Document:

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                                                                    EXHIBIT 10.2

                              MANAGEMENT AGREEMENT

      This MANAGEMENT AGREEMENT (the "Agreement") is dated as of
this_________day of_________, 2002, between the Tenants in Common whose
signatures appear at the end hereof (collectively, the "Tenants in Common"), and
Triple Net Properties Realty, Inc., a California corporation ("Property
Manager").

      The Tenants in Common own certain real property and improvements in
_______________, _______, commonly known as__________________________, as more
particularly described in Exhibit "A" attached hereto and incorporated herein
(the "Property"). The Tenants in Common have entered into a Tenants in Common
Agreement (the "Tenants in Common Agreement") concurrently herewith to provide
for the orderly ownership and operation of the Property. The Tenants in Common
desire to engage Property Manager to manage, lease, operate, and maintain the
Property.

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

      1. COMMENCEMENT AND TERMINATION DATES; AUTHORITY OF TENANTS IN COMMON.

            1.1 Commencement and Termination. Property Manager's duties and
responsibilities under this Agreement shall begin on the date of this Agreement
(the "Start Date") and shall terminate on the earlier of (i) the sale of the
Property or any portion thereof, as to such portion of the Property sold only
(other than any sale of an undivided interest held by a Tenant in Common to a
party that will acquire such interest subject to the Tenants in Common
Agreement), (ii) termination as provided in Section 10.1, or (iii) December 31,
2012.

            1.2 Approval of the Tenants in Common. Whenever in this Agreement
the approval, consent or other action by the Tenants in Common is required or
otherwise appropriate, the unanimous approval, consent or other action of the
Tenants in Common shall be required to approve: (i) this Management Agreement
and all amendments and renewals hereof in accordance with Section 10.1; (ii) all
leases and amendments thereof in accordance with Sections 2.5 and 2.6; (iii) all
financing and refinancing of the Property; and (iv) sale of the Property (other
than a sale pursuant to the Purchase Option described in Section 11 of the
Tenants in Common Agreement). All other actions in this Agreement requiring
approval of the Tenants in Common may be taken by the Tenants in Common holding
more than fifty percent (50%) of the undivided interests in the Property.
Whenever in this Agreement the consent or approval of the Tenants in Common is
required or otherwise requested, each Tenant in Common generally shall have
thirty (30) days after the date on which the request for consent or approval is
submitted to it by Property Manager in which to approve or disapprove of the
matter in writing (unless a longer or shorter period for response is expressly
provided for herein, for example, the ten (10) day period to review and approve
leasing matters). A Tenant in Common who does not disapprove of the matter
within such thirty (30) day period (or such longer or shorter period expressly
provided for herein) shall be deemed to have approved the matter. Property
Manager shall have no obligation hereunder to comply with any requests or
direction made by less than all of the appropriate percentage of the Tenants in
Common pursuant to Section 1.2 of this Agreement.

      2. PROPERTY MANAGER'S RESPONSIBILITIES.

            2.1 Status of Property Manager. The Tenants in Common and Property
Manager do not intend to form a joint venture, partnership or similar
relationship. Instead, the parties intend that Property Manager shall act solely
in the capacity of an independent contractor for the Tenants in Common. Nothing
in this Agreement shall cause Property Manager and the Tenants in Common to be
joint ventures or partners of each other, and neither shall have the power to
bind or obligate the other party by virtue of this Agreement, except the powers
of Property Manager as expressly provided in this Agreement. Nothing in this
Agreement shall deprive or otherwise affect the

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right of either party to own, invest in, manage, or operate, or to conduct
business activities which compete with, the Property.

            2.2 Management. Property Manager shall manage, operate and maintain
the Property in an efficient, economic, and satisfactory manner and shall manage
the performance of everything reasonably necessary for the proper operation of
the Property for the tenants thereof, subject to (a) applicable governmental
requirements, and (b) the terms and provisions of this Agreement. At the expense
of each of the Tenants in Common, based on their undivided interests in the
Property, Property Manager shall keep the Property clean and in good repair,
shall order and supervise the completion of such repairs as may be required and
shall generally do and perform, or cause to be done or performed, all things
necessary or required for the proper and efficient management, operation, and
maintenance of the Property, provided each of the Tenants in Common, based on
their undivided interests in the Property, in a manner reasonably satisfactory
to Properly Manager, make available to Property Manager sufficient sums to pay
the costs thereof. Property Manager shall perform all services in a diligent and
professional manner.

            2.3 Employees/Independent Contractors of Property Manager. Property
Manager shall employ, directly or through third party contractors (for example,
an employee leasing company or on-site property manager), at all times, a
sufficient number of capable employees and/or independent contractors to enable
Property Manager to properly, adequately, safely and economically manage,
operate and maintain the Property. All matters pertaining to the supervision of
such employees shall be the responsibility of Property Manager. All salaries and
benefits and positions of employees who perform work in connection with the
Property shall be consistent with the Budget (as defined in Section 2.5).

            2.4 Compliance with Laws, Mortgages and Other Matters

                  2.4.1 Property Manager shall use reasonable efforts to comply
with all applicable governmental requirements, including by way of illustration,
but not limitation, Board of Fire Underwriters or other similar body, relative
to the performance of if its duties hereunder, and cause the Property to comply
with all applicable governmental laws, ordinances, rules, regulations, and
requirements. Property Manager may implement such procedures with respect to the
Property as Property Manager may deem advisable for the more efficient and
economic management and operation thereof. Property Manager shall pay from the
Operating Account (defined in Section 6.1) expenses incurred to remedy
violations of laws. However, Property Manager shall not be obligated to remedy
violations of law if sufficient funds are not available in the Operating Account
or if the Tenants in Common do not provide sufficient additional funds to do so.

                  2.4.2 Property Manager shall furnish to the Tenants in Common,
promptly after receipt, any notice of violation of any governmental requirement
or order issued by any governmental entity, any Board of Fire Underwriters or
other similar body against the Property, any notice of default from the holder
of any mortgage or deed of trust encumbering the Property, or any notice of
termination or cancellation of any insurance policy.

            2.5 Budgets and Operating Plan.

                  2.5.1 Property Manager shall prepare and submit to the Tenants
in Common, upon written request, an initial capital and operating budget
("Budget") for the promotion, operation, leasing (including leasing parameters
for the Property), repair, maintenance and improvement of the Property for the
first full calendar year of ownership on or before November 15th of the calendar
year in which the Property was acquired. The Budget shall be on a monthly, cash
basis. Property Manager shall also deliver a Budget for each subsequent calendar
year on or about November 15th of the calendar year before the budget year. The
Budget shall be approved by each Tenant in Common. Each Tenant in Common shall
be deemed to have approved the Budget and the leasing parameters contained
therein (the "Leasing Parameters") unless the Tenant in Common provides written
notice to Property Manager and the other Tenants in Common indicating specific
objection to certain Budget items within (a) thirty (30) days from receipt of
the Budget for all matters except leasing matters and (b) ten (10) days with
respect to all leasing matters. In the event any Tenant in Common disagrees with
any item in the Budget, the disputing Tenant in Common shall negotiate in good
faith with Property Manager and the other Tenants in Common for fifteen (15)
days to resolve the issue. If the parties are unable to reach an agreement on
any issue other than leasing matters, the issue shall be resolved by arbitration
as set forth in Section 2.5.5 with (a) each of the disputing Tenant(s) in

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Common paying his pro rate share of fifty percent (50%) of the cost of
arbitration, and (b) all the other Tenants in Common paying his pro rata share
of fifty percent (50%) of the costs of the arbitration. The Property Manager may
proceed under the terms of the proposed Budget for items that are not objected
to and may take any action with respect to items not approved for Emergency
Expenditures (as defined in Section 2.5.2). Property Manager shall provide the
Tenants in Common with such information regarding the Budget as may be, from
time to time, reasonably requested by the Tenants in Common. Property Manager
may at any time submit a revised Budget to the Tenants in Common.

                  2.5.2 Property Manager shall charge all expenses to the proper
account as specified in the Budget, provided that Property Manager may
reallocate savings from one line item to other line items, so long as not more
than ten percent (10%) of the amount of any line item is reallocated in any
calendar year. Property Manager shall submit a revised Budget to the Tenants in
Common prior to making any expenditure not within the Budget unless the
expenditure is (a) less than Ten Thousand Dollars ($10,000), or (b) in the
Property Manager's reasonable judgment, required to avoid personal injury,
significant property damage, a default under any loan encumbering the Property,
a violation of applicable law or the suspension of a service (collectively,
"Emergency Expenditures").

                  2.5.3 During each year, Property Manager shall inform the
Tenants in Common of any material increases in costs and expenses not foreseen
and not included in the Budget within a reasonable time after Property Manager
learns of such changes.

                  2.5.4 Together with the submission of the Budget, Property
Manager shall submit each year to the Tenants in Common an operating plan for
the general operation of the Property, including a proposed list of improvements
to the Property, general insurance plan, marketing plan and plan for the general
operation and maintenance of the Property (the "Operating Plan"). Property
Manager may submit a revised Operating Plan to the Tenants in Common at any
time.

                  2.5.5 Any controversy arising out of, or related to, any
dispute regarding the Budget as set forth in Section 2.5.1 shall be settled by
binding arbitration in Orange County, California, in accordance with the rules
of The American Arbitration Association (the "AAA"). The arbitration panel shall
consist of one member, and shall be a person agreed to by each party to the
dispute within fifteen (15) days following the end of the ten (10) day period
set forth in Section 2.5.1. If the parties are unable within such fifteen (15)
day period to agree upon an arbitrator, then the panel shall be comprised of one
arbitrator selected solely by the Orange County office of the AAA, which
arbitrator shall be experienced in the area of real estate and who shall be
knowledgeable with respect to the subject matter area of the dispute. The
disputing Tenants in Common and all the other Tenants in Common shall each pay
fifty percent (50%) of any fees and expenses of the arbitrator and other
tribunal fees and expenses; each Tenant in Common's share shall be computed
separately for the disputing and non-disputing Tenants in Common as a group, by
taking each Tenant in Common's undivided interest in the Property over all such
non-disputing (or disputing) Tenants in Common (as the case may be). Each party
shall pay their own legal fees and other costs. Each party shall submit a
written proposal with respect to the issues in dispute. The arbitrator shall
render a binding, non-appealable decision within fifteen (15) days (or as soon
thereafter as may be practicable) following the close of presentation by the
parties of their cases and any rebuttal. The arbitrator shall be limited to
picking either alternative submitted without any change. Property Manager shall
proceed with the alternative selected by the arbitrator.

            2.6 Leasing.

                  2.6.1 Each Tenant in Common hereby approves all Leases (as
defined in Section 2.6.2) presently in effect on the date hereof. New leases,
amendments and renewals shall be subject to the procedure and voting process
described in Sections 2.5.1 and 2.6.2

                  2.6.2 Property Manager shall use its commercially reasonable
efforts to obtain tenants for all rental units in the Property and to renew
leases and rental agreements (collectively, "Leases") as provided herein.
Property Manager shall have the authority to negotiate and execute new leases,
amendments and renewal on behalf of the Tenants in Common provided the terms are
consistent with the Leasing Parameters set forth in the Budget. Property Manager
will forward to each Tenant in Common by certified United States mail, with
return receipt requested, a copy or summary of all new leases, material lease
modifications and lease renewals (other than

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automatic renewals contained in previously approved leases) that have not been
approved by the Tenants in Common in accordance with the procedure set forth in
Section. 2.5.1. The Tenants in Common are encouraged to review all such leasing
materials or summary and contact the Property Manager to discuss any questions
and comments they may have with respect to the Leasing Parameters and any other
leasing matters. If any Tenant in Common objects to any such leasing matters not
described in the Leasing Parameters section of the Budget, he is required to
give the Property Manager and all other Tenants in Common written notice that
must be received by the Property Manager and all the other Tenants in Common
within ten (10) days of when the leasing materials were sent to the objecting
Tenant in Common. All of the Tenants in Common will be deemed to have approved
all such leasing matters if no Tenant in Common objects within this 10-day
period. In addition, the Tenants in Common will grant to the Property Manager a
power of attorney to execute all approved leases. If any Tenant in Common
objects to any such leasing matters, the Property Manager will not have
authority to execute the rejected leases on behalf of the Tenants in Common.

                  2.6.3 Notwithstanding anything to the contrary contained
herein, Property Manager shall only provide ordinary and customary services to
tenants of the Property and others, and shall provide no unusual or
non-customary services to the tenants or any other parties on behalf of the
Tenants in Common.

                  2.6.4 Except as provided in the Operating Plan, Property
Manager shall not, without the prior written approval of the Tenants in Common,
give free rental or discounts or rental concessions to any employees, officers
or shareholders of Property Manager or anyone related to such employees,
officers or shareholders, unless such discounts or concessions are in lieu of
salaries or other benefits to which they would be contractually entitled.
Property Manager shall not lease any space in the Property to itself or to any
of its affiliates or subsidiaries, except as provided in the Operating Plan,
without the prior written consent of the Tenants in Common.

                  2.6.5 Property Manager shall reasonably investigate all
prospective tenants, and shall not rent to persons not meeting credit standards
reasonable for the market. Property Manager shall obtain a credit check for all
prospective tenants through Equifax or a similar service. Property Manager shall
retain such information for the duration of the tenancy, and shall make it
available to the Tenants in Common upon reasonable request. Property Manager
does not guarantee the accuracy of any such information or the financial
condition of any tenant.

                  2.6.6 Property Manager and the Tenants in Common agree that
there shall be no discrimination against or segregation of any person or group
of persons on account of age, race, color, religion, creed, handicap, sex or
national origin in the leasing of the Property, nor shall the Tenants in Common
or Property Manager permit any such practice or practices of discrimination or
segregation with respect to the selection, location, number or occupancy of
tenants.

                  2.6.7 Property Manager shall engage contractors, engineers,
architects and other consultants on behalf of the Tenants in Common to design
and construct improvements to the Property other than those required to be
performed by tenants under their leases. For any contract requiring capital
expenditures in excess of $50,000, Property Manager shall follow the bidding
procedures specified in Section 2.9 below.

            2.7 Collection of Rents and Other Income. Property Manager shall
bill all tenants and shall use its commercially reasonable efforts to collect
all rent and other charges due and payable from any tenant or from others for
services provided in connection with the Property. Property Manager shall
deposit all monies so collected in the Operating Account. Each of the Tenants in
Common shall be entitled to the income and revenue from any Property based on
their undivided interests in the Property.

            2.8 Repairs and Maintenance. Property Manager shall maintain the
buildings, appurtenances and grounds of the Property, other than areas which are
the responsibility of tenants, including, without limitation, all repairs,
cleaning, painting, decorations and alterations, for example electrical,
plumbing, carpentry, masonry, elevators and such other routine repairs as are
necessary or reasonably appropriate in the course of maintenance of the Property
(subject to the limitations of this Agreement). Property Manager shall pay
actual and reasonable expenses for materials and labor for such purposes from
the Operating Account. Property Manager shall take reasonable precautions
against fire, vandalism, burglary and trespass to the Property. However,
Property Manager

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shall only provide ordinary and customary services to tenants of the Property
and shall provide no other services to the tenants or others on behalf of the
Tenants in Common.

            2.9 Capital Expenditures. Property Manager may make any capital
expenditure within any Budget approved by the Tenants in Common without any
further consent, provided that Property Manager follows the bid procedures
prescribed below. All other capital expenditures other than on an Emergency
Expenditure shall be subject to submittal of a revised Budget to the Tenants in
Common. Unless the Tenants in Common specifically waive such requirements, or
approve a particular contract, Property Manager shall award any contract for a
capital improvement exceeding $50,000 in cost on the basis of competitive
bidding, solicited from a minimum of two (2) written bids. Property Manager
shall accept the bid of the lowest bidder determined by Property Manager to be
responsible, qualified and capable of completing such improvements on a
reasonable schedule.

            2.10 Service Contracts, Supplies and Equipment.

                  2.10.1 Property Manager may enter into or renew any customary
contract for cleaning, maintenance, repairing or servicing the Property or any
of the constituent parts of the Property (including contracts for fuel oil,
security or other protection, extermination, landscaping, architects or
engineering services) contemplated by the Budget and/or the Operating Plan with
any unrelated third party without the consent of the Tenants in Common. Each
such service contract shall (a) be in the name of the Tenants in Common, (b) be
assignable to the transferee of the Tenants in Common, and (c) be for a term not
to exceed one (1) year. Unless the Tenants in Common specifically waive such
requirements or approve a particular contract, all service contracts for amounts
in excess of $50,000 per year shall be subject to bid under the procedure
specified in Section 2.9.

                  2.10.2 If this Agreement terminates pursuant to Section 10,
Property Manager, at the option of the Tenants in Common, shall assign to the
nominee of the Tenants in Common all of Property Manager's interest in the
service agreements pertaining to the Property.

                  2.10.3 At the expense of the Tenants in Common, Property
Manager shall purchase, provide, and pay for all needed janitorial and
maintenance supplies, tools and equipment, restroom and toilet supplies, light
bulbs, paints, and similar supplies necessary to the efficient and economical
operation and maintenance of the Property. Such supplies and equipment shall be
the property of the Tenants in Common based on their undivided interests in the
Property. All such supplies, tools, and equipment generally shall be delivered
to and stored in the Property and shall be used only in connection with the
management, operation, and maintenance of the Property.

                  2.10.4 Property Manager shall use reasonable efforts to
purchase all goods, supplies or services at the lowest cost reasonably available
from reputable sources in the metropolitan area where the Property is located.
In making any contract or purchase hereunder, Property Manager shall use
reasonable efforts to obtain favorable discounts for the Tenants in Common and
all discounts, rebates or commissions under any contract or purchase order made
hereunder shall inure to the benefit of the Tenants in Common based on their
undivided interests in such Property. Property Manager shall make payments under
any such contract or purchase order to enable the Tenants in Common to take
advantage of any such discount if the Tenants in Common provides sufficient
funds therefor.

            2.11 Taxes and Mortgages. Property Manager, unless otherwise
requested, shall obtain and verify bills for real estate and personal property
taxes, general and special real property assessments and other like charges
(collectively "Taxes") which are, or may become, liens against the Property.
Property Manager shall appeal such Taxes as Property Manager may decide, in its
reasonable judgment, to be prudent. Property Manager shall report any such Taxes
that materially exceed the amounts contemplated by the Budget to the Tenants in
Common prior to Property Manager's payment thereof. Property Manager, if
requested by the Tenants in Common, will cooperate to prepare an application for
correction of the assessed valuation to be filed with the appropriate
governmental agency. Property Manager shall pay, within the time required to
obtain discounts, from funds provided by the Tenants in Common or from the
Operating Account, all utilities, Taxes and payments due under each lease,
mortgage, deed of trust or other security instrument, if any, affecting the
Property. To the extent contemplated by the Budget and/or the Operating Plan (as
either may be revised from time to time), Property Manager may make any such
payments without the approval of the Tenants in Common. Expenses for any Taxes

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that are based upon the assessed valuation of the Property (or any portion
thereof or interest therein) shall not be allocated to the Tenants in Common on
a pro rata basis. Instead, each Tenant in Common shall be responsible for all
such Taxes attributable to the Tenant in Common's undivided interest in the
Property, as reasonably determined by Property Manager, based on the Taxes that
would have been allocated to the undivided interest if it was a separate
assessor's parcel.

            2.12 Tenant Relations; Compliance. Property Manager will use
reasonable efforts to develop and maintain good relations with the tenants in
the Property. At all times during the term hereof, Property Manager shall use
its reasonable efforts to retain existing tenants in the Property and, after
completion of the initial leasing activity for new tenants, to retain such
tenants. Property Manager shall use its reasonable efforts to secure compliance
by the tenants with the terms and conditions of their respective Leases.

            2.13 Miscellaneous Duties. Property Manager shall (a) maintain at
Property Manager's office address as set forth in Section 12.1 and readily
accessible to the Tenants in Common, orderly files containing rent records,
insurance policies, leases and subleases, correspondence, receipted bills and
vouchers, bank statements, canceled checks, deposit slips, debit and credit
memos, and all other documents and papers pertaining to the Property or the
operation thereof; (b) provide information about the Property necessary for the
preparation and filing by each of the Tenants in Common of their individual
income or other tax returns required by any governmental authority, including
annual statements, identifying each Tenant in Common's undivided percentage of
all expenses paid and income received by such Tenant in Common; (c) consider and
record tenant service requests in systematic fashion showing the action taken
with respect to each, and thoroughly investigate and report to the Tenants in
Common in a timely fashion with appropriate recommendations all complaints of a
nature which might have a material adverse effect on the Property or the Budget;
(d) supervise the moving in and out of tenants and subtenants; arrange, to the
extent possible, the dates thereof to minimize disturbance to the operation of
the Property and inconvenience to other tenants or subtenants; and render an
inspection report, an assessment for damages and a recommendation on the
disposition of any deposit held as security for the performance by the tenant
under its lease with respect to each premises vacated; (e) check all bills
received for the services, work and supplies ordered in connection with
maintaining and operating the Property and, except as otherwise provided in this
Agreement, pay such bills when due and payable; and (f) not knowingly permit the
use of the Property for any purpose that might void any policy of insurance held
by the Tenants in Common or which might render any loss thereunder
uncollectible. All such records are the property of the Tenants in Common and
will be delivered to the Tenants in Common upon request.

            2.14 Right to Subcontract Property Management Functions. Property
Manager reserves the right, in its sole discretion, to subcontract some or all
of the property management functions described herein to local property managers
and certain other parties. However, except as expressly provided herein, the
fees to be paid to Property Manager under this Agreement are inclusive of fees
payable to such third parties.

      3. INSURANCE.

            3.1 Insurance.

                  3.1.1 Property Manager, at the Tenants in Common's expense,
based on their undivided interests in the Property, will obtain and keep in
force adequate insurance against physical damage (such as fire with extended
coverage endorsement, boiler and machinery) and against liability for loss,
damage or injury to property or persons which might arise out of the occupancy,
management, operation or maintenance of the Property, as contemplated by the
Operating Plan to the extent available at commercially reasonable rates. Such
insurance shall be obtained for each of the Tenants in Common and shall include
each of the Tenants in Common as a named insured. Property Manager shall not be
required to obtain earthquake or flood insurance unless expressly directed to do
so by a specific written notice from the Tenants in Common, but may do so in
Property Manager's reasonable discretion. Property Manager shall be a named
insured on all property damage insurance and an additional insured on all
liability insurance maintained with respect to the Property.

                  3.1.2 As part of the Operating Plan, Property Manager shall
advise the Tenants in Common in writing and make recommendations with respect to
the proper insurance coverage for the Property, taking into account the
insurance requirements set forth in any mortgage on the Property, shall furnish
such

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information as the Tenants in Common may reasonably request to obtain insurance
coverage and shall reasonably aid and cooperate with respect to such insurance
and any loss thereunder. The Tenants in Common acknowledge that Property Manager
is not a licensed insurance agent or insurance expert. Accordingly, Property
Manager shall be entitled to rely on the advice of a reputable insurance broker
or consultant regarding the proper insurance for the Property.

                  3.1.3 Property Manager shall investigate and submit, as soon
as reasonably possible, a written report to the insurance carrier and the
Tenants in Common as to all accidents, claims for damage relating to the
ownership, operation and maintenance of the Property, any damage to or
destruction of the Property and the estimated costs of repair thereof, and
prepare and file with the insurance company in a timely manner required reports
in connection therewith. Notwithstanding the foregoing, Property Manager shall
not be required to give such notice to the Tenants in Common if the amount of
the claims, damage or destruction, as reasonably estimated by Property Manager,
does not exceed $10,000 for any one occurrence. Property Manager shall settle
all claims against insurance companies arising out of any policies, including
the execution of proofs of loss, the adjustment of losses, signing and
collection of receipts and collection of money, except that Property Manager
shall not settle claims in excess of $10,000 without submitting prior notice to
the Tenants in Common.

            3.2 Additional Insurance. Any insurance obtained by Property Manager
for its own account, and not for the benefit of the Tenants in Common, or the
Property, shall be at Property Manager's own expense.

            3.3 Contractor's and Subcontractor's Insurance. Property Manager
shall require all contractors and subcontractors entering upon the Property to
perform services to have insurance coverage at the contractor's or
subcontractor's expense, in the following minimum amounts: (a) worker's
compensation - statutory amount; (b) employer's liability (if required) -
$500,000; and (c) comprehensive general liability insurance, including
comprehensive auto liability insurance covering the use of all owned and hired
automobiles, with bodily injury and property damage limits of $750,000 per
occurrence. Property Manager may waive such requirements in its reasonable
discretion. Property Manager shall obtain and keep on file a certificate of
insurance which shows that each contractor and subcontractor is so insured.

            3.4 Waiver of Subrogation. To the extent available at commercially
reasonable rates, all property damage insurance policies required hereunder
shall contain language whereby the insurance carrier thereunder waives any right
of subrogation it may have with respect to the Tenants in Common or Property
Manager.

      4. FINANCIAL REPORTING AND RECORD KEEPING.

            4.1 Books of Accounts. Property Manager shall maintain adequate and
separate books and records for the Property with the entries supported by
sufficient documentation to ascertain their accuracy with respect to the
Property. Such books and records shall contain a separate accounting of all
items of income and all items of expenses for each Tenant in Common. The Tenants
in Common agree to provide to Property Manager any financial or other
information reasonably requested by Property Manager to carry out its services
hereunder. Property Manager shall maintain such books and records, including
separate accounting records for each Tenant in Common's income and expense of
the Property, at Property Manager's office set forth in Section 12.1. Property
Manager shall ensure such control over accounting and financial transactions as
is reasonably necessary to protect the Tenants in Common's assets from theft,
error or fraudulent activity by Property Manager's employees. Property Manager
shall bear losses arising from such instances, including, without limitation,
the following: (a) theft of assets by Property Manager's employees, principals,
or officers or those individuals associated or affiliated with Property Manager;
(b) overpayment or duplicate payment of invoices arising from either fraud or
gross negligence, unless credit is subsequently received by the Tenants in
Common; (c) overpayment of labor costs arising from either fraud or gross
negligence, unless credit is subsequently received by the Tenants in Common; (d)
overpayment resulting from payment from suppliers to Property Manager's
employees or associates arising from the purchase of goods or services for the
Property; and (e) unauthorized use of facilities by Property Manager or Property
Manager's employees or associates.

            4.2 Financial Reports. On or about the twentieth (20th) day of each
month, Property Manager shall furnish to the Tenants in Common a report of all
significant transactions occurring during the prior

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month. These reports shall show all collections, delinquencies, uncollectible
items, vacancies and other matters pertaining to the management, operation, and
maintenance of the Property during the month. Property Manager also shall
deliver to the Tenants in Common within a reasonable time after (a) the close of
a calendar year and (b) the termination of this Agreement, a balance sheet for
the Property. The statement of income and expenses, the balance sheet, and all
other financial statements and reports shall be prepared on a cash basis.

            4.3 Supporting Documentation. As additional support to the monthly
financial statement, unless otherwise directed by the Tenants in Common, and at
the expense of the Tenants in Common, Property Manager shall maintain and make
available at Property Manager's office, as set forth in Section 12.1, copies of
the following: (a) all bank statements, bank deposit slips, bank debit and
credit memos, canceled checks, and bank reconciliations; (b) detailed cash
receipts and disbursement records; (c) detailed trial balance for receivables
and payables and billed and unbilled revenue items; (d) rent roll of tenants;
(e) paid invoices (or copies thereof); (f) summaries of adjusting journal
entries as part of the annual accounting process; (g) supporting documentation
for payroll, payroll taxes and employee benefits; (h) appropriate details of
accrued expenses and property records; (i) information regarding the operation
of the Property necessary for preparation by each Tenant in Common of such
Tenant in Common's individual tax returns; and (j) market study of competition
(quarterly only). In addition, Property Manager shall deliver to the Tenants in
Common with the monthly financial statement copies of the documents described in
(a) (statements and reconciliations only), (b), (c), (d), and (h) above.
Property Manager shall deliver a copy of the document described in (j) to any
Tenant in Common upon request. Property Manager shall maintain separate income
and expense accounts for each Tenant in Common.

      5. RIGHT TO AUDIT. Each of the Tenants in Common and their representatives
may examine all books, records and files maintained for the Tenants in Common by
Property Manager. The Tenants in Common may perform any audit or investigations
relating to Property Manager's activities at any office of Property Manager if
such audit or investigation relates to Property Manager's activities for the
Tenants in Common. Should any of the Tenants in Common discover defects in
internal control or errors in record keeping, Property Manager shall undertake
with all appropriate diligence to correct such discrepancies either upon
discovery or within a reasonable period of time. Property Manager shall inform
the Tenants in Common in writing of the action taken to correct any audit
discrepancies.

      6. BANK ACCOUNTS.

            6.1 Bank Account. Property Manager shall establish and maintain, in
reputable banks or financial institutions designated by Property Manager,
separate bank accounts in trust for, or in the name of, the Tenants in Common
(the "Bank Accounts"). All moneys collected from, or in connection with, the
Property shall be deposited in the Bank Accounts. Any bank accounts maintained
by a third party property manager shall be designated as a real estate trust
account or shall be in trust for, or in the name of, the Tenants in Common.

            6.2 Operating Account. Property Manager shall be permitted to
deposit and make withdrawals from a master Bank Account. Property Manager shall
maintain books and records of deposits and withdrawals credited and charged to
each Tenant in Common's subaccount (such master account together with and any
interest earned thereon, shall hereinafter be referred to as the "Operating
Account"). The Tenants in Common shall maintain the Operating Account so that an
amount at least as great as the budgeted expenses for such month is in Operating
Account as of the first of each month. Property Manager shall pay from the
Operating Account, on behalf of each Tenant in Common with respect to their
share of Property operating expenses, based on their undivided interests in the
Property, the operating expenses of the Property and any other payments relating
to the Property as required by this Agreement. If more than one bank account is
necessary to operate the Property, each account shall have a unique name.

