Party is organized or any political subdivision thereof, arising
out of or as a result of this Agreement or the ownership of Receivable
Interests or in respect of any Receivable or any Contract. Without limiting
or being limited by the foregoing, the Seller shall pay on demand to each
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party from and against any and all Indemnified Amounts relating to or
resulting from any of the following:
(i) the creation of an undivided percentage ownership
interest in any Receivable which purports to be part of the Net
Receivables Pool Balance but which is not at the date of the
creation of such interest an Eligible Receivable or which
thereafter ceases to be an Eligible Receivable;
(ii) reliance on any representation or warranty or statement
made or deemed made by the Seller (or any of its officers) under or
in connection with this Agreement which shall have been incorrect
in any material respect when made;
(iii) the failure by the Seller to comply with any
applicable law, rule or regulation with respect to any Pool
Receivable or the related Contract; or the failure of any Pool
Receivable or the related Contract to conform to any such
applicable law, rule or regulation;
<PAGE>
(iv) the failure to vest in any Bank or any other owner of a
Receivable Interest a perfected undivided percentage ownership
interest, to the extent of such Receivable Interest, in the
Receivables in, or purporting to be in, the Receivables Pool and
the Related Security and Collections in respect thereof, free and
clear of any Adverse Claim;
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other applicable
laws with respect to any Receivables in, or purporting to be in,
the Receivables Pool and the Related Security and Collections in
respect thereof, whether at the time of any purchase or
reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense based on
such Receivable or the related Contract not being a legal, valid
and binding obligation of such Obligor enforceable against it in
accordance with its terms, or any other claim resulting from the
sale of the merchandise or services related to such Receivable or
the furnishing or failure to furnish such merchandise or services
or relating to collection activities with respect to such
Receivable (if such collection activities were performed by the
Seller or any of its Affiliates acting as Collection Agent);
(vii) any failure of the Seller, as Collection Agent or
otherwise, to perform its duties or obligations in accordance with
the provisions hereof or of the Collection Agent Agreement or to
perform its duties or obligations under the Contracts;
(viii) any products liability or other claim arising out of
or in connection with merchandise, insurance or services which are
the subject of any Contract;
(ix) the commingling of Collections of Pool Receivables at
any time with other funds;
<PAGE>
(x) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of purchases or reinvestments or
the ownership of Receivable Interests or in respect of any
Receivable, Related Security or Contract;
(xi) any theft of payments with respect to Pool Receivables
resulting from the Seller's established payment remittance
procedures;
(xii) any failure of payments with respect to Pool Receivables
to be deposited into the Collection Account within three Business
Days after receipt by the Seller; or
(xiii) any claim relating to a Receivable which is generated
through a shipment routing involving an interline carrier.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement (including, without limitation, any provision of
the Receivables Purchase Agreement which is incorporated herein by reference)
or consent to any departure by the Seller therefrom shall be effective unless
in a writing signed by the Agent, as agent for the Banks, and, in the case of
any amendment, by the Seller, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Banks or the Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right.
SECTION 4.02. Notices, Etc. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and faxed or delivered, if to the Seller,
Societe Generale, or the Agent, to each such party at its address set forth
under its name on the signature pages hereof, and if to any other Bank, to
such Bank at its address specified in the Assignment and Acceptance pursuant
to which it became a Bank, or, as to each party, at such other address as
<PAGE>
shall be designated by such party in a written notice to the other parties
hereto. Notices and communications by facsimile shall be effective when sent
(and shall be followed by hard copy sent by regular mail), and notices and
communications sent by other means shall be effective when received.
SECTION 4.03. Assignability. (a) Rights and Limitations of Banks.
Each Bank may assign to any Eligible Assignee or to any other Bank all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Bank Commitment and any
Receivable Interests or interests therein owned by it). Each assignor of a
Receivable Interest may, in connection with the assignment or participation,
disclose to the assignee or participant any information, relating to the
Seller or the Receivables, furnished to such assignor by or on behalf of the
Seller or by the Agent.
(b) The Agent. This Agreement and the rights and obligations of the
Agent herein shall be assignable by the Agent and its successors and assigns.
(c) The Seller. The Seller may not assign its rights or obligations
hereunder or any interest herein without the prior written consent of the
Agent.
(d) The Banks. Without limiting any other rights that may be
available under applicable law, the rights of the Banks may be enforced
through them or by their agents.
SECTION 4.04. Costs, Expenses and Taxes. (a) In addition to the
rights of indemnification granted under Section 3.01 hereof, the Seller
agrees to pay on demand all costs and expenses in connection with the
preparation, execution, delivery and administration (including periodic
auditing of Receivables) of this Agreement, and the other documents and
agreements to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent, Societe
Generale and their respective agents with respect thereto and with respect to
advising the Agent, Societe Generale and their respective agents as to their
rights and remedies under this Agreement, and all costs and expenses, if any
(including reasonable counsel fees and expenses), of the Agent, the Banks and
any of their respective agents, in connection with the enforcement of this
Agreement and the other documents and agreements to be delivered hereunder.
(b) In addition, the Seller shall pay any and all stamp and other
taxes and fees payable in connection with the execution, delivery, filing and
<PAGE>
recording of this Agreement or the other documents or agreements to be
delivered hereunder, and agrees to save each Indemnified Party harmless from
and against any liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees.
SECTION 4.05. Confidentiality. Unless otherwise required by
applicable law, the Seller and the parties hereto agree to maintain the
confidentiality of this Agreement (and all drafts thereof) in communications
with third parties and otherwise; provided that this Agreement (a) may be
disclosed to third parties to the extent such disclosure is made pursuant to
a written agreement of confidentiality in form and substance reasonably
satisfactory to the parties hereto and (b) may be disclosed to the parties'
legal counsel and auditors if they agree to hold it confidential and (c) may
be filed with the Securities and Exchange Commission as an Exhibit to the
Parent's annual report on Form 10-k.
SECTION 4.06. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York (without
giving effect to the conflict of laws principles thereof), except to the
extent that the perfection of the interests of the banks in the receivables
or remedies hereunder, in respect thereof, are governed by the laws of a
jurisdiction other than the State of New York.
SECTION 4.07. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement.
SECTION 4.08. Termination. The then current date set forth in clause
(a) of the definition of Commitment Termination Date may be extended for
additional 360 day periods in the sole discretion of Societe Generale upon no
less than 30 days written notice to the Seller prior to the then current
Commitment Termination Date. The provisions of Sections 1.08, 1.09, 1.10,
3.01, 4.04 and 4.05 shall survive any termination of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER: ABF FREIGHT SYSTEM, INC.
By: _______________________________
Name:
Title:
1001 South 21st Street
Fort Smith, Arkansas 72901
Attention: General Counsel
Tel No. (501) 785-6130
Facsimile No. (501) 785-6124
BANK: SOCIETE GENERALE
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
Trammel Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Attention: Louis P. LaVille III
Tel. No. (214) 979-1104
Facsimile No. (312) 578-5099
<PAGE>
AGENT: SOCIETE GENERALE
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
181 West Madison Street, Suite 3400
Chicago, IL 60602
Attention: Migdalia Lagoa
Tel. No. (312) 578-5058
Facsimile No. (312) 578-5099
<PAGE>
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits), the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Agent's Account" means the special account (account number 144-8-
17247) of the Agent maintained at the office of Chemical Bank in New York for
the benefit of the Banks.
"Assignment and Acceptance" means an assignment and acceptance
agreement entered into by a Bank, an Eligible Assignee and the Agent,
pursuant to which such Eligible Assignee may become a party to the Agreement.
