FORBEARANCE AGREEMENT
This Forbearance Agreement (this "Agreement") is entered into this 30th
day of December, 1999 by and among T&W FUNDING COMPANY VIII, L.L.C., a
Delaware limited liability company (the "Borrower"), SPECIAL PURPOSE ACCOUNTS
RECEIVABLE COOPERATIVE CORPORATION, a California corporation (the "Lender"),
and CANADIAN IMPERIAL BANK OF COMMERCE (as Agent with respect to the Credit
Agreement (as defined below), the "Agent"). Capitalized terms used herein
and not defined herein shall have the meanings set forth in that certain
Contracts Credit Agreement dated as of June 15, 1998 among the Borrower, T&W
Financial Services Company L.L.C. ("T&W"), the Lender, and the Agent (as such
agreement has been amended from time to time through the date hereof, the
"Credit Agreement").
WHEREAS, as a result of the occurrence of certain Servicer Defaults,
pursuant to the Credit Agreement, an Event of Termination has occurred under
the Credit Agreement and the Termination Date has occurred; and
WHEREAS, as of the date hereof the Lender and the Agent have, in their
sole and absolute discretion, determined to forbear from exercising their
enforcement rights under the Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the parties hereby
agree as follows:
1. RECITALS. The terms and provisions of the introductory paragraphs
of this Agreement are hereby acknowledged by the undersigned as true and
correct as of the date hereof and are hereby incorporated into this Agreement
as a part hereof by this reference.
2. SERVICING TRANSITION ACKNOWLEDGMENT. (a) The Borrower hereby
agrees and acknowledges that the rights and duties of the Servicer under the
Credit Agreement have been transferred to Finova Loan Administration Inc.
("Finova"), pursuant to the Credit Agreement, and that Finova is currently
the Servicer pursuant to the Credit Agreement. In connection with the
foregoing, T&W, the Lender and the Agent have entered into a Servicing
Transition Agreement of even date herewith (the "Servicing Transition
Agreement"). The Borrower agrees that the Servicing Agreement attached as
Attachment 1 to the Servicing Transition Agreement (the "Servicing
Agreement") shall constitute a supplement to and be incorporated into the
Credit Agreement in its entirety, and is a binding agreement among the
parties hereto and thereto. If any of the terms and conditions of the
Servicing Agreement conflict with any of the other terms and conditions of
the Credit Agreement, the terms and conditions set forth in the Servicing
Agreement shall prevail and be binding on all of the parties to the Servicing
Agreement and/or the Credit Agreement. In furtherance of the foregoing, (A)
as a condition to the effectiveness of this Agreement, the Borrower shall
have executed and delivered, simultaneously with the execution and delivery
of this Agreement, that Power of Attorney appended to the Servicing
Transition Agreement as ATTACHMENT 3, and (B) without prejudice or limitation
to any provision in the Facility Documents, the Agent and the Lender are
hereby authorized and empowered to
execute and deliver, on behalf of the Borrower, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things, required of the Borrower pursuant to this Agreement.
(b) The Agent and the Lender hereby notify the Borrower that Finova is
their authorized agent for all purposes regarding the servicing of the
Collateral and the Pledged Assets and that the Borrower is authorized to take
instructions from Finova with respect to such servicing as if such
instructions were given directly by the Agent or the Lender. The Borrower
agrees to fully and faithfully act in accordance with such instructions of
Finova as if such instructions were given directly by the Agent or the Lender.
3. FORBEARANCE. (a) In connection with the existing Events of
Termination under the Credit Agreement, the Borrower has requested that the
Lender and the Agent forbear temporarily in the exercise of their respective
rights and remedies under the Credit Agreement and other Facility Documents,
subject to the provisions of this Agreement. The Lender and the Agent have
agreed to this request upon the terms, subject to the conditions, and in
reliance upon the agreements, representations and warranties set forth in
this Agreement.
(b) The Borrower acknowledges that the Lender and the Agent have
preserved all of their respective rights and remedies under the Credit
Agreement, the other Facility Documents and applicable law and that, but for
the provisions of this Agreement, the Lender and the Agent would be
immediately entitled to enforce their rights and remedies under the Credit
Agreement and the other Facility Documents. Notwithstanding the foregoing,
the Lender and the Agent acknowledge and agree that, during the "Forbearance
Period" (as defined below) they shall not (1) take any action to foreclose
upon the "Collateral" (as defined in Section 6.01 of the Credit Agreement),
or (2) send a written notice to Norwest Bank Minnesota, National Association
terminating any further disbursements from T&W's Concentration Account as
more fully set forth in the Norwest notice referenced in PARAGRAPH 4(d) of
the Servicing Transition Agreement. In the event and to the extent of any
conflict between the provisions contained in the Facility Documents and the
provisions contained in this Agreement, the provisions of this Agreement
shall control.