            6.3 Security Deposit Account. If applicable law requires a
segregated account of security deposits, Property Manager will open, on behalf
of each Tenant in Common, a separate account at a reputable bank or other
financial institution. Property Manager shall maintain such account in
accordance with applicable law. Property Manager shall use the account only to
maintain security deposits on behalf of the Tenants in Common. Property Manager
shall inform the bank or financial institution to hold the funds in trust for
the Tenants in Common. Property Manager shall maintain detailed records of all
security deposits deposited, and allow the Tenants in Common or their designees
access to such records. Property Manager may return such deposits to any tenant
in the

                                       8
<PAGE>

ordinary course of business in accordance with the terms of the applicable lease
and applicable law. If interest is earned on any interest-bearing accounts in
excess of $2,500 in any given month, each Tenant in Common shall be entitled to
its share of such interest; otherwise, Property Manager shall be entitled to
retain such interest.

            6.4 Access to Account. As authorized by signature cards,
representatives of Property Manager shall have access to and may draw upon all
funds in the accounts described in Sections 6.1, 6.2 and 6.3 without the
approval of the Tenants in Common. The Tenants in Common may not withdraw funds
from such accounts without Property Manager's prior written consent.

      7. PAYMENTS OF EXPENSES.

            7.1 Costs Eligible for Payment from Operating Account. Property
Manager shall pay all expenses of the operation, maintenance and repair of the
Property contemplated by the Budget directly from the Operating Account, subject
to the conditions set forth in Section 2.5, including the following: (a) costs
of the gross salary and wages or proportional shares thereof, payroll taxes,
worker's compensation insurance, and all other benefits of employees (for
example, on-site personnel) required to manage, operate and maintain the
Property properly, adequately, safely and economically, subject to this
Agreement, provided that Property Manager shall not pay such employees in
advance; (b) cost to correct the violation of any governmental requirement
relating to the leasing, use, repair and maintenance of the Property, or
relating to the rules, regulations or orders of the local Board of Fire
Underwriters or other similar body, if such cost is not the result of Property
Manager's gross negligence or willful misconduct; (c) actual and reasonable cost
of making all repairs, decorations and alterations if such cost is not the
result of Property Manager's gross negligence or willful misconduct; (d) cost
incurred by Property Manager in connection with all service agreements; (e) cost
of collection of delinquent rents collected by a collection agency or attorney;
(f) legal fees of attorneys; (g) cost of capital expenditures subject to the
restrictions in Section 2.9 and in this Section; (h) cost of printed checks for
each account required for the Property and the Tenants in Common; (i) cost of
utilities; (j) cost of advertising; (k) cost of printed forms and supplies
required for use at the Property; (1) management compensation set forth in
Section 9; (m) the cost of tenant improvements to the Property; (n) all hiring,
relocation and termination costs for any employee, including those individuals
whose salaries and benefits are paid by the Tenants in Common; (o) broker's
commissions; (p) debt service; (q) the cost of utilities, services, contractors
and insurance; (r) reimbursement of Property Manager's out-of-pocket costs and
expenses to the extent not prohibited by Section 8 below; (s) general accounting
and reporting services within the reasonable scope of the Property Manager's
responsibility to the Tenants in Common; (t) cost of forms, papers, ledgers, and
other supplies and equipment used in connection with the Property for the
preparation of reports, information and returns to be prepared by Property
Manager under the terms of this Agreement; (u) all expenses of Property
Manager's on-site office; (v) all other costs directly related to the Property,
including, but not limited to, communication costs (telephone, postage, etc.),
computer rentals or time, supplies (paper, envelopes, business forms, checks,
payroll forms and record cards, forms for governmental reports, etc.), printing,
insurance, fidelity bonds, taxes and license fees, and general office expenses
allocable to the Property; and (w) cost of routine travel by Property Manager's
employees or associates to and from Property. Except as expressly set forth in
the Budget, Property Manager shall be paid $5,000 per year as reimbursement for
the items set froth above in Subsection 7.1(r), (s) and (t). All other amounts
not directly related to the Property or the Tenants in Common shall be payable
solely by Property Manager, and shall not be paid out of the Operating Account
or reimbursed by the Tenants in Common.

            7.2 Operating Account Deficiency. If there are not sufficient funds
in the Operating Account to make any such payment, Property Manager shall notify
the Tenants in Common, if possible, at least ten (10) days prior to any
delinquency so that the Tenants in Common have an opportunity, based on their
interests in the Property, to deposit sufficient funds in the Operating Account
to allow for such payment prior to the imposition of any penalty or late charge.
No later than the twentieth (20th) day of each month, Property Manager shall
remit to the Tenants in Common all unexpended funds for the prior month, except
for a reserve for contingencies reflected in the Budget which shall remain in
the Operating Account in the amount equal to the expenses budgeted for the month
in which the remittance is to be made. All expenses of the Property shall be
allocated to the Tenants in Common in accordance with their interests in the
Property.

            7.3 Interest on Funds Advanced or Loaned by Property Manager.
Property Manager, Cunningham Lending Group, LLC, an Affiliate of Anthony W.
Thompson, President of the Property Manager, or NNN 2004 Notes Program, LLC, an
Affiliate of Property Manager, may (but shall not be obligated to) loan funds to

                                       9
<PAGE>

the Tenants in Common in the future, with simple interest thereon at its cost of
funds not to exceed twelve percent (12%) per annum (or, if lower, the highest
rate permitted by law), plus a possible profit participation for loans made by
NNN 2004 Notes Program, LLC. Such loans, if any, shall be fully recourse to each
Tenant in Common and must be repaid within thirty one (31) days of funding.

      8. PROPERTY MANAGER'S COSTS NOT TO BE REIMBURSED.

            8.1 Non-reimbursable Costs. The following expenses or costs incurred
by or on behalf of Property Manager in connection with the management and
leasing of the Property shall be at the sole cost and expense of Property
Manager and shall not be reimbursed by the Tenants in Common: (a) cost
attributable to losses arising from gross negligence or fraud on the part of
Property Manager, Property Manager's associates or employees; (b) cost of
insurance purchased by Property Manager for its own account; and (c) Property
Manager's cost of overhead, salaries and other items except as expressly
provided in Section 7.1.

            8.2 Litigation. Property Manager will be responsible for and hold
the Tenants in Common harmless from, all fees, costs, expenses, and damages
relating to disputes with employees for worker's compensation (to the extent not
covered by insurance), discrimination or wrongful termination, including legal
fees and other expenses.

      9. COMPENSATION. Each Tenant in Common shall pay the fees set forth below
based on their undivided interest in the Property.

            9.1 Property Management Fee. Property Manager, or an Affiliate,
shall receive, for its services in managing the Property in accordance with the
terms of this Agreement, a monthly management fee (the "Property Management
Fee"), equal to five percent (5%) of Gross Revenues (defined below), which
Property Management Fee shall be in addition to out-of-pocket and on-site
personnel costs that are reimbursable pursuant to Section 7, and the other fees
provided in this Agreement. "Gross Revenues" shall be all gross billings from
the operations of the Property, including rental receipts and reimbursements by
tenants for common area expenses, operating expenses and taxes and similar
pass-through, obligations paid by tenants, but excluding (a) security deposits
received from tenants and interest accrued thereon for the benefit of the tenant
until such deposits or interest are included in the taxable income of the
Tenants in Common, (b) advance rents until the month in which payments are to
apply as rental income, (c) reimbursements by tenant's for work done for that
particular tenant, (d) insurance proceeds received by the Tenants in Common as a
result of any insured loss (except proceeds from rent insurance), (e)
condemnation proceeds not attributable to rent, (f) capital contributions made
by the Tenants in Common, (g) proceeds from capital, financing and any other
transaction not in the ordinary course of the operation of the Property, (h)
income derived from interest on investments or otherwise, (i) abatement of
taxes, awards arising out of takings by eminent domain, discounts and dividends
on insurance policies, and (j) rental concessions not paid by third parties. The
Management Fee shall be payable monthly, following calculation thereof, upon
submission of a monthly statement from the Operating Account or from other funds
timely provided by the Tenants in Common. Upon termination of this Agreement,
the parties will prorate the Management Fee on a daily basis to the effective
date of such cancellation or termination. If Property Manager engages local
property managers or other parties to provide property management services in
accordance with Section 2.14, Property Manager shall be obligated to pay such
third parties, it being intended that the Property Management Fee shall be
inclusive of such third party fees.

            9.2 Leasing Commissions. Property Manager or an Affiliate shall
receive, for its services in leasing the Property in accordance with the terms
of this Agreement, a leasing commission (the "Leasing Commission") equal to six
percent (6%) of the value of any lease centered into during the term of this
Agreement and three percent (3%) with respect to any renewals. Any leasing fees
due outside leasing agents or brokers, except for any who are on site will be
paid by the Property Manager from these commissions. The value of the lease
shall be calculated by totaling the minimum monthly rent (or similar rent) for
the term of the lease. The term of the lease shall not exceed five (5) years for
purposes of the foregoing computation and shall be exclusive of option periods.
If another broker represents the tenant, then Property Manager may cooperate
with that broker on terms and conditions acceptable to Property Manager, in its
sole discretion, with commissions to the other broker to be paid by the Property
Manager.

                                       10
<PAGE>

            9.3 Construction Management Fee. Property Manager, or an Affiliate,
shall receive, for its services in supervising any construction or repair
project in or about the Property, including the anticipated improvements
described in Section 2.14, a construction management fee (the "Construction
Management Fee") equal to five percent (5%) of any amount (including related
professional services) up to Twenty-Five Thousand Dollars ($25,000.00), four
percent (4%) of any amount over Twenty-Five Thousand Dollars ($25,000.00) but
less than Fifty Thousand Dollars ($50,000.00), and three percent (3%) of any
amount over Fifty Thousand Dollars ($50,000.00) which is expended in any
calendar year for construction or repair projects.

            9.4 Selling Commission. The Tenants in Common hereby grant Property
Manager, or an Affiliate, the exclusive right to sell the Property on terms
acceptable to the Tenants in Common as described herein. Property Manager shall
be entitled to receive a sales commission (the "Selling Commission") from the
Tenants in Common equal to up to five percent (5%) maximum of the gross sales
price of the Property if the Property Manager obtains a buyer for the Property
(or portion thereof) on terms approved by the Tenants in Common or if Property
Manager or an Affiliate purchases the Property pursuant to the Purchase Option
set forth in Section 11 of the Tenants in Common Agreement. The Property Manager
or an Affiliate will be entitled to a maximum of four percent (4%) of the
Selling Commission; any third party real estate agents and brokers who assist in
the sale will also be paid a portion of the Selling Commission up to a maximum
of five percent (5%) including the Selling Commission paid to the Property
Manager. Notwithstanding anything to the contrary contained herein, if the
Property Manager is terminated "for cause" pursuant to Section 10.1 of this
Agreement, the Property Manager shall not thereafter have the right to sell the
Property and shall not receive the Selling Commission.

            9.5 Loan Fee. Property Manager or an Affiliate shall receive a loan
fee (the "Loan Fee") in the amount of one percent (1%) of the principal amount
of all loans obtained for the Property by the Property Manager during the term
of this Agreement. Property Manager or an Affiliate shall pay any loan brokers
or other parties (other than the lender) who assist in such financings.

            9.6 Payment of Fees. The Property Management Fee shall be paid
monthly in arrears. The Leasing Commission, Construction Management Fee and Loan
Fee shall each be paid when the Lease is signed, the construction is
substantially completed, the court appearance has occurred and the new financing
has closed escrow. The Selling Commission shall be paid upon closing escrow,
after the Tenants in Common have received a return of their unrecovered
investment in the Property but before any net profits are distributed to the
Tenants in Common.

      10. TERMINATION.

            10.1 Termination by Tenants in Common. This Agreement shall renew on
an annual basis until December 31, 2012, unless terminated by any of the Tenants
in Common as provided below. Each of the Tenants in Common shall have the right
to terminate this Agreement: (a) without cause, within thirty (30) days of each
anniversary of the date hereof and upon payment of their pro rata share of the
termination fee computed in the same manner as the Special Allocation (as
defined in the Memorandum), as if the Properties were sold based on a value
equal to the greater of (i) the appraised value or (ii) the acquisition
capitalization rate for the Properties, times the net operating income of the
Properties for the 12 month period prior to the termination and (b) "for cause,"
upon thirty (30) days prior written notice. However, the Lender is required to
approve the termination in writing before any such termination shall be
effective. For purposes of this Agreement, termination "for cause" shall mean
termination due to the (a) gross negligence or fraud of Property Manager, (b)
willful misconduct or willful breach of this Agreement by Property Manager, (c)
bankruptcy, insolvency or inability of the Property Manager to meet its
obligation as the same come due, or (d) a conviction of a felony by Anthony W.
Thompson, President of Property Manager. If an affiliate of Property Manager
owns membership interests in NNN 2002 Value Fund, LLC, the vote of such
affiliate shall not be counted for any purpose in such a vote to terminate this
Agreement. The parties acknowledge that the termination fee is due on
termination without cause in recognition of the substantial costs that Property
Manager has incurred in start-up and other expenses to be prepared to manage,
and to manage, the Property.

            10.2 Termination by Property Manager. Property Manager shall have
the right to terminate this Agreement, provided that the Tenants in Common are
in default in the performance of any of its obligations hereunder, and such
default remains uncured for thirty (30) days following Property Manager's giving
of written notice of such default to the Tenants in Common.

                                       11
<PAGE>

            10.3 Termination On Sale. This Agreement shall automatically
terminate upon the sale of the entire Property without payment of any
termination fee.

            10.4 Final Accounting. Within thirty (30) days after termination of
this Agreement for any reason, Property Manager shall deliver to each Tenant in
Common based on their undivided interest in the Property, the following: (a) a
final accounting, setting forth the balance of income and expenses on the
Property as of the date of termination; (b) any balance or monies of the Tenants
in Common or tenant security deposits held by Property Manager with respect to
the Property; and (c) all materials and supplies, keys, books and records,
contracts, leases, receipts for deposits, unpaid bills and other papers or
documents which pertain to the Property. For a period of thirty (30) days after
such expiration or cancellation for any reason other than the Tenants in
Common's default, Property Manager shall be available, through its senior
executives familiar with the Property, to consult with and advise the Tenants in
Common or any person or entity succeeding to the Tenants in Common as owner of
the Property or such other person or persons selected by the Tenants in Common
regarding the operation and maintenance of the Property. In addition, Property
Manager shall cooperate with the Tenants in Common in notifying all tenants of
the Property of the expiration and termination of this Agreement, and shall use
reasonable efforts to cooperate with the Tenants in Common to accomplish an
orderly transfer of the operation and management of the Property to a party
designated by the Tenants in Common. Property Manager shall receive its monthly
Property Management Fee for such services. Property Manager shall, at its cost
and expense, promptly remove all signs wherever located indicating that it is
the Property Manager and replace and repair any damage resulting therefrom.
Termination of this Agreement shall not release either party from liability for
failure to perform any of the duties or obligations as expressed herein and
required to be performed by such party for the period prior to the termination.

      11. CONFLICTS. Property Manager shall not deal with or engage, or purchase
goods or services from, any subsidiary or affiliated company of Property Manager
in connection with the management of the Property for amounts above market
rates.

      12. NOTICES.

            12.1 Notices. All notices, demands, consents, approvals, reports and
other communications provided for in this Agreement shall be in writing and
shall be given to the Tenants in Common or Property Manager at the address set
forth below or at such other address as they may specify hereafter in writing:

      Tenants in Common:      At the addresses specified in the Tenants in
                              Common Agreement

      Property Manager:       Triple Net Properties Realty, Inc., Property
                              Manager
                              1551 N. Tustin Avenue, Suite 650
                              Santa Ana, California 92705
                              Attn: Anthony W. Thompson, President

      With a copy to:         Hirschler Fleischer
                              P.O. Box 500
                              Richmond, Virginia 23218-0500
                              Attn: Louis J. Rogers, Esquire

Such notice or other communication may be delivered by a recognized overnight
delivery service providing a receipt, facsimile transmission or mailed by United
States registered or certified mail, return receipt requested, postage prepaid
if deposited in a United States Post Office or depository for the receipt of
mail regularly maintained by the post office. Notices sent by overnight courier
shall be deemed given one (1) business day after mailing; notices sent by
registered or certified mail shall be deemed given two (2) business days after
mailing; and notices sent by facsimile transmission shall be deemed given as of
the date sent (if sent prior to 5:00 p.m. PST and if receipt has been
acknowledged by the operator of the receiving machine).

                                       12
<PAGE>

      13. MISCELLANEOUS.

            13.1 Assignment. Property Manager may not assign this Agreement
without the prior written consent of each of the Tenants in Common, which
consent may be withheld in each of the Tenants in Common's sole and absolute
discretion. Subject to the Tenants in Common Agreement, a Tenant in Common may
assign its rights to a party acquiring its undivided interest ("Successor Tenant
in Common") and upon assignment and the assumption of this Agreement by the
Successor Tenant in Common pursuant to an agreement whereby (a) the assigning
Tenant in Common assigns to the Successor Tenant in Common all of its right,
title and interest in and to this Agreement and (b) the Successor Tenant in
Common assumes and agrees to perform faithfully and to be bound by all of the
terms, covenants, conditions, provisions and agreements of this Agreement with
respect to the undivided interest to be transferred, the assigning Tenant in
Common shall be relieved of all liability accruing after the effective date of
the assignment and, without further action by Property Manager or the other
Tenants in Common, the Successor Tenant in Common shall become a party to this
Agreement.

            13.2 Gender. Each gender shall include each other gender. The
singular shall include the plural and vice-versa.

            13.3 Amendments. Except as otherwise provided, each amendment,
addition or deletion to this Agreement shall not be effective unless approved by
the parties in writing.

            13.4 Attorneys' Fees. In any action or proceeding between Property
Manager and the Tenants in Common arising from or relating to this Agreement or
the enforcement or interpretation hereof, the party prevailing in such action or
proceeding shall be entitled to recover from the other party all of its
reasonable attorneys' fees and other costs and expenses of the action or
proceeding.

            13.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California
without regard to any choice of law rules.

            13.6 Headings. All headings are only for convenience and ease of
reference and are irrelevant to the construction or interpretation of any
provision of this Agreement.

            13.7 Representations. Property Manager represents and warrants that
it is or shall be prior to entering into any transaction fully qualified and
licensed, to the extent required by law, to manage and lease real estate and
perform all obligations assumed by Property Manager hereunder. Property Manager
shall use reasonable efforts to comply with all such laws now or hereafter in
effect.

            13.8 Indemnification by Property Manager. Property Manager shall
indemnify, defend and hold the Tenants in Common and their shareholders,
officers, directors, and employees harmless from any and all claims, demands,
causes of action, losses, damages, fines, penalties, liabilities, costs and
expenses, including reasonable attorneys' fees and court costs, sustained or
incurred by or asserted against the Tenants in Common by reason of the acts of
Property Manager which arise out of its gross negligence or fraud of Property
Manager, its agents or employees or Property Manager's breach of this Agreement.
If any person or entity makes a claim or institutes a suit against the Tenants
in Common on a matter for which the Tenants in Common claim the benefit of the
foregoing indemnification, then (a) the Tenants in Common shall give Property
Manager prompt notice thereof in writing; (b) Property Manager may defend such
claim or action by counsel of its own choosing provided such counsel is
reasonably satisfactory to the Tenants in Common; and (c) neither the Tenants in
Common nor Property Manager shall settle any claim without the other's written
consent.

            13.9 Indemnification by the Tenants in Common. The Tenants in Common
shall indemnify, defend and hold Property Manager and its shareholders,
officers, directors and employees harmless from any and all claims, demands,
causes of action, losses, damages, fines, penalties, liabilities, costs and
expenses, including reasonable attorney's fees and court costs, sustained or
incurred by or asserted against Property Manager by reason of the operation,
management, and maintenance of the Property and the performance by Property
Manager of Property Manager's obligations under this Agreement but only to the
extent of each Tenants in Common's interest in the Property, except those which
arise from Property Manager's gross negligence or fraud. If any person or entity
makes a claim or institutes a suit against Property Manager on any matter for
which Property Manager claims the

                                       13
<PAGE>

benefit of the foregoing indemnification, then (a) Property Manager shall give
the Tenants in Common prompt notice thereof in writing; (b) the Tenants in
Common may defend such claim or action by counsel of its own choosing provided
such counsel is reasonably satisfactory to Property Manager; (c) neither
Property Manager nor the Tenants in Common shall settle any claim without the
other's written consent; and (d) this subsection shall not be so construed as to
release the Tenants in Common or the Property Manager from any liability to the
other for a breach of any of the covenants agreed to be performed under the
terms of this Agreement.

            13.10 Complete Agreement. This Agreement shall supersede and take
the place of any and all previous agreements entered into between the parties
with respect to the management of the Property.

            13.11 Severability. If any provisions of this Agreement or
application to any party or circumstances shall be determined by any court of
competent jurisdiction to be invalid and unenforceable to any extent, the
remainder of this Agreement, where the application of such provisions or
circumstances other than those as to which it is determined to be invalid or
unenforceable shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.

            13.12 No Waiver. The failure by any party to insist upon the strict
performance of, or to seek remedy of, any one of the terms or conditions of this
Agreement or to exercise any right, remedy, or election set forth herein or
permitted by law shall not constitute or be construed as a waiver or
relinquishment for the future of such term, condition, right, remedy or
election, but such item shall continue and remain in full force and effect. All
rights or remedies of the parties specified in this Agreement and all other
rights or remedies that they may have at law, in equity or otherwise shall be
distinct, separate and cumulative rights or remedies, and no one of them,
whether exercised or not, shall be deemed to be in exclusion of any other right
or remedy of the parties.

            13.13 Binding Effect. This Agreement shall be binding and inure to
the benefit of the parties and their respective successors and assigns.

            13.14 Enforcement of Property Manager's Rights. In the enforcement
of its rights under this Agreement, Property Manager shall not seek or obtain a
money judgment or any other right or remedy against any shareholders or
disclosed or undisclosed principals of the Tenants in Common. Property Manager
shall enforce its rights and remedies solely against the estate of the Tenants
in Common in the Property or the proceeds of any sale of all or any portion of
the Tenants in Common's interest therein.

            13.15 Binding Arbitration. BY EXECUTING THIS AGREEMENT YOU ARE
AGREEING TO HAVE CERTAIN DISPUTES DECIDED BY NEUTRAL ARBITRATION AND YOU ARE
GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE SUCH DISPUTES LITIGATED IN A
COURT OR JURY TRIAL. BY EXECUTING THIS AGREEMENT YOU ARE GIVING UP YOUR JUDICIAL
RIGHTS TO DISCOVERY AND APPEAL. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY.

                   [BALANCE OF PAGE LEFT INTENTIONALLY BLANK]

                                       14
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
date and year first above written.

                                        PROPERTY MANAGER:

                                        TRIPLE NET PROPERTIES REALTY, INC.,
                                        a California corporation

                                        By:
                                            ------------------------------------
                                            Anthony W. Thompson, President

                                        TENANTS IN COMMON:

                                        NNN 2002 VALUE FUND, LLC,
                                        a Virginia limited liability company

                                        By: TRIPLE NET PROPERTIES, LLC,
                                            a Virginia limited liability company
                                            Its: Manager

                                        By:
                                            ------------------------------------
                                            Anthony W. Thompson, President

                                        ----------------------------------------

                                        ----------------------------------------

                                        ----------------------------------------

                                       15exv10w1

 

Exhibit 10.1

EXECUTION COPY

RECEIVABLES SALE AGREEMENT

DATED AS OF DECEMBER 28, 2004

AMONG

USF FINANCE COMPANY LLC

AS THE SELLER,

USF CORPORATION,

AS THE INITIAL SERVICER,

ABN AMRO BANK N.V.,

AS THE AGENT AND AS THE WINDMILL PURCHASER AGENT,

THE OTHER PURCHASER AGENTS

FROM TIME TO TIME PARTY HERETO,

THE RELATED BANK PURCHASERS

FROM TIME TO TIME PARTY HERETO,

WINDMILL FUNDING CORPORATION, AS A CONDUIT PURCHASER,

USF ASSURANCE CO. LTD., AS A PURCHASER

AND

THE OTHER PURCHASERS

FROM TIME TO TIME PARTY HERETO

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I Purchases from Seller and Settlements
	 	 	1	 
	Section 1.1 Sales
	 	 	1	 
	Section 1.2 Interim Liquidations
	 	 	3	 
	Section 1.3 Selection of Discount Rates and Tranche Periods
	 	 	4	 
	Section 1.4 Fees and Other Costs and Expenses
	 	 	5	 
	Section 1.5 Maintenance of Sold Interest; Deemed Collection
	 	 	5	 
	Section 1.6 Reduction in Commitments
	 	 	6	 
	Section 1.7 Optional Repurchases
	 	 	7	 
	Section 1.8 Assignment of Purchase Agreement
	 	 	7	 
	Section 1.9 Repurchases
	 	 	7	 
	ARTICLE II Sales to and purchases from Windmill; Allocations
	 	 	8	 
	Section 2.1 Required Purchases from Windmill
	 	 	8	 
	Section 2.2 Purchases by Windmill
	 	 	8	 
	Section 2.3 Allocations and Distributions
	 	 	9	 
	ARTICLE III Administration and Collections
	 	 	11	 
	Section 3.1 Appointment of Servicer
	 	 	11	 
	Section 3.2 Duties of Servicer
	 	 	12	 
	Section 3.3 Reports
	 	 	13	 
	Section 3.4 Lock-Box Arrangements
	 	 	13	 
	Section 3.5 Enforcement Rights
	 	 	13	 
	Section 3.6 Servicer Fee
	 	 	14	 
	Section 3.7 Responsibilities of the Seller
	 	 	15	 
	Section 3.8 [Reserved]
	 	 	15	 
	Section 3.9 Indemnities by the Servicer
	 	 	15	 
	ARTICLE IV Representations and Warranties
	 	 	16	 
	Section 4.1 Seller Representations and Warranties
	 	 	16	 
	Section 4.2 Servicer Representations and Warranties
	 	 	18	 
	Section 4.3 USF Assurance Representations and Warranties
	 	 	19	 
	ARTICLE V Covenants
	 	 	20	 
	Section 5.1 Covenants of the Seller
	 	 	20	 

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TABLE OF CONTENTS

(Continued)

	 	 	 	 	 
	 	 	Page
	Section 5.2 Covenants of the Servicer
	 	 	25	 
	ARTICLE VI Indemnification
	 	 	28	 
	Section 6.1 Indemnities by the Seller
	 	 	28	 
	Section 6.2 Increased Cost and Reduced Return
	 	 	29	 
	Section 6.3 Other Costs and Expenses
	 	 	30	 
	Section 6.4 Withholding Taxes
	 	 	31	 
	Section 6.5 Payments and Allocations
	 	 	31	 
	ARTICLE VII Conditions Precedent
	 	 	31	 
	Section 7.1 Conditions to Closing
	 	 	31	 
	Section 7.2 Conditions to Each Purchase
	 	 	32	 
	Section 7.3 Conditions to Initial Purchase of USF Assurance
	 	 	33	 
	ARTICLE VIII The Agent
	 	 	34	 
	Section 8.1 Appointment and Authorization
	 	 	34	 
	Section 8.2 Delegation of Duties
	 	 	35	 
	Section 8.3 Exculpatory Provisions
	 	 	35	 
	Section 8.4 Reliance by Agent
	 	 	35	 
	Section 8.5 Assumed Payments
	 	 	36	 
	Section 8.6 Notice of Termination Events
	 	 	36	 
	Section 8.7 Non-Reliance on Agent, Purchaser Agents and Other Purchasers
	 	 	37	 
	Section 8.8 Agents and Affiliates
	 	 	37	 
	Section 8.9 Indemnification
	 	 	37	 
	Section 8.10 Successor Agent
	 	 	38	 
	ARTICLE IX Miscellaneous
	 	 	38	 
	Section 9.1 Termination
	 	 	38	 
	Section 9.2 Notices
	 	 	38	 
	Section 9.3 Payments and Computations
	 	 	39	 
	Section 9.4 Sharing of Recoveries
	 	 	39	 
	Section 9.5 Right of Setoff
	 	 	39	 
	Section 9.6 Amendments
	 	 	40	 

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TABLE OF CONTENTS

(Continued)

	 	 	 	 	 
	 	 	Page
	Section 9.7 Waivers
	 	 	40	 
	Section 9.8 Successors and Assigns; Participations; Assignments
	 	 	41	 
	Section 9.9 Commercial Reasonableness
	 	 	42	 
	Section 9.10 Confidentiality
	 	 	42	 
	Section 9.11 Agreement Not to Petition
	 	 	43	 
	Section 9.12 Excess Funds
	 	 	43	 
	Section 9.13 No Recourse
	 	 	44	 
	Section 9.14 Headings; Counterparts
	 	 	44	 
	Section 9.15 Cumulative Rights and Severability
	 	 	44	 
	Section 9.16 Governing Law; Submission to Jurisdiction
	 	 	44	 
	Section 9.17 Waiver of Trial by Jury
	 	 	44	 
	Section 9.18 USA Patriot Act Notice
	 	 	44	 
	Section 9.19 Entire Agreement
	 	 	45	 

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TABLE OF CONTENTS

(Continued)

	 	 	 	 	 
	 	 	 	 	Page
	Schedules

	 	Description	 	 
	 
	 	 	 	 
	Schedule I

	 	Definitions	 	 
	Schedule II

	 	Related Bank and Commitments of Related Bank Purchasers	 	 
	Schedule III

	 	Asset Based Performance Ratios	 	 
	Schedule IV

	 	Fiscal Months	 	 
	Schedule 4.2(f)

	 	Litigation	 	 
	 
	 	 	 	 
	Exhibits

	 	Description	 	 
	 
	 	 	 	 
	Exhibit A

	 	Form of Incremental Purchase Request	 	 
	Exhibit B

	 	[Reserved]	 	 
	Exhibit C

	 	Form of Notification of Assignment from the Windmill Committed Purchasers to Windmill	 	 
	Exhibit D

	 	Form of Periodic Report	 	 
	Exhibit E

	 	Addresses and Names of Seller and the Originators	 	 
	Exhibit F

	 	Form of Bermuda Counsel Opinion	 	 
	Exhibit G

	 	Lock-Boxes and Lock-Box Banks	 	 
	Exhibit H

	 	Form of Lock-Box Agreement	 	 
	Exhibit I

	 	Compliance Certificate	 	 
	Exhibit J

	 	Credit and Collection Policies	 	 

-iv-

 

RECEIVABLES SALE AGREEMENT

     Receivables Sale Agreement, dated as of December 28, 2004 (this
“Agreement”), among USF Finance Company LLC, a Delaware limited liability
company, as Seller (the “Seller”), USF Corporation, a Delaware corporation, as
the Initial Servicer (the “Initial Servicer”), ABN AMRO Bank N.V., as the
Windmill Purchaser Agent and as administrative agent for the Purchasers (the
“Agent”), the other Purchaser Agents from time to time party hereto, the
Related Bank Purchasers from time to time party hereto, Windmill Funding
Corporation, as a Conduit Purchaser (“Windmill”), USF Assurance Co. Ltd. (“USF
Assurance”) and the other Purchasers from time to time party hereto. Certain
capitalized terms used herein, and certain rules of construction, are defined
in Schedule I. The Related Bank Purchasers/Liquidity Banks for each
Uncommitted Conduit Purchaser and each Committed Purchaser and their
Commitments and the Purchaser Group Limits for each Purchaser Group are listed
on Schedule II.

     The parties hereto agree as follows:

ARTICLE I

PURCHASES FROM SELLER AND SETTLEMENTS

          Section 1.1 Sales.

     (a) The Sold Interest. Subject to the terms and conditions hereof, the
Seller may, from time to time before the Termination Date, request that one or
more Purchasers (or, in the case of an Uncommitted Purchaser, only if such
Uncommitted Purchaser denies such request or is unable to fund, request that
the Related Bank Purchasers, if any, for such Uncommitted Purchaser) make
purchases of an undivided percentage ownership interest in the Receivables and
all related Collections. Upon any such request, subject to the terms and
conditions of this Agreement, (i) the Uncommitted Purchasers may, in their sole
discretion, purchase such interest, or, if any such Uncommitted Purchaser
decides not to purchase such interest, the Related Bank Purchasers, if any, of
such Uncommitted Purchaser shall purchase such interest, and (ii) the Committed
Purchasers shall purchase such interest.

Such interest shall be transferred to the Agent, as representative of the
applicable Purchaser. Any such purchase (a “Purchase") shall be made by each
relevant Purchaser remitting funds to the Agent’s Account, pursuant to Section
1.1(c) or by the Servicer remitting Collections to the Seller pursuant to
Section 1.1(d). The aggregate percentage ownership interest so acquired by a
Purchaser in the Receivables and related Collections (its “Purchase Interest")
shall equal at any time the following quotient:

I + PR

NRB

where:

	 	 	 	 	 	 	 
	

	 	I
	 	=
	 	the outstanding Investment of such Purchaser at such time;

 

 

	 	 	 	 	 	 	 
	

	 	PR
	 	=
	 	the Purchaser Reserve for such Purchaser at such time; and
	 
	 	 	 	 	 	 
	

	 	NRB
	 	=
	 	the Net Receivables Balance at such time.

Except during a Liquidation Period for a Purchaser, such Purchaser’s Purchase
Interest will change whenever its Investment, its Purchaser Reserve or the Net
Receivables Balance changes. During a Liquidation Period for a Purchaser its
Purchase Interest shall remain constant, except for redeterminations to reflect
Investment acquired from or transferred to a Purchaser under Article II. The
sum of all Purchasers’ Purchase Interests at any time is referred to herein as
the “Sold Interest”, which at any time is the aggregate percentage ownership
interest then held by the Purchasers in the Receivables and Collections.

     (b) Uncommitted Purchaser Purchase Option and Committed Conduit Purchaser
Commitments. Subject to Section 1.1(d) concerning Reinvestment Purchases, at
no time will an Uncommitted Purchaser have any obligation to make a Purchase.
Each Committed Purchaser severally hereby agrees, subject to Section 7.2 and
the other terms and conditions hereof, to make Purchases before the Termination
Date, to the extent (i) its Investment would not thereby exceed its Commitment,
(ii) the sum of all Investments of Purchasers in its Purchaser Group would not
thereby exceed the applicable Group Limit, (iii) the Aggregate Investment would
not thereby exceed the Purchase Limit, and (iv) the Matured Aggregate
Investment would not thereby exceed the Aggregate Commitments. The first
Purchase and each additional Purchase not made from Collections pursuant to
Section 1.1(d) is referred to herein as an “Incremental Purchase.” Each
Purchase made by a Purchaser with the proceeds of Collections in which it has a
Purchase Interest, which does not increase the outstanding Investment of such
Purchaser, is referred to herein as a “Reinvestment Purchase.”

     (c) Incremental Purchases. In order to request an Incremental Purchase
from a Purchaser (including any Incremental Purchase the proceeds of which will
be used to make a Repurchase from any Purchaser pursuant to Section 1.9), the
Seller must provide to such Purchaser or, if applicable, the related Purchaser
Agent an irrevocable written request (including by telecopier or other
facsimile communication) substantially in the form of Exhibit A, by 10:00 a.m.
(Chicago time) three Business Days before the requested date (the “Purchase
Date”) of such Purchase, specifying (i) the requested Purchase Date (which must
be a Business Day), (ii) the requested amount (the “Purchase Amount”) of such
Purchase, which must be in a minimum amount of $1,000,000 and multiples thereof
(or, if less, an amount equal to the Maximum Incremental Purchase Amount) and
such Purchaser’s Percentage Factor which shall exist immediately following the
consummation of such sale. Each Purchaser Agent shall promptly notify the
related Purchasers from which a Purchase is requested of the contents of such
request. If a portion of an Incremental Purchase is requested from an
Uncommitted Purchaser and such Uncommitted Purchaser determines, in its sole
discretion, to make the requested portion of such Incremental Purchase, such
Uncommitted Purchaser shall transfer to the Agent’s Account its requested
Purchase Amount by no later than 12:00 noon (Chicago time) on the Purchase
Date. If a portion of an Incremental Purchase is requested from a Committed
Purchaser or the Related Bank Purchasers for a Purchaser Group, subject to
Section 7.2 and the other terms and conditions hereof, such Committed Purchaser
or such Related Bank Purchasers for a Purchaser Group shall transfer its
requested Purchase Amount into the Agent’s Account by no later than 12:00 noon

2

 

(Chicago time) on the Purchase Date. The Agent shall promptly transfer to
the Seller Account the proceeds of any Incremental Purchase delivered into the
Agent’s Account.

     (d) Reinvestment Purchases. Unless an Uncommitted Purchaser has provided
to the Agent, its Purchaser Agent, the Seller, and the Servicer a notice (which
notice shall be delivered not less than one Business Day prior to the cessation
of Reinvestment Purchases) still in effect that it no longer wishes to make
Reinvestment Purchases (in which case such Uncommitted Purchaser’s Reinvestment
Purchases, but not those of its Related Bank Purchasers, if any, or any
Committed Purchaser, shall cease), at any time before the Termination Date when
no Interim Liquidation is in effect, then on each day that any Collections are
received by the Servicer a Purchaser’s Purchase Interest in such Collections
shall automatically be used to make a Reinvestment Purchase by such Purchaser,
but only to the extent such Reinvestment Purchase would not cause such
Purchaser’s Investment to increase above the amount of such Investment at the
start of the day plus any Incremental Purchases made by such Purchaser on that
day. An Uncommitted Purchaser may revoke any notice provided under the first
sentence of this Section 1.1(d) by notifying the Agent, its Purchaser Agent,
the Seller, and the Servicer that it will make Reinvestment Purchases. If at
any time any Uncommitted Purchaser other than USF Assurance delivers a notice
that it no longer wishes to make Reinvestment Purchases pursuant to this
Section 1.1(d) and USF Assurance then, or at any time during the related
Liquidation Period, holds any Investment, then USF Assurance shall be deemed to
have delivered the same notice at the same time and Reinvestment Purchases
shall cease for such Uncommitted Purchaser and USF Assurance at the same time
and for the same period. USF Assurance may not revoke any such notice deemed
to have been given pursuant to the preceding sentence until such time as the
Uncommitted Purchaser which gave the notice pursuant to the first sentence of
this Section 1.1(d) has revoked its notice.

     (e) Security Interest. To secure all of the Seller’s obligations under
the Transaction Documents, the Seller hereby grants to the Agent (for the
benefit of the Purchasers) a security interest in all of the Seller’s right,
title and interest in, to and under all Receivables now existing and hereafter
arising, all Collections, the Lock-Box Accounts, the Lock-Boxes, the Purchase
Agreement, and all proceeds of the foregoing.

     (f) Calculation of Percentage Factor. The Percentage Factor represented
by each Purchase Interest shall be recomputed or deemed recomputed as of the
opening of business of the Servicer on each Business Day. Each such Percentage
Factor shall remain constant from the time as of which any such recomputation
is made or deemed made until the time as of which the next such recomputation
if any, shall be made or deemed made. The Percentage Factor represented by any
Purchase Interest, as recomputed or deemed recomputed as of the Business Day
immediately preceding the Termination Date, shall remain constant at all times
on and after the Termination Date. Such Percentage Factor shall become zero
only at such time as all Investment and all other amounts due to the Purchasers
shall have been reduced to zero. The Servicer shall at all times maintain
information sufficient to make the foregoing recomputations and deemed
recomputations.

          Section 1.2 Interim Liquidations

3

 

     (a) Optional. The Servicer may at any time direct that Reinvestment
Purchases cease and that an Interim Liquidation commence for any Purchaser by
giving the Agent and each Purchaser Agent, at least three (3) Business Days
written (including telecopy or other facsimile communication) notice specifying
the date on which the Interim Liquidation shall commence and, if desired, when
such Interim Liquidation shall cease before the Termination Date (identified as
a specific date or as when the Aggregate Investment is reduced to a specified
amount). The Servicer may not direct that an Interim Liquidation commence with
respect to any Purchaser unless the Servicer shall have delivered the
Certification required by Section 7.2 (e). If the Servicer does not so specify
the date on which an Interim Liquidation shall cease, it may cause such Interim
Liquidation to cease at any time before the Termination Date, subject to
Section 1.2(b) below, by notifying the Agent and the related Purchaser Agent in
writing (including by telecopy or other facsimile communication) at least three
(3) Business Days before the date on which it desires such Interim Liquidation
to cease; provided that the Servicer shall not cause any Interim Liquidation to
cease if the requirement of Section 7.2(e)(iv) would not be satisfied as a
result thereof.

     (b) Mandatory. If at any time before the Termination Date any condition
in Section 7.2 is not fulfilled, the Servicer shall immediately notify the
Agent and each Purchaser Agent, whereupon Reinvestment Purchases shall cease
and an Interim Liquidation shall commence, which shall only cease upon the
Servicer confirming to the Agent that the conditions in Section 7.2 are
fulfilled.

        Section 1.3 Selection of Discount Rates and Tranche Periods. (a) All
Investment of each Purchaser Group shall be allocated to one or more Tranches
reflecting the Discount Rates at which such Investment accrues Discount and
the Tranche Periods for which such Discount Rates apply. Not later than (1)
concurrently with any request for an Incremental Purchase from the Related
Bank Purchasers and USF Assurance, (2) 3:00 p.m., Chicago time, one Business
Day prior to the expiration of any Tranche Period applicable to any
Investment of each Related Bank Purchaser or USF Assurance if the requested
Tranche Period is a Prime Tranche and (3) 10:00 a.m., Chicago time, two
Business Days prior to the expiration of any Tranche Period applicable to any
Investment of each Related Bank Purchaser if the requested Tranche Period is
a Eurodollar Tranche, the Seller may select the Discount Rate(s) and Tranche
Period(s) to be applicable to such Investment. All Investment (i) of each
Conduit Purchaser shall, and USF Assurance may, accrue Discount at the CP
Rate and (ii) of the Related Bank Purchasers and USF Assurance may accrue
Discount at either the Eurodollar Rate or the Prime Rate, in all cases as
established for each Tranche Period applicable to such Investment. Each
Tranche shall be in the minimum amount of $100,000 and in multiples thereof
or, in the case of Discount accruing at the Prime Rate, in any amount of
Investment that otherwise has not been allocated to another Tranche Period.
Any Investment of each Purchaser Group not allocated to a Tranche Period
shall accrue Discount at the Prime Rate. During the continuance of a
Termination Event, any outstanding Investment of any Purchaser Group shall
accrue Discount at the greater of the Eurodollar Rate and the Prime Rate. On
each Settlement Date, the Seller shall pay to the Agent (for the benefit of
each Conduit Purchaser and, if USF Assurance’s Investment is accruing
Discount at the CP Rate, USF Assurance) an aggregate amount equal to all
accrued and unpaid Discount in respect of the Investment of such Purchaser
for the immediately preceding Discount Period. All Discount accrued during a

4

 

     Tranche Period for a Related Bank Purchaser or USF Assurance shall be
paid by the Seller to the Agent (for the benefit of the Related Bank
Purchasers and USF Assurance) on the last day of such Tranche Period or, for
a Eurodollar Tranche with a Tranche Period of more than three months, 90 days
after the commencement, and on the last day, of such Tranche Period.

     (b) If, by the time required in Section 1.3(a), the Seller fails to select
a Tranche Period for any Investment of any Purchaser Group, the related
Purchaser Agent may, in its sole discretion, select such Tranche Period. If,
by the time required in Section 1.3(a), the Seller fails to select a Discount
Rate or Tranche Period for any Investment of the Related Bank Purchasers, such
amount of Investment shall automatically accrue Discount at the Prime Rate for
a three Business Day Tranche Period. Any Investment purchased from a Conduit
Purchaser pursuant to Section 2.1 shall have a Tranche Period of three Business
Days and shall accrue Discount at the Prime Rate.

     (c) If any Related Bank Purchaser determines (i) that maintenance of any
Eurodollar Tranche would violate any applicable law or regulation or (ii) that
deposits of a type and maturity appropriate to match fund any of such Related
Bank Purchaser’s Eurodollar Tranches are not available, then the Agent, upon
the direction of such Related Bank Purchaser, shall suspend the availability
of, and terminate any outstanding, Eurodollar Tranche so affected. All
Investment allocated to any such terminated Eurodollar Tranche shall be
reallocated to a Prime Tranche.

        Section 1.4 Fees and Other Costs and Expenses. (a) The Seller shall pay
to each Purchaser Agent for the benefit of its Purchaser Group, such amounts
as agreed to with the Seller in the Fee Letter for such Purchaser Group.

     (b) If the amount of Investment of any Purchaser Group allocated to any CP
Tranche or Eurodollar Tranche is reduced before the last day of its Tranche
Period, or if a requested Incremental Purchase at the Eurodollar Rate does not
take place on its scheduled Purchase Date, the Seller shall pay the Early
Payment Fee to each Purchaser in the applicable Purchaser Group that had its
Investment so reduced or scheduled Purchase not made.

     (c) Investment shall be payable solely from Collections and from amounts
payable under Sections 1.1(c) (to the extent such Incremental Purchase is made
in connection with any Repurchase and the proceeds thereof are applied in
accordance with Section 1.9), 1.5, 1.7 and 6.1 (to the extent amounts paid
under Section 6.1 indemnify against reductions in or non-payment of
Receivables) or from other amounts available to the Seller. The Seller shall
pay, as a full recourse obligation, all other amounts payable hereunder and
under the Fee Letters, including all Discount, fees described in clauses (a)
and (b) above and amounts payable under Article VI.

        Section 1.5 Maintenance of Sold Interest; Deemed Collection.

     (a) General. If at any time before the Termination Date, the Net
Receivables Balance is less than the sum of the Aggregate Investment (or, if a
Termination Event exists, the Matured Aggregate Investment) plus the Reserve,
the Seller shall promptly (but not later than three Business Days after the
Seller becomes aware of such condition) pay to the Agent an amount equal to
such deficiency for application to reduce the Investments of the Purchasers
ratably in accordance with the principal amount of their respective
Investments, applied pro rata among the

5

 

outstanding Tranches. Any amount so applied to reduce Windmill’s
Investment shall be deposited in the Special Transaction Subaccount.

     (b) Deemed Collections. If on any day the outstanding balance of a
Receivable is reduced or cancelled as a result of any defective or rejected
services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation),
any setoff or credit (whether such claim or credit arises out of the same, a
related, or an unrelated transaction) or other similar reason not arising from
the financial inability of the Obligor to pay undisputed indebtedness, the
Seller shall be deemed to have received on such day a Collection on such
Receivable in the amount of such reduction or cancellation. If any
representation, warranty or covenant of the Seller related to a Receivable set
forth in Section 4.1(e), (f), (j), or (l) or Section 5.1(g), (h) or (i) is not
true or is not satisfied, the Seller shall be deemed to have received on such
day a Collection in the amount of the outstanding balance of such Receivable.
All such Collections deemed received by the Seller under this Section 1.5(b)
shall be remitted by the Seller to the Servicer in accordance with Section
5.1(i).

     (c) Adjustment to Sold Interest. Notwithstanding the foregoing, at any
time before the Termination Date that the Seller is deemed to have received any
Collection under Section 1.5(b) (“Deemed Collections”) that derive from a
Receivable that is otherwise reported as an Eligible Receivable, so long as no
Liquidation Period then exists (unless such Liquidation Period only applies to
an Uncommitted Purchaser pursuant to Section 1.1(d)), the Seller may satisfy
its obligation to deliver such amount to the Servicer by instead notifying the
Agent that the Sold Interest should be recalculated by decreasing the Net
Receivables Balance by the amount of such Deemed Collections, so long as such
adjustment does not cause the Sold Interest to exceed 100%.

     (d) Payment Assumption. Unless an Obligor otherwise specifies (by
reference to a particular invoice or otherwise) or another application is
required by contract or law, any payment received by the Seller from any
Obligor shall be applied as a Collection of Receivables of such Obligor
(starting with the oldest such Receivable) and remitted to the Servicer as
such.

        Section 1.6 Reduction in Commitments. The Seller may, upon five (5)
days’ notice to the Agent and each Purchaser Agent, reduce the Aggregate
Commitment in increments of $1,000,000, so long as the Aggregate Commitment
at all times equals at least the outstanding Matured Aggregate Investments of
all Purchaser Groups. Each such reduction in the Aggregate Commitment shall
ratably reduce the Commitment of each Committed Purchaser and shall ratably
reduce the Purchase Limit and Group Limits of all Purchaser Groups that
include Committed Purchasers so that (i) the Commitments of the Related Bank
Purchasers of each Purchaser Group remains at least 102% of the Group Limit
for such Purchaser Group, (ii) the Group Limit for each Purchaser Group is
not less than the sum of the Investments of Purchasers in such Purchaser
Group, and (iii) the Purchase Limit is not less then the outstanding
Aggregate Investment. The Group Limit for the USF Assurance Purchaser Group
shall be reduced such that it shall equal the aggregate of the Group Limits
for all other Purchaser Groups.

6

 

        Section 1.7 Optional Repurchases. At any time that the Aggregate
Investment is less than 10% of the Aggregate Commitment in effect on the date
hereof, the Initial Servicer may, upon five (5) days’ notice to the Agent and
each Purchaser Agent, purchase the entire Sold Interest from the Purchasers
at a price equal to the outstanding Matured Aggregate Investment and all
other amounts then owed hereunder.

        Section 1.8 Assignment of Purchase Agreement. The Seller hereby assigns
and otherwise transfers to the Agent (for the benefit of the Agent, each
Purchaser Agent, each Purchaser and any other Person to whom any amount is
owed hereunder), all of the Seller’s right, title and interest in, to and
under the Purchase Agreement. The Seller shall file and record all financing
statements, continuation statements and other documents required to perfect
or protect such assignment. This assignment includes (a) all monies due and
to become due to the Seller from any Originator under or in connection with
the Purchase Agreement (including fees, expenses, costs, indemnities and
damages for the breach of any obligation or representation related to either
such agreement) and (b) all rights, remedies, powers, privileges and claims
of the Seller against any Originator under or in connection with the Purchase
Agreement. All provisions of the Purchase Agreement shall inure to the
benefit of, and may be relied upon by, the Agent, each Purchaser Agent, each
Purchaser and each such other Person. At any time after a Servicer
Replacement Event or Termination Event, the Agent shall have the sole right
to enforce the Seller’s rights and remedies under the Purchase Agreement to
the same extent as the Seller could absent this assignment, but without any
obligation on the part of the Agent, any Purchaser Agent, any Purchaser or
any other such Person to perform any of the obligations of the Seller under
the Purchase Agreement (or any of the promissory notes executed thereunder).
All amounts distributed to the Seller under the Purchase Agreement from
Receivables sold to the Seller thereunder shall constitute Collections
hereunder and shall be applied in accordance herewith.

        Section 1.9 Repurchases. (a) So long as no Potential Termination Event
or Termination Event shall have occurred or shall result therefrom and
subject to the conditions precedent set forth in Section 7.2, USF Assurance
may require that the Seller repurchase all or any portion of its Purchase
Interest (a “USF Assurance Repurchase”) upon at least five (5) Business Days’
prior written notice to the Agent, the Purchaser Agents, the Seller and the
Servicer indicating the amount of the USF Assurance Repurchase and the date
of such requested USF Assurance Repurchase. The Seller shall request an
Incremental Purchase from one or more other Purchasers in the aggregate
amount of such Repurchase in accordance with Section 1.1(c) in order to make
such USF Assurance Repurchase and the Seller shall use the proceeds of any
such Incremental Purchase to make such USF Assurance Repurchase. The Seller
shall not be required to make any USF Assurance Repurchase, if after giving
effect thereto and any related Incremental Purchases, the Coverage Ratio
shall exceed 100% or if the conditions precedent set forth in Section 7.2
related to such Repurchase or related Incremental Purchase are not satisfied.

            (b) So long as no Potential Termination Event or Termination Event shall
have occurred and subject to the conditions precedent set forth in Section 7.2,
the Seller may repurchase all or any portion of any Purchaser’s Purchase
Interest (a “Seller Repurchase”) upon at least three (3) Business Days’ prior
written notice to the Agent, the Purchaser Agents, the

7

 

Seller and the Servicer indicating the amount of the Seller Repurchase and the
date of such requested Seller Repurchase. The Seller may request an
Incremental Purchase from one or more other Purchasers in the aggregate amount
of such Repurchase in accordance with Section 1.1(c) in order to make such
Seller Repurchase and, if an Incremental Purchase is so requested, the Seller
shall use the proceeds of any such Incremental Purchase to make such Seller
Repurchase. The Seller shall not make any Seller Repurchase, if after giving
effect thereto and any related Incremental Purchases, the Coverage Ratio shall
exceed 100% or if the conditions precedent set forth in Section 7.2 related to
such Repurchase or related Incremental Purchase are not satisfied.

ARTICLE II

SALES TO AND PURCHASES FROM WINDMILL; ALLOCATIONS

        Section 2.1 Required Purchases from Windmill. (a) Windmill may, at any
time, and on the earlier of the Termination Date and ten Business Days
following the Agent and Windmill learning of a continuing Termination Event,
Windmill shall, sell to its Committed Purchasers pursuant to the Windmill
Transfer Agreement any percentage designated by Windmill of Windmill’s
Investment and its related Windmill Settlement (each, a
“Put”).

     (b) Any portion of Windmill’s Investment and related Windmill Settlement
purchased by a Committed Purchaser shall be considered part of such Purchaser’s
Investment and related Windmill Settlement from the date of the relevant Put.
Immediately upon any purchase by its Committed Purchasers of any portion of
Windmill’s Investment, the Seller shall pay to the Agent (for the ratable
benefit of such Purchasers) an amount equal to the sum of (i) the assigned
Windmill Settlement and (ii) all unpaid Discount owed to Windmill (whether or
not then due) to the end of each applicable Tranche Period to which any
Investment being Put has been allocated, (iii) all accrued but unpaid fees
(whether or not then due) payable to Windmill in connection herewith at the
time of such purchase and (iv) all accrued and unpaid costs, expenses and
indemnities due to Windmill from the Seller in connection herewith.

     (c) The proceeds from each Put received by Windmill (other than, if
applicable, amounts described in clauses (iii) and (iv) of the last sentence of
Section 2.1(b)), shall be transferred into the Special Transaction Subaccount
and used solely to pay that portion of the outstanding commercial paper of
Windmill issued to fund or maintain the Investment of Windmill so transferred.
Until used to pay Windmill’s commercial paper notes, all proceeds of any Put
pursuant to this Section shall be invested in Permitted Investments. All
earnings on such Permitted Investments shall be promptly remitted to the
Seller.

        Section 2.2 Purchases by Windmill. If the Seller requests an increase
in Windmill’s Investment when any Windmill Committed Purchaser has any
outstanding Investment, Windmill shall determine the amount, if any, by which
it desires to increase its Investment (the “Desired
Increase”) and shall so
notify the Windmill Purchaser Agent. If Windmill has a Desired Increase, the
Windmill Purchaser Agent shall deliver to the Windmill Committed Purchasers a
notification of assignment in substantially the form of Exhibit C and, before
purchasing any additional Investment from the Seller, Windmill shall purchase
in full the Investment of the Windmill Committed Purchasers, at a purchase
price equal to such Investment plus accrued and unpaid Discount thereon. As
a condition to any such sale of

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Investment by Windmill Committed Purchasers to Windmill, the Seller must
pay the Early Payment Fee then owed to such Windmill Committed Purchasers.
Any sale from any Windmill Committed Purchaser to Windmill pursuant to this
Section 2.2 shall be without recourse, representation or warranty except for
the representation and warranty that the Investment sold by such Windmill
Committed Purchaser is free and clear of any Adverse Claim created or granted
by such Windmill Committed Purchaser and that such Windmill Committed
Purchaser has not suffered a Bankruptcy Event.

        Section 2.3 Allocations and Distributions.

     (a) Non-Reinvestment Periods. Before the Termination Date unless an
Interim Liquidation is in effect, on each day during a period that an
Uncommitted Purchaser is not making Reinvestment Purchases (as established
under Section 1.1(d)), the Servicer (i) shall set aside and hold solely for the
benefit of the applicable Uncommitted Purchaser (or deliver to the applicable
Purchaser Agent, if so instructed pursuant to Section 3.2(a)) such Uncommitted
Purchaser’s Purchase Interest in all Collections received on such day and (ii)
shall distribute on the last day of each Tranche Period to which such
Uncommitted Purchaser’s Investment has been allocated to the applicable
Purchaser Agent (for the benefit of such Uncommitted Purchaser) the amounts so
set aside up to the amount of such Uncommitted Purchaser’s Purchase Amount and,
to the extent not already paid in full, all Discount thereon and all other
amounts then due from the Seller in connection with such Purchase Amount and
the applicable Tranche Period. Prior to the occurrence of the Servicer
Replacement Event, it is understood and agreed that amounts set aside and held
for the benefit of an Uncommitted Purchaser as provided in the first sentence
of this section need not be segregated from other funds of the Seller or the
Servicer.

     (b) Interim Liquidations. On each day during any Interim Liquidation with
respect to any Purchaser, the Servicer shall set aside and hold solely for the
account of the related Purchaser Agent, for the benefit of such Purchaser, to
the extent provided below (or deliver to such Purchaser Agent, if so instructed
pursuant to Section 3.2(a)) and for the account of the Agent, all Collections
received on such day and such portion of Collections shall be allocated as
follows:

          (i) first, if such date is a Settlement Date, the Servicer Fee owing
to the Servicer;

          (ii) second, ratably to each Purchaser all Discount due to each
Purchaser;

          (iii) third, ratably to each Purchaser for which an Interim
Liquidation has been declared based on the ratio each such Purchaser’s
outstanding Investment bears to the aggregate Investments of all
Purchasers for which an Interim Liquidation has been declared until the
Investment of each such Purchaser has been paid in full;

          (iv) fourth, ratably to each Purchaser Group until all other amounts
(other than Investment) owed to each Purchaser Group under the
Transaction Documents have been paid in full;

          (v) fifth, ratably to the Agent and such Purchaser Agent until all
amounts owed to such Persons under the Transaction Documents have been
paid in full;

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          (vi) sixth, to any other Person to whom any amounts are owed (other
than Investment) under the Transaction Documents until all such amounts
have been paid in full; and

          (vii) seventh, to the Seller (or as otherwise required by applicable
law).

Unless an Interim Liquidation has ended by such date (in which case
Reinvestment Purchases shall resume to the extent provided in Section 1.1(d)),
on each Settlement Date (unless otherwise instructed by a Purchaser Agent
pursuant to Section 3.2(a)), the Servicer shall pay to the appropriate parties,
from such set aside Collections, all amounts allocated to the related
Settlement Period and all Settlement Periods that ended before such date, due
in accordance with the priorities in clauses (i), (ii) and (iii) above.
Amounts held in any Purchaser Agent’s account shall be invested in Permitted
Investments pending distribution, and all proceeds of such Permitted
Investments shall be distributed as Collections as provided in this Section
2.3(b). No distributions shall be made to pay amounts under clauses (v), (vi)
and (vii) above until sufficient Collections have been set aside to pay all
amounts described in clauses (i), (ii), (iii) and (iv) that may become payable
for all outstanding Settlement Periods. All distributions shall be made
ratably within each priority level in accordance with the respective amounts
then due each Person (or group of Persons) included in such level. As provided
in Section 1.4(c) all interest and other amounts payable hereunder other than
Investment are payable by the Seller. If any part of the Sold Interest in any
Collections is applied to pay any such amounts other than Investment pursuant
to this Section 2.3(b) and the Sold Interest has not been repaid in full if
required to be paid in full at such time, the Seller shall pay to the Servicer
the amount so applied for distribution as part of Collections.

     (c) Termination Date. On each day on and after the Termination Date, the
Servicer shall set aside and hold solely for the account of each Purchaser
Agent, for the benefit of its Purchaser Group, to the extent provided below (or
deliver to the Agent, if so instructed pursuant to Section 3.2(a)) and for the
account of the Agent, all Collections received on such day and such Collections
shall be allocated as follows:

          (i) first, if such date is a Settlement Date, the Servicer Fee owing
to the Servicer;

          (ii) second, ratably to each Purchaser in any Purchaser Group (other
than the USF Assurance Purchaser Group) for which the aggregate
Percentage Factors of the Purchasers in such Purchaser Group are greater
than such Purchaser Group’s Ratable Share, until the Investments of each
Purchaser in each such Purchaser Group are reduced such that the
aggregate Percentage Factors of the Purchasers in such Purchaser Group
equals such Purchaser Group’s Ratable Share;

          (iii) third, ratably to each Purchaser until all Investment of, and
Discount due but not paid to, each Purchaser has been paid in full;

          (iv) fourth, ratably to each Purchaser until all other amounts owed
under the Transaction Documents to such Purchaser have been paid in full;

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          (v) fifth, ratably to the Agent and each Purchaser Agent until all
amounts owed under the Transaction Documents to such Persons have been
paid in full;

          (vi) sixth, to any other Person to whom any amounts are owed under
the Transaction Documents until all such amounts have been paid in full;
and

          (vii) seventh, to the Seller (or as otherwise required by applicable
law).

On each Settlement Date (unless otherwise instructed by a Purchaser Agent
pursuant to Section 3.2(a)), the Servicer shall pay to the appropriate parties,
from such set aside Collections, all amounts allocated to the related
Settlement Period and all Settlement Periods that ended before such date, due
in accordance with the priorities in clauses (i), (ii), (iii) and (iv) above.
Amounts held in the Agent’s account shall be invested in Permitted Investments
pending distribution, and all proceeds of such Permitted Investments shall be
distributed as Collections as provided in this Section 2.3(b). No
distributions shall be made to pay amounts under clauses (v), (vi) and (vii)
above until sufficient Collections have been set aside to pay all amounts
described in clauses (i), (ii), (iii) and (iv) that may become payable for all
outstanding Settlement Periods. All distributions shall be made ratably within
each priority level in accordance with the respective amounts then due each
Person (or group of Persons) included in such level unless otherwise agreed by
the Purchaser Agents. As provided in Section 1.4(c) all interest and other
amounts payable hereunder other than Investment are payable by the Seller. If
any part of the Sold Interest in any Collections is applied to pay any such
amounts other than Investment pursuant to this Section 2.3(c) and the Sold
Interest has not been repaid in full, the Seller shall pay to the Servicer the
amount so applied for distribution as part of Collections.

ARTICLE III

ADMINISTRATION AND COLLECTIONS

        Section 3.1 Appointment of Servicer. (a) The servicing, administering
and collecting of the Receivables shall be conducted by a Person (the
“Servicer”) designated to so act on behalf of the Purchasers under this
Article III. As the Initial Servicer, the Parent is hereby designated as,
and agrees to perform the duties and obligations of, the Servicer. The
Initial Servicer acknowledges that the Agent, each Purchaser Agent and each
Purchaser have relied on the Initial Servicer’s agreement to act as Servicer
(and the agreement of any of the sub-servicers to so act) in making the
decision to execute and deliver this Agreement and agrees that it will not
voluntarily resign as Servicer nor permit any sub-servicer to voluntarily
resign as a sub-servicer. At any time after the occurrence of a Servicer
Replacement Event, the Agent may designate a new Servicer to succeed the
Initial Servicer (or any successor Servicer).

     (b) The Initial Servicer may delegate its duties and obligations as
Servicer to any Affiliate (acting as a sub-servicer). Notwithstanding such
delegation, the Initial Servicer shall remain primarily liable for the
performance of the duties and obligations so delegated, and the Agent, each
Purchaser Agent and each Purchaser shall have the right to look solely to the
Initial Servicer for such performance. The Agent (with the consent of the
Instructing Group) may at any time after the occurrence of a Servicer
Replacement Event remove or replace any sub-servicer.

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     (c) If replaced, the Servicer agrees it will terminate, and will cause
each existing sub-servicer to terminate, its collection activities in a manner
requested by the Agent to facilitate the transition to a new Servicer. The
Servicer shall cooperate with and assist any new Servicer in assuming the
obligation to service the Receivables, including all reasonable efforts to
provide, or cause to be provided to, the new Servicer with access to all
software programs of the Servicer or any sub-servicer necessary or desirable to
collect the Receivables. For a sixty day period after the appointment of a new
Servicer, at the expense of the Initial Servicer, the Initial Servicer
irrevocably agrees to act (if requested to do so) as the data-processing agent
for any new Servicer in substantially the same manner as the Initial Servicer
conducted such data-processing functions while it acted as the Servicer.

        Section 3.2 Duties of Servicer. (a) The Servicer shall take, or cause
to be taken, all action necessary or advisable to collect each Receivable in
accordance with this Agreement, the applicable Credit and Collection Policy
and all applicable laws, rules and regulations using the skill and attention
the Servicer exercises in collecting other receivables or obligations owed
solely to it. The Servicer may, prior to the occurrence of a Termination
Event, commingle Collections with its other funds until such amounts are
required to be paid pursuant to Section 2.3. If so instructed by a Purchaser
Agent following the occurrence of a Servicer Replacement Event, the Servicer
shall transfer to the Agent the amount of Collections to which each Purchaser
Group is entitled by the Business Day following receipt. Each party hereto
hereby appoints the Servicer to enforce such Person’s rights and interests in
the Receivables. The Servicer shall be entitled to commence or settle any
legal action to enforce the collection of any Receivable; provided that
during the continuance of a Termination Event, the Agent shall have the right
to approve any such settlement. If at any time during the continuance of a
Termination Event, the Agent notifies the Servicer that the Agent believes
litigation would be an appropriate means to collect any Receivable, and the
Servicer declines to initiate such litigation after good faith discussion
with the Agent, the Agent shall be entitled to notify the Obligor on such
Receivable of the assignment of an interest therein to the Agent and to
initiate litigation with respect thereto in the name of the Purchasers.

     (b) If no Termination Event exists and the Servicer determines that such
action is appropriate in order to maximize the Collections, the Servicer may,
in accordance with the applicable Credit and Collection Policy, extend the
maturity of any Receivable (but no such extension shall be for a period more
than thirty (30) days or adjust the outstanding balance of any Receivable. Any
such extension or adjustment shall not alter the status of a Receivable as a
Defaulted Receivable or limit any rights of the Agent, any Purchaser Agent or
the Purchasers hereunder. If a Termination Event exists, the Servicer may make
such extensions or adjustments only with the prior consent of the Instructing
Group.

     (c) Prior to an Interim Liquidation or the Termination Date, the Servicer
shall turn over to the Seller (i) any percentage of Collections in excess of
the Sold Interest, less all reasonable costs and expenses of the Servicer for
servicing, collecting and administering the Receivables and (ii) subject to
Section 1.5(d), the collections and records for any indebtedness owed to the
Seller that is not a Receivable. The Servicer shall have no obligation to
remit any such funds or records to the Seller until the Servicer receives
evidence (satisfactory to the Agent) that the Seller is entitled to such items.
The Servicer has no obligations concerning indebtedness

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that is not a Receivable other than to deliver the collections and records
for such indebtedness to the Seller when required by this Section 3.2(c).

     (d) The Servicer shall take all actions necessary to cause the Seller to
comply with its obligations under Section 5.1(g) to take all actions necessary
to maintain vested in the Agent a valid perfected security interest in the
Receivables, the Collections, the Lock-Boxes, the Lock-Box Accounts, the
Purchase Agreement and the proceeds thereof; provided that the Servicer shall
not be required to cause the interest in the Lock-Box Accounts to be perfected
through the execution of the Lock-Box Agreements until the date that is 45 days
after the Closing Date.

        Section 3.3
Reports. On or before the eighteenth (18th) day of each
calendar month or, if such day is not a Business Day, the next succeeding
Business Day (or, (i) weekly, if the Servicer’s long-term unsecured debt
rating has been reduced below (A) BBB- and Baa3 by S&P and Moody’s,
respectively, or (B) BBB- or Baa3 by S&P or Moody’s respectively, if the
difference in the long-term unsecured debt rating of S&P and Moody’s is more
than one notch, or (ii) daily, if the Servicer’s long-term unsecured debt
rating has been reduced below (A) BB and Ba2 by S&P and Moody’s,
respectively, or (B) BB or Ba2 by S&P or Moody’s, respectively, if the
difference in the long-term unsecured debt rating of S&P and Moody’s is more
than one notch), the Servicer shall deliver to the Agent and each Purchaser
Agent a report reflecting information as of the close of business of the
Servicer for the immediately preceding Fiscal Month or such other preceding
period as is requested (each a “Periodic Report”), containing the information
described on Exhibit D (with such modifications or additional information as
reasonably requested by the Agent or the Instructing Group).

        Section 3.4 Lock-Box Arrangements. The Agent is hereby authorized to
give notice at any time after the occurrence and during the continuance of a
Termination Event to any or all Lock-Box Banks that the Agent is exercising
its rights under the Lock-Box Agreements and to take all actions permitted
under the Lock-Box Agreements. The Seller agrees to take any action
requested by the Agent to facilitate the foregoing. After the Agent takes
any such action under the Lock-Box Agreements, the Servicer and the Seller
shall immediately deliver to the Agent any Collections received by the
Servicer or the Seller. Should the Agent receive written notice (together
with satisfactory proof) that amounts it has previously received are not
Collections, it shall remit such amounts to the Seller promptly after
receiving such notice and proof. If the Agent takes control of any Lock-Box
Account, the Agent shall distribute, Collections it receives in accordance
with Section 2.3 and shall deliver to the Servicer, for distribution under
Section 3.2, all other amounts it receives from such Lock-Box Account.

        Section 3.5 Enforcement Rights. (a) The Agent may, at any time after
the occurrence of a Termination Event, direct the Lock-Box Banks to make all
payments on the Receivables directly to the Agent or its designee. The Agent
may, at any time after the occurrence of a Servicer Replacement Event, direct
the Obligors to make all payments on the Receivables directly to the Agent or
its assignee. The Agent may, and the Seller shall at the Agent’s request,
withhold the identity of the Purchasers from the Obligors and Lock-Box Banks.
Upon the Agent’s request, Seller and the Servicer (at their expense) shall
(i) following a Servicer Replacement Event, (A) give notice to each Obligor
of the Agent’s ownership of the Sold Interest and direct that payments on
Receivables be made directly to the Agent or its designee

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and (B) use all reasonable efforts to transfer (or cause to be
transferred) to the Agent (or its designee) licenses for the use of, all
software useful to collect the Receivables and (ii) following a Termination
Event (A) assemble for the Agent all Records and collateral security for the
Receivables, and (B) segregate in a manner acceptable to the Agent all
Collections the Servicer or the Seller receives and, promptly upon receipt,
remit such Collections in the form received, duly endorsed or with duly
executed instruments of transfer, to the Agent or its designee.

     (b) Upon the occurrence of a Termination Event, the Servicer shall
segregate Collections from other funds of the Seller and hold such amounts for
the Agent (for the benefit of the Purchasers). Upon the occurrence of a
Termination Event, the Seller hereby irrevocably appoints the Agent as its
attorney-in-fact coupled with an interest, with full power of substitution and
with full authority in the place of the Seller, to take any and all steps
deemed desirable by the Agent, in the name and on behalf of the Seller to (i)
collect any amounts due under any Receivable, including endorsing the name of
the Seller on checks and other instruments representing Collections and
enforcing such Receivables, and (ii) exercise any and all of the Seller’s
rights and remedies under the Purchase Agreement. The Agent’s powers under
this Section 3.5(b) shall not subject the Agent to any liability if any action
taken by it proves to be inadequate or invalid, nor shall such powers confer
any obligation whatsoever upon the Agent.

     (c) None of the Agent, any Purchaser Agent or any Purchaser shall have any
obligation to take or consent to any action to realize upon any Receivable or
to enforce any rights or remedies related thereto.

        Section 3.6 Servicer Fee. On each Settlement Date, the Seller shall pay
to the Servicer a fee for the immediately preceding Fiscal Month as
compensation for its services (the “Servicer Fee”) equal to (a) at all times
the Seller or an Affiliate thereof is the Servicer, 1.0% times the weighted
average aggregate outstanding balance of all Receivables during such Fiscal
Month, payable monthly (or such other commercially reasonable rate agreed to
between the Seller and the Servicer), and (b) at all times any other Person
is the Servicer, a reasonable amount agreed upon by the Agent (with the
consent of the Instructing Group) and the new Servicer on an arm’s-length
basis reflecting rates and terms prevailing in the market at such time. The
Servicer may only apply to payment of the Servicer Fee the portion of the
Collections in excess of the Sold Interest or Collections that fund
Reinvestment Purchases. The Agent may, with the consent of the Instructing
Group, pay the Servicer Fee to the Servicer from the Sold Interest in
Collections. The Seller shall be obligated to reimburse any such payment to
the extent required by Section 1.5 or 2.3.

        Section 3.7 Responsibilities of the Seller. The Seller shall, or shall
cause the Originators to, pay when due all Taxes payable in connection with
the applicable Receivables or their creation or satisfaction. The Seller
shall, and shall cause the Originators to, perform all of their respective
obligations under agreements related to the Receivables to the same extent as
if interests in the Receivables had not been transferred hereunder or, in the
case of any Originator, under the related Purchase Agreement. The Agent’s,
any Purchaser Agent’s or any Purchaser’s exercise of any rights hereunder
shall not relieve the Seller or any Originator from such obligations. None
of the Agent, any Purchaser Agent or any Purchaser shall have

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any obligation to perform any obligation of the Seller or of any
Originator or any other obligation or liability in connection with the
Receivables.

         
    Section 3.8 [Reserved].

        Section 3.9 Indemnities by the Servicer. Without limiting any other
rights any such Person may have hereunder or under applicable law, the
Servicer hereby indemnifies and holds harmless, on an after-Tax basis, the
Agent, each Purchaser Agent and each Purchaser and their respective officers,
directors, agents and employees (each an “Indemnified
Party”) from and
against any and all damages, losses, claims, liabilities, penalties, costs
and expenses (including attorneys’ fees and court costs) (all of the
foregoing collectively, the “Indemnified Losses”) at any time imposed on or
incurred by any Indemnified Party arising out of or otherwise relating to:

          (i) any representation or warranty made by the Servicer (or any
employee or agent of the Servicer) in this Agreement, any other
Transaction Document, any Periodic Report or any other information or
report delivered by the Servicer pursuant hereto, which shall have been
false or incorrect in any material respect when made (including, without
limitation, the representations made pursuant to Section 7.2(e));

          (ii) the failure by the Servicer to comply with any applicable law,
rule or regulation related to any Receivable, or the nonconformity of any
Receivable with any such applicable law, rule or regulation as the result
of any action taken or omitted to be taken by the Servicer;

          (iii) any failure of the Agent (for the benefit of itself, the
Purchasers and the Purchaser Agents) to have a perfected ownership or
security interest in the Sold Interest, and the property conveyed
pursuant to Section 1.1(e) and Section 1.8, free and clear of any Adverse
Claim as the result of any action taken or omitted to be taken by the
Servicer;

          (iv) any failure of the Servicer, to perform its duties or
obligations in accordance with the provisions of this Agreement or any
other Transaction Document to which the Servicer is a party; or

          (v) any commingling by the Servicer of funds to which the Agent, any
Purchaser Agent or any Purchaser is entitled hereunder with any other
funds;

whether arising by reason of the acts to be performed by the Servicer hereunder
or otherwise, excluding only Indemnified Losses to the extent (a) such
Indemnified Losses resulted solely from the gross negligence or willful
misconduct of the Indemnified Party seeking indemnification, or (b) such
Indemnified Losses resulted due to Receivables being uncollectible on account
of the insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; provided, however, that nothing contained in this sentence shall limit
the liability of the Servicer or limit the recourse of the Agent, any Purchaser
Agent and each Purchaser to the Servicer for any amounts otherwise specifically
provided to be paid by the Servicer hereunder.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

        Section 4.1 Seller Representations and Warranties. The Seller
represents and warrants to the Agent, each Purchaser Agent and each Purchaser
as of the date hereof and each Purchase Date that:

     (a) Limited Liability Company Existence and Power. The Seller is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all limited liability company
power and authority and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which its
business is now conducted, except where failure to obtain such license,
authorization, consent or approval would not reasonably be expected to have a
Material Adverse Effect.

     (b) Limited Liability Company Authorization and No Contravention. The
execution, delivery and performance by the Seller of each Transaction Document
to which it is a party (i) are within its limited liability company powers,
(ii) have been duly authorized by all necessary limited liability company
action, (iii) do not contravene or constitute a default under (A) any
applicable law, rule or regulation that would reasonably be expected to have a
Material Adverse Effect, (B) its certificate of formation or limited liability
company agreement or (C) any agreement, order or other instrument to which it
is a party or its property is subject that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect and (iv) will
not result in any Adverse Claim on any Receivable or Collection or give cause
for the acceleration of any indebtedness of the Seller.

     (c) No Consent Required. No approval, authorization or other action by,
or filings with, any Governmental Authority or other Person (other than the
parties hereto) is required in connection with the execution, delivery and
performance by the Seller of any Transaction Document or any transaction
contemplated thereby other than the filing of the financing statements
contemplated by the Transaction Documents which will be made within ten (10)
days of the Closing Date.

     (d) Binding Effect. Each Transaction Document to which the Seller is a
party constitutes the legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms, except as limited
by bankruptcy, insolvency, or other similar laws of general application
relating to or affecting the enforcement of creditors’ rights generally and
subject to general principles of equity (regardless of whether such enforcement
is sought in a proceeding in equity or at law).

     (e) Perfection of Ownership Interest. The Seller owns the Receivables
free of any Adverse Claim other than the interests of the Purchasers (through
the Agent) therein that are created hereby, and each Purchaser shall at all
times have a valid undivided percentage ownership interest to the extent of its
Purchase Interest or a security interest, which shall be a first priority
perfected security interest, in the Receivables and Collections.

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     (f) Accuracy of Information. All information furnished by or on behalf of
the Seller to the Agent, any Purchaser Agent or any Purchaser in connection
with any Transaction Document, or any transaction contemplated thereby, is, at
the time so furnished, true and accurate in all material respects and does not,
at the time so furnished, omit to state a material fact or any fact necessary
to make the statements contained therein not materially misleading on the date
as of which such information is dated or certified.

     (g) No Actions, Suits. There are no actions, suits or other proceedings
(including matters relating to environmental liability) pending or threatened
against or affecting the Seller, or any of its respective properties, that (i)
if adversely determined, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect or (ii) involve any Transaction
Document or any transaction contemplated thereby. The Seller is not in default
of any contractual obligation or in violation of any order, rule or regulation
of any Governmental Authority, which default or violation would, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     (h) Accuracy of Exhibits; Lock-Box Arrangements. All information on
Exhibits E-G (listing offices and names of the Seller and the Originators and
where they maintain Records; the Subsidiaries; and Lock Boxes) is true and
complete, subject to any changes permitted by, and notified to the Agent in
accordance with, Article V. The Seller has complied with the provisions of
Section 5.1(i) related to the delivery of Lock-Box Agreements. The Seller has
not granted any interest in any Lock-Box or Lock-Box Account to any Person
other than the Agent and, upon delivery to a Lock-Box Bank of the related
Lock-Box Letter, the Agent will have exclusive ownership and control of the
Lock-Box Account at such Lock-Box Bank.

     (i) Sales by the Originators. Each sale by each Originator to the Seller
of an interest in Receivables and their Collections has been made in accordance
with the terms of the Purchase Agreement, including the payments by the Seller
to each Originator of the purchase price described in the Purchase Agreement.
Each such sale has been made for “reasonably equivalent value” (as such term is
used in Section 548 of the Bankruptcy Code) and not for or on account of
“antecedent debt” (as such term is used in Section 547 of the Bankruptcy Code)
owed by any Originator to the Seller.

     (j) Credit and Collection Policy. Each Receivable has been originated in
compliance in all material respects with the applicable Credit and Collection
Policy.

     (k) Subsidiaries. The Seller has no ownership interest in any other
Person.

     (l) Eligible Receivables. Each Receivable included in the Net Receivables
Balance on the date of any Purchase or Reinvestment shall be an Eligible
Receivable on such date.

        Section 4.2 Servicer Representations and Warranties. The Servicer
represents and warrants to the Agent and each Purchaser as of the date hereof
and each Purchase Date that:

          (a) Corporate Existence and Power. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware and has all corporate power and authority and all
governmental licenses, authorizations,

17

 

consents and approvals required to carry on its business in each
jurisdiction in which its business is now conducted, except where failure
to obtain such license, authorization, consent or approval would not
reasonably be expected to have a Material Adverse Effect.

          (b) Corporate Authorization and No Contravention. The execution,
delivery and performance by the Servicer of each Transaction Document to
which it is a party (i) are within its corporate powers, (ii) have been
duly authorized by all necessary corporate action, (iii) do not
contravene or constitute a default under (A) any applicable law, rule or
regulation that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect, (B) its constitutional
documents or (C) any agreement, order or other instrument to which it is
a party or its property is subject that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect
and (iv) will not result in any Adverse Claim on any Receivable or
Collection or give cause for the acceleration of any indebtedness of the
Servicer.

          (c) No Consent Required. No approval, authorization or other action
by, or filings with, any Governmental Authority or other Person (other
than the parties hereto) is required in connection with the execution,
delivery and performance by the Servicer of any Transaction Document or
any transaction contemplated thereby other than the filing of the
financing statements contemplated by the Transaction Documents which will
be made within ten (10) days of the Closing Date.

          (d) Binding Effect. Each Transaction Document to which the Servicer
is a party constitutes the legal, valid and binding obligation of the
Servicer enforceable against the Servicer in accordance with its terms,
except as limited by bankruptcy, insolvency, or other similar laws of
general application relating to or affecting the enforcement of
creditors’ rights generally and subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law).

          (e) Accuracy of Information. All information furnished by or on
behalf of the Servicer to the Agent or any Purchaser (including without
limitation each Periodic Report) in connection with any Transaction
Document, or any transaction contemplated thereby, is, at the time so
furnished, true and accurate in all material respects and does not, at
the time so furnished, omit to state a material fact or any fact
necessary to make the statements contained therein not materially
misleading on the date as of which such information is dated or
certified.

          (f) No Actions, Suits. Other than as disclosed on Schedule 4.2(f),
there are no actions, suits or other proceedings (including matters
relating to environmental liability) pending or threatened against or
affecting the Servicer, or any of its respective properties, that, if
adversely determined, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. The Servicer is not in
default of any contractual obligation or in violation of any order, rule
or regulation of any Governmental Authority, which default or violation

would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

18

 

          (g) Credit and Collection Policy. The Servicer has administered
each Receivable in accordance in all material respects with the
applicable Credit and Collection Policy.

        Section 4.3 USF Assurance Representations and Warranties. USF Assurance
represents and warrants to the Agent, each other Purchaser Agent and each
other Purchaser that:

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

     (b) Corporate Authorization and No Contravention. The execution, delivery
and performance by USF Assurance each Transaction Document to which it is a
party (i) are within its corporate powers, (ii) have been duly authorized by
all necessary corporate action, (iii) do not contravene or constitute a default
under (A) any applicable law, rule or regulation, (B) its memorandum of
association or by-laws or (C) any agreement, order or other instrument to which
it is a party or its property is subject that in the case of clause (A) or (C)
would reasonably be expected to have a material adverse effect on (i) its
ability to perform its obligations under, or the enforceability of, any
Transaction Document to which it is a party, (ii) its business or financial
condition, (iii) the interests of the Agent, any Purchaser Agent or any
Purchaser under any Transaction Document or (iv) the enforceability or
collectibility of any Receivable not due to the creditworthiness of the
Obligors.

     (c) No Consent Required. No approval, authorization or other action by,
or filings with, any Governmental Authority or other Person (other than the
parties hereto) is required in connection with the execution, delivery and
performance by USF Assurance of any Transaction Document or any transaction
contemplated thereby other than those that have been obtained.

     (d) Binding Effect. Each Transaction Document to which USF Assurance is a
party constitutes the legal, valid and binding obligation of USF Assurance
enforceable against USF Assurance in accordance with its terms, except as
limited by bankruptcy, insolvency, or other similar laws of general application
relating to or affecting the enforcement of creditors’ rights generally and
subject to general principles of equity (regardless of whether enforcement is
sought in equity or at law).

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ARTICLE V

COVENANTS

        Section 5.1 Covenants of the Seller. The Seller hereby covenants and
agrees to comply with the following covenants and agreements, unless the
Agent (with the consent of the Instructing Group) shall otherwise consent:

     (a) Financial Reporting. The Seller will maintain a system of accounting
established and administered in accordance with GAAP and will furnish to the
Agent and each Purchaser Agent:

          (i) as soon as available, and in any event within 45 days after the
close of each of the first three fiscal quarters of each fiscal year of
the Servicer and within 60 days after the close of the last fiscal
quarter of each fiscal year of the Servicer, a copy of the consolidated
balance sheet of the Servicer and its Subsidiaries as of the last day of
such fiscal quarter and the consolidated statements of income, retained
earnings, and cash flows of the Servicer and its Subsidiaries for the
fiscal quarter and for the fiscal year-to-date period then ended, each in
reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by
the Servicer in accordance with GAAP (subject to the absence of footnote
disclosures and year-end audit adjustments);

          (ii) as soon as available, and in any event within 90 days after the
close of each fiscal year of the Servicer, a copy of the consolidated
balance sheet of the Servicer and its Subsidiaries as of the last day of
the fiscal year then ended and the consolidated statements of income,
retained earnings, and cash flows of the Servicer and its Subsidiaries
for the fiscal year then ended, and accompanying notes thereto, each in
reasonable detail showing in comparative form the figures for the
previous fiscal year, accompanied in the case of the consolidated
financial statements by an audit report of Deloitte & Touche LLP or
another firm of independent public accountants of recognized national
standing, selected by the Servicer and reasonably satisfactory to the
Agent and the Instructing Group, without qualifications unacceptable to
any Agent, to the effect that the consolidated financial statements have
been prepared in accordance with GAAP and present fairly in accordance
with GAAP the consolidated financial condition of the Servicer and its
Subsidiaries as of the close of such fiscal year and the results of their
operations and cash flows for the fiscal year then ended and that an
examination of such accounts in connection with such financial statements
has been made in accordance with generally accepted auditing standards
and accordingly, such examination included such tests of the accounting
records and such other auditing procedures as were considered necessary
in the circumstances;

          (iii) within the period provided in subsection (b) above, the
written statement of the accountants who certified the audit report
thereby required that in the course of their audit they have obtained no
knowledge of any Potential Termination Event or Termination Event of any
covenant contained in Section 5.2(k) or, if such accountants

20

 

have obtained knowledge of any such Potential Termination Event or
Termination Event, they shall disclose in such statement the nature and
period of the existence thereof;

          (iv) promptly after receipt thereof, any additional written reports,
management letters or other detailed information contained in writing
concerning significant aspects of the Servicer’s or any Subsidiary’s
operations and financial affairs given to it by its independent public
accountants;

          (v) promptly after the sending or filing thereof, copies of each
financial statement, report, notice or proxy statement sent by the
Servicer or any Subsidiary to its stockholders or other equity holders,
and copies of each regular, periodic or special report, registration
statement or prospectus (including all Form 10-K, Form 10-Q and Form 8-K
reports) filed by the Servicer or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor
agency;

          (vi) notice of any Change in Control;

          (vii) a revised and updated Schedule 4.2(f) promptly and in any
event within 10 days after knowledge shall have come to the attention of
any of the President, chief executive officer, chief financial officer,
chief operating officer, treasurer, or any assistant treasurer of the
Servicer, of any threatened or pending litigation or governmental
proceeding or labor controversy against the Servicer or any Subsidiary
which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect;

          (viii) with each of the financial statements furnished to the Agent
and the Purchaser Agents pursuant to subsections (i) and (ii) above, a
written certificate signed by the chief financial officer of the Servicer
or another officer of the Servicer acceptable to the Agent to the effect
that to the best of such officer’s knowledge and belief no Potential
Termination Event or Termination Event has occurred during the period
covered by such statements or, if any such Potential Termination Event or
Termination Event has occurred during such period, setting forth a
description of such Potential Termination Event or Termination Event and
specifying the action, if any, taken by the Servicer or any Subsidiary to
remedy the same. Such certificate shall also set forth the calculation
supporting such statements in respect of Section 5.2(k) hereof.

          (ix) Other Information. With reasonable promptness, such other
information relating to any Originator, the Seller, the Receivables and
the Obligors as may be reasonably requested by the Agent or any Purchaser
Agent (with a copy of such request to the Agent).

     (b) Notices. Within two (2) Business Days of the Seller becoming aware of
or receiving notice of any of the following the Seller will notify the Agent
and each Purchaser Agent and provide a description of:

          (i) Potential Termination Events. The occurrence of any Termination
Event or a Potential Termination Event;

21

 

          (ii) Representations and Warranties. The failure of any
representation or warranty herein to be true (when made) in any material
respect;

          (iii) Litigation. The institution of any litigation, arbitration
proceeding or governmental proceeding against the Seller or that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;

          (iv) Judgments. The entry of any judgment or decree against any USF
Entity (excluding a judgment against an entity other than the Seller) if
the aggregate amount (not covered by insurance) of all judgments then
outstanding against the USF Entities is more than $10,000,000; or

          (v) Changes in Business. Any change in, or proposed change in, the
character of any USF Entity’s business that would reasonably be expected
to have a Material Adverse Effect.

If the Agent or any Purchaser Agent receives such a notice, the Agent or such
Purchaser Agent shall promptly give notice thereof to each Purchaser.

     (c) Conduct of Business. The Seller will perform all actions necessary to
remain duly organized, validly existing and in good standing in its
jurisdiction of organization and to maintain all requisite authority to conduct
its business in each jurisdiction in which it conducts business if the failure
to maintain such authority would reasonably be expected to have a Material
Adverse Effect.

     (d) Compliance with Laws. The Seller will comply with all laws,
regulations, judgments and other directions or orders imposed by any
Governmental Authority to which such Person or any Receivable or Collections
may be subject where such non-compliance, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.

     (e) Furnishing Information and Inspection of Records. The Seller will
furnish to the Agent, each Purchaser Agent and the Purchasers such Records
concerning the Receivables as the Agent, any Purchaser Agent or a Purchaser may
reasonably request. The Seller will permit, at any time during regular
business hours, and, so long as no Termination Event exists upon reasonable
notice, the Agent, any Purchaser Agent or any Purchaser (or any representatives
thereof, including an independent public accountants) (i) to examine and make
copies of all Records, (ii) to visit the offices and properties of the Seller
for the purpose of examining the Records, (iii) to discuss matters relating
hereto with any of the Seller’s officers, directors, employees or independent
public accountants having knowledge of such matters and (iv) to conduct an
audit of the Records or make test verifications of the Receivables and
Collections, provided that so long as no Termination Event exists, the Agent
shall not conduct more than one such audit at the expense of the Servicer in
any calendar year (it being understood that the audit of Records located at
different locations shall not constitute separate audits).

     (f) Keeping Records. (i) The Seller will have and maintain (A)
administrative and operating procedures (including an ability to recreate
Records necessary to service outstanding Receivables and prepare reports
required by the Transaction Documents if originals are

22

 

destroyed), (B) adequate facilities, personnel and equipment and (C) all
Records and other information necessary or advisable for collecting the
Receivables (including Records adequate to permit the immediate identification
of each new Receivable and all Collections of, and adjustments to, each
existing Receivable).

          (ii) The Seller will, at all times from and after the date hereof,
clearly and conspicuously mark its books and records, and all information
delivered to any third party (including without limitation any data tapes
or electronic files), with a legend describing the Agent’s and the
Purchasers’ interest in the Receivables.

     (g) Perfection. (i) The Seller will, at its expense, promptly execute and
deliver all instruments and documents and take all action necessary or
requested by the Agent (including the execution and filing of financing or
continuation statements, amendments thereto or assignments thereof) to enable
the Agent to exercise and enforce all its rights hereunder and to vest and
maintain vested in the Agent a valid, first priority perfected security
interest in the Receivables, the Collections, the Lock-Boxes, the Lock-Box
Accounts, the Purchase Agreement, and proceeds thereof free and clear of any
Adverse Claim (and a perfected ownership interest in the Receivables and
Collections to the extent of the Sold Interest); provided that the Seller shall
not be required to cause the interest in the Lock-Box Accounts to be perfected
through the execution of the Lock-Box Agreements until the date that is 45 days
after the Closing Date. The Agent is hereby authorized to file any
continuation statements, amendments thereto and assignments thereof.

          (ii) The Seller will only change its name, jurisdiction of
organization or corporate structure or relocate its chief executive
office or the Records following thirty (30) days advance notice to the
Agent and the delivery to the Agent of all financing statements,
instruments and other documents (including direction letters and
opinions) reasonably requested by the Agent.

          (iii) The Seller will at all times maintain its jurisdiction of
organization within a jurisdiction in the United States of America in
which Article 9 of the UCC is in effect. If the Seller or any Originator
moves its jurisdiction of organization to a location that imposes Taxes,
fees or other charges to perfect the Agent’s and the Purchasers’
interests hereunder or the Seller’s interests under the Purchase
Agreement, the Seller will pay all such amounts and any other costs and
expenses incurred in order to maintain the enforceability of the
Transaction Documents, the Sold Interest and the interests of the Agent,
the Purchaser Agents and the Purchasers in the Receivables, the
Collections, the Purchase Agreement and the proceeds thereof.

     (h) Performance of Duties. The Seller will perform its respective duties
or obligations in accordance with the provisions of each of the Transaction
Documents. The Seller (at its expense) will (i) fully and timely perform in
all material respects all agreements required to be observed by it in
connection with each Receivable, (ii) comply in all material respects with the
Credit and Collection Policy, and (iii) refrain from any action that may impair
the rights of the Agent, the Purchaser Agents or the Purchasers in the
Receivables, Collections, the Purchase Agreement and the proceeds thereof.

23

 

     (i) Payments on Receivables, Accounts. The Seller will at all times
instruct all Obligors to deliver payments on the Receivables to a Lock-Box or
Lock-Box Account, provided that, with respect to any Obligor that had been
instructed to send payments on any Receivable to the JPMorgan Lock-Box or
JPMorgan Lock-Box Account, the Seller will instruct each such Obligor to
deliver payments on its Receivables to a Lock-Box or a Lock-Box Account within
45 days after the Closing Date. If any such payments or other Collections are
received by the Seller, it shall hold such payments in trust for the benefit of
the Agent, the Purchaser Agents and the Purchasers and promptly (but in any
event within two Business Days after receipt) remit such funds into the
appropriate Lock-Box Account. Within 45 days after the Closing Date, the
Seller shall have delivered to the Agent an executed and acknowledged copy of a
Lock-Box Agreement substantially in the form of Exhibit H (with such changes
acceptable to the Agent) from each Lock-Box Bank. The Seller will cause each
Lock-Box Bank to comply with the terms of each applicable Lock-Box Agreement.
The Seller will not permit the funds of any Affiliate to be deposited into any
Lock-Box Account. If such funds are nevertheless deposited into any Lock-Box
Account, the Seller will promptly identify such funds for segregation. After
the occurrence of a Servicer Replacement Event, the Seller will not, and will
not permit any Servicer or other Person to, commingle Collections or other
funds to which the Agent or any Purchaser is entitled with any other funds.
The Seller shall only add, and shall only permit an Originator to add, a
Lock-Box Bank, Lock-Box, or Lock-Box Account to those listed on Exhibit G if
the Agent has received notice of such addition, an executed and acknowledged
copy of a Lock-Box Agreement substantially in the form of Exhibit H (with such
changes as are acceptable to the Agent) from any new Lock-Box Bank. The Seller
shall only terminate a Lock-Box Bank or Lock-Box, or close a Lock-Box Account,
upon 30 days advance notice to the Agent.

     (j) Change in Business or Credit and Collection Policy. The Seller will
not make any material change in its business or any Credit and Collection
Policy.

     (k) Accounting for Sale. The Seller will not account for, or otherwise
treat, the transactions contemplated by the Purchase Agreement other than as a
sale of Receivables or inconsistent with the Agent’s ownership interest in the
Receivables and Collections.

     (l) Purchase Agreement; Subordinated Note. The Seller will not amend or
modify or grant any consent or waiver under the Purchase Agreement or any
Subordinated Note.

     (m) True Sale/Substantive Consolidation Opinion. The Seller will comply
with each of the assumptions of fact set forth in the opinion of Sidley Austin
Brown & Wood LLP dated as of the date hereof regarding certain bankruptcy
matters.

        Section 5.2 Covenants of the Servicer. The Servicer hereby covenants
and agrees to comply with the following covenants and agreements, unless the
Agent (with the consent of the Instructing Group) shall otherwise consent:

     (a) Financial Reporting. The Servicer will maintain a system of
accounting established and administered in accordance with GAAP and will
furnish to the Agent:

24

 

          (i) Annual and Quarterly Financial Statements. The annual and
quarterly financial statements and officer’s certificates required to be
delivered under Section 5.1(a) within the time periods required
thereunder;

          (ii) Other Information. With reasonable promptness, such other
information relating to the Seller, the Servicer, the Receivables and the
Obligors as may be reasonably requested by the Agent.

     (b) Notices. Within two (2) Business Days of the Servicer becoming aware
of or receiving notice of any of the following the Servicer will notify the
Agent and provide a description of:

          (i) Potential Termination Events. The occurrence of any Termination
Event or a Potential Termination Event;

          (ii) Representations and Warranties. The failure of any
representation or warranty herein to be true (when made) in any material
respect;

          (iii) Litigation. The institution of any litigation, arbitration
proceeding or governmental proceeding against the Seller or that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;

          (iv) Judgments. The entry of any judgment or decree against any USF
Entity (excluding a judgment against an entity other than the Seller if
the aggregate amount (not covered by insurance) of all judgments then
outstanding against the USF Entities is more than $10,000,000; or

          (v) Changes in Business. Any change in, or proposed change in, the
character of any USF Entity’s business that would reasonably be expected
to have a Material Adverse Effect.

If the Agent receives such a notice, the Agent shall promptly give notice
thereof to each Purchaser.

     (c) Conduct of Business. The Servicer will perform, and will cause each
Originator to perform, all actions necessary to remain duly organized, validly
existing and in good standing in its jurisdiction of organization and to
maintain all requisite authority to conduct its business in each jurisdiction
in which it conducts business except where failure to do so would not
reasonably be expected to have a Material Adverse Effect.

     (d) Compliance with Laws. The Servicer will comply, and will cause each
Originator to comply, with all laws, regulations, judgments and other
directions or orders imposed by any Governmental Authority to which such Person
or any Receivable or Collections may be subject if the failure to do so would
reasonably be expected to have a Material Adverse Effect.

     (e) Furnishing Information and Inspection of Records. The Servicer will
furnish to the Agent and the Purchasers such Records concerning the Receivables
as the Agent or a

25

 

Purchaser may reasonably request. The Servicer will permit, so long as no
Termination Event exists upon reasonable notice, at any time during regular
business hours, the Agent or any Purchaser (or any representatives thereof,
including independent public accountants) (i) to examine and make copies of all
Records, (ii) to visit the offices and properties of the Servicer for the
purpose of examining the Records, (iii) to discuss matters relating hereto with
any of the Servicer’s officers, directors, employees or independent public
accountants having knowledge of such matters and (iv) to conduct an audit of
the Records or make test verifications of the Receivables and Collections,
provided that so long as no Termination Event exists, the Agent shall not
conduct more than one such audit at the expense of the Servicer in any calendar
year (it being understood that the audit of Records located at different
locations shall not constitute separate audits).

     (f) Keeping Records. (i) The Servicer will have and maintain (A)
administrative and operating procedures (including an ability to recreate
Records necessary to service outstanding Receivables and prepare reports
required by the Transaction Documents if originals are destroyed), (B) adequate
facilities, personnel and equipment and (C) all Records and other information
reasonably necessary or advisable for collecting the Receivables (including
Records adequate to permit the immediate identification of each Obligor, each
new Receivable and all Collections of, and adjustments to, each existing
Receivable).

          (ii) The Servicer will, at all times from and after the date hereof,
clearly and conspicuously mark its books and records, and all information
delivered to any third party (including without limitation any data tapes
or electronic files), with a legend describing the Agent’s and the
Purchasers’ interests in the Receivables.

          (iii) The Servicer will at all times maintain a current list of all
Obligors.

     (g) Performance of Duties. The Servicer will perform its duties or
obligations in accordance with the provisions of each of the Transaction
Documents. The Servicer (at its expense) will (i) fully and timely perform in
all material respects all agreements required to be observed by it in
connection with each Receivable, (ii) comply in all material respects with the
Credit and Collection Policies, and (iii) refrain from any action that may
impair the rights of the Agent or the Purchasers in the Receivables, the
Collections, the Purchase Agreement or the proceeds thereof.

     (h) Payments on Receivables, Accounts. The Servicer will at all times
instruct all Obligors to deliver payments on the Receivables to a Lock-Box or
Lock-Box Account, provided that, with respect to any Obligor that had been
instructed to send payments on any Receivable to the JPMorgan Lock-Box or
JPMorgan Lock-Box Account, the Sevicer will instruct each such Obligor to
deliver payments on its Receivables to a Lock-Box or a Lock-Box Account within
45 days of the Closing Date. The Servicer will not make any change in its
payment instructions to any Obligor without prior notice to the Agent. If any
such payments or other Collections are received by the Servicer or an incorrect
account, it shall hold such payments in trust for the benefit of the Agent and
the Purchasers and promptly (but in any event within two Business Days after
receipt) remit such funds into a Lock-Box Account. The Servicer will not
permit the funds of any Affiliate (other than the Seller) to be deposited into
a Lock-Box Account. If such funds

26

 

are nevertheless deposited into a Lock-Box Account, the Servicer will
promptly identify such funds for segregation. The Servicer will not, and will
not permit the Seller or other Person to, thereafter commingle Collections or
other funds to which the Agent or any Purchaser is entitled with any other
funds. The Servicer shall not close any Lock-Box Account without the prior
written consent of the Agent.

     (i) Sales and Adverse Claims Relating to Receivables. Except as otherwise
provided herein, the Servicer will not (by operation of law or otherwise)
dispose of or otherwise transfer, or create or suffer to exist any Adverse
Claim upon, the Receivables, the Collections, the Purchase Agreement, the
proceeds thereof or any assets which may give rise to a Receivable.

     (j) Change in Business or Credit and Collection Policy. The Servicer will
not make any material change in any Credit and Collection Policy or any change
in its business that would reasonably be expected to have a Material Adverse
Effect.

     (k) Incorporation of Covenants. Reference is made to Sections 7.19 and
7.20 of the USF Credit Agreement (hereinafter referred to as the “Incorporated
Covenants”). The Servicer agrees with the Agent, the Purchaser Agents and the
Purchasers that the Incorporated Covenants (and all other relevant provisions
of the USF Credit Agreement related thereto, including, but not limited to, the
defined terms used in the Incorporated Covenants) are hereby incorporated by
reference into this Agreement to the same extent and with the same effect as if
set forth fully herein and therein and shall inure to the benefit of the Agent,
the Purchaser Agents and each of the Purchasers, without giving effect to any
waiver, amendment, modification or replacement of the USF Credit Agreement, any
term or provision of the Incorporated Covenants or and defined term used in the
Incorporated Covenants occurring subsequent to the date of this Agreement,
except to the extent otherwise specifically provided in the following
provisions of this paragraph. In the event a waiver is granted under the USF
Credit Agreement or an amendment or modification is executed with respect to
the USF Credit Agreement, and such waiver, amendment or modification affects
the Incorporated Covenants or any defined term used in the Incorporated
Covenants, then such waiver, amendment or modification shall be effective with
respect to the Incorporated Covenants or the defined terms used therein as
incorporated by reference into this Agreement only if consented to in writing
by the Instructing Group. In the event of any replacement of the USF Credit
Agreement with a similar credit facility (the “New Facility”), the covenants
and related defined terms contained in the New Facility which correspond to the
covenants contained in Sections 7.19 and 7.20 of the USF Credit Agreement and
the related defined terms shall become the Incorporated Covenants hereunder
only if consented to in writing by the Instructing Group, and, if such consent
is not granted, then the covenants contained in Sections 7.19 and 7.20 of the
USF Credit Agreement (together with any modifications or amendments approved in
accordance with this paragraph) shall continue to be the Incorporated Covenants
hereunder. If the USF Credit Agreement (or any such New Facility, as the case
may be) is terminated and not replaced, then, notwithstanding such termination,
the covenants contained in Sections 7.19 and 7.20 of the USF Credit Agreement
(together with any modifications or amendments thereto, or covenants of the New
Facility, in each case approved in accordance with this paragraph) shall
continue to be the Incorporated Covenants hereunder.

27

 

     (l) True Sale/Substantive Consolidation Opinion. The Servicer will comply
with each of the assumptions of fact set forth in the opinion of Sidley Austin
Brown & Wood LLP dated as of the date hereof regarding certain bankruptcy
matters.

ARTICLE VI

INDEMNIFICATION

        Section 6.1 Indemnities by the Seller. Without limiting any other
rights any such Person may have hereunder or under applicable law, the Seller
hereby indemnifies and holds harmless, on an after-Tax basis, the Agent, each
Purchaser Agent and each Purchaser and their respective officers, directors,
agents and employees (each an “Indemnified Party”) from and against any and
all damages, losses, claims, liabilities, penalties, Taxes, costs and
expenses (including reasonable attorneys’ fees and court costs) (all of the
foregoing collectively, the “Indemnified Losses”) at any time imposed on or
incurred by any Indemnified Party arising out of or otherwise relating to any
Transaction Document, the transactions contemplated thereby or the
acquisition of any portion of the Sold Interest, or any action taken or
omitted by any of the Indemnified Parties in connection with the transactions
contemplated hereby (including any action taken by the Agent as
attorney-in-fact for the Seller pursuant to Section 3.5(b)), whether arising
by reason of the acts to be performed by the Seller hereunder or otherwise,
excluding only Indemnified Losses to the extent (a) such Indemnified Losses
resulting solely from gross negligence or willful misconduct of the
Indemnified Party seeking indemnification, (b) such Indemnified Losses result
due to Receivables being uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor or (c) such
Indemnified Losses include Taxes on, or measured by, the overall net income
of the Indemnified Party seeking indemnification; provided, however, that
nothing contained in this sentence shall limit the liability of the Seller or
the Servicer or limit the recourse of the Agent, each Purchaser Agent and
each Purchaser to the Seller or the Servicer for any amounts otherwise
specifically provided to be paid by the Seller or the Servicer hereunder.
Without limiting the foregoing indemnification, but subject to the
limitations set forth in clauses (a), (b) or (c) of the previous sentence,
the Seller shall indemnify each Indemnified Party for Indemnified Losses
(including losses in respect of uncollectible Receivables, regardless for
these specific matters whether reimbursement therefor would constitute
recourse to the Seller or the Servicer) relating to or resulting from:

          (i) any representation or warranty made by the Seller (or any
employee or agent of the Seller) under or in connection with any
Transaction Document, any Periodic Report or any other information or
report delivered by the Seller pursuant hereto, which shall have been
false or incorrect in any material respect when made or deemed made
(including, without limitation, the representations made pursuant to
Section 7.2(e));

          (ii) the failure by the Seller or the Servicer to comply with any
applicable law, rule or regulation related to any Receivable, or the
nonconformity of any Receivable with any such applicable law, rule or
regulation;

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          (iii) the failure of the Seller to vest and maintain vested in the
Agent, for the benefit of itself, the Purchaser Agents and the
Purchasers, a perfected ownership or security interest in the Sold
Interest and the property conveyed pursuant to Section 1.1(e) and Section
1.8, free and clear of any Adverse Claim;

          (iv) any commingling of funds to which the Agent, any Purchaser
Agent or any Purchaser is entitled hereunder with any other funds;

          (v) any failure of a Lock-Box Bank to comply with the terms of the
applicable Lock-Box Agreement or any failure by JPMorgan Chase Bank to
forward any Collections sent to the JPMorgan Lock-Box or the JPMorgan
Lock-Box Account to the Servicer, any sub-servicer, a Lock-Box or a
Lock-Box Account;

          (vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable, or any other claim resulting from the sale or lease of goods
or the rendering of services related to such Receivable or the furnishing
or failure to furnish any such goods or services or other similar claim
or defense not arising from the financial inability of any Obligor to pay
undisputed indebtedness;

          (vii) any failure of the Seller or the Servicer to perform its
duties or obligations in accordance with the provisions of this Agreement
or any other Transaction Document to which it is a party;

          (viii) any environmental liability claim, products liability claim
or personal injury or property damage suit or other similar or related
claim or action of whatever sort, arising out of or in connection with
any Receivable or any other suit, claim or action of whatever sort
relating to any of the Transaction Documents;

          (ix) any tax or governmental fee or charge (other than franchise
taxes and taxes on or measured by the net income of any Purchaser), all
interest and penalties thereon or with respect thereto, and all
out-of-pocket costs and expenses, including the reasonable fees and
expenses of counsel in defending against the same, which may arise by
reason of the purchase or ownership of the Receivables; or

          (x) any amounts any Conduit Purchaser must pay to any Funding Source
pursuant to any Funding Agreement on account of any Tax.

        Section 6.2 Increased Cost and Reduced Return. By way of clarification,
and not of limitation, of Section 6.1, if the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by
any Funding Source, the Agent, any Purchaser Agent or any Purchaser
(collectively, the “Funding Parties”) with any request or directive (whether
or not having the force of law) of any such Governmental Authority after the
date hereof (a “Regulatory Change”) (a) subjects any Funding Party to any
charge or withholding on or in connection with a Funding Agreement or this
Agreement (collectively, the “Funding Documents”) or any

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        Receivable, (b) changes the basis of taxation of payments to any of the
Funding Parties of any amounts payable under any of the Funding Documents
(except for changes in the rate of Tax on the overall net income of such
Funding Party), (c) imposes, modifies or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or any credit extended by,
any of the Funding Parties, (d) has the effect of reducing the rate of return
on such Funding Party’s capital to a level below that which such Funding
Party could have achieved but for such adoption, change or compliance (taking
into consideration such Funding Party’s policies concerning capital adequacy)
or (e) imposes any other condition, and the result of any of the foregoing is
(x) to impose a cost on, or increase the cost to, any Funding Party of its
commitment under any Funding Document or of purchasing, maintaining or
funding any interest acquired under any Funding Document, (y) to reduce the
amount of any sum received or receivable by, or to reduce the rate of return
of, any Funding Party under any Funding Document or (z) to require any
payment calculated by reference to the amount of interests held or amounts
received by it hereunder, then, upon demand by the Agent or applicable
Purchaser Agent, the Seller shall pay to the Agent (with respect to amounts
owed to it) or the applicable Purchaser Agent (with respect to amounts owed
to it or any Purchaser in its Purchaser Group) for the account of the Person
such additional amounts as will compensate the Agent, the Purchaser Agents or
such Purchaser (or, in the case of any Conduit Purchaser, will enable such
Conduit Purchaser to compensate any Funding Source) for such increased cost
or reduction. Without limiting the foregoing, the Seller acknowledges and
agrees that the fees and other amounts payable by the Seller to the
Purchasers and the Agent have been negotiated on the basis that the unused
portion of the Commitment of each Liquidity Bank is treated as a “short term
commitment” for which there is no regulatory capital requirement and the
Commitment of each Enhancement Bank carries the same capital requirement as a
funded Purchase in the same amount. If any Liquidity Bank determines it is
required to maintain capital against its unused commitment with respect to
this transaction, or if any Enhancement Bank is required to maintain capital
on its unused commitment with respect to this transaction (or any Purchaser
is required to maintain capital against its Investment) in excess of the
amount of capital it would be required to maintain against a funded Purchase
in the same amount, such Purchaser shall be entitled to compensation under
this Section 6.2.

        Section 6.3 Other Costs and Expenses. Also by way of clarification, and
not of limitation, of Section 6.1, the Seller shall pay to the Agent (with
respect to amounts owed to it) or the applicable Purchaser Agent (with
respect to amounts owed to it or any Purchaser in its Purchaser Group) on
demand all costs and expenses in connection with (a) the preparation,
execution, delivery and administration (including amendments of any
provision) of the Transaction Documents, (b) the sale of the Sold Interest,
(c) the perfection of the Agent’s rights in the Receivables, Collections, the
Purchase Agreement and proceeds thereof, (d) the enforcement by the Agent,
any Purchaser Agent or the Purchasers of the obligations of the Seller under
the Transaction Documents or of any Obligor under a Receivable and (e) the
maintenance by the Agent of the Lock-Boxes and Lock-Box Accounts, including
reasonable fees, costs and expenses of legal counsel for the Agent and each
Purchaser Agent relating to any of the foregoing or to advising the Agent,
any Purchaser Agent and any Funding Source about its rights and remedies
under any Transaction Document or any related Funding Agreement and all costs
and expenses (including counsel fees and expenses) of the Agent,

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each Purchaser Agent, each Purchaser and each Funding Source in
connection with the administration and enforcement of the Transaction
Documents or any Funding Agreement.

        Section 6.4 Withholding Taxes. (a) All payments made by the Seller
hereunder shall be made without withholding for or on account of any present
or future taxes (other than overall net income taxes on the recipient). If
any such withholding is so required, the Seller shall make the withholding,
pay the amount withheld to the appropriate authority before penalties attach
thereto or interest accrues thereon and pay such additional amount as may be
necessary to ensure that the net amount actually received by each Purchaser,
Purchaser Agent and the Agent free and clear of such taxes (including such
taxes on such additional amount) is equal to the amount that Purchaser,
Purchaser Agent or the Agent (as the case may be) would have received had
such withholding not been made. If the Agent, any Purchaser Agent or any
Purchaser pays any such taxes, penalties or interest the Seller shall
reimburse the Agent, such Purchaser Agent or such Purchaser for that payment
on demand. If the Seller pays any such taxes, penalties or interest, it
shall deliver official tax receipts evidencing that payment or certified
copies thereof to the related Purchaser Agent on whose account such
withholding was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth day after payment.

     (a) Before the first date on which any amount is payable hereunder for the
account of any Purchaser not incorporated under the laws of the United States
such Purchaser shall deliver to the Seller and the Agent each two (2) duly
completed copies of United States Internal Revenue Service Form W-8ECl or
W-8BEN (or successor applicable form) certifying that such Purchaser is
entitled to receive payments hereunder without deduction or withholding of any
United States federal income taxes. Each such Purchaser shall replace or
update such forms when necessary to maintain any applicable exemption and as
requested by the Agent or the Seller.

        Section 6.5 Payments and Allocations. If any Person seeks compensation
pursuant to this Article VI, such Person shall deliver to the Seller and the
Agent a certificate setting forth the amount due to such Person, a
description of the circumstance giving rise thereto and, in reasonable
detail, the basis of the calculations of such amount, which certificate shall
be presumed to be correct absent manifest error. The Seller shall pay to the
Agent (with respect to amounts owed to it) or the applicable Purchaser Agent
(with respect to amounts owed to it or any Purchaser in its Purchaser Group),
for the account of such Person, the amount shown as due on any such
certificate within 10 Business Days after receipt of the notice.

ARTICLE VII

CONDITIONS PRECEDENT

        Section 7.1 Conditions to Closing. This Agreement shall become
effective on the first date all conditions in this Section 7.1 are satisfied.
On or before such date, the Seller shall deliver to the Agent and each
Purchaser Agent the following documents in form, substance and quantity
reasonably acceptable to the Agent and each Purchaser Agent, as applicable:

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          (a) All instruments and other documents required, or deemed
desirable by the Agent, to perfect the Agent’s first priority interest in
the Receivables, the Collections, the Purchase Agreement and proceeds
thereof in all appropriate jurisdictions.

          (b) Favorable opinions of counsel to the USF Entities covering such
matters as any Purchaser Agent or the Agent may request.

          (c) Customary documentation with respect to each USF Entity’s
existence, qualifications to do business, and authorization, execution
and delivery of the Transaction Documents;

          (d) Fully executed copies of this Agreement and the other
Transaction Documents.

          (e) Such other approvals, opinions or documents as the Agent or any
Conduit Purchaser may reasonably request.

        Section 7.2 Conditions to Each Purchase. The obligation of each
Committed Purchaser to make any Purchase or Reinvestment, the right of the
Seller to request or accept any Purchase or Reinvestment, or the right of the
Seller or the Servicer to request any Interim Liquidation or Repurchase, are
subject to the conditions (and each Purchase, Reinvestment, Interim
Liquidation or Repurchase shall evidence the Seller’s representation and
warranty that clauses (a)-(f) of this Section 7.2 have been satisfied) that
on the date of such Purchase, Interim Liquidation or Repurchase before and
after giving effect to the Purchase, Interim Liquidation or Repurchase:

          (a) no Potential Termination Event shall then exist or shall occur
as a result of the Purchase or Reinvestment;

          (b) the Termination Date has not occurred;

          (c) after giving effect to the application of the proceeds of such
Purchase, (i) the outstanding Matured Aggregate Investment would not
exceed the Aggregate Commitment, (ii) the outstanding Aggregate
Investment would not exceed the Purchase Limit, (iii) the sum of the
Investments for all Purchasers in a Purchaser Group would not exclude
such Purchaser Group’s Group Limit, and (iv) the aggregate Matured Value
of the Investments of a Purchaser Group would not exceed the Commitments
of the Related Bank Purchasers for such Purchaser Group;

          (d) the representations and warranties in Sections 4.1, and 4.2
hereof and Section 4 of the Purchase Agreement are true and correct in
all material respects on and as of such date (except to the extent such
representations and warranties relate solely to an earlier date and then
as of such earlier date);

          (e) if any Purchaser is making a Purchase, or any Purchaser is in an
Interim Liquidation at a time when any other Purchaser is not in an
Interim Liquidation or a Repurchase will be made on such date, each of
the following representations and

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warranties shall be true and the Agent shall have received a
certification of the Servicer and the Seller stating that:

               (i) if any Purchaser other than USF Assurance is making a
Purchase or any Purchaser is in an Interim Liquidation at a time
when any other Purchaser is not or a Repurchase will be made, no
Potential Termination Event or Servicer Replacement Event shall
then exist, shall occur as a result of such Purchase, Interim
Liquidation or Repurchase or is imminent;

               (ii) if any Purchaser other than USF Assurance is making a
Purchase or any Purchaser is in an Interim Liquidation at a time
when any other Purchaser is not or a Repurchase will be made, such
Purchase, Interim Liquidation or Repurchase could not be reasonably
expected to have an adverse effect on the other Purchasers;

               (iii) after giving effect to such Purchase, Repurchase or
Interim Liquidation, each of the statements set forth in clauses
(i) and (ii) will be true and correct; and

               (iv) if there are any Purchasers other than USF Assurance that
hold a Purchase Interest at such time or will hold a Purchase
Interest after giving effect to such Purchase, Repurchase or
Interim Liquidation, the aggregate Investments of the Purchasers
other than USF Assurance is at least equal to 50% of the Aggregate
Investment after giving effect to such Purchase, Repurchase or
Interim Liquidation; and

          (f) With respect to any Incremental Purchase, the Agent shall have
received the Incremental Purchase Request required by Section 1.1(c).

Nothing in this Section 7.2 limits the obligations of each Related Bank
Purchaser to its related Conduit Purchaser.

        Section 7.3 Conditions to Initial Purchase of USF Assurance. On or before
the date of the initial Purchase by USF Assurance, USF Assurance shall deliver
to the Agent and each Purchaser Agent the following:

          (a) Evidence reasonably acceptable to the Agent that USF Assurance
shall have obtained a Certificate of Registration of USF Assurance as a
Class 1 insurer (the “Insurance Licence”), from the Bermuda Monetary
Authority;

          (b) Evidence reasonably acceptable to the Agent that USF Assurance
shall have obtained a direction (the “Direction”) under Section 56 of the
Insurance Act 1978, from the Bermuda Monetary Authority, allowing USF
Assurance to treat its investments pursuant to this Agreement as
“relevant assets” for the purposes of the liquidity ratio as set out in
the Insurance Returns and Solvency Regulations 1980, effective as of the
date of the Insurance Licence; and

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          (c) An opinion of Bermuda counsel to USF Assurance in substantially
the form attached hereto as Exhibit F.

ARTICLE VIII

THE AGENT

        Section 8.1 Appointment and Authorization. (a) Each Purchaser and each
Purchaser Agent hereby irrevocably designates and appoints ABN AMRO Bank N.V.
as the “Agent” hereunder and authorizes the Agent to take such actions and to
exercise such powers as are delegated to the Agent hereby and to exercise
such other powers as are reasonably incidental thereto. The Agent shall
hold, in its name, for the benefit of each Purchaser, the Purchase Interest
of such Purchaser. The Agent shall not have any duties other than those
expressly set forth herein or any fiduciary relationship with any Purchaser,
and no implied obligations or liabilities shall be read into this Agreement,
or otherwise exist, against the Agent. The Agent does not assume, nor shall
it be deemed to have assumed, any obligation to, or relationship of trust or
agency with, the Seller. Notwithstanding any provision of this Agreement or
any other Transaction Document, in no event shall the Agent ever be required
to take any action which exposes the Agent to personal liability or which is
contrary to the provision of any Transaction Document or applicable law.

         (b) Each Purchaser hereby irrevocably designates and appoints the
respective institution identified on the applicable signature page hereto or in
the related Transfer Supplement (as applicable) as its Purchaser Agent
hereunder, and each authorizes such Purchaser Agent to take such action on its
behalf under the provisions of this Agreement and to exercise such powers and
perform such duties as are expressly delegated to such Purchaser Agent by the
terms of this Agreement, if any, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Purchaser Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser or other Purchaser Agent or the Agent, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of such Purchaser Agent shall be read into this
Agreement or otherwise exist against such Purchaser Agent.

         (c) Except as otherwise specifically provided in this Agreement, the
provisions of this Article VIII are solely for the benefit of the Purchaser
Agents, the Agent and the Purchasers, and none of the Seller or any Servicer
shall have any rights as a third-party beneficiary or otherwise under any of
the provisions of this Article VIII, except that this Article VIII shall not
affect any obligations which any Purchaser Agent, the Agent or the Purchaser
may have to the Seller or any Servicer under the other provisions of this
Agreement. Furthermore, no Purchaser shall have any rights as a third-party
beneficiary or otherwise under any of the provisions hereof in respect of a
Purchaser Agent which is not the Purchaser Agent for such Purchaser.

         (d) In performing its functions and duties hereunder, the Agent shall act
solely as the agent of the Purchasers and the Purchaser Agents and does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Seller or Servicer

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or any of their successors and assigns. In performing its functions and
duties hereunder, each Purchaser Agent shall act solely as the agent of the
Purchasers in its Purchaser Group and does not assume nor shall be deemed to
have assumed any obligation or relationship of trust or agency with or for the
Seller, any Servicer, any other Purchaser, any other Purchaser Agent or the
Agent, or any of their respective successors and assigns.

        Section 8.2 Delegation of Duties. The Agent may execute any of its
duties through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall
not be responsible to any Purchaser for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.

        Section 8.3 Exculpatory Provisions. None of the Agent, any Purchaser
Agent or any of their respective directors, officers, agents or employees
shall be liable for any action taken or omitted (i) with the consent or at
the direction of the Instructing Group or (ii) in the absence of such
Person’s gross negligence or willful misconduct. The Agent shall not be
responsible to any Purchaser Agent, Purchaser or other Person for any
recitals, representations, warranties or other statements made by the Seller,
any Originator or any of their Affiliates, (ii) the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Transaction
Document, (iii) any failure of the Seller, any Originator or any of their
Affiliates to perform any obligation or (iv) the satisfaction of any
condition specified in Article VII. The Agent shall not have any obligation
to any Purchaser Agent or any Purchaser to ascertain or inquire about the
observance or performance of any agreement contained in any Transaction
Document or to inspect the properties, books or records of the Seller, any
Originator or any of their Affiliates.

        Section 8.4 Reliance by Agent. (a) Each Purchaser Agent and the Agent
shall in all cases be entitled to rely, and shall be fully protected in
relying, upon any document, other writing or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person and upon advice and statements of legal counsel (including counsel to
the Seller), independent accountants and other experts selected by the Agent.
Each Purchaser Agent and the Agent shall in all cases be fully justified in
failing or refusing to take any action under any Transaction Document unless
it shall first receive such advice or concurrence of the Purchasers, and
assurance of its indemnification, as it deems appropriate.

         (b) The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
the Instructing Group, the Purchasers or the Purchaser Agents, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all Purchasers, the Agent and Purchaser Agents.

         (c) For each Purchaser Group, 66-2/3% of the Commitments represented by
such Purchaser Group (each, a “Voting Block”), shall be required to request or
direct the applicable Purchaser Agent to take action, or refrain from taking
action, under this Agreement on behalf of such Purchasers. Such Purchaser Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement in accordance with a request of its appropriate Voting
Block, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of such Purchaser Agent’s Purchasers.

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         (d) Unless otherwise advised in writing by a Purchaser Agent or by any
Purchaser on whose behalf such Purchaser Agent is purportedly acting, each
party to this Agreement may assume that (i) such Purchaser Agent is acting for
the benefit of each of the Purchasers in respect of which such Purchaser Agent
is identified as being the “Purchaser Agent” in the definition of “Purchaser
Agent” hereto, as well as for the benefit of each assignee or other transferee
from any such Person, and (ii) each action taken by such Purchaser Agent has
been duly authorized and approved by all necessary action on the part of the
Purchasers on whose behalf it is purportedly acting. Each initial Purchaser
(or, with the consent of all other Purchasers then existing, any other
Purchasers) shall have the right to designate a new Purchaser Agent (which may
be itself) to act on its behalf and on behalf of its assignees and transferees
for purposes of this Agreement by giving to the Agent written notice thereof
signed by such Purchaser(s) and the newly designated Purchaser Agent. Such
notice shall be effective when receipt thereof is acknowledged by the Agent,
which acknowledgment the Agent shall not unreasonably delay giving, and
thereafter the party named as such therein shall be Purchaser Agent for such
Purchaser under this Agreement. Each Purchaser Agent and its Purchaser(s) shall
agree amongst themselves as to the circumstances and procedures for removal and
resignation of such Purchaser Agent.

        Section 8.5 Assumed Payments. Unless the Agent shall have received
notice from the applicable Purchaser Agent before the date of any Put or of
any Incremental Purchase that the applicable Purchaser Group will not make
available to the Agent (in the case of an Incremental Purchase) or the
applicable Purchaser Agent (in the case of a Put) the amount it is scheduled
to remit as part of such Put or Incremental Purchase, the Agent may assume
such Purchaser Group has made such amount available to the Agent when due (an
“Assumed Payment”) and, in reliance upon such assumption, the Agent may (but
shall have no obligation to) make available such amount to the appropriate
Person. If and to the extent that any Purchaser Group shall not have made
its Assumed Payment available to the Agent, such Purchaser Group (and the
Seller in the case of any Incremental Purchase) hereby agrees to pay the
Agent forthwith on demand such unpaid portion of such Assumed Payment up to
the amount of funds actually paid by the Agent, together with interest
thereon for each day from the date of such payment by the Agent until the
date the requisite amount is repaid to the Agent, at a rate per annum equal
to (i) for the first five Business Days after such payment was due, the
Agent’s cost of funds (as reasonably determined by the Agent) and (ii)
thereafter (until the date the requisite amount is repaid to the Agent), the
Prime Rate plus 2%.

        Section 8.6 Notice of Termination Events. Neither any Purchaser Agent
nor the Agent shall be deemed to have knowledge or notice of the occurrence
of any Potential Termination Event unless the Agent or such Purchaser Agent
has received notice from any Purchaser or the Seller stating that a Potential
Termination Event has occurred hereunder and describing such Potential
Termination Event. In the event that the Agent receives such a notice, it
shall promptly give notice thereof to each Purchaser Agent whereupon each
Purchaser Agent shall promptly give notice thereof to its Purchasers,
Enhancement Banks and Liquidity Banks. In the event that a Purchaser Agent
receives such a notice (other than from the Agent), it shall promptly give
notice thereof to the Agent and each of its affiliated Enhancement Banks and
Liquidity Banks. The Agent shall take such action concerning a Potential
Termination Event as may be directed by the Instructing Group or, if only USF
Assurance shall have any

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outstanding Investment at such time, USF Assurance
(or, if otherwise required for such action,
 all of the Purchasers), but until the Agent receives such directions,
the Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, as the Agent deems advisable and in the best
interests of the Purchasers and Purchaser Agents; provided, that if USF
Assurance shall be entitled to give such direction, no waiver by USF
Assurance of such Potential Termination Event shall be binding on any other
Purchaser, including without limitation for purposes of Section 7.2(a) or, if
such Potential Termination Event becomes a Termination Event for purposes of
declaring the Termination Date.

        Section 8.7 Non-Reliance on Agent, Purchaser Agents and Other
Purchasers. Each Purchaser expressly acknowledges that none of the Agent,
the Purchaser Agents or any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent or any
Purchaser Agent hereafter taken, including any review of the affairs of the
Seller or any Originator, shall be deemed to constitute any representation or
warranty by the Agent or such Purchaser Agent, as applicable. Each Purchaser
represents and warrants to the Agent and the Purchaser Agents that,
independently and without reliance upon the Agent, Purchaser Agents or any
other Purchaser and based on such documents and information as it has deemed
appropriate, it has made and will continue to make its own appraisal of and
investigation into the business, operations, property, prospects, financial
and other conditions and creditworthiness of the Seller, any Originator, and
the Receivables and its own decision to enter into this Agreement and to
take, or omit, action under any Transaction Document. The Agent shall
deliver each month to any Purchaser Agent that so requests a copy of the
Periodic Report(s) received covering the preceding Fiscal Month. Except for
items specifically required to be delivered hereunder, the Agent shall not
have any duty or responsibility to provide any Purchaser Agent or Purchaser
with any information concerning the Seller, any Originator or any of their
Affiliates that comes into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.

        Section 8.8 Agents and Affiliates. Each of the Purchaser Agents, the
Purchasers and the Agent and their respective Affiliates may extend credit
to, accept deposits from and generally engage in any kind of banking, trust,
debt, entity or other business with the Seller, any Originator or any of
their Affiliates and ABN AMRO may exercise or refrain from exercising its
rights and powers as if it were not the Agent. With respect to the
acquisition of the Receivables pursuant to this Agreement, each of the
Purchaser Agents and the Agents shall have the same rights and powers under
this Agreement as any Purchaser and may exercise the same as though it were
not such an agent, and the terms “Purchaser” and “Purchasers” shall include
each of the Purchaser Agents and the Agent in their individual capacities.

        Section 8.9 Indemnification. Each Purchaser Group shall indemnify and
hold harmless the Agent and its officers, directors, employees,
representatives and agents (to the extent not reimbursed by the Seller or any
Originator and without limiting the obligation of the Seller or any
Originator to do so), ratably in accordance with the Percentage Factors of
the Purchasers in such Purchaser Group from and against any and all
liabilities, obligations, losses, damages, penalties, judgments, settlements,
costs, expenses and disbursements of any kind whatsoever (including in
connection with any investigative or threatened proceeding,

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whether or not
the Agent or such Person shall be designated a party thereto) that may at any
time be imposed on, incurred by or asserted against the Agent or such
Person as a result of, or related to, any of the transactions contemplated by
the Transaction Documents or the execution, delivery or performance of the
Transaction Documents or any other document furnished in connection therewith
(but excluding any such liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses or disbursements resulting solely
from the gross negligence or willful misconduct of the Agent or such Person
as finally determined by a court of competent jurisdiction).

        Section 8.10 Successor Agent. The Agent may, upon at least forty-five
(45) days notice to the Seller, each Purchaser and each Purchaser Agent,
resign as Agent. Such resignation shall not become effective until a
successor agent is appointed by the Instructing Group and has accepted such
appointment. Upon such acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall succeed to and become vested with
all the rights and duties of the retiring Agent, and the retiring Agent shall
be discharged from its duties and obligations under the Transaction
Documents. After any retiring Agent’s resignation hereunder, the provisions
of Article VI and this Article VIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent.

ARTICLE IX

MISCELLANEOUS

        Section 9.1 Termination. Each Purchaser shall cease to be a party
hereto when the Termination Date has occurred, such Purchaser holds no
Investment and no Commitment and all amounts payable to it hereunder have
been indefeasibly paid in full. This Agreement shall terminate following the
Termination Date when no Investment is held by any Purchaser and all other
amounts payable hereunder have been indefeasibly paid in full, but the rights
and remedies of the Agent, each Purchaser Agent and each Purchaser concerning
any representation, warranty or covenant made, or deemed to be made, by the
Seller and under Article VI and Sections 3.9, 8.9, 9.10, 9.11, 9.12, 9.13 and
9.18 shall survive such termination.

        Section 9.2 Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or
other facsimile communication), given to the appropriate Person at its
address or telecopy number set forth on the signature pages hereof or at such
other address or telecopy number as such Person may specify, and effective
when received at the address specified by such Person. Each party hereto,
however, authorizes the Agent and each Purchaser Agent to act on telephone
notices of Purchases, Puts, and Discount Rate and Tranche Period selections
from any person the Agent or such Purchaser Agent in good faith believes to
be acting on behalf of the relevant party and, at the Agent’s or such
Purchaser Agent’s option, to tape record any such telephone conversation.
Each party hereto agrees to deliver promptly to the Agent or such Purchaser
Agent a confirmation of each telephone notice given or received by such party
(signed by an authorized officer of such party), but the absence of such
confirmation shall not affect the validity of the telephone notice. The
Agent’s or such Purchaser Agent’s records of all such conversations shall be

38

 

deemed correct and, if the confirmation of a conversation differs in any
material respect from the action taken by the Agent or such Purchaser Agent,
the records of the Agent or such Purchaser Agent shall govern absent manifest error. The number of days
for any advance notice required hereunder may be waived (orally or in
writing) by the Person receiving such notice and, in the case of notices to
the Agent, the consent of each Person to which the Agent or such Purchaser
Agent is required to forward such notice.

        Section 9.3 Payments and Computations. Notwithstanding anything herein
to the contrary, any amounts to be paid or transferred by the Seller or the
Servicer to, or for the benefit of, any Purchaser or any other Person shall
be paid or transferred to the Agent or the appropriate Purchaser Agent, as
specified herein. All amounts to be paid or deposited hereunder shall be
paid or transferred on the day when due in immediately available Dollars
(and, if due from the Seller or Servicer, by 11:00 a.m. (Chicago time), with
amounts received after such time being deemed paid on the Business Day
following such receipt). The Seller shall, to the extent permitted by law,
pay to the Agent upon demand, for the account of the applicable Person,
interest on all amounts not paid or transferred by the Seller or the Servicer
when due hereunder at a rate equal to Prime Rate plus 2% calculated from the
date any such amount became due until the date paid in full. Any payment or
other transfer of funds scheduled to be made on a day that is not a Business
Day shall be made on the next Business Day, and any Discount Rate or interest
rate accruing on such amount to be paid or transferred shall continue to
accrue to such next Business Day. All computations of interest, fees, and
Discount shall be calculated for the actual days elapsed based on a 360 day
year, except in the case of Discount accruing at the Prime Rate which shall
be calculated based on a 365/366 day year.

        Section 9.4 Sharing of Recoveries. Each Purchaser agrees that if it
receives any recovery, through set-off, judicial action or otherwise, on any
amount payable or recoverable hereunder in a greater proportion than should
have been received hereunder or otherwise inconsistent with the provisions
hereof, then the recipient of such recovery shall purchase for cash an
interest in amounts owing to the other Purchasers (as return of Investment or
otherwise), without representation or warranty except for the representation
and warranty that such interest is being sold by each such other Purchaser
free and clear of any Adverse Claim created or granted by such other
Purchaser Group, in the amount necessary to create proportional participation
by the Purchasers in such recovery (as if such recovery were distributed
pursuant to Section 2.3(c) including clause (ii) thereof). If all or any
portion of such amount is thereafter recovered from the recipient, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.

        Section 9.5 Right of Setoff. Subject to Section 9.4, during a
Termination Event, each Purchaser is hereby authorized (in addition to any
other rights it may have) to setoff, appropriate and apply (without
presentment, demand, protest or other notice which are hereby expressly
waived) any deposits and any other indebtedness held or owing by such
Purchaser (including by any branches or agencies of such Purchaser) to, or
for the account of, the Seller or the Servicer against amounts owing by the
Seller or the Servicer (as applicable) under the Transaction Documents.

39

 

        Section 9.6 Amendments. Except as otherwise expressly provided herein,
no amendment or waiver hereof shall be effective unless signed by the Seller,
the Servicer and the Purchasers, and prior written notification of the substance of each
amendment or waiver is furnished to each Rating Agency. In addition, no
amendment of any Transaction Document shall, without the consent of (a) all
the Purchasers (i) extend the Termination Date or the date of any payment or
transfer of Collections by the Seller to the Servicer or by the Seller or the
Servicer to the Agent, any Purchaser Agent or any Purchaser, (ii) reduce the
rate or extend the time of payment of Discount for any Tranche, (iii) reduce
or extend the time of payment of any fee payable to the Purchasers, (iv)
except as provided herein, release, transfer or modify any Purchaser’s
Purchase Interest or change any Commitment, (v) amend the definition of
Instructing Group, subsections (b), (e) and (g) in the definition of
Termination Event or Section 1.1, 1.2, 1.5, 1.7, 2.1, 2.2, 2.3, 3.9, 7.2 or
9.6, Article VI, or any obligation of any USF Entity thereunder, (vi) consent
to the assignment or transfer by the Seller or any Originator of any interest
in the Receivables other than transfers permitted under the Transaction
Documents or permit any USF Entity to transfer any of its obligations under
any Transaction Document except as expressly contemplated by the terms of the
Transaction Documents, or (vii) amend any defined term relevant to the
restrictions in clauses (i) through (vi) in a manner which would circumvent
the intention of such restrictions, or (b) the Agent and each affected
Purchaser Agent, amend any provision hereof if the effect thereof is to
affect the indemnities to, or the rights or duties of, the Agent or any
Purchaser Agent or to reduce any fee payable for the Agent’s or such
Purchaser Agent’s own account. Notwithstanding the foregoing, the amount of
any fee or other payment due and payable from the Seller or the Servicer to
the Agent (for its own account), any Purchaser Agent or any Purchaser may be
changed or otherwise adjusted solely with the consent of the Seller and the
party to which such payment is payable. Any amendment hereof shall apply to
each Purchaser equally and shall be binding upon the Seller, the Servicer,
the Purchasers, the Purchaser Agents and the Agent. If required by the
Rating Agencies for the applicable Conduit Purchaser, no material amendment
hereof or assignment, termination, resignation or removal hereunder shall be
effective unless a statement is obtained from the applicable Rating Agencies
that its Rating will not be downgraded, withdrawn or suspended as a result of
such amendment assignment, termination, resignation or removal.

        Section 9.7 Waivers. No failure or delay of the Agent, any Purchaser
Agent or any Purchaser in exercising any power, right, privilege or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right, privilege or remedy preclude any other or
further exercise thereof or the exercise of any other power, right, privilege
or remedy. Any waiver hereof shall be effective only in the specific
instance and for the specific purpose for which such waiver was given. After
any waiver, the Seller, the Purchasers, the Purchaser Agents and the Agent
shall be restored to their former position and rights and any Termination
Event waived shall be deemed to be cured and not continuing, but no such
waiver shall extend to (or impair any right consequent upon) any subsequent
or other Termination Event. Any additional Discount that has accrued after a
Termination Event before the execution of a waiver thereof, solely as a
result of the occurrence of such Termination Event, may be waived by the
Agent or related Purchaser Agent at the direction of the Purchaser entitled
thereto.

40

 

        Section 9.8 Successors and Assigns; Participations; Assignments.

     (a) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Except as otherwise provided herein, neither the Seller nor the
Servicer may assign or transfer any of its rights or delegate any of its duties
without (i) obtaining the prior consent of the Agent, the Purchaser Agents and
the Purchasers and (ii) furnishing prior written notification of any assignment
or transfer to each Rating Agency. Any Purchaser may from time to time sell to
one or more Related Bank Purchasers all or any portion of its Investment.

     (b) Participations. Any Purchaser may sell to one or more Persons (each a
“Participant”) participating interests in the interests of such Purchaser
hereunder. Such Purchaser shall remain solely responsible for performing its
obligations hereunder, and the Seller, each Purchaser Agent and the Agent shall
continue to deal solely and directly with such Purchaser in connection with
such Purchaser’s rights and obligations hereunder. Each Participant shall be
entitled to the benefits of Article VI and Section 3.9 and shall have the right
of setoff through its participation in amounts owing hereunder to the same
extent as if it were a Purchaser hereunder, which right of setoff is subject to
such Participant’s obligation to share with the Purchasers as provided in
Section 9.4; provided, however, that no Participant shall be entitled to any
amount under Section 3.9 and Article VI greater than the amount that would have
been have payable thereunder to the Purchaser who sold the participation if
such participation had not been sold. A Purchaser shall not agree with a
Participant to restrict such Purchaser’s right to agree to any amendment
hereto, except amendments described in clause (a) of Section 9.6.

     (c) Assignments by Committed Purchasers. Any Committed Purchaser may
assign to one or more Persons (“Purchasing Committed
Purchasers”), acceptable
to the Agent in its sole discretion and, prior to the occurrence of a
Termination Event, subject to the prior written consent of the Seller (which
consent will not be unreasonably withheld) any portion of its Commitment as a
Committed Purchaser hereunder and Purchase Interest pursuant to a supplement
hereto (a “Transfer Supplement”) in form satisfactory to the Agent executed by
each such Purchasing Committed Purchaser, such selling Committed Purchaser and
the Agent. Any such assignment by a Committed Purchaser must be for an amount
of at least $10,000,000. Each Purchasing Committed Purchaser shall pay a fee
of $3,000 to the Agent. Any partial assignment shall be an assignment of an
identical percentage of such selling Committed Purchaser’s Investment, if any,
and its Commitment as a Committed Purchaser hereunder. Upon the execution and
delivery to the Agent of the Transfer Supplement and payment by the Purchasing
Committed Purchaser to the selling Committed Purchaser of the agreed purchase
price, such selling Committed Purchaser shall be released from its obligations
hereunder to the extent of such assignment and such Purchasing Committed
Purchaser shall for all purposes be a Committed Purchaser party hereto and
shall have all the rights and obligations of a Committed Purchaser hereunder to
the same extent as if it were an original party hereto with a Commitment as a
Committed Purchaser, any Investment and any related assigned Settlement
described in the Transfer Supplement.

     (d) Assignment by Conduit Purchasers. Each party hereto agrees and
consents (i) to each Conduit Purchaser’s assignment, participation, grant of
security interests in or other

41

 

transfers of any portion of, or any of its beneficial interest in, the Purchase Interest and the related assigned
Settlement and (ii) to the complete assignment by such Conduit Purchaser of all
of its rights and obligations hereunder to (x) a Related Bank Purchaser or Liquidity Bank or
(y) any other Person reasonably acceptable to the Seller (provided that the
Seller’s approval shall not be unreasonably withheld and no such approval shall
be required after the occurrence of a Termination Event). Upon such assignment
such Conduit Purchaser shall be released from all obligations and duties
hereunder. Each Conduit Purchaser shall promptly notify each party hereto of
any such assignment. Upon such an assignment of any portion of a Conduit
Purchaser’s Purchase Interest and the related assigned Settlement, the assignee
shall have all of the rights of such Conduit Purchaser hereunder related to
such Purchase Interest and related assigned Settlement.

     (e) Assignment by USF Assurance. USF Assurance may assign its rights and
obligations hereunder to any Person with the prior written consent of the Agent
(which consent may not be unreasonably withheld). Upon an assignment of any
portion of USF Assurance’s Purchase Interest, the assignee shall have all of
the rights of USF Assurance hereunder related to such Purchase Interest.

     (f) Opinions of Counsel. If required by the Agent or any Purchaser Agent
or to maintain the Ratings, each Transfer Supplement must be accompanied by an
opinion of counsel of the assignee as to such matters as the Agent or such

Purchaser Agent may reasonably request.

     (g) Notwithstanding the foregoing, no Purchaser may assign or participate
any of its interests hereunder to USF Assurance and USF Assurance may not
assign or participate any of its interests hereunder to any other Purchaser,
unless after giving effect to such assignment or participation, if any
Purchaser other than USF Assurance holds a Purchase Interest at such time or
will hold a Purchase Interest after giving effect to such assignment or
participation, the aggregate Investments of the Purchasers other than USF
Assurance (which have not been participated to USF Assurance) is at least equal
to 50% of the Aggregate Investment.

        Section 9.9 Commercial Reasonableness. Each party hereto agrees that
all provisions of the Transaction Documents shall be interpreted, and all
rights and remedies thereunder will be exercised, in a commercially
reasonable manner, taking into account the materiality of any purported
breach thereof.

        Section 9.10 Confidentiality. The Seller and the Servicer hereto agree
to hold the Transaction Documents or any other confidential or proprietary
information of the Agent, the Purchaser Agents or the Purchasers received in
connection therewith in confidence and agree not to provide any Person with
copies of any Transaction Document or such other confidential or proprietary
information other than to (i) any officers, directors, members, managers,
employees or outside accountants, financial advisors, auditors or attorneys
thereof, or (ii) Governmental Authorities with appropriate jurisdiction and
provided that the Seller and the Servicer may provide copies of the
Transaction Documents (other than the Fee Letters) to the lenders under the
USF Credit Agreement. The Agent, each Purchaser Agent and each Purchaser
will agree to hold any other confidential or proprietary information of the
USF Entities received in connection with the Transaction Documents in
confidence and agree not to

42

 

provide any Person with copies of such other
confidential or proprietary information other than to (i) any officers,
directors, members, managers, employees or outside accountants, auditors or
attorneys of the Agent, the Purchaser Agents and the Purchasers, (ii) any
prospective or actual assignee or participant which (in each case) has agreed to comply
with this Section 9.10, (iii) Governmental Authorities with appropriate
jurisdiction and (iv) any actual or potential investor in a Conduit
Purchaser’s commercial paper, any CP Dealer or any Rating Agency.
Notwithstanding the above stated obligations, the parties hereto will not be
liable for disclosure or use of such information which such Person can
establish by tangible evidence: (i) was required by law, including pursuant
to a subpoena or other legal process, (ii) was in such Person’s possession or
known to such Person prior to receipt or (iii) is or becomes known to the
public through disclosure in a printed publication (without breach of any of
such Person’s obligations hereunder).

        Section 9.11 Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness
for borrowed money for each Conduit Purchaser, not, prior to the date which
is one (1) year and one (1) day after the payment in full of all such
indebtedness, to acquiesce, petition or otherwise, directly or indirectly,
invoke, or cause such Conduit Purchaser to invoke, the process of any
Governmental Authority for the purpose of (a) commencing or sustaining a case
against such Conduit Purchaser under any federal or state bankruptcy,
insolvency or similar law (including the Federal Bankruptcy Code), (b)
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official for such Conduit Purchaser, or any substantial part
of its property, or (c) ordering the winding up or liquidation of the affairs
of such Conduit Purchaser. This Section shall survive the termination of
this Agreement.

        Section 9.12 Excess Funds. Notwithstanding any provisions contained in
this Agreement to the contrary, each Conduit Purchaser shall not, and shall
not be obligated to, pay any amount pursuant to this Agreement unless (i)
such Conduit Purchaser has received funds which may be used to make such
payment and which funds are not required to repay its commercial paper notes
when due and (ii) after giving effect to such payment, either (x) such
Conduit Purchaser could issue commercial paper notes to refinance all of its
outstanding commercial paper notes (assuming such outstanding commercial
paper notes matured at such time) in accordance with the program documents
governing such Conduit Purchaser’s securitization program or (y) all of such
Conduit Purchaser’s commercial paper notes are paid in full. Any amount
which such Conduit Purchaser does not pay pursuant to the operation of the
preceding sentence shall not constitute a claim (as defined in §101 of the
United States Bankruptcy Code) against or corporate obligation of such
Conduit Purchaser for any such insufficiency unless and until such Conduit
Purchaser satisfies the provisions of clauses (i) and (ii) above. This
Section shall survive the termination of this Agreement.

        Section 9.13 No Recourse. The obligations of each Conduit Purchaser,
its management company, its administrator and its referral agents (each a
“Program Administrator”) under any Transaction Document or other document
(each, a “Program Document”) to which a Program Administrator is a party are
solely the corporate obligations of such Program Administrator and no
recourse shall be had for such obligations against any

43

 

Affiliate, director,
officer, member, manager, employee, attorney or agent of any Program
Administrator.

        Section 9.14 Headings; Counterparts. Article and Section Headings in
this Agreement are for reference only and shall not affect the construction
of this Agreement. This Agreement may be executed by different parties on
any number of counterparts, each of which shall constitute an original and
all of which, taken together, shall constitute one and the same agreement.

        Section 9.15 Cumulative Rights and Severability. All rights and
remedies of the Purchasers, Purchaser Agents and Agent hereunder shall be
cumulative and non-exclusive of any rights or remedies such Persons have
under law or otherwise. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, in such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof and without affecting such provision in any
other jurisdiction.

        Section 9.16 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws
(and not the law of conflicts) of the State of Illinois. The Seller, the
Servicer and USF Assurance hereby submit to the nonexclusive jurisdiction of
the United States District Court for the Northern District of Illinois and of
any Illinois state court sitting in Chicago, Illinois for purposes of all
legal proceedings arising out of, or relating to, the Transaction Documents
or the transactions contemplated thereby. Each of the Seller, the Servicer
and USF Assurance hereby irrevocably waive, to the fullest extent permitted
by law, any objection it may now or hereafter have to the venue of any such
proceeding and any claim that any such proceeding has been brought in an
inconvenient forum. Nothing in this Section 9.16 shall affect the right of
the Agent, any Purchaser Agent or any Purchaser to bring any action or
proceeding against the Seller or its property in the courts of other
jurisdictions.

        Section 9.17 Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE SELLER, THE SERVICER AND USF ASSURANCE
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH, ANY TRANSACTION DOCUMENT
OR ANY MATTER ARISING THEREUNDER.

        Section 9.18 USA Patriot Act Notice. Each Purchaser that is subject to
the Act (as hereinafter defined) and the Agent (for itself and not on behalf
of any Purchaser) hereby notifies the Seller and the Servicer that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies each USF Entity, which
information includes the name and address of each USF Entity and other
information that will allow such Purchaser or the Agent, as applicable, to
identify each USF Entity in accordance with the Act.

        Section 9.19 Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or
oral, concerning such matters are superseded thereby.

44

 

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date
hereof.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	ABN AMRO Bank N.V.,	 	 	 	ABN AMRO Bank N.V.,
	 as the Agent	 	 	 	 as the Related Bank Purchaser for Windmill
	 	 	 	 	 	 	   and as the Windmill Purchaser Agent
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Kevin G. Pilz	 	By:	 	/s/ Kevin G. Pilz	 	 
	 	 	
	 	 	 	
	 	 
	Title:

	 	Vice President	 	Title:	 	Vice President	 	 
	 	 	
	 	 	 	
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Thomas J. Educate	 	By:	 	/s/ Thomas J. Educate	 	 
	 	 	
	 	 	 	
	 	 
	Title:

	 	Sr. Vice President	 	Title:	 	Sr. Vice President	 	 
	 	 	
	 	 	 	
	 	 
	

	 	Address:
	 	Structured Finance,
	 	 	 	Address:
	 	Structured Finance,	 	 
	

	 	 	 	Asset Securitization
	 	 	 	 	 	Asset Securitization	 	 
	

	 	 	 	540 West Madison Street
	 	 	 	 	 	540 West Madison Street	 	 
	

	 	 	 	27th Floor
	 	 	 	 	 	27th Floor	 	 
	

	 	 	 	Mailcode C540-2721
	 	 	 	 	 	Mailcode C540-2721	 	 
	

	 	 	 	Chicago, IL 60661
	 	 	 	 	 	Chicago, IL 60661	 	 
	

	 	 	 	Attention: Purchaser Agent-
	 	 	 	 	 	Attention: Windmill	 	 
	

	 	 	 	  Windmill	 	 	 	 	 	 	 	 
	

	 	Telephone:
	 	(312) 904-2119
	 	 	 	Telephone:
	 	(312) 904-2119	 	 
	

	 	Telecopy:
	 	(312) 904-1711
	 	 	 	Telecopy:
	 	(312) 904-1711	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	WINDMILL FUNDING CORPORATION
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Bernard J. Angelo	 	 
	 	 	 	 	 	 	 	 	
	 	 
	 

	 	 	 	Title:	 	Vice President	 	 
	 	 	 	 	 	 	 	 	
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Andrew L. Stidd	 	 
	 	 	 	 	 	 	 	 	
	 	 
	 

	 	 	 	Title:	 	President	 	 
	 	 	 	 	 	 	 	 	
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	Address:
	 	c/o Global Securitization	 	 
	

	 	 	 	 	 	 	 	 	 	Services, LLC	 	 
	

	 	 	 	 	 	 	 	 	 	445 Broad Hollow Road	 	 
	

	 	 	 	 	 	 	 	 	 	Suite 239	 	 
	

	 	 	 	 	 	 	 	 	 	Melville, NY 11747	 	 
	

	 	 	 	 	 	 	 	 	 	Attention: Andrew L. Stidd	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	Telephone:
	 	(631) 587-4700	 	 
	

	 	 	 	 	 	 	 	Telecopy:
	 	(212) 302-8767	 	 

Signature Page to

Receivables Sale Agreement

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	USF CORPORATION	 	 	 	USF FINANCE COMPANY LLC
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Chester J. Popkowski	 	By:	 	/s/ Chester J.
Popkowski	 	 
	 	 	
	 	 	 	
	 	 
	Title:

	 	Vice President, Finance
and Internal Audit, and	 	Title:	 	President	 	 
	 	 	
	 	 	 	
	 	 
	 

	 	Treasurer	 	 	 	 	 	 
	 	 	
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	Address:
	 	8550 W. Bryn Mawr Avenue
	 	 	 	Address:
	 	8550 W. Bryn Mawr Avenue	 	 
	

	 	 	 	Suite 700
	 	 	 	 	 	Suite 700	 	 
	

	 	 	 	Chicago, IL 60631
	 	 	 	 	 	Chicago, IL 60631	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	     Attn:
	 	Chester Popkowski
	 	 	 	     Attn:
	 	Chester Popkowski	 	 
	

	 	 	 	Vice President Finance and
	 	 	 	 	 	Vice President Finance and	 	 
	

	 	 	 	Internal Audit
	 	 	 	 	 	Internal Audit	 	 
	

	 	     Telephone:
	 	(773) 824-2336
	 	 	 	     Telephone:
	 	(773) 824-2336	 	 
	

	 	     Telecopy:
	 	(773) 824-2300
	 	 	 	     Telecopy:
	 	(773) 824-2300	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	with a copy to:	 	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	USF Corporation
	 	 	 	 	 	USF Corporation	 	 
	

	 	 	 	8550 W. Bryn Mawr Avenue
	 	 	 	 	 	8550 W. Bryn Mawr Avenue	 	 
	

	 	 	 	Suite 700
	 	 	 	 	 	Suite 700	 	 
	

	 	 	 	Chicago, IL 60631
	 	 	 	 	 	Chicago, IL 60631	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	     Attn:
	 	Senior Vice President, General
	 	 	 	     Attn:
	 	Senior Vice President,	 	 
	

	 	 	 	Counsel & Secretary
	 	 	 	 	 	General Counsel & Secretary	 	 
	

	 	     Telephone:
	 	(773) 824-2286
	 	 	 	     Telephone:
	 	(773) 824-2286	 	 
	

	 	     Telecopy:
	 	(773) 824-2346
	 	 	 	     Telecopy:
	 	(773) 824-2346	 	 

Signature Page to

Receivables Sale Agreement

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	USF ASSURANCE CO. LTD.,
	 	 	 	 	 	 	as a Purchaser and its Purchaser Agent
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Chester J.
Popkowski	 	 
	 	 	 	 	 	 	 	 	
	 	 
	 

	 	 	 	Title:	 	President	 	 
	 	 	 	 	 	 	 	 	
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Address:	 	USF Assurance Company Ltd.	 	 
	 	 	 	 	 	 	 	 	PO Box HM 1179	 	 
	 	 	 	 	 	 	 	 	Hamilton HM EX	 	 
	 	 	 	 	 	 	 	 	Bermuda	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	     Attention:	 	 Corporate Secretary	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	     with a copy to:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	USF Assurance Company Ltd.	 	 
	 	 	 	 	 	 	 	 	400 North LaSalle Street	 	 
	 	 	 	 	 	 	 	 	Apt. 2707	 	 
	 	 	 	 	 	 	 	 	Chicago, Il 60610	 	 
	 	 	 	 	 	 	     Attn:	 	Chester J. Popkowski President	 	 

Signature Page to

Receivables Sale Agreement

 

SCHEDULE I

DEFINITIONS

     The following terms have the meanings set forth, or referred to, below:

     “ABN AMRO” means ABN AMRO Bank N.V. in its individual capacity and not in
its capacity as the Agent.

     “Adverse Claim” means, for any asset or property of a Person, a lien,
security interest, charge, mortgage, pledge, hypothecation, assignment or
encumbrance, or any other right or claim, in, of or on such asset or property
in favor of any other Person, except those in favor of the Agent.

     “Affiliate” means, for any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person. For purposes of this definition, “control” means the power,
directly or indirectly, to either (i) vote ten percent (10%) or more of the
securities having ordinary voting power for the election of directors of a
Person or (ii) cause the direction of the management and policies of a Person.

     “Agent” is defined in the first paragraph hereof.

     “Agent’s Account” means the Agent’s account number 451118894850 at ABN
AMRO or such other account designated to the Seller, the Purchaser Agents and
the Purchasers by the Agent.

     “Aggregate Commitment” means the aggregate of all Commitments of all
Purchaser Groups, as such amount may be reduced pursuant to Section 1.6.

     “Aggregate Investment” means the sum of the Investments of all Purchasers.

     “Applicable Margin” is defined in the Fee Letter for the Windmill
Purchaser Group.

     “Bankruptcy Event” means, for any Person, that (a) such Person makes a
general assignment for the benefit of creditors or any proceeding is instituted
by such Person seeking to adjudicate it bankrupt or insolvent, or seeking the
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 or other similar
official for it or any substantial part of its property, (b) such Person takes
any corporate action to authorize any such action or (c) any proceeding of the
type described in clause (a) is instituted against such Person without the
consent of such Person and, except in the case of the Seller or any Obligor,
such proceeding continues undismissed or unstayed for 60 days, or an order for
relief is entered in any such proceeding.

     “Business Day” means any day other than (a) a Saturday, Sunday or other
day on which banks in New York City or Chicago, Illinois are authorized or
required to close, (b) a holiday on the Federal Reserve calendar and, (c)
solely for matters relating to a Eurodollar Tranche, a day on which dealings in
Dollars are not carried on in the London interbank market.

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     “Change of Control” means (i) the Parent ceases to own (directly or
indirectly) all of the non-voting membership interests of the Seller; (ii) USF
Holding Corp. ceases to own (directly or indirectly) all of the voting
membership interests of the Seller; (iii) Broad Street Contract Services, Inc.
ceases to own (directly or indirectly) all of the issued and outstanding
capital stock of USF Holding Corp., or (iv) the Parent ceases to own (directly
or indirectly) all of the issued and outstanding shares of capital stock or
other equity interests of any Originator.

     “Charge-Off” means any Receivable that has or should have been (in
accordance with the applicable Credit and Collection Policy) charged-off or
written-off by the applicable Originator or Servicer.

     "Charge-Off Ratio” means, for any Fiscal Month, the ratio of (a) the
average aggregate outstanding balance of all Receivables which first became
Charge-Offs during such Fiscal Month to (b) the Collections received during
such Fiscal Month.

     “Collection” means any amount paid, or deemed paid, on a Receivable,
including from the proceeds of collateral securing, or any guaranty of, such
Receivable, by the Seller under Section 1.5(b) or by any Originator pursuant to
Section 3.2 of the Purchase Agreement.

     “Committed Conduit Purchaser” means each Person that becomes a Committed
Conduit Purchaser pursuant to a Transfer Supplement.

     “Committed Purchasers” means each Related Bank Purchaser for an
Uncommitted Conduit Purchaser and each Committed Conduit Purchaser.

     “Commitment” means, for each Committed Purchaser, the amount set forth on
Schedule II for such Committed Purchaser, and, for each Purchaser Group, the
amount set forth on Schedule II for such Purchaser Group, in each case as
adjusted in accordance with Sections 1.6 and 9.8.

     “Commitment Percentage” means, for each Related Bank Purchaser in a
Purchaser Group, the Commitment for such Related Bank Purchaser divided by the
Commitment of such Purchaser Group.

     “Commitment Termination Date” means December 27, 2005.

     “Concentration Limit” means the percentages of the Eligible Receivables
Balance set forth in the table below based upon the short-term credit ratings
of such Obligors from Moody’s and S&P:

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	 	 	 	 	 	 	Concentration Limit (% of
	Moody’s Rating
	 	S&P Rating
	 	Eligible Receivables Balance)

	      P-1
	 	 	A-1	 	 	 	4.5	%
	      P-2
	 	 	A-2	 	 	 	3.5	%
	      P-3
	 	 	A-3	 	 	 	2.5	%
	None of the above
	 	None of the above	 	 	2.0	%

     For purposes of the foregoing, the lower of the two ratings shall apply.
If either Moody’s or S&P does not maintain a short-term unsecured senior debt
rating of an Obligor, the Concentration Limit for such Obligor shall be treated
as “None of the above”.

     “Conduit Purchaser” means each Committed Conduit Purchaser and Uncommitted
Purchaser.

     “Coverage Ratio” means, as of any date of determination, a fraction the
numerator of which is the sum of the Aggregate Investment and the Reserve and
the denominator of which is the Net Receivables Pool Balance.

     “CP Dealer” means, at any time for any Conduit Purchaser, each Person such
Conduit Purchaser then engages as a placement agent or commercial paper dealer.

     “CP Rate” means, for any Tranche Period for any CP Tranche, the per annum
rate equivalent to the weighted average cost (as determined by the related
Purchaser Agent and which shall include commissions of CP Dealers, incremental
carrying costs incurred with respect to commercial paper maturing on dates
other than those on which corresponding funds are received by the Conduit
Purchaser, other borrowings by the Conduit Purchaser and any other costs
associated with the issuance of commercial paper) of or related to the issuance
of commercial paper that are allocated, in whole or in part, by the Conduit
Purchaser or the related Purchaser Agent to fund or maintain such CP Tranche
(and which may be also allocated in part to the funding of other assets of the
Conduit Purchaser); provided, however, that if any component of such rate is a
discount rate, in calculating the “CP Rate” for such CP Tranche for such
Tranche Period, the Conduit Investor shall for such component use the rate
resulting from converting such discount rate to an interest bearing equivalent
rate per annum.

     “CP Tranche” is defined in the definition of Tranche.

     “Credit and Collection Policy” means each Originator’s credit and
collection policy and practices relating to Receivables attached hereto as
Exhibit J-1 and J-2.

     “Deemed Collections” is defined in Section 1.5(c).

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     “Default Ratio” means, for any Fiscal Month, the ratio of (a) the average
aggregate outstanding balance of all Defaulted Receivables during such Fiscal
Month to (b) the average aggregate outstanding balance of all Receivables
during such Fiscal Month.

     “Defaulted Receivable” means any Receivable (a) on which any amount is
unpaid more than 90 days past its invoice date, (b) the Obligor on which is the
subject of a Bankruptcy Event at the time of, or any time after the origination
of such Receivable or (c) that has been written-off by the Servicer.

     “Delinquency Ratio” means, for any Fiscal Month, the ratio of (a) the
average aggregate outstanding balance of all Delinquent Receivables during such
Fiscal Month to (b) the average aggregate outstanding balance of all
Receivables during such Fiscal Month.

     “Delinquent Receivable” means any Receivable on which any amount is unpaid
for more than 60, but not more than 90, days past its invoice date.

     “Designated Financial Officer” means the Senior Vice President, Vice
President, Chief Financial Officer, Treasurer, President or Chief Operating
Officer of the Seller or the relevant USF Entity, as applicable or such other
officer with similar responsibilities as the Servicer shall specify in a notice
to the Agent.

     “Desired Increase” is defined in Section 2.2.

     “Dilution Horizon Ratio” means, for any Fiscal Month, the quotient of (i)
the aggregate outstanding balance of Receivables originated during the prior
Fiscal Month divided by (ii) the Net Receivables Pool Balance as of the end of
such Fiscal Month.

     “Dilution Ratio” means, for any Fiscal Month, the ratio of (a) the average
aggregate amount of payments owed by the Seller pursuant to the first sentence
of Section 1.5(b) during such Fiscal Month to (b) the aggregate outstanding
balance of all Receivables originated during the prior Fiscal Month.

     “Dilution Reserve” means, at any time, the product of (i) the Net
Receivables Balance at such time and (ii) the Dilution Reserve Percent as of
the most recently ended Fiscal Month.

     “Dilution Reserve Percent” means for any Fiscal Month the product of (A)
and (B); where (A) is the sum of (i) the product of 2.5 and the average
Dilution Ratio for the most recent 12 Fiscal Months, and (ii) the product of
(a) the difference between the highest Dilution Ratio for the most recent 12
Fiscal Months and the average Dilution Ratio for the most recent 12 Fiscal
Months, and (b) the quotient of the highest Dilution Ratio for the most recent
12 Fiscal Months and the average Dilution Ratio for the most recent 12 Fiscal
Months, and (B) the Dilution Horizon Ratio for such Fiscal Month.

     “Discount” means, for any Tranche during any Tranche Period, (a) the
product of (i) the Discount Rate for such Tranche, (ii) the total amount of
Investment allocated to such Tranche Period, and (iii) the number of days
elapsed during such Tranche Period divided by (b) 360 days (or 365/366 days for
a Prime Tranche).

I - 4

 

     “Discount Period” means, with respect to any Settlement Date or the
Liquidity Termination Date, the period from and including the preceding
Settlement Date (or if none, the date that the first Incremental Purchase is
made hereunder) to but not including such Settlement Date or Liquidity
Termination Date, as applicable.

     “Discount Rate” means, for any Tranche Period, the CP Rate, the Eurodollar
Rate or the Prime Rate.

     “Discount Reserve” means, at any time, the Discount Reserve Percent for
the most recently ended Fiscal Month multiplied by the Aggregate Investment at
such time.

     “Discount Reserve Percent” means, for any Fiscal Month, (i) the product of
(A) 1.5, (B) the Prime Rate plus 1.00%, and (C) the average of the Turnover
Ratios for the three Fiscal Months most recently ended, divided by (ii) 360.

     “Dollar” and “$” means lawful currency of the United States of America.

     “Early Payment Fee” means, if any Investment of a Purchaser allocated (or,
in the case of a requested Purchase not made by the Committed Purchasers for
any reason other than their default, scheduled to be allocated) to a Tranche
Period for a CP Tranche or Eurodollar Tranche is reduced or terminated before
the last day of such Tranche Period, including as the result of a Seller
Repurchase (the amount of Investment so reduced or terminated being referred to
as the “Prepaid Amount”), the cost to the relevant Purchaser of terminating or
reducing such Tranche, which (a) for a CP Tranche means any compensation
payable in prepaying the related commercial paper or, if not prepaid, any
shortfall between the amount that will be available to the applicable Conduit
Purchaser on the maturity date of the related commercial paper from reinvesting
the Prepaid Amount in Permitted Investments and the Face Amount of such
commercial paper and (b) for a Eurodollar Tranche will be determined based on
the difference between the LIBOR applicable to such Tranche and the LIBOR
applicable for a period equal to the remaining maturity of the Tranche on the
date the Prepaid Amount is received.

     “Eligible Receivable” means, at any time, any Receivable:

          (i) the Obligor of which (a) is a resident of, or organized under
the laws of with its chief executive office in, the United States of
America; (b) is not an Affiliate of any of the parties hereto or an
Originator; (c) is not a government or a governmental subdivision or
agency; (d) is not the subject of a Bankruptcy Event at the time of, or
any time after, the origination of such Receivable; and (e) is a customer
of an Originator in good standing and not the Obligor of Defaulted
Receivables constituting more than 25% of such Obligor’s Receivables or
any Charge-Off;

          (ii) which is stated to be due and payable within 60 days after
invoice therefor;

          (iii) which is not a Defaulted Receivable, Delinquent Receivable or
a Charge-Off;

I - 5

 

          (iv) which is an “account,” “payment intangible,” or “chattel paper”
within the meaning of Section 9-105 and Section 9-106, respectively of
the UCC of all applicable jurisdictions;

          (v) which is denominated and payable only in Dollars in the United
States of America;

          (vi) which arises under a contract or is invoiced on an invoice that
is in full force and effect and constitutes the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in
accordance with its terms subject to no offset, counterclaim, defense or
other Adverse Claim, and is not an executory contract or unexpired lease
within the meaning of Section 365 of the Bankruptcy Code;

          (vii) (a) which arises under a contract that contains an obligation
to pay a specified sum of money and is subject to no contingencies, and
(b) which is fully assignable without the consent of any Person;

          (viii) which does not, in whole or in part, contravene any law, rule
or regulation applicable thereto (including those relating to usury,
truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy);

          (ix) which satisfies all applicable requirements of the applicable
Credit and Collection Policy and was generated in the ordinary course of
an Originators’ business from the provision of transportation services to
a related Obligor solely by an Originator;

          (x) the purchase of which with proceeds of notes would constitute a
“current transaction” within the meaning of Section 3(a)(3) of the
Securities Act of 1933;

          (xi) which has not been extended, amended, rescinded or cancelled;
and

          (xii) which directs payments by the related Obligor to be made to a
Lock-Box, a Lock-Box Account or, at any time prior to the date which is
45 days after the date hereof, the JPMorgan Lock-Box or the JPMorgan
Lock-Box Account.

     “Eligible Receivable Balance” means at any time, the aggregate outstanding
balance of all Eligible Receivables.

     “Enhancement Bank” means, for Windmill, ABN AMRO; provided, however, to
the extent the Enhancement Bank is no longer party to the Windmill Transfer
Agreement all references herein to the Enhancement Bank (with respect to
Windmill) shall be of no further force and effect.

     “Eurodollar Rate” means for any Tranche Period for a Eurodollar Tranche,
the sum of (a) the sum of (i) LIBOR for such Tranche Period divided by 1 minus
the “Reserve Requirement” plus (ii) the Applicable Margin, plus (b) on or after
the occurrence of a Termination Event, 2.00%; where “Reserve Requirement”
means, for any Tranche Period for a Eurodollar Tranche, the maximum reserve
requirement imposed during such Tranche Period on

I - 6

 

     “eurocurrency liabilities” as currently defined in Regulation D of the Board of
Governors of the Federal Reserve System.

     “Eurodollar Tranche” is defined in the definition of “Tranche”.

     “Face Amount” means the face amount of any commercial paper issued by a
Conduit Purchaser on a discount basis or, if not issued on a discount basis,
the principal amount of such note and interest scheduled to accrue thereon to
its stated maturity.

     “Federal Funds Rate” means, for the Windmill Purchaser Group, for any day
the greater of (i) the highest rate per annum as determined by ABN AMRO at
which overnight Federal funds are offered to ABN AMRO for such day by major
banks in the interbank market, and (ii) if ABN AMRO is borrowing overnight
funds from a Federal Reserve Bank that day, the highest rate per annum at which
such overnight borrowings are made on that day. Each determination of the
Federal Funds Rate by ABN AMRO shall be conclusive and binding on the Seller
except in the case of manifest error.

     “Fee Letter” means, for each Purchaser Group, the letter agreement between
the Seller and the Purchaser Agent for such Purchaser Group, if any.

     “Fiscal Month” means each of the fiscal months of the Originators and the
Parent as set forth on Schedule IV.

     “Force Majeure Event” means an interruption of the business of the
Servicer or the Seller by Acts of God, riots, civil commotions, insurrections,
wars or any other causes beyond their respective control, or by any strikes or
lockouts.

     “Funding Agreement” means any agreement or instrument executed by a
Conduit Purchaser and executed by or in favor of any Funding Source or executed
by any Funding Source at the request of such Conduit Purchaser.

     “Funding Source” means any insurance company, bank or other financial
institution providing liquidity, back-up purchase or credit support for any
Conduit Purchaser.

     “GAAP” means generally accepted accounting principles in the United States
of America, applied on a consistent basis.

     “Governmental Authority” means any (a) Federal, state, municipal or other
governmental entity, board, bureau, agency or instrumentality, (b)
administrative or regulatory authority (including any central bank or similar
authority), (c) court, judicial authority or arbitrator, in each case, whether
foreign or domestic, or (d) any accounting board or authority (whether or not a
part of government) which is responsible for the establishment or
interpretation of national or international accounting principles, in each
case, whether foreign or domestic.

     “Group Limit” means, for each Purchaser Group, the amount set forth on
Schedule II for such Purchaser Group, as adjusted in accordance with Sections
1.6 and 9.8.

     “Incorporated Covenants” is defined in Section 5.2(k).

I - 7

 

     “Incremental Purchase” is defined in Section 1.1(b).

     “Initial Servicer” is defined in the first paragraph hereof.

     “Instructing Group” means Purchaser Agents (other than USF Assurance)
representing Purchaser Groups with a majority of the Commitments other than the
Commitments of USF Assurance.

     “Interim Liquidation” means any time before the Termination Date during
which no Reinvestment Purchases are made by any Purchaser, as established
pursuant to Section 1.2.

     “Investment” means, for each Purchaser, (a) the sum of (i) all Incremental
Purchases by such Purchaser and (ii) the aggregate amount of any payments or
exchanges made by, or on behalf of, such Purchaser to any other Purchaser under
Article II minus (b) all Collections, amounts received from other Purchasers
under Article II, all Repurchases and other amounts received or exchanged and,
in each case, applied by the Agent or such Purchaser to reduce such Purchaser’s
Investment. A Purchaser’s Investment shall be restored to the extent any
amounts so received or exchanged and applied are rescinded or must be returned
for any reason.

     “JPMorgan Lock-Box” means USF Holland, 73032 Network Place, Chicago, IL
60661, Attn: LBX Title and Box 73032.

     “JPMorgan Lock-Box Account” means the lock-box account of USF Holland with
account number 5491045 at JPMorgan Chase Bank.

     “LIBOR” means, for any Tranche Period for a Eurodollar Tranche or other
time period, for the Windmill Purchaser Group and (unless specified otherwise
in its Fee Letter) each other Purchaser Group, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in Dollars for a period equal to such Tranche
Period or other period, which appears on Page 3750 of the Telerate Service (or
any successor page or successor service that displays the British Bankers’
Association Interest Settlement Rates for Dollar deposits) as of 11:00 a.m.
(London, England time) two Business Days before the commencement of such
Tranche Period or other period; provided that if for any Tranche Period for a
Eurodollar Tranche no such displayed rate is available (or, for any other
period, if such displayed rate is not available or the need to calculate LIBOR
is not notified to the Agent at least 3 Business Days before the commencement
of the period for which it is to be determined), the Agent shall determine such
rate based on the rates ABN AMRO is offered on deposits of such duration in the
London interbank market.

     “LIBOR Business Day” shall mean a Business Day on which dealings in
Dollars are carried on in the London interbank market and on which commercial
banks are open for business in London.

     “LIBOR Interest Determination Date” shall mean the second LIBOR Business
Day immediately preceding the first day of the related Tranche Period.

I - 8

 

     “Liquidation Period” means all times when an Uncommitted Purchaser is not
making Reinvestment Purchases pursuant to Section 1.1(d) and, for all
Purchasers, all times (x) during an Interim Liquidation and (y) on and after
the Termination Date.

     “Liquidity Bank” means any commercial lending institution identified as a
Liquidity Bank/Related Bank Purchaser on Schedule II hereto.

     “Lock-Box” means each post office box or bank box listed on Exhibit G, as
revised pursuant to Section 5.1(i).

     “Lock-Box Account” means each deposit account maintained by the Servicer
at a Lock-Box Bank for the purpose of receiving or concentrating Collections.

     “Lock-Box Agreement” means an agreement in substantially the form of
Exhibit H (or otherwise acceptable to the Agent) from the Seller and the
Servicer to each Lock-Box Bank, acknowledged and accepted by such Lock-Box Bank
and the Agent.

     “Lock-Box Bank” means each bank listed on Exhibit G, as revised pursuant
to Section 5.1(i).

     “Lock-Box Letter” means any letter delivered by the Agent in accordance
with a Lock-Box Agreement.

     “Loss Horizon Ratio” means, for any Fiscal Month, the quotient of (i) the
cumulative sales generated during the two prior Fiscal Months divided by (ii)
the Net Receivables Pool Balance at the end of such Fiscal Month.

     “Loss Proxy Ratio” means, as of the end of any Fiscal Month, the average
of the following amounts calculated for such Fiscal Month and each of the two
prior Fiscal Months: the amount, expressed as a percentage, equal to (a) the
outstanding balance of Defaulted Receivables (other than Receivables on which
any amount is unpaid more than 120 days past its original due date) as of the
end of the applicable Fiscal Month divided by (b) the aggregate outstanding
balance of all Receivables originated during the three Fiscal Months prior to
the applicable Fiscal Month.

     “Loss Reserve” means, at any time, the product of (i) the Net Receivables
Balance at such time and (ii) the Loss Reserve Percent for the most recently
ended Fiscal Month.

     “Loss Reserve Percent” means, for any Fiscal Month, the greater of (x) 10%
and (y) the product of (i) 2.5, times (ii) the Loss Horizon Ratio for such
Fiscal Month, times (iii) the highest Loss Proxy Ratio during the prior twelve
Fiscal Months.

     “Material Adverse Effect” means a material adverse effect on (i) any USF
Entity’s ability to perform its obligations under or in connection with, or the
enforceability of, any Transaction Document, (ii) the business or condition
(financial or otherwise) of any USF Entity and its Subsidiaries taken as a
whole, (iii) the interests of the Seller, the Agent, any Purchaser Agent or any
Purchaser under or in connection with any Transaction Document or (iv) the
enforceability or collectibility of any Receivable not due to the
creditworthiness of the Obligors.

I - 9

 

     “Matured Aggregate Investment” means, at any time, the Matured Value of
the Conduit Purchasers’ Investments plus the total Investments of all other
Purchasers then outstanding.

     “Matured Value” means, of any Investment, the sum of such Investment and
all unpaid Discount, fees and other amounts scheduled to become due (whether or
not then due) on such Investment during all Tranche Periods to which any
portion of such Investment has been allocated.

     “Maximum Incremental Purchase Amount” means, at any time, the lesser of
(a) the difference between the Purchase Limit and the Aggregate Investment then
outstanding and (b) the difference between the Aggregate Commitment and the
Matured Aggregate Investment then outstanding.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Net Receivables Balance” means the Eligible Receivables Balance minus the
sum of the amounts (determined for each Obligor) by which the portion of the
Eligible Receivable Balance owed by an Obligor exceeds the Concentration Limit
for such Obligor.

     “Obligor” means, for any Receivable, each Person obligated to pay such
Receivable and each guarantor of such obligation.

     “Originators” means USF Reddaway Inc., an Oregon corporation, and USF
Holland Inc., a Michigan corporation, and each other Subsidiary of the Parent
that shall from time to time become a party to the Purchase and Sale Agreement.

     “Parent” means USF Corporation, a Delaware corporation.

     “Percentage Factor” means, at any time in respect of any Purchaser, a
fraction (expressed as a percentage) the numerator of which is the Investment
plus the Purchaser Reserve of such Purchaser at such time and the denominator
of which is the Net Receivables Balance at such time. Except as contemplated
by Section 1.1(f), the Percentage Factor shall change at any time that such
Purchaser’s Investment or the Net Receivables Balance changes.

     “Performance Guaranty” means the Performance Guaranty, dated as of the
date hereof, issued by the Parent in favor of the Agent.

     “Periodic Report” is defined in Section 3.3.

     “Permitted Investments” means (a) evidences of indebtedness issued by, or
guaranteed by the full faith and credit of, the federal government of the
United States of America, (b) repurchase agreements with banking institutions
or broker-dealers the short term unsecured indebtedness of which is rated at
least “A-1+” (or the equivalent) by S&P and at least “P-1” (or the equivalent)
by Moody’s registered under the Securities Exchange Act of 1934 which are fully
secured by obligations of the kind specified in clause (a), (c) money market
funds (i) rated not lower than the highest rating category from Moody’s and
“AAA m” or “AAAm-g,” from S&P or (ii) which are otherwise acceptable to the
Rating Agencies or (d) commercial paper issued by any corporation incorporated
under the laws of the United States of America and rated at least

I - 10

 

“A-1+” (or the equivalent) by S&P and at least “P-1” (or the equivalent)
by Moody’s. All Permitted Investments must (1) be denominated and payable only
in Dollars, (2) not have an “r” designation if rated by S&P, and (3) must
mature (A) within thirty (30) days after the date of purchase thereof or (B) by
the date on which the funds so invested are needed in order to make any payment
required hereunder.

     “Person” means an individual, partnership, corporation, association, joint
venture, Governmental Authority or other entity of any kind.

     “Potential Termination Event” means any Termination Event or any event or
condition that with the lapse of time or giving of notice, or both, would
constitute a Termination Event.

     “Prime Rate” means for the Windmill Purchaser Group and (unless specified
otherwise in its Fee Letter) each other Purchaser Group, for any period, the
daily average during such period of (a) the greater of (i) the floating
commercial Purchase rate per annum of ABN AMRO (which rate is a reference rate
and does not necessarily represent the lowest or best rate actually charged to
any customer by ABN AMRO) announced from time to time as its prime rate or
equivalent for Dollar purchases in the United States of America, changing as
and when said rate changes and (ii) the Federal Funds Rate plus 0.75% plus (b)
on or after the occurrence of a Termination Event, 2.0%.

     “Prime Tranche” is defined in the definition of “Tranche”.

     “Purchase” is defined in Section 1.1(a).

     “Purchase Agreement” means the Purchase and Sale Agreement dated as of the
date hereof among the Seller, the Originators and the Parent.

     "Purchase Amount” is defined in Section 1.1(c).

     “Purchase Date” is defined in Section 1.1(c).

     “Purchase Interest” means, for a Purchaser, the percentage ownership
interest in the Receivables and Collections held by such Purchaser, calculated
when and as described in Section 1.1(a); provided, however, that (except for
purposes of computing a Purchase Interest or the Sold Interest in Section 1.5
or 1.7) at any time the Sold Interest would otherwise exceed 100% each
Purchaser then holding any Investment shall have its Purchase Interest reduced
by multiplying such Purchase Interest by a fraction equal to 100% divided by
the Sold Interest otherwise then in effect, so that the Sold Interest is
thereby reduced to 100%.

     “Purchase Limit” means $100,000,000.

     “Purchaser Agent” means any of the Windmill Purchaser Agent, USF Assurance
or any other person who becomes a party to this Agreement as a Purchaser Agent
for a Purchaser Group pursuant to a Transfer Supplement.

I - 11

 

     “Purchaser Group” means, (x) for each Conduit Purchaser, such Conduit
Purchaser, its Related Bank Purchasers (if any) and (without duplication) its
related Liquidity Banks and Enhancement Banks, and (y) for USF Assurance,
itself.

     “Purchaser Reserve” means, for each Purchaser, an amount obtained by
multiplying the Reserve by the quotient of (i) the outstanding Investment of
such Purchaser divided by (ii) the Aggregate Investment at such time.

     “Purchasers” means the Conduit Purchasers, the Related Bank Purchasers and
USF Assurance.

     “Put” is defined in Section 2.l(a).

     “Ratable Share” means, for each Purchaser Group, (i) if at such time USF
Assurance has any outstanding Investment, such Purchaser Group’s Group Limit
divided by the aggregate Group Limits of all Purchaser Groups and (ii)
otherwise, such Purchaser Group’s Commitment divided by the Aggregate
Commitment.

     “Rating Agency” means, for any Conduit Purchaser, Moody’s, S&P and any
other rating agency such Conduit Purchaser chooses to rate its commercial paper
notes.

     “Ratings” means, for any Conduit Purchaser, the ratings by the Rating
Agencies of such Conduit Purchaser of the indebtedness for borrowed money of
such Conduit Purchaser.

     “Receivable” means each obligation of an Obligor to pay for services
rendered by an Originator and sold or purported to be sold to the Seller under
the Purchase Agreement and includes (i) the related Originator’s rights to
payment of any interest or finance charges relating to such Receivable, (ii)
all security interests, guaranties and property securing or supporting payment
of such Receivable, (iii) all Records, (iv) all rights of Seller under the
Purchase Agreement with respect thereto, and (v) and all proceeds of the
foregoing. Deemed Collections shall reduce the outstanding balance of
Receivables hereunder, so that any Receivable that has its outstanding balance
deemed collected shall cease to be a Receivable hereunder after (x) the
Servicer receives payment of such Deemed Collections under Section 1.5(b) or
(y) if such Deemed Collection is received before the Termination Date, an
adjustment to the Sold Interest permitted by Section 1.5(c) is made.

     “Records” means, for any Receivable, all contracts, books, records and
other documents or information (including computer programs, tapes, disks,
software and related property and rights) relating to such Receivable or the
related Obligor.

     “Reinvestment Purchase” is defined in Section 1.1(b).

     “Related Bank Purchasers” means the Persons listed as such (and their
respective Purchase Commitments) for each Uncommitted Purchaser as listed on
Schedule II hereto.

     “Repurchase” means a USF Assurance Repurchase or a Seller Repurchase.

I - 12

 

     “Reserve” means, at any time, the sum of the Loss Reserve, the Discount
Reserve and the Dilution Reserve.

     “Responsible Officer” means, with respect to any Person, the Chief
Financial Officer, General Counsel or Vice President of Finance of such Person.

     “Seller” is defined in the first paragraph hereof.

     “Seller Account” means the Seller’s account number 431-3110 at Harris
Bank, Chicago (ABA # 071000288) or such other account designated by the Seller
to the Agent with at least ten (10) days prior notice.

     “Seller Repurchase” is defined in Section 1.9(b).

     “Servicer” is defined in Section 3.1(a).

     “Servicer Fee” is defined in Section 3.6.

     “Servicer Replacement Event” means the occurrence of any one or more of
the following:

          (a) any representation, warranty, certification or statement made,
or deemed made by any Originator or the Servicer in, or pursuant to, any
Transaction Document proves to have been incorrect in any material
respect when made or deemed made; provided that any breach of
representation, warranty, certification or statement made with respect to
a Receivable shall not constitute a Servicer Replacement Event if the
Coverage Ratio does not exceed 100% after a recalculation thereof without
including such Receivable; or

          (b) the Servicer fails to make any payment or other transfer of
funds hereunder when due and such failure shall continue for three days;
or

          (c) (i) the Servicer fails to perform any Incorporated Covenant;
(ii) the Servicer fails to perform any covenant or agreement contained in
Article III of this Agreement if such failure continues for three (3)
Business Days; or (iii) or the Servicer fails to perform any other
covenant or agreement in any Transaction Document to which it is a party
if such failure continues uncured for a period of thirty (30) days;
provided that any breach of representation, warranty, certification or
statement made with respect to a Receivable shall not constitute a
Servicer Replacement Event if the Coverage Ratio does not exceed 100%
after a recalculation thereof without including such Receivable; or

          (d) a Bankruptcy Event occurs with respect to any USF Entity; or

          (e) (i) any USF Entity, directly or indirectly, disaffirms or
contests the validity or enforceability of any Transaction Document or
(ii) any Transaction Document to which it is a party fails to be the
enforceable obligation of any USF Entity; or

I - 13

 

          (f) any USF Entity (i) generally does not pay its debts as such
debts become due or admits in writing its inability to pay its debts
generally or (ii) fails to pay any of its indebtedness and (except in aggregate principal amount of less than
$10,000,000) for all USF Entities) or defaults in the performance of any
provision of any agreement under which such indebtedness was created or
is governed and such default permits such indebtedness to be declared due
and payable or to be required to be prepaid before the scheduled maturity
thereof.

     “Settlement” means Windmill Settlement with respect to the Windmill
Purchaser Group and has the meaning set forth in the Fee Letter with respect to
any other Purchaser Group.

     “Settlement Period” means each Fiscal Month.

     “Settlement
Date” means the 21st day of each calendar month or, if such
day is not a Business Day, the next following Business Day.

     “Sold Interest” is defined in Section 1.1(a).

     “S&P” means Standard & Poor’s Ratings Group.

     “Special Transaction Subaccount” is defined in the Windmill Transfer
Agreement.

     “Subordinated Note” means a revolving promissory note issued by the Seller
to an Originator under the Purchase Agreement.

     “Subsidiary” means any Person of which at least a majority of the voting
stock (or equivalent equity interests) is owned or controlled by such Person or
by one or more other Subsidiaries of such Person.

     “Taxes” means all taxes, charges, fees, levies or other assessments
(including income, gross receipts, profits, withholding, excise, property,
sales, use, license, occupation and franchise taxes and including any related
interest, penalties or other additions) imposed by any jurisdiction or taxing
authority (whether foreign or domestic).

     “Termination Date” means the earliest of (a) the Business Day designated
by the Seller with no less than five Business Days prior notice to the Agent,
(b) the date of the occurrence of a Termination Event under paragraph (d) of
the definition thereof, (c) the date designated by the Agent (at the direction
of either (i) the Instructing Group or (ii) if only USF Assurance shall have
any outstanding Investment at such time, USF Assurance) following the
occurrence of a Termination Event other than under paragraph (d) of the
definition thereof, and (d) the earlier of (i) December 24, 2007, and (ii) the
Commitment Termination Date.

     “Termination Event” means the occurrence of any one or more of the
following:

          (a) any representation, warranty, certification or statement made,
or deemed made by any USF Entity in, or pursuant to, any Transaction
Document proves to have been incorrect in any material respect when made
or deemed made; provided that any breach of a representation, warranty,
certification or statement made with respect to a

I - 14

 

Receivable shall not
constitute a Termination Event if the Coverage Ratio does not exceed 100%
after a recalculation thereof without including such Receivable; or

          (b) any USF Entity fails to make any payment or other transfer of
funds hereunder when due (including any payments under Section 1.5(a)),
and such failure shall continue for three days; or

          (c) (i) any USF Entity fails to perform any covenant or agreement
contained in Article III of this Agreement if such failure continues for
three (3) Business Days or (ii) any USF Entity fails to perform any other
covenant or agreement in any Transaction Document to which it is a party
and such breach (in the care of this clause (ii)) continues uncured for a
period of thirty (30) days; provided that a breach of covenant or
agreement with respect to a Receivable shall not constitute a Termination
Event if the Coverage Ratio does not exceed 100% after a recalculation
thereof without including such Receivable; or

          (d) a Bankruptcy Event occurs with respect to any USF Entity; or

          (e) as of the end of any Fiscal Month, the three-Fiscal Month
rolling average Delinquency Ratio, the three-Fiscal Month rolling average
Default Ratio, the three-Fiscal Month rolling average Dilution Ratio or
the Charge-Off Ratio exceeds the applicable percentage determined in
accordance with the chart on Schedule III hereto; or

          (f) as of the end of any Fiscal Month, the average Turnover Ratio
for the three most recently ended Fiscal Months exceeds 90 days; or

          (g) the Coverage Ratio exceeds 100% for three (3) consecutive
Business Days; or

          (h) any USF Entity directly or indirectly, disaffirms or contests in
writing the validity or enforceability of any Transaction Document or
(ii) any Transaction Document fails to be the enforceable obligation of
any USF Entity; or

          (i) (i) any USF Entity (A) generally does not pay its debts as such
debts become due or admits in writing its inability to pay its debts
generally or (B) fails to pay any of its indebtedness (except in
aggregate principal amount of less than $10,000,000 for all USF Entities
other than the Seller) or defaults in the performance of any provision of
any agreement under which such indebtedness was created or is governed
and such default permits such indebtedness to be declared due and payable
or to be required to be prepaid before the scheduled maturity thereof; or

          (j) a Change of Control shall occur; or

          (k) any Servicer Replacement Event shall occur.

     “Tranche” means a portion of the Investment of a Purchaser or of the
Related Bank Purchasers allocated to a Tranche Period pursuant to Section 1.3.
A Tranche is a (i) CP Tranche,

I - 15

 

(ii) Eurodollar Tranche or (iii) Prime Tranche
depending whether Discount accrues during its Tranche Period based on a (i) CP
Rate, (ii) Eurodollar Rate, or (iii) Prime Rate.

     “Tranche Period” means (i) for any Tranche other than a CP Tranche a
period of days ending on a Business Day selected pursuant to Section 1.3, which
(A) for a LIBOR Tranche shall not exceed 180 days, and (B) for a Prime Tranche
shall not be less than 2 days and shall not exceed 30 days, and (ii) with
respect to any CP Tranche, (A) initially the period commencing on (and
including) the date of the initial purchase or funding of such CP Tranche and
ending on (but excluding) the next following Settlement Date, and (B)
thereafter, each period commencing on (and including) a Settlement Date and
ending on (but excluding) the next following Settlement Date.

     “Transaction Documents” means this Agreement, each Fee Letter, the
Purchase Agreement, the Performance Guaranty, the Subordinated Notes and all
other documents, instruments and agreements executed or furnished in connection
herewith and therewith.

     “Transfer Agreement” means for each Purchaser Group, the liquidity
agreement, if any, executed by the Purchasers in such Purchaser Group, as
amended from time to time.

     “Transfer Supplement” means an agreement among (i) the parties hereto
pursuant to which an existing Purchaser Group adds a new Purchaser and (ii) the
parties hereto and a new Purchaser Group pursuant to which such new Purchaser
Group becomes party to this Agreement.

     “Turnover Ratio” means, for any Fiscal Month, the product, expressed in
number of days, of (a) the fraction the numerator of which is the aggregate
outstanding balance of all Receivables as of the first day of such Fiscal Month
and the denominator of which is the Collections received during such Fiscal
Month and (b) 30.

     “UCC” means, for any state, the Uniform Commercial Code as in effect in
such state.

     “Uncommitted Conduit Purchaser” means Windmill and each other Person who
becomes an Uncommitted Purchaser pursuant to a Transfer Supplement.

     “Uncommitted Purchasers” means USF Assurance and the Uncommitted Conduit
Purchasers.

     “Unused Commitment” means, for any Committed Purchaser at any time, the
difference between its Commitment and its Investment then outstanding.

     “USF Assurance” is defined in the first paragraph hereof.

     “USF Assurance Repurchase” is defined in Section 1.9(a).

     “USF Credit Agreement” means the Credit Agreement, dated as of October 24,
2002, among US Freightways Corporation, the guarantors from time to time
parties thereto, the lenders from time to time parties thereto, and Harris
Trust and Savings Bank, as Administrative Agent, as in effect on the date
hereof.

I - 16

 

     “USF Entity” means the Seller, any Originator and the Initial Servicer.

     “Windmill” is defined in the first paragraph hereof.

     “Windmill Committed Purchasers” means the Related Bank Purchasers for
Windmill.

     “Windmill Purchaser Agent” means ABN AMRO.

     “Windmill Purchaser Group” means Windmill, ABN AMRO, as the Related Bank
Purchaser for Windmill and ABN AMRO as the Liquidity Bank and Enhancement Bank
for Windmill.

     “Windmill Settlement” means the sum of all claims and rights to payment
pursuant to Section 1.5 or 1.7 or any other provision owed to Windmill (or owed
to the Agent or the Servicer for the benefit of Windmill) by the Seller that,
if paid, would be applied to reduce Windmill’s Investment.

     “Windmill Transfer Agreement” means, the Windmill Transfer Agreement,
dated as of the date hereof, between Windmill, ABN AMRO Bank N.V., in its
capacity as the Windmill Agent, Windmill’s Letter of Credit Provider and a
Liquidity Bank and the other Persons who become Liquidity Banks thereunder.

     The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Unless otherwise inconsistent with the
terms of this Agreement, all accounting terms used herein shall be interpreted,
and all accounting determinations hereunder shall be made, in accordance with
GAAP. Amounts to be calculated hereunder shall be continuously recalculated at
the time any information relevant to such calculation changes.

I - 17

 

SCHEDULE II

A. RELATED BANK PURCHASERS AND PURCHASE COMMITMENTS OF RELATED BANK

PURCHASERS

	 	 	 	 	 	 	 
	
	 	 	 	NAMES OF RELATED	 	 
	UNCOMMITTED
	 	GROUP LIMIT
	 	BANK PURCHASER AND
	 	COMMITMENTS OF RELATED
	CONDUIT PURCHASE
	 	$100,000,000
	 	LIQUIDITY BANK
	 	BANK PURCHASERS
	 	 	 	 	 	 	 
	Windmill
	 	 	 	ABN AMRO Bank N.V.
	 	$102,000,000
	 	 	 	 	 	 	 
	COMMITTED CONDUIT
	 	 
	 	 	 	COMMITMENT OF COMMITTED
	PURCHASER
	 	 	 	GROUP LIMIT
	 	CONDUIT PURCHASERS
	 	 	 	 	 	 	 
	None
	 	 	 	N/A
	 	N/A

B. NON-CONDUIT PURCHASERS

	 	 	 
	UNCOMMITTED NON- CONDUIT	 	 
	PURCHASER
	 	GROUP LIMIT
	 	 	 
	USF ASSURANCE
	 	$100,000,000

II-1

 

SCHEDULE III

ASSET BASED PERFORMANCE RATIOS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Delinquency	 	 	 	 
	Default Ratio
	 	Ratio
	 	Dilution Ratio
	 	Charge-Off Ratio

	6.5%
	 	 	7.5	%	 	 	15.0	%	 	 	1.0	%

III-1

 

SCHEDULE IV

FISCAL MONTHS

IV-1

 

Exhibit A

TO

RECEIVABLES SALE AGREEMENT

FORM OF INCREMENTAL PURCHASE REQUEST

______________, ______

ABN AMRO Bank N.V., as the Agent

Asset Securitization, Structured Finance

540 West Madison Street, 27th Floor

Mailcode C540-2721

Chicago, IL 60661

	 	 	 
	Re:

	 	Receivables Sale Agreement dated as of December 28, 2004
(the “Sale Agreement”) among USF Finance Company LLC, the Initial
Servicer, ABN AMRO Bank N.V., as Agent, the Purchaser Agents from
time to time party thereto and the Purchasers thereunder

Ladies and Gentlemen:

     The undersigned Seller under the above-referenced Sale Agreement hereby
confirms it has requested an Incremental Purchase of
$      by
[Purchaser] under the Sale Agreement. In the event the Uncommitted Purchasers
are unable or unwilling to make the requested Incremental Purchase, the Seller
hereby requests an Incremental Purchase of $       by the Related Bank
Purchasers under the Sale Agreement. The interest rates for such Incremental
Purchase will be governed by the Sale Agreement or the applicable Fee Letter
for each Purchaser, as appropriate.]

     Attached hereto as Schedule I is information relating to the proposed
Incremental Purchase required by the Sale Agreement. If on the date of this
Incremental Purchase Request (“Notice”), an Interim Liquidation is in effect,
this Notice revokes our request for such Interim Liquidation so that
Reinvestment Purchases shall immediately commence in accordance with Section
1.1(d) of the Sale Agreement.

     The Seller hereby certifies that both before and after giving effect to
[each of] the proposed Incremental Purchase[s] contemplated hereby and the use
of the proceeds therefrom, all of the requirements of Section 7.2 of the Sale
Agreement have been satisfied.

A - 1

 

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	USF Finance Company LLC
	 
	 	 	 	 
	

	 	By	 	 
	

	 	Title	 	 
	

	 	 	 	

A - 2

 

Schedule I

to

Incremental Purchase Requests

Summary of Information Relating to Proposed Sale(s)

     1. Dates, Amounts, Purchaser(s)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A1

	 	Date of Notice
	 	          	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A2

	 	Measurement Date (the last
Business Day of the Fiscal Month
immediately preceding the
month in which the Date of
Notice occurs)
	 	          	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A3

	 	Proposed Purchase Dates
(each of which is a
Business Day)
	 	          
	 	          
	 	          
	 	          	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A4

	 	Respective Proposed

Incremental Purchase on

each such Purchase Date
	 	$          
	 	$          
	 	$          
	 	$          	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	(each Incremental
Purchase must be in a
minimum amount of
$1,000,000 and multiples
thereof, or, if less, an
amount equal to the
Maximum Incremental
Purchase Amount)
	 	(A4A)
	 	(A4B)
	 	(A4C)
	 	(A4D)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A5

	 	Allocation among

Purchasers	 	 	 	 	 	 	 	 	 	 	 	 

A - 3

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	Conduit Purchasers
	 	$          
	 	 $          
	 	 $          
	 	$          	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	     Name of Related	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	     Bank	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	     Purchaser
	 	$          
	 	 $          
	 	 $          
	 	$          	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	Committed Non-Conduit

Purchasers
	 	$          
	 	 $          
	 	 $          
	 	$          	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	Uncommitted Non-Conduit

Purchasers
	 	$          
	 	 $          
	 	 $          
	 	$          	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A6

	 	Used Aggregate

Commitment Amount

(after such Incremental Purchase):
	 	 	 	 	 	 	 	$          	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A7

	 	Percentage Factor	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	Conduit Purchasers
	 	 	 	 	 	 	 	          %	 	 	 	 
	

	 	Related Bank Purchaser
	 	 	 	 	 	 	 	          %	 	 	 	 
	

	 	Committed Non-Conduit Purchaser
	 	 	 	 	 	 	 	          %	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Each proposed Purchase Date must be a Business Day and must occur no later than two weeks
after the Measurement Date set forth above.

A - 4

 

Exhibit C

TO

RECEIVABLES SALE AGREEMENT

FORM OF NOTIFICATION OF ASSIGNMENT TO WINDMILL

FROM THE WINDMILL COMMITTED PURCHASERS

                    ,                     

USF Finance Company LLC

8550 W. Bryn Mawr Avenue

Suite 700

Chicago, Illinois 60631

ABN AMRO Bank N.V., as Windmill Purchaser Agent

Asset Securitization, Structured Finance

540 West Madison Street, 27th Floor

Mailcode C540-2721

Chicago, IL 60661

Attn: Enhancement Bank-Windmill

[Insert Name and Address of each
   Windmill
Committed Purchaser]

	 	 	 
	Re:

	 	Receivables Sale Agreement dated as of December 28, 2004
(the “Sale Agreement”) among USF Finance Company LLC, the
Initial Servicer, ABN AMRO Bank N.V., as Agent, the Purchaser
Agents from time to time party thereto and the Purchasers
thereunder

Ladies and Gentlemen:

     The Windmill Purchaser Agent under the above-referenced Sale Agreement
hereby notifies each of you that Windmill has notified the Windmill Purchaser
Agent pursuant to Section 2.3 of the Sale Agreement that it will purchase from
the Windmill Committed Purchasers     on    (the
“Purchase Date”) that
portion of the Windmill Committed Purchasers’ Investments identified on
Schedule I hereto (the “Assigned Interest”). As further provided in Section
2.3 of the Sale Agreement, upon payment by Windmill to the Windmill Purchaser
Agent of the purchase price of such Investments described on Schedule I hereto,
effective as of the Purchase Date the assignment by the Windmill Committed
Purchasers to Windmill of the Assigned Interest shall be complete and all
payments thereon under the Sale Agreement shall be made to Windmill.

C - 1

 

     In accordance with the Sale Agreement, each Windmill Committed Purchaser’s
acceptance of the portion purchase price payable to it described on Schedule I
hereto constitutes its representation and warranty that it is the legal and
beneficial owner of the portion of the Assigned Interest related to its
Purchase Interest identified on Schedule I free and clear of any Adverse Claim
created or granted by it and that on the Purchase Date it is not subject to a
Bankruptcy Event.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	ABN AMRO Bank N.V., as Windmill
	 	 	   Purchaser Agent
	 
	 	 	 	 
	

	 	By	 	 
	

	 	Name	 	 
	

	 	 	 	

	

	 	Title	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	By	 	 
	

	 	Name	 	 
	

	 	 	 	

	

	 	Title	 	 
	

	 	 	 	

C - 2

 

SCHEDULE I

TO

NOTIFICATION OF ASSIGNMENT

Dated ___________, _________

I. Amount of Windmill Committed Purchaser Investment Assigned: $                    

II. Information for each Windmill Committed Purchaser.

	 	 	 	 	 	 	 	 	 
	Purchaser
	 	Purchased Percentage
	 	Purchase Price

	                    
	 	 	                    	 	 	 	                    	 
	                    
	 	 	                    	 	 	 	                    	 
	                    
	 	 	                    	 	 	 	                    	 
	                    
	 	 	                    	 	 	 	                    	 
	                    
	 	 	                    	 	 	 	                    	 

III. Information for Seller.

     Aggregate amounts of purchase price in excess of amount of Investment
assigned: $                    .

C - 3

 

Exhibit D

Form of Periodic Report

D - 1

 

Exhibit E

ADDRESSES AND NAMES OF SELLER AND ORIGINATORS

     1. Locations. (a) The chief executive office of the Seller and the
Originators are located at the following addresses:

	 	 	 
	Seller:

	 	8550 W. Bryn Mawr Avenue
	

	 	Chicago, IL 60631
	 
	 	 
	USF Reddaway Inc.:

	 	16277 SE 130th Avenue
	

	 	Clackamas, OR 97015
	 
	 	 
	USF Holland Inc.:

	 	750 E. 40th Street
	

	 	Holland, MI 49423

No such address was different at any time since December 1, 1999.

     (b) The following are all the locations where the Seller and the
Originators directly or through its agents maintain any Records:

	 	 	 
	Same as (a) above, plus for Seller:
	 
	 	 
	

	 	16277 SE 130th Avenue
	

	 	Clackamas, OR 97015
	 
	 	 
	and
	 	 
	 
	 	 
	

	 	750 E. 40th Street
	

	 	Holland, MI 49423
	 
	 	 
	and for each of USF Reddaway Inc. and USF Holland Inc.:
	 
	 	 
	

	 	8550 W. Bryn Mawr Avenue
	

	 	Chicago, IL 60631

     2. Names. The following is a list of all names (including trade names or
similar appellations) used by the Seller and the Originators or any of its
divisions or other business units:

	 	 	 
	

	 	USF Finance Company LLC
	

	 	USF Reddaway Inc.
	

	 	USF Holland Inc.
	

	 	US Freightways

E - 1

 

Exhibit F

FORM OF BERMUDA COUNSEL OPINION

F - 1

 

Exhibit G

LOCK BOXES AND LOCK-BOX BANKS

	 	 	 	 	 	 	 	 	 
	BANK	 	LOCK-BOX ADDRESSES	 	ACCOUNT NUMBER
	USF Reddaway
	 	P.O. Box 31001-0890	 	 	 	 
	 
	 	Pasadena, CA  91110-0890	 	 	1017300995	 
	 
	 	 	 	 	 	 	 	 
	PNC Bank
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	USF Holland
	 	Standard Federal Bank NA	 	 	105430407	 
	 
	 	Drawer #5833	 	 	 	 
	Standard Federal Bank NA
	 	PO Box 79001	 	 	 	 
	 
	 	Detroit, MI  48279-5833	 	 	 	 

G - 1

 

Exhibit H

TO RECEIVABLES SALE AGREEMENT

FORM OF LOCK BOX AGREEMENT

H - 1

 

Exhibit I

TO RECEIVABLES SALE AGREEMENT

COMPLIANCE CERTIFICATE

To:      ABN AMRO Bank N.V., as Agent, and each Purchaser

     This Compliance Certificate is furnished pursuant to Section [5.1(a)(iii)]
of the Receivables Sale Agreement, dated as of December 28, 2004 (as amended,
supplemented or otherwise modified through the date hereof, the “Sale
Agreement”), among USF Finance Company LLC, the Initial Servicer, the Agent,
the Purchaser Agents from time to time party thereto and the Purchasers
thereunder. Terms used in this Compliance Certificate and not otherwise
defined herein shall have the respective meanings ascribed thereto in the Sale
Agreement.

     The undersigned hereby represents, warrants, certifies and confirms that:

     1. The undersigned is a duly elected Designated Financial Officer of
the undersigned.

     2. Attached hereto is a copy of the financial statements described
in Section 5.1(a)(i) or 5.1(a)(ii) of the Sale Agreement.

     3. The undersigned has reviewed the terms of the Transaction
Documents and has made, or caused to be made under his/her supervision, a
detailed review of the transactions and the conditions of the Seller and
the Originators during and at the end of the accounting period covered by
the attached financial statements.

     4. The examinations described in paragraph 3 hereof did not
disclose, and the undersigned has no knowledge of, the existence of any
condition or event which constitutes a Potential Termination Event,
during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Compliance Certificate,
except as set forth below.

     Described below are the exceptions, if any, to paragraph 4 listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action the undersigned has taken, is taking or proposes to take
with respect to each such condition or event:

     The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered this    day of
   ,    .

I - 1

 

	 	 	 	 	 
	 	 	[Name of Seller or Originator]
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Designated Financial Officer

I - 2

 

Exhibit J

CREDIT AND COLLECTION POLICIES

I - 3

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