"Bank Commitment" of any Bank means, (a) with respect to Societe
Generale, $55,000,000 or such amount as reduced by any Assignment and
Acceptance entered into between Societe Generale and other Banks or (b) with
respect to a Bank that has entered into an Assignment and Acceptance, the
amount set forth therein as such Bank's Bank Commitment or such amount as
reduced by an Assignment and Acceptance entered into between such Bank and an
Eligible Assignee, in each case as reduced (or terminated) pursuant to the
next sentence. Any reduction (or termination) of the Total Commitment
pursuant to the terms of the Agreement shall reduce ratably (or terminate)
each Bank's Bank Commitment.
"Banks" means Societe Generale and each Eligible Assignee that shall
become a party to the Agreement pursuant to Section 4.03.
"Capital" of any Receivable Interest means the original amount paid to
the Seller for such Receivable Interest at the time of its purchase by the
Banks, pursuant to the Agreement, or such amount divided or combined in
accordance with Section 1.07, in each case reduced from time to time by
Collections distributed on account of such Capital pursuant to Section
1.04(d); provided that if such Capital shall have been reduced by any
distribution and thereafter all or a portion of such distribution is
rescinded
<PAGE>
or must otherwise be returned for any reason, such Capital shall be increased
by the amount of such rescinded or returned distribution, as though it had
not been made.
"Collection Agent" means at any time the Person then authorized
pursuant to the Collection Agent Agreement to administer and collect Pool
Receivables.
"Collection Agent Agreement" means an agreement between the Seller and
the Agent (and, if the Seller does not act as Collection Agent, consented to
by the Collection Agent), in form and substance satisfactory to them,
governing the appointment and responsibilities of the Collection Agent as to
administration and collection of the Pool Receivables, and requiring the
Collection Agent to perform its obligations set forth in the Agreement.
"Commitment Termination Date" means the earliest of (a) February 25,
1995, (b) the Facility Termination Date under the Receivables Purchase
Agreement, (c) the date determined pursuant to Section 2.02, and (d) the date
the Total Commitment reduces to zero. The date set forth in clause (a) above
may be extended pursuant to Section 4.08 of the Agreement.
"Eligible Assignee" means Societe Generale, any of its Affiliates, any
Person managed by Societe Generale or any of its Affiliates, or any financial
or other institution acceptable to the Agent.
"Event of Termination" has the meaning specified in Exhibit V.
"Liquidity Asset Purchase Agreement" means the Liquidity Asset Purchase
Agreement entered into by a Bank concurrently with the Assignment and
Acceptance pursuant to which it became party to this Agreement, that relates
to the Receivables Purchase Agreement.
"Parent Undertaking Agreement" means the Parent Undertaking Agreement,
dated as of the date hereof, by Arkansas Best Corporation, a Delaware
corporation in favor of Societe Generale, as Agent for the Banks, as the same
may, from time to time, be amended, modified or supplemented.
"Percentage" of any Bank means, (a) with respect to Societe Generale,
100% or such amount as reduced by any Assignment and Acceptance entered into
with an Eligible Assignee, or (b) with respect to a Bank that has entered
into an Assignment and Acceptance, the amount set forth therein as such Bank's
<PAGE>
Percentage, or such amount as reduced by an Assignment and Acceptance entered
into between such Bank and an Eligible Assignee.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of the date hereof, among the Seller, Renaissance Asset
Funding Corp. and Societe Generale, as Agent, as the same may, from time to
time, be amended, modified or supplemented.
"Termination Date" for any Receivable Interest means the earlier of (i)
that Business Day which the Seller so designates by notice to the Agent at
least one Business Day in advance for such Receivable Interest effective as
of the last day of the Fixed Period with respect to such Receivable Interest
and (ii) the Commitment Termination Date.
"Total Commitment" means $55,000,000, as such amount may be reduced
pursuant to Section 1.01. References to the unused portion of the Total
Commitment shall mean, at any time, the Total Commitment, as then reduced
pursuant to Section 1.01(b) or pursuant to the next sentence, minus the sum
of the then outstanding Capital of Receivable Interests under the Agreement
and the then outstanding "Capital" of "Receivable Interests" under the
Receivables Purchase Agreement. Furthermore, on each day on which the Seller
reduces the unused portion of (or terminates) the "Purchase Limit" under the
Receivables Purchase Agreement, the Total Commitment automatically shall
reduce by the same amount (or so terminate).
"Yield" means for each Receivable Interest for any Fixed Period the
result of:
AR x C x ED + LF
----------------
360
where:
AR = the Assignee Rate for such Receivable
Interest for such Fixed Period
C = the Capital of such Receivable
Interest during such Fixed Period
<PAGE>
ED = the actual number of days elapsed
during such Fixed Period
LF = the Liquidation Fee, if any, for such
Receivable Interest for such Fixed Period;
provided that no provision of the Agreement shall require the payment or
permit the collection of Yield in excess of the maximum permitted by
applicable law; and provided, further, that Yield for any Receivable Interest
shall not be considered paid by any distribution to the extent that at any
time all or a portion of such distribution is rescinded or must otherwise be
returned for any reason.
Defined Terms Incorporated by Reference. Unless otherwise defined in
the Agreement and subject to the modifications herein set forth, capitalized
terms used in the Agreement or in any provisions of the Receivables Purchase
Agreement incorporated in the Agreement by reference shall have the meanings
given to them in the Receivables Purchase Agreement. Without limiting the
foregoing, the defined terms "Credit and Collection Policy," "Seller Report"
and "Collection Account Agreement" are hereby incorporated by reference
together with the related Schedule II, Annex A and Annex B, respectively, of
the Receivables Purchase Agreement. All references to the "Agent" and
"Agreement" in provisions of the Receivables Purchase Agreement (including
Exhibits and Schedules) incorporated in the Agreement by reference shall,
without further reference, mean Societe Generale, as Agent under the
Agreement and the Receivables Purchase Agreement, respectively. Furthermore,
all references in such incorporated provisions to "Collections," "Contract,"
"Net Receivables Pool Balance," "Pool Receivable," "Receivable Interest,"
"Receivables Pool" and "Related Security" shall mean the Collections, a
Contract, the Net Receivables Pool Balance, a Pool Receivable, a Receivable
Interest, the Receivables Pool and the Related Security under the Agreement,
respectively. To the extent any word or phrase is defined in the Agreement,
any such word or phrase appearing in provisions so incorporated by reference
from the Receivables Purchase Agreement shall have the meaning given to it in
the Agreement. The incorporation by reference into the Agreement from the
Receivables Purchase Agreement is for convenience only, and the Agreement and
the Receivables Purchase Agreement shall at all times be, and be treated as,
separate and distinct facilities. Incorporations by reference in the
Agreement from the Receivables Purchase Agreement shall not be affected or
impaired by any subsequent expiration or termination of the Receivables
Purchase Agreement, nor by any amendment thereof or waiver thereunder unless
the
<PAGE>
Agent, as Agent for the Banks, shall have consented to such amendment or
waiver in writing.
Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State of New York,
and not specifically defined herein, are used herein as defined in such
Article 9.
<PAGE>
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The initial purchase of
a Receivable Interest under the Agreement is subject to the conditions
precedent that the conditions precedent to the initial purchase under the
Receivables Purchase Agreement shall have been satisfied on or prior to the
date of such purchase under the Agreement and that the Agent shall have
received on or before the date of such purchase under the Agreement the
following, each (unless otherwise indicated) dated such date, in form and
substance satisfactory to the Agent:
(a) Certified copies of the resolutions of the Board of
Directors of the Seller approving the Agreement and certified copies of
all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to the Agreement.
(b) Certified copies of the resolutions of the Board of
Directors of the Parent approving the Parent Undertaking Agreement and
certified copies of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to the Parent
Undertaking Agreement.
(c) A certificate of the Secretary or Assistant Secretary of the
Seller certifying the names and true signatures of the officers of the
Seller authorized to sign the Agreement and the other documents to be
delivered by it hereunder.