(c) Notwithstanding Section 3(b), each of the Lender and the Agent
is at any time authorized: (i) to take any action: (A) to prevent the loss,
seizure or sale of any of the Collateral pursuant to any trustee's sale writ
of execution, writ of attachment or other legal process; (B) to resist or
oppose any claim by any other creditor to any offset or to a marshaling or
other ordering of the priority or manner of the disposition of the Collateral
or any part thereof, or (C) to take any actions required to be taken by the
Lender or the Agent pursuant to any law, regulation or process to which the
Lender or the Agent is subject including, without limitation, any action to
perfect, preserve, defend, or protect its security interest or priority as a
secured creditor of the Borrower; and (ii) to take any legal action if such
action is a necessary or permissive counterclaim or cross-complaint in any
action which either the Borrower or any other person has commenced against
the Lender or the Agent or involving any of the Collateral.
4. FORBEARANCE PERIOD. The "Forbearance Period" under this
Agreement shall (A) commence upon the satisfaction of the conditions described
in Section 11(b) of the
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Servicing Transition Agreement and all other conditions in the Servicing
Transition Agreement to the making of any part of the Servicing Transition
Loan (as defined therein), and (B) terminate upon the occurrence of any one
or more of the following (each a "Forbearance Termination Event"):
(a) The Borrower fails to perform or observe any covenant, term,
agreement or condition in this Agreement and such failure to perform or
observe is not cured by the Borrower within one business day after written
notice of the same is given by the Agent to the Borrower and the
non-guarantor parties to the T&W Funding Agreement (as defined in the
Servicing Transition Agreement).
(b) The validity, binding nature of, or enforceability of any material
term or provision of any other Facility Document is disputed by, on behalf
of, or in the right or name of the Borrower or T&W, or any material term or
provision of any such Facility Document is found or declared to be invalid,
avoidable, or non-enforceable by any court of competent jurisdiction.
(c) Any warranty or representation made by the Borrower in this
Agreement or in any writing delivered in connection therewith shall prove to
have been false or incorrect in any material respect.
(d) A final judgment is entered, or an order or orders of any judicial
authority or governmental entity is issued, against the Borrower for payment
of money in excess of $100,000 and such judgment is not discharged or stayed
pending appeal within 15 days after entry or issuance thereof.
(e) The Borrower applies for, consents to, or acquiesces in, the
appointment of a trustee, receiver or other custodian for a substantial part
of its property, or makes a general assignment for the benefit of creditors.
(f) The Borrower commences any bankruptcy, reorganization, debt arrangement,
or other case or proceeding under any state, federal or foreign bankruptcy or
insolvency law, or any dissolution or liquidation proceeding.
(g) Any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any state, federal or foreign bankruptcy or insolvency law,
or any dissolution or liquidation proceeding, is involuntarily commenced
against or in respect of the Borrower or an order for relief is entered in
any such proceeding.
(h) A trustee, receiver or other custodian is appointed for the Borrower.
(i) Any lien of the Lender or the Agent in the Collateral with a value of
$100,000 or more shall cease to be, either in whole or in part, a valid,
first priority perfected lien in favor of the Lender or the Agent, or the
Borrower shall, either directly or indirectly, contest any of the foregoing.
(j) The Borrower shall have concealed, removed or permitted to be removed
any part of its property with intent to hinder, delay or defraud its
creditors or made or suffered a transfer of any of its property which is
fraudulent under any bankruptcy, fraudulent conveyance or similar law.
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(k) Any of the events described in Section 11(e) of the Servicing Transition
Agreement shall have occurred.
Notwithstanding anything to the contrary above, the Forbearance Period shall
not commence unless and until the Agent shall have received a certificate of
the Secretary or Assistant Secretary of the Borrower certifying (i) a copy of
the resolutions of the Members of the Borrower approving this Agreement, and
(ii) the names and true signatures of the officers authorized on the
Borrower's behalf to sign this Agreement (on which certificate the Agent and
the Lender may conclusively rely).