(d) A certificate of the Secretary or Assistant Secretary of the
Parent certifying the names and true signatures of the officers thereof
authorized to sign the Parent Undertaking Agreement.
(e) Acknowledgment copies or time stamped receipt copies of
proper financing statements, duly filed on or before the date of such
initial purchase under the UCC of all jurisdictions that the Agent may
deem necessary or desirable in order to perfect the ownership interests
contemplated by the Agreement.
<PAGE>
(f) Acknowledgment copies or time stamped receipt copies of
proper financing statements, if any, necessary to release all security
interests and other rights of any Person in the Receivables, Contracts
or Related Security previously granted by the Seller.
(g) Completed requests for information, dated on or before the
date of such initial purchase, listing the financing statements referred
to in subsection (e) above and all other effective financing statements
filed in the jurisdictions referred to in subsection (e) above that name
the Seller as debtor, together with copies of such other financing
statements (none of which shall cover any Receivables, Contracts or
Related Security).
(h) A favorable opinion of Richard F. Cooper, Esq., in-house
counsel for the Seller, substantially in the form of Annex C hereto and
as to such other matters as the Agent may reasonably request.
(i) A favorable opinion of Richard F. Cooper, Esq., in-house
counsel for the Parent, substantially in the form of Annex F hereto and
as to such other matters as the Agent may reasonably request.
(j) The Collection Agent Agreement.
(k) The fee agreement referred to in Section 1.05.
(l) The Parent Undertaking Agreements duly executed by the
Parent.
(m) Satisfactory results of a review and audit of the Seller's
collection, operating and reporting systems, Credit and Collection
Policy, historical receivables data and accounts.
(n) A copy of the executed Collection Account Agreement.
(o) A listing by invoice, on computer tape, of all Pool
Receivables.
2. Conditions Precedent to All Purchases and Reinvestments. Each
purchase (including the initial purchase) and each reinvestment shall be
subject to the further conditions precedent that
<PAGE>
(a) in the case of each purchase, the Collection Agent shall have
delivered to the Agent on or prior to such purchase in form and substance
satisfactory to the Agent, a completed Seller Report as of the previous month
end dated within three days prior to the date of such purchase together with
a summary by invoice (and, if requested by the Agent, by Obligor) of all Pool
Receivables and such additional information as may reasonably be requested by
the Agent,
(b) on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):
(i) the representations and warranties contained in Exhibit III
are correct on and as of the date of such purchase or reinvestment as
though made on and as of such date,
(ii) no event has occurred and is continuing, or would result
from such purchase or reinvestment, that constitutes an Event of
Termination or that would constitute an Event of Termination but for the
requirement that notice be given or time elapse or both, and
(iii) all of the Parent's long-term public debt securities, if
any, and convertible preferred securities are rated Investment Grade;
provided that if the Parent does not have any such rated securities
outstanding, the Agent has determined, in its sole discretion, that if
the Parent did have such securities, that they would receive at least
such a rating, and
(c) the Agent shall have received such other approvals, opinions or
documents as it may reasonably request.
<PAGE>
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
Exhibit III of the Receivables Purchase Agreement is hereby
incorporated herein by reference, except that each reference therein to the
"Investors" shall be deemed to be a reference to the Banks.
<PAGE>
EXHIBIT IV
COVENANTS
Exhibit IV of the Receivables Purchase Agreement is hereby incorporated
herein by reference, except that each reference therein to the "Facility
Termination Date" shall be deemed to be a reference to the Commitment
Termination Date.
<PAGE>
EXHIBIT V
EVENTS OF TERMINATION
Each of the "Events of Termination" set forth in Exhibit V of the
Receivables Purchase Agreement is hereby incorporated by reference, except
that the references in subsections (i) and (j) thereof to the "Alternate
Receivables Purchase Agreement" shall be deemed to be references to the
Receivables Purchase Agreement.
<PAGE>
COLLECTION AGENT AGREEMENT
COLLECTION AGENT AGREEMENT, dated as of March 2, 1994, between ABF
Freight System, Inc., a Delaware corporation, individually (the "Seller") and
as collection agent (the "Collection Agent"), and Societe Generale, a French
banking corporation, acting through its United States branches or agencies
(the "Agent").
W I T N E S S E T H:
WHEREAS, the Seller and the Agent are parties to the Receivables
Purchase Agreement, dated as of March 2, 1994, with Renaissance Asset Funding
Corp. (the "Issuer") and to the Alternate Receivables Purchase Agreement,
dated as of March 2, 1994, with Societe Generale (collectively, the
"Agreements").
WHEREAS, it is a condition precedent to the execution and delivery of
the Agreements that the parties hereto enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other consideration, the receipt of which
is hereby acknowledged, the parties agree as follows:
SECTION 1. Definitions. Unless otherwise defined herein, capitalized
terms shall have the meanings assigned to such terms in the Agreements.
SECTION 2. Designation of Collection Agent. The servicing,
administration and collection of the Pool Receivables shall be conducted by
the Collection Agent so designated hereunder from time to time. Until the
Agent gives notice to the Seller of the designation of a new Collection
Agent, the Seller is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Collection Agent pursuant to the terms hereof
and of each Agreement. The Agent at any time may designate as Collection
Agent any Person (including the Agent) to succeed the Seller or any successor
Collection Agent, if such Person shall consent and agree to the terms hereof.
<PAGE>
The Agent shall notify Duff & Phelps Credit Rating Co., Fitch Investors
Service, Inc. and Standard & Poor's Corporation of the designation of a new
Collection Agent. The Collection Agent may, with the prior consent of the
Agent, subcontract with any other Person for the servicing, administration or
collection of the Pool Receivables. Any such subcontract shall not affect
the Collection Agent's liability for performance of its duties and
obligations pursuant to the terms hereof.
SECTION 3. Duties of Collection Agent. The Collection Agent
shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Pool Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable
care and diligence, and in accordance with the Credit and Collection
Policy. The Seller and the Agent hereby appoint the Collection Agent,
from time to time designated pursuant to Section 1 hereof, as agent for
themselves, for the Banks and for the Investors to enforce their
respective rights and interests in the Pool Receivables, the Related
Security and the related Contracts.
(b) The Collection Agent shall administer the Collections in
accordance with the procedures described in Section 1.04 of each
Agreement. The Collection Agent also shall perform the other
obligations of the "Collection Agent" set forth in each Agreement.
(c) If no Event of Termination or event that but for notice or
lapse of time or both would constitute an Event of Termination shall
have occurred and be continuing, the Seller, while it is the Collection
Agent, may, in accordance with the Credit and Collection Policy, extend
the maturity or adjust the Outstanding Balance of any Receivable as the
Seller deems appropriate to maximize Collections thereof.
(d) The Collection Agent shall hold in trust for the Seller and
each Investor, in accordance with their respective interests, all
documents, instruments and records (including, without limitation,
computer tapes or disks) which evidence or relate to Pool Receivables.
At the request of the Agent, the Collection Agent shall mark
conspicuously the Seller's copy of each invoice evidencing each Pool
Receivable and the related Contract with a legend, acceptable to the
Agent, evidencing that Receivable Interests therein have been sold and
<PAGE>
shall mark the Seller's master data processing records evidencing such
Pool Receivables and related Contracts with such a legend.
(e) The Collection Agent shall, as soon as practicable following
receipt, turn over to the Seller any cash collections or other cash
proceeds received with respect to Receivables not constituting Pool
Receivables.
(f) The Collection Agent shall, from time to time at the request
of the Agent, furnish to the Agent (promptly after any such request) a
calculation of the amounts set aside for the Investors and the Banks
pursuant to Section 1.04 of the Agreements.
(g) Prior to the 20th day of each month, the Collection Agent
shall prepare and forward to the Agent (i) a Seller Report relating to
the Receivable Interests outstanding on the last day of the immediately
preceding month, and (ii) a summary of all Pool Receivables outstanding
on such last day, together with an analysis of the aging of such
Receivables.
SECTION 4. Certain Rights of the Agent. The Agent is
authorized at any time to date, and to deliver to the First National
Bank of Fort Smith the Notice of Effectiveness provided for in the
Collection Account Agreement. The Seller hereby transfers to the Agent,
effective when the Agent delivers such Notice of Effectiveness, the
exclusive ownership and control of the Collection Account. The Seller
shall take any actions reasonably requested by the Agent to effect such
transfer. Upon the delivery of such Notice of Effectiveness, the Agent
shall hold in trust for the Seller all amounts in the Collection Account
which do not represent Collections of Receivables. All such amounts
held in trust for the Seller may, at the request of the Seller, be
utilized to pay the general operating expenses of the Seller. All
amounts which represent Collections of Receivables may, in accordance
with the Agreements, be deposited into the Investor Account or the
Agent's Account, pro rata in accordance with outstanding Capital, as the
Agent may determine.
(b) At any time:
(I) The Agent may direct the Obligors of Pool Receivables
that all payments thereunder be made directly to the Agent or its
designee.
<PAGE>
(ii) At the Agent's request and at the Seller's expense, the
Seller shall notify each Obligor of Pool Receivables of the
ownership of Receivable Interests under the Agreements and direct
that payments be made directly to the Agent or its designee.
(iii) At the Agent's request and at the Seller's expense,
the Seller shall (A) assemble all of the documents, instruments and
other records (including, without limitation, computer tapes and
disks) that evidence or relate to the Pool Receivables, and the
related Contracts and Related Security, or that are otherwise
necessary or desirable to collect the Pool Receivables, and shall
make the same available to the Agent at a place selected by the
Agent or its designee, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting
Collections of Pool Receivables in a manner acceptable to the Agent
and, promptly upon receipt, remit all such cash, checks and
instruments, duly indorsed or with duly executed instruments of
transfer, to the Agent or its designee.
(iv) The Seller authorizes the Agent to take any and all
steps in the Seller's name and on behalf of the Seller that are
necessary or desirable, in the determination of the Agent, to
collect amounts due under the Pool Receivables, including, without
limitation, endorsing the Seller's name on checks and other
instruments representing Collections of Pool Receivables and
enforcing the Pool Receivables and the Related Security and related
Contracts.
SECTION 5. Further Assurances. The Seller agrees from time to
time, at its expense, promptly to execute and deliver all further
instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Agent may reasonably request, to
perfect, protect or more fully evidence the Receivable Interests
purchased under the Agreements, or to enable the Investors, the Banks or
the Agent to exercise and enforce their respective rights and remedies
hereunder or under the Agreements. Without limiting the foregoing, the
Seller will, upon the request of the Agent, execute and file such
financing or continuation statements, or amendments thereto, and such
other instruments and documents, that may be necessary or desirable, or
<PAGE>
that the Agent may reasonably request, to perfect, protect or evidence
such Receivable Interests.
(b) The Seller authorizes the Agent to file UCC financing
continuation statements, and assignments thereof, relating to the Pool
Receivables and the Related Security, the related Contracts and the
Collections with respect thereto without the signature of the Seller
where permitted by law. A photocopy or other reproduction of the
applicable Agreement and this Agreement shall be sufficient as a
financing statement where permitted by law.
SECTION 6. Collection Agent Fee. The Collection Agent shall be paid a
collection agent fee of 1/4 of 1% per annum on the average daily Outstanding
Balance of Pool Receivables relating to each Receivable Interest, from the
date of purchase of such Receivable Interest until the later of the
Termination Date for such Receivable Interest or the date on which such
Capital is reduced to zero, payable on the last day of each Settlement Period
for such Receivable Interest. Upon three Business Days' notice to the Agent,
the Collection Agent (if not the Seller or its designee) may elect to be
paid, as such fee, another percentage per annum on the average daily Capital
of such Receivable Interest, but in no event in excess for all Receivable
Interests relating to a single Receivables Pool of 110% of the reasonable
costs and expenses of the Collection Agent in administering and collecting
the Receivables in such Receivables Pool. The collection agent fee shall be
payable only from Collections pursuant to, and subject to the priority of
payment set forth in, Section 1.04 of each Agreement.
SECTION 7. Rights and Remedies. If the Collection Agent fails
to perform any of its obligations hereunder or under the Agreements, the
Agent may (but shall not be required to) itself perform, or cause
performance of, such obligation; and the Agent's costs and expenses
incurred in connection therewith shall be payable by the Seller (if the
Collection Agent that fails to so perform is the Seller or its
designee).
(b) The exercise by the Agent on behalf of the Investors and the
Banks of their rights hereunder and under the Agreements shall not
release the Collection Agent or the Seller from any of their duties or
obligations with respect to any Pool Receivables or under the related
Contracts. Neither the Agent, the Banks nor the Investors shall have
<PAGE>
any obligation or liability with respect to any Pool Receivables or
related Contracts, nor shall any of them be obligated to perform the
obligations of the Seller thereunder.
(c) The Seller shall perform its obligations under the Contracts
related to the Pool Receivables to the same extent as if Receivable
Interests had not been sold.
(d) The Investors and the Banks shall be third party
beneficiaries of this Agreement.
SECTION 8. Term of Agreement. The term of this Agreement shall be
coterminous with the Agreements unless earlier terminated upon notice by any
party hereto. Upon termination of this Agreement, the Collection Agent shall
remit all funds then held by it to the parties as required by Section 1.04 of
the Agreements.
SECTION 9. Execution in Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which shall be deemed
to be an original, and all such counterparts shall together constitute but
one and the same instrument.
SECTION 10. Amendments. The provisions of this Agreement may be
supplemented, modified or amended only by written instrument signed on behalf
of the parties hereto by their duly authorized officers; provided, however,
that no material amendment of this Agreement shall be effective unless a
written statement is obtained from Duff & Phelps Credit Rating Co., Fitch
Investors Service, Inc. and Standard & Poor's Corporation that the rating of
the Issuer's commercial paper notes will not be downgraded or withdrawn
solely as a result of such amendment.
SECTION 11. Waivers, Consents and Approvals. No party hereto shall be
deemed to have consented to, approved or waived any matter under this
Agreement, unless any purported consent, approval or waiver is expressly set
forth in writing and signed by the party giving the consent, approval or
waiver. No failure on the part of any party hereto to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof nor
shall any single or partial exercise of any right hereunder preclude any
<PAGE>
other or further exercise thereof with the exercise of any other right or be
construed as a waiver to or of any other breach of the same or any other
covenant, condition or duty.
SECTION 12. Notices, Etc. Except when telephone communications are
expressly authorized in this Agreement, all demands, notices and
communications hereunder shall be in writing (which shall include facsimile
transmission), shall be personally delivered, express couriered,
electronically transmitted (in which case a hard copy shall also be sent by
regular mail) or mailed by registered or certified mail to each party hereto
at its address set forth under its name on the signature pages hereof or at
such other address as shall be specified in a notice furnished hereunder.
Notices and communications by facsimile shall be effective when sent and
notices and communications sent by other means shall be effective when
received.
SECTION 13. Headings. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
SECTION 14. No Third Party Rights. Nothing expressed or implied
herein is intended or shall be construed to confer upon or to give to any
person, firm or corporation, other than the parties hereto or as specified in
Section 7(d), any right, remedy or claim under or by reason of this Agreement
or of any term, covenant or condition hereof, and all the terms, covenants,
conditions, promises and agreements contained herein shall be for the sole
and exclusive benefit of the parties hereto and their successors and
permitted assigns.
SECTION 15. Assignability. This Agreement and the rights and
obligations hereunder may not be assigned by the Seller or the Collection
Agent without the prior written consent of the Agent.
SECTION 16. Severability. If any provision of this Agreement is
invalid or unenforceable, the balance of this Agreement shall remain in
effect and, if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and
circumstances.
SECTION 17. No Proceedings. The Seller, the Collection Agent and the
Agent each hereby agree that it shall not institute against, or join any
other person in instituting against, the Issuer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceedings under any federal or state bankruptcy or similar law, for one
year and a day after the latest maturing commercial paper note issued by the
Issuer is paid.
<PAGE>
SECTION 18. Governing Law. This agreement shall be governed by, and
construed in accordance with, the law of the State of New York, without
giving effect to the conflict of laws principles thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER: ABF FREIGHT SYSTEM, INC.,
Individually and as Collection Agent
By _______________________________
Name:
Title:
1000 South 21st Street
Fort Smith, Arkansas 72901
Attention: General Counsel
Tel. No: (501) 785-6130
Facsimile No: (501) 785-6124
<PAGE>
AGENT: SOCIETE GENERALE
By________________________________
Name:
Title:
By________________________________
Name:
Title:
181 West Madison Street, Suite 3400
Chicago, IL 60602
Attention: Migdalia Lagoa
Tel No: (312) 578-5058
Facsimile No: (312) 578-5099
<PAGE>
COLLECTION ACCOUNT AGREEMENT
March 2, 1994
First National Bank
of Fort Smith
Sixth and Garrison Avenue
Fort Smith, Arkansas 72901
Re: ABF Freight System, Inc.
Account No. 1002155
Ladies and Gentlemen:
ABF Freight System, Inc. (the "Assignor") hereby notifies you that in
connection with certain transactions involving the Assignor's accounts
receivables, the Assignor will transfer exclusive ownership and control of
its account no. 1002155 maintained with you (the "Collection Account") to
Societe Generale as agent (the "Agent"). This transfer will become effective
upon your receipt of a notice of effectiveness, substantially in the form
attached hereto as Attachment 1 (the "Notice of Effectiveness"), which shall
be delivered via facsimile transmission to your attention.
In connection with the foregoing, the Assignor and the Agent hereby
instruct you, beginning on the date of receipt of the Notice of Effectiveness
to transfer all funds deposited in the Collection Account pursuant to
instructions given to you by the Agent from time to time.
You are hereby further instructed: (i) that unless and until the Agent
notifies you to the contrary, you shall make such transfers from the
Collection Account at such times and in such manner as the Assignor, in its
capacity as servicer for the Agent, shall from time to time instruct to the
extent such instructions are not inconsistent with the instructions set forth
herein, and (ii) to permit the Assignor (in its capacity as servicer for the
<PAGE>
Agent) and the Agent to obtain upon request any information relating to the
Collection Account, including, without limitation, any information regarding
the balance of activity or the Collection Account.
The Assignor also hereby notifies you that, beginning on the date of
receipt by facsimile of the Notice of Effectiveness from the Agent,
notwithstanding anything herein or elsewhere to the contrary, the Agent shall
be irrevocably entitled to exercise any and all rights in respect of or in
connection with the Collection Account, including, without limitation, the
right to specify when payments are to be made out of the Collection Account.
The Agent acts as agent for persons having a continuing interest in all of
the checks and their proceeds and all monies and earnings, if any, thereon in
the Collection Account, and you shall be the Agent's agent for the purpose of
holding such property. The funds deposited into the Collection Account will
not be subject to deduction, set-off, banker's lien, or any other right in
favor of any person other than the Agent (except that you may set off (i) all
amounts due to you in respect of your customary fees and expenses for the
routine maintenance and operation of the Collection Account, and (ii) the
face amount of any checks returned unpaid because of uncollected or
insufficient funds).
This Agreement may not be terminated at any time by the Assignor or
you, without the prior written consent of the Agent. Neither this Agreement
nor any provision hereof may be changed, amended, modified or waived orally
but only by an instrument in writing signed by the Agent and the Assignor.
You shall not assign or transfer your rights or obligations hereunder
(other than to the Agent) without the prior written consent of the Agent and
the Assignor. Subject to the preceding sentence, this Agreement shall be
binding upon each of the parties hereto and their respective successors and
assigns, and shall inure to the benefit of, and be enforceable by, the Agent,
each of the parties hereto and their respective successors and assigns.
You hereby represent that the person signing this Agreement on your
behalf is duly authorized by you to so sign.
You agree to give the Agent and the Assignor prompt notice if the
Collection Account becomes subject to any writ, judgment, warrant of
attachment, execution or similar process.
<PAGE>
Any notice, demand or other communication required or permitted to be
given hereunder shall be in writing and may be (a) personally served, (b)
sent by courier service, (c) telecopied or (d) sent by United States mail and
shall be deemed to have been given when (i) delivered in person, (ii)
delivered by courier service, (iii) upon receipt of the telecopy or (iv)
three Business Days after deposit in the United States mail (registered or
certified, with postage prepaid and properly addressed). For the purposes
hereof, (x) the addresses of the parties hereto shall be as set forth below
each party's name below, or, as to each party, at such other address as may
be designated by such party in a written notice to the other party and the
Agent, and (y) the address of Societe Generale shall be 181 West Madison
Street, Suite 3400, Chicago, Illinois 60602, facsimile: (312) 578-5099, Attn:
Migdalia Lagoa or at such other address as may be designated by the Agent in
a written notice to each of the parties hereto.
<PAGE>
Please agree to the terms of, and acknowledge receipt of, this
Agreement by signing in the space provided below.
Very truly yours,
ABF FREIGHT SYSTEM, INC.
By:
Name:
Title:
1000 South 21st Street
Fort Smith, Arkansas 72901
Attention: General Counsel
Tel. No: (501) 785-6130
Facsimile No: (501) 785-6124
ACKNOWLEDGED AND AGREED:
FIRST NATIONAL BANK OF FORT SMITH
By:
Title:
Date:
Address: Sixth and Garrison Avenue
Fort Smith, Arkansas 72901
Attention: Mont Echols, Executive Vice President
Facsimile No.: (501) 782-8856
<PAGE>
ATTACHMENT 1
COLLECTION ACCOUNT AGREEMENT
NOTICE OF EFFECTIVENESS
VIA FACSIMILE TRANSMISSION
TO: First National Bank of Fort Smith
DATED: [Date]
ATTENTION:
Re: Account No. 1002155
Gentlemen:
Pursuant to the Collection Account Agreement between ABF Freight
System, Inc. and you, dated as of March 2, 1994 (the "Agreement"), we hereby
give you notice that the transfers of the above-referenced Collection
Account, as described in the Agreement, are effective as of the date hereof.
You are hereby instructed to comply immediately with the instructions set
forth in the Agreement and, until we notify you to the contrary, to transfer
all funds deposited in the Collection Account to account number ________ at
______________________________.
SOCIETE GENERALE
as Agent
By:
Name:
Title:
<PAGE>
ACKNOWLEDGED AND AGREED:
FIRST NATIONAL BANK OF FORT SMITH
By:
Title:
Date:
Address: Sixth and Garrison Avenue
Fort Smith, Arkansas 72901
Attention: Mont Echols, Executive Vice President
Facsimile No.: (501) 782-8856
<PAGE>
PARENT UNDERTAKING AGREEMENT
AGREEMENT, dated as of March 2, 1994, made by Arkansas Best
Corporation, a corporation organized and existing under the laws of Delaware
(the "Parent"), in favor of Renaissance Asset Funding Corp. (the "Issuer"), a
Delaware corporation, and Societe Generale as agent (the "Agent") for the
Investors.
PRELIMINARY STATEMENTS:
(1) The Issuer and the Agent have entered into a Receivables Purchase
Agreement, dated as of March 2, 1994 (such agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Receivables
Agreement," the terms defined therein and not otherwise defined herein being
used herein as therein defined) with ABF Freight System, Inc., a corporation
organized and existing under the laws of Delaware (the "Seller").
(2) It is a condition precedent to the making of purchases of
Receivable Interests by the Issuer under the Receivables Agreement that the
Parent, as beneficial owner of one hundred percent of the outstanding shares
of stock of the Seller, shall have executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Issuer to make purchases under the Receivables Agreement, the Parent
hereby agrees as follows:
SECTION 1. Unconditional Undertaking. (a) The Parent hereby
unconditionally and irrevocably undertakes and agrees with and for the
benefit of the Agent (and the parties for whom it acts as agent) to cause the
due and punctual performance and observance by the Seller and its successors
and assigns of all of the terms, covenants, conditions, agreements and
undertakings on the part of the Seller (whether as Seller, Collection Agent
or otherwise) to be performed or observed under the Receivables Agreement,
Collection Agent Agreement or any document delivered in connection with the
Receivables Agreement in accordance with the terms thereof, including the
punctual payment when due of all obligations of the Seller now or hereafter
existing under the Receivables Agreement, whether for indemnification
payments, fees, expenses or similar obligations (all of the foregoing being
the "Obligations"), and agrees to pay any and all expenses (including
<PAGE>
reasonable counsel fees and expenses) incurred by the Agent (and the parties
for whom they act as agent) in enforcing any rights under this Agreement.
(b) In the event that the Seller shall fail in any manner whatsoever
to perform or observe any of the Obligations when the same shall be required
to be performed or observed under the Receivables Agreement or any such other
document, then the Parent will duly and punctually perform or observe, or
cause to be duly and punctually performed or observed, such Obligations, and
it shall not be a condition to the accrual of the obligation of the Parent
hereunder to perform or observe any Obligation (or to cause the same to be
performed or observed) that the Agent shall have first made any request of or
demand upon or given any notice to the Parent or to the Seller or their
respective successors or assigns, or have instituted any action or proceeding
against the Parent or the Seller or their respective successors or assigns in
respect thereof.
SECTION 2. Obligation Absolute. The Parent undertakes that the
Obligations will be performed or paid strictly in accordance with the terms
of the Receivables Agreement and any other document delivered in connection
with the Receivables Agreement, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Agent or the Investors with respect thereto. The
obligations of the Parent under this Agreement are independent of the
Obligations, and a separate action or actions may be brought and prosecuted
against the Parent to enforce this Agreement, irrespective of whether any
action is brought against the Seller or whether the Seller is joined in any
such action or actions. The liability of the Parent under this Agreement
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Receivables
Agreement or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to departure from the Receivables Agreement
or any other agreement or instrument relating thereto, including,
without limitation, any increase in the Obligations resulting from
additional purchases of Receivable Interests or otherwise;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the Obligations;
<PAGE>
(iv) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Obligations or any
other assets of the Seller or any of its subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Seller or any of its subsidiaries; or
(vi) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Seller or a guarantor.
This Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Obligations is rescinded or
must otherwise be returned by the Agent or any Investor upon the insolvency,
bankruptcy or reorganization of the Seller or otherwise, all as though
payment had not been made.
SECTION 3. Waiver. The Parent hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the
Obligations and this Agreement and any requirement that the Agent or any
Investor protect, secure, perfect or insure any security interest or lien or
any property subject thereto or exhaust any right or take any action against
the Seller or any other person or entity or any collateral.
SECTION 4. Subrogation. The Parent will not exercise any rights which
it may acquire by way of subrogation under this Agreement, by any payment or
performance made hereunder or otherwise, until all the Obligations and all
other amounts payable under this Agreement shall have been paid and performed
in full and the Facility Termination Date shall have occurred. If any amount
shall be paid to the Parent on account of such subrogation rights at any time
prior to the later of (x) the payment and performance in full of the
Obligations and the payment of all other amounts payable under this Agreement
and (y) the Facility Termination Date, such amount shall be held in trust for
the benefit of the Agent and the Investors and shall forthwith be paid to the
Agent to be credited and applied upon the Obligations, whether matured or
unmatured, in accordance with the terms of the Receivables Agreement or to be
held by the Agent as collateral security for any Obligations thereafter
existing. If (i) the Parent shall make payment to the Agent or the Investors
of all or any part of the Obligations, (ii) all the Obligations and all other
amounts payable under this Agreement shall be paid
<PAGE>
and performed in full and (iii) the Facility Termination Date shall have
occurred, the Agent and the Investors will, at the Parent's request, execute
and deliver to the Parent appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to the Parent of an interest in the Obligations resulting from such payment
by the Parent.
SECTION 5. Representations and Warranties. The Parent represents and
warrants as follows:
(a) The Parent is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its organization.
(b) The execution, delivery and performance by the Parent of this
Agreement are within the Parent's corporate powers, have been duly authorized
by all necessary corporate action, do not contravene (i) the charter,
articles of incorporation or by-laws of the Parent or (ii) law or any
contractual restriction binding on or affecting the Parent.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Parent of this Agreement.
(d) This Agreement is the legal, valid and binding obligation of the
Parent enforceable against the Parent in accordance with its terms, subject
to bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and to general principles of equity (whether considered in a
proceeding in equity or at law).
(e) The consolidated financial statements of the Parent as of
December 31, 1992 and for the fiscal year then ended, copies of which have
been furnished to the Agent, fairly present the financial condition of the
Parent on a consolidated basis as at such date and its results of operations
on a consolidated basis for the period covered, all in accordance with
generally accepted accounting principles consistently applied (except as
stated in the notes thereto), and since such date there has been no material
adverse change in such financial condition or results of operations on a
consolidated basis.
(f) There is no pending threatened action or proceeding affecting the
Parent before any court, governmental agency or arbitrator which may
<PAGE>
materially adversely affect the financial condition or operations of the
Parent or the ability of the Parent to perform its obligations under this
Agreement or which purports to affect the legality, validity or
enforceability of this Agreement.
(g) Each information, financial statement, document, book, record or
report furnished or to be furnished at any time by the Parent to the Agent or
any Investor in connection with this Agreement is or will be accurate in all
material respects as of its date or (except as otherwise disclosed to the
Agent or such Investor, as the case may be, at such time) as of the date so
furnished, and no such document contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary
in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
(h) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(i) The Parent is the direct or indirect beneficial owner of all of
the issued and outstanding shares of each class of the capital stock of the
Seller and all such shares of capital stock have been duly authorized and
issued and are fully paid and nonassessable.
(j) The obligations of the Parent under this Agreement do rank and
will rank at least pari passu in priority of payment and in all other
respects with all other unsecured Debt of the Parent.
SECTION 6. Covenants. The Parent covenants and agrees that, until the
latest of the Facility Termination Date, the date on which no Capital of any
Receivable Interest shall be outstanding or the date all other amounts owed
by the Seller under the Receivables Agreement to the Investors or the Agent
are paid in full, the Parent will, unless the Agent shall otherwise consent
in writing:
(a) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders with respect to
it, its business and properties.
(b) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each relevant jurisdiction,
<PAGE>
except to the extent that the failure so to preserve and maintain such
existence, rights, franchises, privileges and qualification would not
materially adversely affect the interests of the Investors or the Agent
hereunder, or the ability of the Parent to perform its obligations
hereunder.
(c) Reporting Requirements. Furnish to the Agent:
(i) as soon as available and in any event within 45 days
after the end of the first three quarters of each fiscal year of
the Parent, a copy of the Parent's quarterly report on Form 10-Q,
filed with the Securities and Exchange Commission certified by the
chief financial officer of the Parent;
(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
Parent's annual report on Form 10-K for such year for the Parent
and its subsidiaries, containing financial statements for such year
audited by Ernst & Young or other independent public accountants
acceptable to the Agent;
(iii) as soon as possible and in any event within five
days after the occurrence of each Event of Termination and each
event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Termination, a statement of the chief
financial officer of the Parent setting forth details of such Event
of Termination or event and the action that the Parent has taken
and proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof, copies of
all reports which the Parent sends to any of its security holders,
and copies of all reports and registration statements which the
Parent files with the Securities and Exchange Commission or any
national securities exchange;
(v) promptly after the filing or receiving thereof, copies
of all reports and notices, if any, which the Parent or any
subsidiary files under ERISA with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation or the U.S. Department of
Labor or which the Parent or any subsidiary receives from any of
the foregoing or from any multiemployer plan (within the meaning of
<PAGE>
Section 4001(a)(3) of ERISA) to which the Seller or any
subsidiary is or was, within the preceding five years, a
contributing employer, in each case in respect of the assessment of
withdrawal liability or an event or condition which could, in the
aggregate, result in the imposition of liability on the Seller
and/or any such subsidiary in excess of $1,000,000; and
(vi) such other information, documents, records or reports
respecting the condition or operations, financial or otherwise, of
the Parent or any of its subsidiaries as the Agent may from time to
time reasonably request.
(d) Stock Ownership. Be the registered and beneficial owner of all of
the issued and outstanding shares of each class of the capital stock of the
Seller.
SECTION 7. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, and no consent to any departure by the Parent herefrom,
shall in any event be effective unless the same shall be in writing and
signed by the Parent (only with respect to amendments) and the Agent, as
agent for the Investors, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 8. Addresses for Notices. All notices and other
communications hereunder shall be in writing (which shall include facsimile
communication), shall be personally delivered, express couriered,
electronically transmitted (in which case a hard copy shall also be sent by
regular mail) or mailed by registered or certified mail, if to the Agent, at
the following address: Societe Generale, 181 West Madison Street, Suite 3400,
Chicago, Illinois 60602, Facsimile: (312) 578-5099, Attention: Migdalia
Lagoa and if to the Parent, at the address set forth under its name on the
signature pages hereof, or, as to any party, at such other address as shall
be designated by such party in a written notice to each other party. Notices
and communications by facsimile shall be effective when sent, and notices and
communications sent by other means shall be effective when received.
SECTION 9. No Waiver; Remedies. No failure on the part of the Agent
or any Investor to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or the
<PAGE>
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 10. Continuing Agreement; Assignments under the Receivables
Agreement. This Agreement is a continuing agreement and shall
(i) remain in full force and effect until the later of (x) the
payment and performance in full of the Obligations and the payment of
all other amounts payable under this Agreement and (y) the Facility
Termination Date,
(ii) be binding upon the Parent, its successors and assigns, and
(iii) inure to the benefit of, and be enforceable by, the Agent, the
Investors and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (iii), any Investor
may assign all or any of its interest in Receivable Interests under the
Receivables Agreement to any assignee permitted under the Receivables
Agreement, and such assignee shall thereupon become vested with all the
benefits in respect thereof granted to such Investor herein or otherwise.
SECTION 11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York, without
giving effect to the conflicts of laws principles thereof.
<PAGE>
IN WITNESS WHEREOF, the Parent has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ARKANSAS BEST CORPORATION
By:__________________________________
Name:
Title:
Address: 1000 South 21st Street
Fort Smith, Arkansas 72901
Attention: General Counsel
Facsimile: (501) 785-6124
<PAGE>
PARENT UNDERTAKING AGREEMENT
AGREEMENT, dated as of March 2, 1994, made by Arkansas Best
Corporation, a corporation organized and existing under the laws of Delaware
(the "Parent"), in favor of Societe Generale, as agent (the "Agent") for the
Banks.
PRELIMINARY STATEMENTS:
(1) The Agent has entered into an Alternate Receivables Purchase
Agreement, dated as of March 2, 1994 (such agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Alternate
Receivables Agreement," the terms defined therein and not otherwise defined
herein being used herein as therein defined) with ABF Freight System, Inc., a
corporation organized and existing under the laws of Delaware (the "Seller").
(2) It is a condition precedent to the making of purchases of
Receivable Interests by the Banks under the Alternate Receivables Agreement
that the Parent, as beneficial owner of one hundred percent of the
outstanding shares of stock of the Seller, shall have executed and delivered
this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Issuer to make purchases under the Alternate Receivables Agreement, the
Parent hereby agrees as follows:
SECTION 1. Unconditional Undertaking. (a) The Parent hereby
unconditionally and irrevocably undertakes and agrees with and for the
benefit of the Agent (and the parties for whom it acts as agent) to cause the
due and punctual performance and observance by the Seller and its successors
and assigns of all of the terms, covenants, conditions, agreements and
undertakings on the part of the Seller (whether as Seller, Collection Agent
or otherwise) to be performed or observed under the Alternate Receivables
Agreement, Receivables Purchase Agreement, Collection Agent Agreement or any
document delivered in connection with the Alternate Receivables Agreement in
accordance with the terms thereof, including the punctual payment when due of
all obligations of the Seller now or hereafter existing under the Alternate
<PAGE>
Receivables Agreement, whether for indemnification payments, fees, expenses
or similar obligations (all of the foregoing being the "Obligations"), and
agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agent (and the parties for whom they act as agent)
in enforcing any rights under this Agreement.
(b) In the event that the Seller shall fail in any manner whatsoever
to perform or observe any of the Obligations when the same shall be required
to be performed or observed under the Alternate Receivables Agreement or any
such other document, then the Parent will duly and punctually perform or
observe, or cause to be duly and punctually performed or observed, such
Obligations, and it shall not be a condition to the accrual of the obligation
of the Parent hereunder to perform or observe any Obligation (or to cause the
same to be performed or observed) that the Agent shall have first made any
request of or demand upon or given any notice to the Parent or to the Seller
or their respective successors or assigns, or have instituted any action or
proceeding against the Parent or the Seller or their respective successors or
assigns in respect thereof.
SECTION 2. Obligation Absolute. The Parent undertakes that the
Obligations will be performed or paid strictly in accordance with the terms
of the Alternate Receivables Agreement and any other document delivered in
connection with the Alternate Receivables Agreement, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Agent or the Banks with respect
thereto. The obligations of the Parent under this Agreement are independent
of the Obligations, and a separate action or actions may be brought and
prosecuted against the Parent to enforce this Agreement, irrespective of
whether any action is brought against the Seller or whether the Seller is
joined in any such action or actions. The liability of the Parent under this
Agreement shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Alternate
Receivables Agreement or any other agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to departure from the Alternate Receivables
Agreement or any other agreement or instrument relating thereto,
<PAGE>
including, without limitation, any increase in the Obligations resulting
from additional purchases of Receivable Interests or otherwise;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the Obligations;
(iv) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Obligations or any
other assets of the Seller or any of its subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Seller or any of its subsidiaries; or
(vi) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Seller or a guarantor.
This Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Obligations is rescinded or
must otherwise be returned by the Agent or any Bank upon the insolvency,
bankruptcy or reorganization of the Seller or otherwise, all as though
payment had not been made.
SECTION 3. Waiver. The Parent hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the
Obligations and this Agreement and any requirement that the Agent or any Bank
protect, secure, perfect or insure any security interest or lien or any
property subject thereto or exhaust any right or take any action against the
Seller or any other person or entity or any collateral.
SECTION 4. Subrogation. The Parent will not exercise any rights which
it may acquire by way of subrogation under this Agreement, by any payment or
performance made hereunder or otherwise, until all the Obligations and all
other amounts payable under this Agreement shall have been paid and performed
in full and the Commitment Termination Date shall have occurred. If any
amount shall be paid to the Parent on account of such subrogation rights at
any time prior to the later of (x) the payment and performance in full of the
Obligations and the payment of all other amounts payable under this Agreement
and (y) the Commitment Termination Date, such amount shall be
<PAGE>
held in trust for the benefit of the Agent and the Banks and shall forthwith
be paid to the Agent to be credited and applied upon the Obligations, whether
matured or unmatured, in accordance with the terms of the Alternate
Receivables Agreement or to be held by the Agent as collateral security for
any Obligations thereafter existing. If (i) the Parent shall make payment to
the Agent or the Banks of all or any part of the Obligations, (ii) all the
Obligations and all other amounts payable under this Agreement shall be paid
and performed in full and (iii) the Commitment Termination Date shall have
occurred, the Agent and the Banks will, at the Parent's request, execute and
deliver to the Parent appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to the Parent of an interest in the Obligations resulting from such payment
by the Parent.
SECTION 5. Representations and Warranties. The Parent represents and
warrants as follows:
(a) The Parent is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its organization.
(b) The execution, delivery and performance by the Parent of this
Agreement are within the Parent's corporate powers, have been duly authorized
by all necessary corporate action, do not contravene (i) the charter,
articles of incorporation or by-laws of the Parent or (ii) law or any
contractual restriction binding on or affecting the Parent.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Parent of this Agreement.
(d) This Agreement is the legal, valid and binding obligation of the
Parent enforceable against the Parent in accordance with its terms, subject
to bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and to general principles of equity (whether considered in a
proceeding in equity or at law).
(e) The consolidated financial statements of the Parent as of
December 31, 1992 and for the fiscal year then ended, copies of which have
been furnished to the Agent, fairly present the financial condition of the
Parent on a consolidated basis as at such date and its results of operations
on a consolidated basis for the period covered, all in accordance with
<PAGE>
generally accepted accounting principles consistently applied (except as
stated in the notes thereto), and since such date there has been no material
adverse change in such financial condition or results of operations on a
consolidated basis.
(f) There is no pending threatened action or proceeding affecting the
Parent before any court, governmental agency or arbitrator which may
materially adversely affect the financial condition or operations of the
Parent or the ability of the Parent to perform its obligations under this
Agreement or which purports to affect the legality, validity or
enforceability of this Agreement.
(g) Each information, financial statement, document, book, record or
report furnished or to be furnished at any time by the Parent to the Agent or
any Bank in connection with this Agreement is or will be accurate in all
material respects as of its date or (except as otherwise disclosed to the
Agent or such Bank, as the case may be, at such time) as of the date so
furnished, and no such document contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary
in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
(h) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(i) The Parent is the direct or indirect beneficial owner of all of
the issued and outstanding shares of each class of the capital stock of the
Seller and all such shares of capital stock have been duly authorized and
issued and are fully paid and nonassessable.
(j) The obligations of the Parent under this Agreement do rank and
will rank at least pari passu in priority of payment and in all other
respects with all other unsecured Debt of the Parent.
SECTION 6. Covenants. The Parent covenants and agrees that, until the
latest of the Commitment Termination Date, the date on which no Capital of
any Receivable Interest shall be outstanding or the date all other amounts
owed by the Seller under the Alternate Receivables Agreement to the Banks or
the Agent are paid in full, the Parent will, unless the Agent shall otherwise
consent in writing:
<PAGE>
(a) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders with respect to
it, its business and properties.
(b) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each relevant jurisdiction,
except to the extent that the failure so to preserve and maintain such
existence, rights, franchises, privileges and qualification would not
materially adversely affect the interests of the Bank or the Agent
hereunder, or the ability of the Parent to perform its obligations
hereunder.
(c) Reporting Requirements. Furnish to the Agent:
(i) as soon as available and in any event within 45 days after
the end of the first three quarters of each fiscal year of the
Parent, a copy of the Parent's quarterly report on Form 10-Q, filed
with the Securities and Exchange Commission certified by the chief
financial officer of the Parent;
(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 Parent's
annual report on Form 10-K for such year for the Parent and its
subsidiaries, containing financial statements for such year audited
by Ernst & Young or other independent public accountants acceptable
to the Agent;
(iii) as soon as possible and in any event within five days
after the occurrence of each Event of Termination and each event
which, with the giving of notice or lapse of time, or both, would
constitute an Event of Termination, a statement of the chief
financial officer of the Parent setting forth details of such Event
of Termination or event and the action that the Parent has taken
and proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof, copies of
all reports which the Parent sends to any of its security holders,
and copies of all reports and registration statements which the
Parent
<PAGE>
files with the Securities and Exchange Commission or any national
securities exchange;
(v) promptly after the filing or receiving thereof, copies of
all reports and notices, if any, which the Parent or any subsidiary
files under ERISA with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor or
which the Parent or any subsidiary receives from any of the
foregoing or from any multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA) to which the Seller or any subsidiary
is or was, within the preceding five years, a contributing
employer, in each case in respect of the assessment of withdrawal
liability or an event or condition which could, in the aggregate,
result in the imposition of liability on the Seller and/or any such
subsidiary in excess of $1,000,000; and
(vi) such other information, documents, records or reports
respecting the condition or operations, financial or otherwise, of
the Parent or any of its subsidiaries as the Agent may from time to
time reasonably request.
(d) Stock Ownership. Be the registered and beneficial owner of all of
the issued and outstanding shares of each class of the capital stock of the
Seller.
SECTION 7. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, and no consent to any departure by the Parent herefrom,
shall in any event be effective unless the same shall be in writing and
signed by the Parent (only with respect to amendments) and the Agent, as
agent for the Banks, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 8. Addresses for Notices. All notices and other
communications hereunder shall be in writing (which shall include facsimile
communication), shall be personally delivered, express couriered,
electronically transmitted (in which case a hard copy shall also be sent by
regular mail) or mailed by registered or certified mail, if to the Agent, at
the following address: Societe Generale, 181 West Madison Street, Suite 3400,
Chicago, Illinois 60602, Facsimile: (312) 578-5099, Attention: Migdalia
Lagoa and if to the Parent, at the address set forth under its name on the
<PAGE>
signature pages hereof, or, as to any party, at such other address as shall
be designated by such party in a written notice to each other party. Notices
and communications by facsimile shall be effective when sent, and notices and
communications sent by other means shall be effective when received.
SECTION 9. No Waiver; Remedies. No failure on the part of the Agent
or any Bank to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 10. Continuing Agreement; Assignments under the Alternate
Receivables Agreement. This Agreement is a continuing agreement and shall
(i) remain in full force and effect until the later of (x) the
payment and performance in full of the Obligations and the payment of
all other amounts payable under this Agreement and (y) the Commitment
Termination Date,
(ii) be binding upon the Parent, its successors and assigns, and
(iii) inure to the benefit of, and be enforceable by, the Agent, the
Banks and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (iii), any Bank may
assign all or any of its interest in Receivable Interests under the Alternate
Receivables Agreement to any assignee permitted under the Alternate
Receivables Agreement, and such assignee shall thereupon become vested with
all the benefits in respect thereof granted to such Investor herein or
otherwise.
SECTION 11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York, without
giving effect to the conflicts of laws principles thereof.
<PAGE>
IN WITNESS WHEREOF, the Parent has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ARKANSAS BEST CORPORATION
By:__________________________________
Name:
Title:
Address: 1000 South 21st Street
Fort Smith, Arkansas 72901
Attention: General Counsel
Facsimile: (501) 785-6124