5. PROFESSIONAL FEES AND OTHER COSTS AND EXPENSES. The Borrower
acknowledges that Xxxxxx Xxxxxxxx ("Xxxxxxxx") has been retained by the Agent
(through its counsel) to conduct a continuing due diligence investigation
with respect to the Collateral and the Pledged Assets. All of the fees and
expenses of Xxxxxxxx and all other out-of-pocket fees, costs and expenses
(including attorneys' fees and expenses) incurred by the Agent or the Lender
in connection with the enforcement of the Facility Documents or otherwise
reimbursable pursuant to the Facility Documents (including, without
limitation, in connection with the negotiation, preparation, execution,
delivery, and monitoring of compliance with this Agreement) shall be
liabilities and obligations of, and reimbursable by, the Borrower from
Collections prior to any payment to the Borrower under clause (xi) of Section
2.06(b) of the Credit Agreement. The foregoing shall be without prejudice
to, and shall not otherwise impair in any manner, any liability that the
Borrower or T&W may have to the Agent or the Lender for such fees, costs, and
expenses or otherwise.
6. NO WAIVER. Except as specifically set forth herein, the terms and
conditions of the Credit Agreement, of all other Facility Documents and any
other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect and are hereby
ratified and confirmed. The execution, delivery and effectiveness of this
Agreement shall not operate as a waiver of any right, power or remedy of the
Agent or the Lender under the Credit Agreement or any other Facility Document
or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein. The
parties hereto understand and agree that (i) the execution, delivery and
effectiveness of this Agreement in no way constitutes a waiver of any Event
of Termination or Servicer Default, or otherwise affects, limits or impairs,
by implication or otherwise, the rights or remedies of the Agent and/or the
Lender arising as a result of such Events of Termination or Servicer
Defaults, (ii) all such rights and remedies are hereby confirmed, and (iii)
each of the Agent and the Lender, by executing this Agreement, hereby
specifically reserves the right to exercise any of its respective rights and
remedies arising in connection with any such Event of Termination or Servicer
Default
7. RELEASE. Effective as of the date hereof, the Borrower, on behalf of
itself and any Person claiming by, through, or under it (the "Releasing
Parties"), hereby releases, waives and forever discharges the Lender, the
Agent, their affiliates, and the officers, directors, employees, agents,
attorneys, and accountants of each of the foregoing (the "Released Parties")
from, and with respect to, any and all manner of action and actions, cause
and causes of action, suits, disputes, claims, counterclaims and/or
liabilities, cross claims, defenses, setoffs, and recoupment whether now
known or unknown, suspected or unsuspected, past or present, asserted or
unasserted,
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contingent or liquidated, whether or not well-founded in fact or law, whether
in contract, in tort or otherwise, at law or in equity, which the Releasing
Parties had or now have, claim to have had, now claim to have or hereafter
can, shall or may claim to have against such Released Party, for or by reason
of any cause, matter, or thing whatsoever arising at any time prior hereto
through the date hereof. The Releasing Parties agree to assume the risk of
any and all unknown, unanticipated or misunderstood action and actions, cause
and causes of action, suits, disputes, claims, counterclaims and/or
liabilities, cross claims, defenses, setoffs, or recoupment which are
released by this Agreement. Notwithstanding anything in the foregoing
sentences of this paragraph to the contrary, no release is intended be made
by the Borrower of its rights (1) to receive Collections under and pursuant
to clause (xi) of Section 2.06(b) of the Credit Agreement, or (2) under this
Agreement.
8. ADDITIONAL AGREEMENTS AND ACKNOWLEDGMENTS. The Borrower acknowledges,
stipulates, represents, warrants, and agrees (as applicable) that:
(a) The Facility Documents are valid and enforceable in accordance with
their respective terms in every respect; all the collateral and security
interests created pursuant thereto in favor of the Lender or the Agent
continues unimpaired and in full force and effect; and all of the terms,
covenants and conditions contained in the Facility Documents are binding upon
the Borrower as provided therein.
(b) As of the Effective Time, the principal amount owing by the Borrower
under the Facility Documents is no less than $126,558,285.86, exclusive of
accrued interest, fees, costs, expenses, and other reimbursements or
Obligations under the Facility Documents.
(c) None of the Released Parties has at any time directed or participated in
any aspect of the management of the Borrower or the conduct of the Borrower's
business, and the Borrower has made all of its business decisions
independently of such parties. Notwithstanding any other provision of this
Agreement or any Facility Document: (a) the relationship between the Agent
and the Lender and the Borrower shall be limited to the relationship of a
lender, and an agent for such lender, to the Borrower in a commercial loan
transaction; (b) no Released Party is or shall be construed as a partner,
joint venturer, fiduciary, alter-ego, manager, controlling person or other
business associate or participant of any kind of the Borrower or any of its
affiliates, and no Released Party intends to assume any such status at any
time; and (c) no Released Party shall be deemed responsible for (or a
participant in) any acts, omissions or decisions of the Borrower, or any of
its affiliates.
(d) All action required to be taken by the Borrower for the authorization,
execution, delivery and performance of this Agreement and the other documents
contemplated hereby and thereby have been taken. This Agreement is, and each
of the documents executed pursuant hereto will be, legal, valid, and binding
obligations of the Borrower, enforceable against the Borrower in accordance
with their respective terms, subject only to bankruptcy, insolvency,
reorganization, moratorium and other laws or equitable principles affecting
creditors' rights generally.
(e) The Borrower will at any time and from time to time do and perform all
acts and things the Agent or the Lender deems reasonably necessary or
appropriate to protect or preserve the perfection or the priority of the
security interests of the Agent or the Lender in or to the
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Collateral and Pledged Assets and otherwise to effectuate this Agreement and
the Facility Documents. Without limiting the foregoing, upon the request of
the Agent or the Lender, the Borrower will execute and deliver to such party
such documents and instruments, including without limitation, Uniform
Commercial Code financing statements and notarized power(s) of attorney, as
such party reasonably deems necessary or convenient to perfect, collect,
dispose of and/or realize upon such party's interests in the Collateral and
Pledged Assets.
(f) The Borrower shall, notwithstanding the terms of this Agreement continue
to comply with all the terms, conditions and covenants contained in the
Facility Documents, it being agreed that the Borrower shall not take any
action thereunder that would otherwise be prohibited during the continuance
of any default or event of default.
9. MISCELLANEOUS.
(a) EFFECT; ASSIGNMENT. This Agreement will bind and inure to the benefit
of the parties hereto, and their permitted successors and assigns.
(b) OTHER DOCUMENTS. The parties shall execute such other documents as may
be reasonably necessary and desirable to implement and consummate this
Agreement.
(c) GOVERNING LAW. This Agreement will be governed, construed and enforced
in accordance with the laws of the State of New York without giving effect to
any conflicts of law rule or principle that might require the application of
the laws of another jurisdiction.
(d) COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such
counterpart were upon the same instrument.
(e) HEADINGS. The headings of the sections of this Agreement are inserted
as a matter of convenience and for reference only and in no respect define,
limit or describe the scope of this Agreement or the intent of any paragraph
hereof.
(f) ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT REPRESENTS THE ENTIRE
UNDERSTANDING AND AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE
SUBJECT MATTER HEREOF, SUPERSEDES ALL PRIOR NEGOTIATIONS BETWEEN SUCH
PARTIES, AND CAN BE AMENDED, SUPPLEMENTED OR CHANGED ONLY BY AN AGREEMENT IN
WRITING SIGNED BY EACH OF THE PARTIES HERETO.
(g) SEVERABILITY. In the event that any section or provision of this
Agreement or any documents executed and delivered in connection therewith is
found by a court or other body of competent jurisdiction to be invalid or
unenforceable, then this Agreement and such documents shall be treated as if
such invalid or unenforceable provision were modified to make it valid and
enforceable (or if such modification is not possible, such provision shall be
deleted) and the balance of this Agreement and such documents shall remain in
full force and effect.
(h) NO WAIVER. Any delay by any party in enforcing any of its rights or
remedies hereunder shall not be deemed to be a waiver of any of such party's
rights or remedies hereunder or a waiver of
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any future rights or remedies. In addition, the rights and remedies of the
parties to this Agreement shall be cumulative.
(i) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit
solely of the parties hereto and no other party is intended to be, or shall
be deemed to be, a third party beneficiary hereof.
(j) CONSTRUCTION. The parties have been represented by counsel in connection
with this Agreement and the transactions contemplated herein. Counsel for
each party has had an opportunity to review and comment on the contents of
this Agreement, and, as a result thereof, any rules of construction which
construe a document against a drafter thereof shall not be applicable with
respect to this Agreement.
(k) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
(l) WAIVER OF JURY TRIAL. EACH PERSON A PARTY HERETO KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
TRANSITION DOCUMENT.
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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.
T&W FUNDING COMPANY VIII, L.L.C.
By: /s/ Xxxxxx X. Virgin
-------------------------------------
Name: Xxxxxx X. Virgin
Address:
Telecopy No.: (000) 000-0000
SPECIAL PURPOSE ACCOUNTS RECEIVABLE
COOPERATIVE CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Authorized Signatory
Address:
Telecopy No.: (000) 000-0000
CANADIAN IMPERIAL BANK OF COMMERCE,
as Agent
By: /s/ Xxxxxx X. Xxxxx Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxx Xx.
Authorized Signatory
Address:
Telecopy No.: (000) 000-0000
All of the terms and conditions of this Agreement are hereby consented to
by Bank Boston, N.A.
BANK BOSTON, N.A.
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx, Authorized Signatory
Address:
Telecopy No.:
