AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
DATED AS OF DECEMBER 1, 2005
AMONG
BOWATER INCORPORATED AND BOWATER AMERICA INC.,
AS SELLERS,
AND
BOWATER FUNDING INC.,
AS BUYER
TABLE OF CONTENTS
PAGE
ARTICLE I AMOUNTS AND TERMS OF CONTRIBUTIONS AND PURCHASES....................2
Section 1.1 Contribution of Certain Receivables............................2
Section 1.2 Purchases of Other Receivables.................................2
Section 1.3 Payment for the Purchases......................................5
Section 1.4 Purchase Price Credit Adjustments..............................6
Section 1.5 Payments and Computations, Etc.................................6
Section 1.6 License of Software............................................7
Section 1.7 Characterization...............................................7
ARTICLE II REPRESENTATIONS AND WARRANTIES.....................................8
Section 2.1 Representations and Warranties of Each Seller..................8
(a) Existence and Power..................................................8
(b) Power and Authority; Due Authorization, Execution and Delivery.......9
(c) No Conflict..........................................................9
(d) Governmental Authorization...........................................9
(e) Actions, Suits.......................................................9
(f) Binding Effect.......................................................9
(g) Accuracy of Information.............................................10
(h) Use of Proceeds.....................................................10
(i) Good Title..........................................................10
(j) Perfection..........................................................10
(k) Chief Executive Office and Locations of Records.....................11
(l) LockBoxes, Etc......................................................11
(m) Seller Material Adverse Effect......................................11
(n) Names...............................................................11
(o) Ownership...........................................................11
(p) Not a Holding Company or an Investment Company......................11
(q) Compliance with Law.................................................11
(r) Compliance with Credit and Collection Policy........................12
(s) Payments to Seller..................................................12
(t) Enforceability of Contracts.........................................12
(u) Accounting..........................................................12
(v) Solvency............................................................12
ARTICLE III CONDITIONS OF PURCHASE...........................................12
Section 3.1 Conditions Precedent to Initial Purchase......................12
Section 3.2 Conditions Precedent to Subsequent Payments...................12
ARTICLE IV COVENANTS.........................................................13
Section 4.1 Affirmative Covenants of Each Seller..........................13
(a) Financial Reporting.................................................13
(i) Annual Reporting.................................................13
(ii) Quarterly Reporting...........................................13
(iii) Compliance Certificate........................................14
(iv) Change in Credit and Collection Policy........................14
(v) Other Information................................................14
(b) Notices.............................................................14
(i) Termination Events or Unmatured Termination Events...............14
(ii) Judgment and Proceedings......................................14
(iii) Seller Material Adverse Effect................................14
(c) Compliance with Laws and Preservation of Existence..................14
(d) Audits..............................................................15
(e) Keeping and Marking of Records and Books............................15
(f) Compliance with Contracts and Credit and Collection Policy..........16
(g) Ownership...........................................................16
(h) Agents' and Lenders' Reliance.......................................16
(i) Collections.........................................................16
(j) Taxes...............................................................17
Section 4.2 Negative Covenants of Each Seller.............................17
(a) Name Change, Offices and Records....................................17
(b) Change in Payment Instructions to Obligors..........................17
(c) Modifications to Contracts and Credit and Collection Policy.........17
(d) Sales, Adverse Claims...............................................17
(e) Accounting for Purchases............................................18
ARTICLE V TERMINATION EVENTS.................................................18
Section 5.1 Termination Events............................................18
Section 5.2 Remedies......................................................19
ARTICLE VI INDEMNIFICATION...................................................20
Section 6.1 Indemnities by Sellers........................................20
Section 6.2 Other Costs and Expenses......................................22
Section 6.3 Taxes.........................................................22
ARTICLE VII MISCELLANEOUS....................................................23
Section 7.1 Waivers and Amendments........................................23
Section 7.2 Notices.......................................................23
Section 7.3 Protection of Ownership Interests of Buyer....................23
Section 7.4 Confidentiality...............................................24
Section 7.5 Bankruptcy Petition...........................................25
Section 7.6 Return of Funds Not Constituting Collections..................25
Section 7.7 CHOICE OF LAW.................................................25
Section 7.8 CONSENT TO JURISDICTION.......................................25
Section 7.9 WAIVER OF JURY TRIAL..........................................26
Section 7.10 Integration; Binding Effect; Survival of Terms.............26
Section 7.11 Counterparts; Severability; Section References.............26
EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II - Jurisdictions of Organization; Chief
Executive Offices; Principal Places of
Business; Locations of
Records; Organizational Identification
Numbers; Other Names
Exhibit III - LockBoxes and LockBox Accounts
Exhibit IV - Form of Compliance Certificate
Exhibit V-1 - Form of Purchase Price Loan Note
Exhibit V-2 - Form of Subordinated Note
Exhibit VI Form of Purchase Report
Exhibit VII Credit and Collection Policy
Exhibit VIII ......... Form of Letter of Credit Request
Schedule A List of Documents to Be Delivered to Buyer
Prior to the Initial Purchase
AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
THIS AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT, dated as of December
1, 2005, is by and among Bowater Incorporated, a Delaware corporation (together
with its successors, "Bowater" or a "Seller"), Bowater America Inc., a Delaware
corporation (together with its successors, "BAI" or a "Seller"), and Bowater
Funding Inc., a Delaware corporation (together with its successors, "Buyer").
Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit I hereto (or, if not defined
in Exhibit I hereto, the meaning assigned to such term in the Loan Agreement).
This Agreement amends and restates in its entirety that certain Receivables Sale
Agreement dated as of December 19, 2002 among the parties (the "Existing
Agreement").
PRELIMINARY STATEMENTS
Bowater now owns, and from time to time hereafter will own,
Receivables. Bowater wishes to sell to BAI, and BAI wishes to sell and
contribute to Buyer (each of Buyer and BAI being sometimes hereinafter
referred to as a "Transferee" with respect any such sale or contribution),
all of their respective right, title and interest in and to all Receivables
originated by Bowater from and after the Initial Cutoff Date through and
including the Termination Date, together with the Related Security and
Collections with respect thereto.
In addition, BAI now owns, and from time to time hereafter will own,
Receivables. BAI wishes to sell and contribute to Buyer, all of its right,
title and interest in and to all Receivables originated by BAI from and
after the Initial Cutoff Date through and including the Termination Date,
together with the Related Security and Collections with respect thereto.
Each of the parties hereto intends the transactions contemplated
hereby to be true sales or true contributions by the applicable Seller to
the applicable Transferee of the Receivables originated or acquired (in
each case, as applicable) by it, providing the applicable Transferee with
the full benefits of ownership of such Receivables, and none of the parties
intends these transactions to be, or for any purpose to be characterized
as, loans from any of the Transferees to any of the Sellers.
Buyer plans to finance its purchases of Receivables hereunder by
borrowing under that certain Amended and Restated Loan Agreement dated as
of December 1, 2005 (as the same may from time to time hereafter be
amended, supplemented, restated or otherwise modified, the "Loan
Agreement") among (a) Buyer, as borrower, (b) Bowater, as initial servicer,
(c) Three Pillars Funding LLC, Variable Funding Capital Company LLC,
SunTrust Bank and Wachovia Bank, National Association, as lenders (together
with their respective successors and assigns, the "Lenders"), (d) SunTrust
Bank and Wachovia Bank, National Association, as "LC Issuers," (e) SunTrust
Capital Markets, Inc. and Wachovia
Bank, National Association, as "Co-Agents," and (f) SunTrust Capital
Markets, Inc., as administrative agent (in such capacity, together with its
successor and assigns in such capacity, the "Administrative Agent" and,
together with the Co-Agents, the "Agents").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF CONTRIBUTIONS AND PURCHASES
Section 1.1 Contribution of Certain Receivables.
(a) Effective on December 19, 2002, BAI contributed, assigned,
transferred, set-over and otherwise conveyed to Buyer, and Buyer accepted
from BAI as a contribution to Buyer's capital, all Receivables originated
by BAI that could not be purchased with cash or the proceeds of a
Subordinated Loan in accordance with the limitation specified in Section
1.2(c) of the Existing Agreement (such Receivables, the "Initial
Contributed Receivables"), together with all Related Security relating
thereto and all Collections thereof. The Initial Contributed Receivables
had an aggregate Outstanding Balance as of the Initial Cutoff Date of not
less than $100,000,000.
(b) Any Seller may from time to time, at its option, by notice to the
applicable Transferee on or prior to the date of the proposed contribution,
identify Receivables which it proposes to contribute to such Transferee as
a capital contribution. On the date of each such contribution and after
giving effect thereto, such Transferee shall own the Receivables so
identified and contributed (collectively, the "Contributed Receivables"),
together with all Related Security relating thereto and all Collections
thereof.
Section 1.2 Purchases of Other Receivables.
(a) Effective on December 19, 2002:
(i) in consideration for the Purchase Price paid to Bowater and upon
the terms and subject to the conditions set forth herein: (A) Bowater sold,
assigned, transferred, set-over and otherwise conveyed to BAI, without
recourse (except to the extent expressly provided herein), and (B) BAI
purchased from Bowater, all of Bowater's right, title and interest in and
to all Receivables originated by Bowater and existing as of the close of
business on the Initial Cutoff Date, together with all Related Security
relating thereto and all Collections thereof; and
(ii) in consideration for the Purchase Price paid to BAI and upon the
terms and subject to the conditions set forth herein: (A) BAI sold,
assigned, transferred, set-over and otherwise conveyed to Buyer, without
recourse (except to the extent expressly provided herein), and (B) Buyer
purchased from BAI, all of BAI's right, title and interest in and to all
Receivables (1) originated by Bowater and (2) originated by BAI (other than
the Initial Contributed Receivables), and existing as of the close of
business on the Initial Cutoff Date, in each case, together with all
Related Security relating thereto and all Collections thereof.
(b) On each Purchase Date after December 19, 2002:
(i) in consideration for the Purchase Price paid to Bowater and upon
the terms and subject to the conditions set forth herein: (A) Bowater does
hereby sell, assign, transfer, set-over and otherwise convey to BAI,
without recourse (except to the extent expressly provided herein), and (B)
BAI shall purchase from Bowater, all of Bowater's right, title and interest
in and to all Receivables originated by Bowater and existing as of the
close of business on the Business Day immediately prior to such Purchase
Date (other than any Contributed Receivables and Receivables previously
sold pursuant to this Agreement), in each case, together with all Related
Security relating thereto and all Collections thereof; and
(ii) in consideration for the Purchase Price paid to BAI and upon the
terms and subject to the conditions set forth herein: (A) BAI does hereby
sell, assign, transfer, set-over and otherwise convey to Buyer, without
recourse (except to the extent expressly provided herein), and (B)
Buyer does hereby purchase from BAI, all of BAI's right, title and interest
in and to all Receivables originated by either Bowater or BAI (other than
the Initial Contributed Receivables, any Contributed Receivables and
Receivables previously sold pursuant to this Agreement) and existing as of
the close of business on the Business Day immediately prior to such
Purchase Date, in each case, together with all Related Security relating
thereto and all Collections thereof.
(c) Each Transferee shall be obligated to pay the applicable Seller the
Purchase Price for the Receivables purchased by it hereunder:
(i) in immediately available funds,
(ii) if Bowater has delivered a Letter of Credit Request to BAI, by
BAI's causing a Letter of Credit to be issued, and if BAI has
delivered a Letter of Credit Request to the Buyer, by Buyer's
obtaining and delivery of a Letter of Credit pursuant to the Loan
Agreement (in each case, with the issuance of such Letter of
Credit constituting a payment of Purchase Price in an amount
equal to the sum of (A) the LC Commission, plus (B) the face
amount of such Letter of Credit),
(iii) by delivery to such Seller of the proceeds of a loan from such
Seller to such Transferee (each, a "Purchase Price Loan") in an
amount not to exceed the least of (A) the remaining unpaid
portion of such Purchase Price, (B) the maximum Purchase Price
Loan that could be borrowed without rendering the Net Worth less
than the Required Capital Amount, and (C) fifteen percent (15%)
of such Purchase Price, and/or
(iv) unless the Termination Date has occurred, by accepting a
contribution to its capital in an amount equal to the remaining
unpaid balance of such Purchase Price.
Each Purchase Price Loan made by Bowater to BAI shall be a senior loan,
and all such senior Purchase Price Loans shall be evidenced by a grid
promissory note in the form of Exhibit V-1 hereto (the "Purchase Price
Loan Note"). Each Purchase Price Loan made by BAI to the Buyer shall be
a subordinated loan (each, a "Subordinated Loan"), and all such
Subordinated Loans shall be evidenced by a single grid promissory note
in the form of Exhibit V-2 hereto (the "Subordinated Note"). Bowater is
hereby authorized by BAI to endorse on the schedule attached to the
Purchase Price Loan Note an appropriate notation evidencing the date
and amount of each advance thereunder, as well as the date of each
payment with respect thereto, provided that the failure to make such
notation shall not affect any obligation of BAI thereunder. BAI is
hereby authorized by Buyer to endorse on the schedule attached to the
Subordinated Note an appropriate notation evidencing the date and
amount of each advance thereunder, as well as the date of each payment
with respect thereto, provided that the failure to make such notation
shall not affect any obligation of Buyer thereunder. On each Reporting
Date, each Seller shall (or shall require Servicer to) deliver to the
applicable Transferee (with a copy to the Administrative Agent, as
Buyer's pledgee, if requested by the Administrative Agent) a report in
substantially the form of Exhibit VI hereto (each such report being
herein called a "Purchase Report") with respect to the Receivables sold
or contributed by such Seller during the Calculation Period then most
recently ended. In addition to, and not in limitation of, the
foregoing, in connection with the payment of the Purchase Price for any
Receivables purchased hereunder, each applicable Transferee may request
that the applicable Seller deliver, and such Seller shall deliver, such
information or documents as such Transferee may reasonably request.
(d) It is the intention of the parties hereto that each sale or
contribution of Receivables to a Transferee pursuant to the Existing Agreement
or this Agreement shall constitute a true sale or contribution or other absolute
transfer and assignment, which sale, contribution, transfer or assignment is
absolute and irrevocable and provides the applicable Transferee with the full
benefits of ownership of the Receivables. Except for the Purchase Price Credits
owed to the applicable Seller pursuant to Section 1.4, each sale of Receivables
under the Existing Agreement or hereunder by a Seller is made without recourse
to such Seller; provided, however, that (i) such Seller shall be liable to the
applicable Transferee and each of its assigns for all representations,
warranties, covenants and indemnities made by such Seller pursuant to the terms
of the Transaction Documents
to which such Seller is a party, and (ii) no such sale constitutes, or is
intended to result in, an assumption by any Transferee or any assignee thereof
of any obligation of such Seller or any other Person arising in connection with
the Receivables, the related Contracts and/or other Related Security or any
other obligations of such Seller. In view of the intention of the parties hereto
that each sale or contribution of Receivables made hereunder shall constitute a
true sale or contribution of such Receivables rather than a loan secured
thereby, each Seller, in accordance with Section 4.1(e)(ii), has
------------------ marked its master data processing records relating to the
Receivables with a legend stating that "The accounts receivable of Bowater
Incorporated and Bowater America Inc. reflected herein have been sold or
contributed, directly or indirectly, to Bowater Funding Inc. (`SPC'), and a
security interest in such receivables has been granted by SPC to SunTrust
Capital Markets, Inc., as administrative agent for various parties" and to note
in its financial statements that its Receivables have been sold or contributed
to the applicable Transferee. Upon the request of any Transferee or the
Administrative Agent, each Seller will prepare and file such financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate to perfect and
maintain the perfection of its applicable Transferee's (and ultimately, Buyer's)
ownership interest in the Receivables and the Related Security that is subject
to Article 9 of the UCC and Collections with respect thereto, or as any
Transferee or the Administrative Agent may reasonably request.
Section 1.3 Payment for the Purchases.
(a) The Purchase Price for each Purchase occurring on December 19,
2002 was paid in full by the applicable Transferee to the applicable Seller
on such date in the manner described in Section 1.2(c) of the Existing
Agreement. The Purchase Price for each Receivable coming into
-------------- existence after the Initial Cutoff Date shall be due and
owing in full (but not necessarily payable) by the applicable Transferee to
the applicable Seller or its designee on the Purchase Date immediately
following the Business Day on which such Receivable comes into existence
(except that each Transferee may, with respect to any such Purchase Price,
offset against such Purchase Price any amounts owed by such Seller to such
Transferee hereunder and which have become due but remain unpaid) and shall
be paid to such Seller in the manner provided in the following paragraphs
(b), (c) and (d).
(b) With respect to each Receivable (other than a Contributed
Receivable) coming into existence after the Initial Cutoff Date, on each
Settlement Date, each applicable Transferee shall pay the applicable Seller
the Purchase Price therefor, in accordance with Sections 1.2(c) and 1.3(d).
(c) From and after the Termination Date, no Seller shall be obligated
to but may, at its option) sell or contribute Receivables to any
Transferee.
(d) Although the Purchase Price for each Receivable coming into
existence after the Initial Cutoff Date shall be due and owing in full by
the applicable Transferee to the applicable Seller on the Purchase Date
immediately following the Business Day on
which such Receivable comes into existence, to the extent that the
obligation to pay Purchase Price is not satisfied through arranging the
issuance of a Letter of Credit, settlement of the Purchase Price between
each Transferee and its applicable Seller shall be effected on a monthly
basis on Settlement Dates with respect to all Receivables originated during
the same Calculation Period and based on the information contained in the
applicable Purchase Report delivered by or on behalf of such Seller for the
Calculation Period then most recently ended. Although settlement shall be
effected on Settlement Dates, any contribution of capital by a Seller to
its Transferee made pursuant to Section 1.3(b) shall be deemed to have
occurred -------------- and shall be effective as of the last Business Day
of the Calculation Period to which such settlement relates.
Section 1.4 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of any Receivable purchased from a Seller
is:
(i) reduced as a result of any defective, rejected or returned
goods or services, any discount or adjustment or otherwise by such
Seller (other than a reduction in such Outstanding Balance resulting
from (A) cash Collections received by the applicable Transferee or by
its assigns or Servicer, on such Transferee's behalf, on account of
such Receivable's Outstanding Balance, or (B) any reserve established
against or write-off of such Receivable that is made due to its
becoming a Defaulted Receivable or otherwise based on the
uncollectibility of such Receivable on account of the insolvency,
bankruptcy, lack of creditworthiness or financial inability to pay of
the applicable Obligor), or
(ii) reduced (in whole or in part) as a result of a setoff in
respect of any claim by any Person (whether such claim arises out of
the same or a related transaction or an unrelated transaction), or
(b) any of such Seller's representations and warranties set forth in
Sections 2.1(i), (j), (r), (s), (t), the second sentence of Section 2.1(q)
hereof and the last sentence of Section 2.1(c) are not true when made or
deemed made with respect to any Receivable,
then, in such event, the applicable Transferee shall be entitled to a credit
(each, a "Purchase Price Credit") against the Purchase Price otherwise payable
to such Seller hereunder equal to (x) in the case of a reduction under the
preceding clause (a)(i) or (ii), the amount of such whole or partial reduction,
and (y) in the case of a misrepresentation described in the preceding clause
(b), the full Outstanding Balance of such Receivable. In any event described in
clause (a)(i) or (a)(ii), the applicable Transferee shall deem this Receivable
collected. If such Purchase Price Credit owing to a Transferee by its applicable
Seller exceeds the aggregate Original Balance of the Receivables originated on
any day by such Seller, such Seller shall pay the remaining amount of such
Purchase Price Credit in cash (i) if the Termination Date has not occurred, not
later than the next Settlement Date, and (ii) if the Termination Date has
occurred, immediately.
Section 1.5 Payments and Computations, Etc. All amounts to be paid or
deposited by a Transferee hereunder shall be paid or deposited in accordance
with the terms
1
hereof on the day when due in immediately available funds to the account of the
applicable Seller designated from time to time by such Seller or as otherwise
directed by such Seller. In the event that any payment owed by any Person
hereunder becomes due on a day that is not a Business Day, then such payment
shall be made on the next succeeding Business Day. If any Person fails to pay
any amount hereunder when due, such Person agrees to pay, on demand, the Default
Fee in respect thereof until paid in full; provided, however, that such Default
Fee shall not at any time exceed the maximum rate permitted by applicable law.
All computations of interest payable hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed.
Section 1.6 License of Software.
(a) To the extent that any software used by a Seller to account
for the Receivables transferred by it is non-transferable, each Seller
hereby grants to its Transferee, such Transferee's assigns, the
Administrative Agent and Servicer an irrevocable, non-exclusive
license to use, without royalty or payment of any kind, all such
software used by such Seller to account for such Receivables, to the
extent necessary to administer such Receivables, whether such software
is owned by such Seller or is owned by others and used by such Seller
under license agreements with respect thereto, provided that should
the consent of any licensor of such software be required for the grant
of the license described herein, to be effective, such Seller hereby
agrees that upon the request of its Transferee (or its assigns), such
Seller will use its reasonable efforts to obtain the consent of such
third-party licensor. The license granted hereby shall be irrevocable
until the later to occur of (i) indefeasible payment in full of the
Obligations (as defined in the Loan Agreement), and (ii) the date on
which each of this Agreement and the Loan Agreement terminates in
accordance with its terms.
(b) Upon the request to any Seller by its Transferee and/or the
Administrative Agent (as the ultimate assignee), such Seller (i) shall
take such action that may be necessary or appropriate to ensure that
Buyer has an enforceable ownership interest in the records included in
the Receivable Files relating to the Receivables, and (ii) shall use
its reasonable efforts to ensure that each of the Buyer, the
Administrative Agent and the Servicer has an enforceable right
(whether by license or sublicense or otherwise) to use all of the
computer software used to account for such Receivables and/or to
recreate such records.
Section 1.7 Characterization. If, notwithstanding the intention of the
parties expressed in Section 1.2(d), any sale or contribution by a Seller of
Receivables hereunder shall be characterized as a secured loan and not a sale or
such sale shall for any reason be ineffective or unenforceable, then this
Agreement shall be deemed to constitute a security agreement under the UCC and
other applicable law. For this purpose and without being in derogation of the
parties' intention that each transfer of Receivables by a Seller hereunder shall
constitute a true sale thereof: each Seller hereby grants to its applicable
Transferee and its assigns a valid and continuing security interest in all of
such Seller's right, title and interest in, to and under all Receivables
originated or acquired by such Seller which are now existing or hereafter
arising and are intended to be sold or contributed to such Transferee in
accordance with the terms of this
2
Agreement, all Collections and Related Security with respect thereto, all other
rights and payments relating to such Receivables and all proceeds of the
foregoing to secure the prompt and complete payment of a loan deemed to have
been made in an amount equal to the Purchase Price of the Receivables purchased
from such Seller together with all other obligations of such Seller hereunder,
which security interest shall be prior to all other Adverse Claims thereto.
Furthermore, to the extent that any Seller has been granted a security interest
pursuant to this Section 1.7, such Seller hereby grants a valid and continuing
security interest in such security interest to its applicable Transferee and
such Transferee's assigns. The applicable Transferee and its assigns shall have,
in addition to the rights and remedies which they may have under this Agreement,
all other rights and remedies provided to a secured creditor under the UCC and
other applicable law, which rights and remedies shall be cumulative.
Section 1.8 Extensions of Letters of Credit. From time to time prior to the
Termination Date:
(a) Letters of Credit may be automatically extended by their terms,
whereupon each applicable Seller who originally requested the issuance of such
Letter of Credit shall pay to its applicable Transferee the applicable L/C
Commission (which payment may be made in cash, by reduction of the Purchase
Price Loans owing to such Seller, or through reduction of the Purchase Price
otherwise payable to such Seller on such date by such Transferee pursuant to
this Agreement).
(b) In addition to automatic extensions described in Section 1.8(a), each
Seller may request that its applicable Transferee arrange for the extension of a
Letter of Credit with a fixed expiration date, whereupon such Transferee shall
arrange or, as applicable, shall request the Buyer to arrange, for the extension
of the expiration date of such Letter of Credit, and the Buyer shall obtain and
deliver such extension. If the applicable LC Issuer (with the consent of each of
the Co-Agents), agrees to such extension, each applicable Seller shall pay its
applicable Transferee the applicable LC Commission (which payment may be made in
cash, by reduction of the Purchase Price Loans owing to such Seller, or through
reduction of the Purchase Price otherwise payable to such Seller on such date by
such Transferee pursuant to this Agreement).
Section 1.9 Expiration of Letters of Credit. In the event that any Letter
of Credit expires without being fully drawn or is surrendered for cancellation
without being fully drawn, Buyer shall promptly pay to BAI (and, if applicable,
BAI shall promptly pay to Bowater) an amount equal to the undrawn balance of
such Letter of Credit. The amount of such payment shall be paid in cash to the
extent of its available funds or, in case of a payment owing by Buyer, at
Buyer's election, by adding the amount to be paid to the outstanding balance
under the Subordinated Note provided the aggregate outstanding principal balance
thereunder resulting from such addition does not exceed the maximum amount
permitted under Section 1.2(c).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Each Seller. Each Seller
hereby represents and warrants to its applicable Transferee and its assigns on
December 19, 2002 and on each Purchase Date thereafter as to such Seller and the
Receivables transferred by it that:
(a) Existence and Power. Such Seller is duly organized under the laws of
its jurisdiction of organization specified in Exhibit II hereto. Such Seller is
validly existing and in good standing under the laws of its jurisdiction of
organization and is duly qualified to do business and is in good standing as a
foreign corporation and has and holds all corporate or company power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted except
where the failure to so qualify or so hold could not reasonably be expected to
have a Seller Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery. The
execution and delivery by such Seller of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder, and such Seller's use of the proceeds of
each Purchase made from it hereunder, are within its corporate powers and
authority and have been duly authorized by all necessary action on its part.
This Agreement and each other Transaction Document to which such Seller is a
party has been duly executed and delivered by such Seller.
(c) No Conflict. The execution and delivery by such Seller of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its Organizational Documents, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Seller or its Subsidiaries (except as
created hereunder)except, in any case set forth in clause (ii)-(iv) above, where
such contravention or violation could not reasonably be expected to have a
Seller Material Adverse Effect. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by such Seller of this Agreement
and each other Transaction Document to which it is a party and the performance
of its obligations hereunder and thereunder.
(e) Actions, Suits. There is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of its
Senior Executives, threatened against or affecting such Seller or any of its
Subsidiaries that, if adversely
4
determined, would have a Seller Material Adverse Effect or which seeks to
prevent, enjoin or delay any Purchase.
(f) Binding Effect. This Agreement and each other Transaction Document to
which such Seller is a party constitute the legal, valid and binding obligations
of such Seller enforceable against such Seller in accordance with their
respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) Accuracy of Information.
(i) All written representations, warranties, reports or certificates of any
Seller's Senior Executives heretofore furnished by such Seller to its applicable
Transferee (or its assigns) for purposes of or in connection with this
Agreement, any of the other Transaction Documents or any transaction
contemplated hereby or thereby are, and all such written representations,
warranties, reports or certificates hereafter furnished by such Seller to its
applicable Transferee (or its assigns) shall be, complete and correct and fairly
present the information contained therein as of the date such information is
certified and do not and will not contain any material misstatement of fact as
of such date or omit to state a material fact or any fact necessary to make the
information contained therein, taken as a whole with all other written or verbal
information provided by such Seller's Senior Executives as of such date, not
misleading.
(ii) To the best of such Seller's knowledge, all verbal information
furnished by any Senior Executive of such Seller to its applicable Transferee
(or its assigns) for purposes of or in connection with this Agreement, any of
the other Transaction Documents or any transaction contemplated hereby or
thereby are, and all such verbal information hereafter furnished by any Senior
Executive of such Seller to its applicable Transferee (or its assigns) shall be,
complete and correct as of the date when made and will not contain any material
misstatement of fact as of such date or omit to state a material fact or any
fact necessary to make such information, taken as a whole with all other written
or verbal information provided by such Seller's Senior Executives as of such
date, not misleading.
(h) Use of Proceeds. No portion of any Purchase Price payment hereunder
will be used for a purpose that violates, or would be inconsistent with, any
law, rule or regulation applicable to such Seller.
(i) Good Title. Immediately prior to each Purchase from such Seller
hereunder and upon the creation of each Receivable originated after the Initial
Cut-Off Date, such Seller (i) is the legal and beneficial owner of such
Receivable and the Collections with respect thereto and (ii) is the legal and
beneficial owner of the Related Security with respect thereto or possesses a
valid and perfected security interest therein, in each case, free and clear of
any Adverse Claim, except as created by the Transaction Documents and the Loan
Agreement.
(j) Perfection. This Agreement, together with the filing of the financing
statements contemplated hereby, is effective to transfer to such Seller's
applicable Transferee
5
(and such Transferee shall acquire from such Seller): (i) legal and equitable
title to, with the right to sell and encumber each Receivable originated or
acquired by such Seller, whether now existing and hereafter arising, together
with the Collections with respect thereto, and (ii) all of such Seller's right,
title and interest in the Related Security associated with each such Receivable,
in each case, free and clear of any Adverse Claim, except as created by the
Transactions Documents and the Loan Agreement. There have been duly filed all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect
Buyer's ownership interest in such Receivables, the Related Security and the
Collections.
(k) Chief Executive Office and Locations of Records. The location of the
chief executive office of such Seller and the offices where it keeps all of its
Receivable Files are located at the address(es) listed on Exhibit II or such
other locations of which Buyer has been notified in accordance with Section
4.2(a) in jurisdictions where all action required by Section 4.2(a) has been
taken and completed. Such Seller's Organizational Identification Number is
correctly set forth on Exhibit II.
(l) LockBoxes, Etc. The addresses of all existing LockBoxes and the related
banks, account names and account numbers for all existing LockBox Accounts are
correctly listed on Exhibit III. Each of the LockBox Accounts has been
transferred into Buyer's name. Such Seller has not granted any Person, other
than Buyer (and the Administrative Agent, as its pledgee) dominion and control
of any LockBox or LockBox Account, or the right to take dominion and control of
any such LockBox or LockBox Account at a future time or upon the occurrence of a
future event.
(m) Seller Material Adverse Effect. Since the last day of the fiscal year
of such Seller as to which financial statements have most recently been
delivered pursuant to Section 4.1(a)(i), no event has occurred and is continuing
that would have a Seller Material Adverse Effect.
(n) Names. The name in which such Seller has executed this Agreement is
identical to the name of such Seller as indicated on the public record of its
jurisdiction of organization as listed on Exhibit II hereto. In the past five
(5) years, such Seller has not used any legal names, trade names or assumed
names other than the name in which it has executed this Agreement and as listed
on Exhibit II.
(o) Ownership. Bowater owns 100% of the issued and outstanding equity
interests of BAI, and BAI owns 100% of the issued and outstanding equity
interests of Buyer. All such equity interests are validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of any Seller (other than Bowater) or Buyer.
(p) Not a Holding Company or an Investment Company. Such Seller is not a
"holding company" or a "subsidiary holding company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or any successor
statute. Such Seller is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or any successor statute.
(q) Compliance with Law. Such Seller has complied with all applicable laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it is subject, except where the failure to so comply would not have a
Seller Material Adverse Effect. Each Receivable transferred by such Seller,
together with the Contract related thereto, does not contravene any laws, rules
or regulations applicable thereto (including, without limitation, laws, rules
and regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy), and no part of such Contract is in violation of any such law, rule or
regulation, except where such contravention or violation could not reasonably be
expected to have a Seller Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. With regard to each
Receivable transferred by such Seller, such Seller has complied in all material
respects with the Credit and Collection Policy and the related Contract. Such
Seller has not made any change in or amendment to the Credit and Collection
Policy, except (i) to the extent such change or amendment would not be
reasonably likely to materially and adversely affect the collectibility of
Receivables transferred by such Seller or to materially decrease the credit
quality of any newly created Receivables in any material respect or (ii) to the
extent such change or amendment has been consented to by the Buyer and the
Co-Agents.
(s) Payments to Seller. With regard to each Receivable sold by such Seller,
the Purchase Price received by such Seller constitutes reasonably equivalent
value in consideration therefor. No transfer hereunder by such Seller of any
Receivable is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. xx.xx. 101 et seq.), as amended.
(t) Enforceability of Contracts. As of the Purchase Date of each Receivable
transferred by such Seller, each Contract with respect to such Receivable is, on
such date, effective to create, and has created, a legally valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) Accounting. The manner in which such Seller accounts for the
transactions contemplated by this Agreement in its financial statements does not
jeopardize the characterization of the transactions contemplated herein as being
true sales.
(v) Solvency. Such Seller is Solvent.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Initial Purchase. The initial Purchase
under this Agreement is subject to the conditions precedent that (a) Buyer shall
have been capitalized with the Initial Contributed Receivables and not less than
$300,000 of cash, (b) Buyer shall have received on or before December 19, 2002
those documents listed on Schedule A, and (c) all of the conditions to the
initial Loan under the Loan Agreement shall have been satisfied or waived in
accordance with the terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments. Each applicable
Transferee's obligation to pay for Receivables coming into existence after the
Initial Cutoff Date shall be subject to the further conditions precedent that:
(a) the Commitment Termination Date shall not have occurred under the Loan
Agreement; (b) Buyer (and the Administrative Agent as its pledgee) shall not
have received written notice that the indebtedness under the Bowater Credit
Agreement has been accelerated (it being understood that this condition
precedent cannot be waived by Buyer or its assigns); (c) Buyer (or its assigns)
shall have received such other documents as it may reasonably request; and (d)
on the date such Receivable came into existence, the following statements shall
be true (and acceptance of the proceeds of any payment for such Receivable shall
be deemed a representation and warranty by the applicable Seller that such
statements are then true):
(i) the representations and warranties of such Seller set
forth in Article II are true and correct on and as of the date
such Receivable came into existence as though made on and as of
such date; and
(ii) no event has occurred and is continuing that
constitutes a Termination Event.
Notwithstanding the foregoing conditions precedent, upon the applicable
Purchase Date for a Receivable (prior to the occurrence of a Termination Event),
title to such Receivable and the Related Security and Collections with respect
thereto shall vest in the applicable Transferee, whether or not the conditions
precedent to such Transferee's obligation to pay for such Receivable were in
fact satisfied and whether or not the Purchase Price has actually been paid as
of such date. If any Seller fails to satisfy any of the foregoing conditions
precedent, however, Buyer, as the ultimate Transferee, may rescind the related
Purchase and direct BAI to pay to Buyer (and BAI may, in turn direct Bowater to
pay to BAI) an amount equal to the Purchase Price payment, if any, made with
respect to the Receivables included in such Purchase.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Each Seller. Until the date on which
this Agreement terminates in accordance with its terms, each Seller hereby
covenants as set forth below:
(a) Financial Reporting. Bowater will maintain, for itself and each
Consolidated Subsidiary, a system of accounting established and administered in
accordance
with GAAP, and furnish to Buyer and to the Administrative Agent (as Buyer's
pledgee) for distribution to the Co-Agents:
(i) Annual Reporting. Within 120 days after the close of each of its
fiscal years, an audit report (with all amounts stated in Dollars),
unqualified as to scope or going concern and certified by independent
certified public accountants of recognized national standing or otherwise
reasonably acceptable to the Administrative Agent, prepared in accordance
with GAAP on a consolidated basis for Bowater and the Consolidated
Subsidiaries, including a consolidated balance sheet and the related
consolidated statements of income, cash flows and statements of changes in
common shareholders' equity, setting forth in each case in comparative form
the figures for such fiscal year and the previous fiscal year; provided
that delivery of a copy of Bowater's Forms 10-K filed with the Securities
and Exchange Commission for such fiscal year shall constitute compliance
with this requirement.
(ii) Quarterly Reporting. Within 60 days after the close of the first
three quarterly periods of each of its fiscal years, for Bowater and the
Consolidated Subsidiaries, an unaudited consolidated balance sheet as at
the close of each such period and a consolidated income statement and a
statement of cash flows for the period from the beginning of such fiscal
year to the end of such quarter, setting forth in the case of such
statements of income and cash flows in comparative form the figures for the
corresponding quarter and the corresponding portion of Seller's previous
fiscal year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, preparation in accordance with GAAP and
consistency by a Financial Officer of Bowater; provided that delivery of a
copy of Bowater's Forms 10-Q filed with the Securities and Exchange
Commission for such fiscal quarter shall constitute compliance with this
requirement.
(iii) Compliance Certificate. Together with the financial statements
required hereunder, a compliance certificate in substantially the form of
Exhibit IV signed by a Financial Officer of Bowater and dated the date of
such annual financial statement or such quarterly financial statement, as
the case may be.
(iv) Change in Credit and Collection Policy. At least thirty (30) days
prior to the effectiveness of any change in or amendment to the Credit and
Collection Policy, a notice (A) indicating such proposed change or
amendment, and (B) if such proposed change or amendment would be reasonably
likely to materially and adversely affect the collectibility of the
Receivables transferred by such Seller or to materially decrease the credit
quality of any newly created Receivables in any material respect,
requesting Buyer's (and the Co-Agents') consent thereto, which consent
shall not be unreasonably withheld or delayed.
(v) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables
transferred by such Seller or the condition or operations, financial or
otherwise, of such Seller as Buyer (or its assigns) may from time to time
reasonably request in order to protect the interests of Buyer (and its
assigns) under or as contemplated by this Agreement.
(b) Notices. As soon as practicable and in any event within one (1)
Business Day after learning of any of the following, such Seller will notify
Buyer (or its assigns) in writing of any of the following, describing the same
and, if applicable, the steps being taken with respect thereto:
(i) Termination Events or Unmatured Termination Events. The occurrence
of each Termination Event and each Unmatured Termination Event.
(ii) Judgment and Proceedings. The institution of any litigation,
arbitration proceeding or governmental proceeding against such Seller or
any of its Subsidiaries, except proceedings or disputes that, if adversely
determined, would not have a Seller Material Adverse Effect.
(iii) Seller Material Adverse Effect. The occurrence of any event or
condition that has had, or would have, a Seller Material Adverse Effect.
(c) Compliance with Laws and Preservation of Existence. Such Seller will
comply in all respects with all applicable laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it is then subject,
except where the failure to so comply could not reasonably be expected to have a
Seller Material Adverse Effect. Such Seller will preserve and maintain its legal
existence, rights, franchises and privileges in the jurisdiction of its
organization, and qualify and remain qualified in good standing as a foreign
entity in each jurisdiction where its business is conducted, except where the
failure to so qualify or remain in good standing could not reasonably be
expected to have a Seller Material Adverse Effect.
(d) Audits. Such Seller will furnish to Buyer and the Administrative Agent
(as Buyer's pledgee) from time to time such information with respect to such
Seller and the Receivables transferred by it as Buyer or the Administrative
Agent may reasonably request. Such Seller will, from time to time during regular
business hours as requested by Buyer (or the Administrative Agent), upon
reasonable notice and at the sole cost of such Seller, permit an accounting firm
designated by the Administrative Agent (as Buyer's pledgee) and reasonably
acceptable to the Buyer: (i) to examine and make copies of and abstracts from
all Receivable Files in the possession or under the control of such Seller and
other records relating to the Receivables, the Collections and the Related
Security, including, without limitation, the related Contracts, and (ii) to
visit the offices and properties of such Seller for the purpose of examining
such materials described in clause (i) above, and to discuss matters relating to
such Seller's financial condition or the Receivables and the Related Security or
such Seller's performance under any of the Transaction Documents or such
Seller's performance under the Contracts and, in each case, with any of the
officers or employees of such Seller having knowledge of such matters; provided,
however, that, prior to a Bowater Downgrade and in the absence of a Termination
Event, Sellers will only be required to pay for up to one (1) such examination
in any calendar year, and provided further, in the event of a Bowater Downgrade,
the Sellers shall only be required to pay for up to two (2) such examinations in
any calendar year, and provided further, that from and after the occurrence of a
Termination Event, the Sellers shall be responsible to pay for, and the
Administrative Agent (or its representatives) shall be entitled to
conduct, as many examinations as Buyer or the Administrative Agent may deem
necessary or appropriate to protect the interests of the Buyer and the Secured
Parties.
(e) Keeping and Marking of Records and Books.
(i) Such Seller will maintain and implement administrative and
operating procedures (including, without limitation, an ability to
recreate records evidencing Receivables in the event of the
destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary
or advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the immediate identification of
each new Receivable and all Collections of and adjustments to each
existing Receivable). Such Seller will give Buyer (or its assigns)
notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
(ii) Such Seller will (A) on or prior to December 19, 2002, xxxx
its master data processing records and other books and records
relating to the Receivables with a legend, acceptable to Buyer (or its
assigns), describing Buyer's ownership interests in the Receivables
and further describing the security interest of the Administrative
Agent (on behalf of the Secured Parties) under the Loan Agreement and
(B) upon the request of Buyer (or its assigns) from and after the
occurrence of a Termination Event: (x) xxxx each invoice evidencing
any Receivable with a legend describing Buyer's ownership thereof and
further describing the security interest of the Administrative Agent
(on behalf of the Agents and the Lenders) and (y) at any time after
such Seller (or one of its Affiliates) is no longer acting as
Servicer, deliver to Buyer (or its assigns) all Contracts relating to
such Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such Seller
will timely and fully (i) perform and comply in all material respects with all
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Receivables hereunder, and (ii) comply in all material
respects with the Credit and Collection Policy in regard to each such Receivable
and the related Contract.
(g) Ownership. Such Seller will take all necessary action to establish and
maintain, irrevocably in Buyer as ultimate Transferee: (A) legal and equitable
title to the Receivables transferred by it and the related Collections and (B)
all of such Seller's right, title and interest in the Related Security
associated with the Receivables described in the preceding clause (A), in each
case, free and clear of any Adverse Claims other than the Adverse Claims in
favor of Buyer (and its assigns) (including, without limitation, the filing of
all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect Buyer's interest in such Receivables,
Related Security and Collections and such other action to perfect, protect or
more fully evidence the interest of Buyer as Buyer (or its assigns) may
reasonably request).
(h) Agents' and Lenders' Reliance. Such Seller acknowledges that the Agents
and Lenders are entering into the transactions contemplated by the Loan
Agreement in reliance upon Buyer's identity as a legal entity that is separate
from such Seller and any Affiliates thereof. Therefore, such Seller will take
all reasonable steps within such Seller's control to maintain Buyer's identity
as a separate legal entity and to make it manifest to third parties that Buyer
is an entity with assets and liabilities distinct from those of such Seller and
any Affiliates thereof and not just a division of such Seller or any such
Affiliate. Without limiting the generality of the foregoing and in addition to
the other covenants set forth herein, such Seller (i) will not hold itself out
to third parties as liable for the debts of Buyer nor purport to own any of the
Receivables and other assets acquired by Buyer, (ii) will not take any action
that would cause Buyer to violate the "separateness covenants" set forth in
Section 9.1.7 of the Loan Agreement and (iii) will cause all tax liabilities
arising in connection with the transactions contemplated herein or otherwise to
be allocated between such Seller and Buyer on an arm's-length basis and in a
manner consistent with the procedures set forth in U.S. Treasury Regulations
ss.ss.1.1502-33(d) and 1.1552-1.
(i) Collections. In the event any payments relating to Receivables
transferred by such Seller are remitted directly to such Seller or any Affiliate
of such Seller, such Seller will remit (or will cause all such payments to be
remitted) directly to a Lockbox Account which is in Buyer's name and listed on
Exhibit III hereto within three (3) Business Days following receipt thereof and,
at all times prior to such remittance, such Seller will itself hold or, if
applicable, will cause such payments to be held in trust for the exclusive
benefit of Buyer and its assigns. Such Seller will transfer exclusive ownership,
dominion and control of each LockBox and LockBox Account to Buyer and, will not
grant the right to take dominion and control of any LockBox or any LockBox
Account at a future time or upon the occurrence of a future event to any Person,
except to Buyer, as contemplated by this Agreement, and to the Administrative
Agent, as contemplated by the Loan Agreement.
(j) Taxes. Such Seller will file all tax returns and reports required by
law to be filed by it and promptly pay all Covered Taxes at any time owing,
except any such Covered Taxes which are not yet delinquent or are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
Section 4.2 Negative Covenants of Each Seller. Until the date on which this
Agreement terminates in accordance with its terms, each Seller hereby covenants
that:
(a) Name Change, Offices and Records. Such Seller will not change its (i)
state of organization, (ii) legal name, (iii) identity or structure (within the
meaning of Article 9 of any applicable enactment of the UCC) or any office where
Receivable Files are kept unless, in each of the foregoing cases, it shall have:
(A) given Buyer (and the Administrative Agent as Buyer's pledgee) at least ten
(10) Business Days' prior written notice thereof and (B) delivered to the
Administrative Agent (as Buyer's pledgee) all financing statements, instruments
and other
documents reasonably requested by Buyer (or the Administrative Agent, as Buyer's
pledgee) in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Such Seller will not add or
terminate any LockBox or LockBox Account, or make any change in the instructions
to Obligors regarding payments to be made to any LockBox or any LockBox Account,
unless Buyer and the Administrative Agent shall have received, at least ten (10)
days before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
LockBox or LockBox Account, an executed LockBox Account Agreement; provided,
however, that Seller may make changes in instructions to Obligors regarding
payments if such new instructions require such Obligor to make payments to
another existing LockBox or LockBox Account.
(c) Modifications to Contracts and Credit and Collection Policy. Such
Seller will not, without the consent of the Buyer and the Co-Agents, make any
change to the Credit and Collection Policy that could reasonably be expected to
materially and adversely affect the collectibility of the Receivables
transferred by it or materially decrease the credit quality of any of its newly
created Receivables. Except (i) in accordance with the Credit and Collection
Policy and (ii) as otherwise permitted hereunder and under the Loan Agreement,
if such Seller is acting as Servicer pursuant to the Loan Agreement, such Seller
will not extend, amend or otherwise modify the terms of any Receivable or any
Contract related thereto.
(d) Sales, Adverse Claims. Such Seller will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any LockBox or any LockBox
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer, as
provided for herein, and of Lenders, as provided for in the Loan Agreement), and
such Seller will defend the right, title and interest of Buyer in, to and under
any of the foregoing property, against all claims of third parties claiming
through or under such Seller.
(e) Accounting for Purchases. Such Seller will not, and will not permit any
Affiliate to, account for the transactions contemplated hereby in any financial
statements in any manner other than the sale (or other outright conveyance) by
such Seller to the applicable Transferee of the Receivables and the associated
Collections and Related Security except to the extent that such transactions are
not recognized on account of consolidated financial reporting in accordance with
generally accepted accounting principles.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or more of the
following events shall constitute a Termination Event:
(a) Any Seller shall fail to make any payment or deposit required
hereunder when due and such failure shall continue for three (3)
consecutive Business Days.
(b) Any representation, warranty, certification or statement made by
any Seller in this Agreement, any other Transaction Document or in any
other document delivered pursuant hereto or thereto shall prove to have
been incorrect in any material respect when made or deemed made; provided
that the materiality threshold in the preceding clause shall not be
applicable with respect to any representation or warranty which itself
contains a materiality threshold and provided further, that any such
incorrect representation, warranty, certification or statement relating to
a Receivable for which Buyer has actually received a Purchase Price Credit
shall not constitute a Termination Event hereunder.
(c) Any Seller shall breach any covenant contained in Section
4.1(b)(i) which is not cured within three (3) days, or any Seller shall
breach any covenant contained in Section 4.2(c) or 4.2(e), which is not
cured within thirty (30) days, or any Seller shall breach any other
covenant contained in Section 4.2(a), (b) or (d).
(d) Any Seller shall breach, fail to perform or observe any covenant
contained in any Section of this Agreement (which is not covered by another
subsection, paragraph or clause of this Section 5.1) or of any other
Transaction Document to which it is a party which is not cured within
thirty (30) days after written notice from Buyer (or the Administrative
Agent, as Buyer's pledgee).
(e) Failure of any Seller or any of its Subsidiaries to pay any
Material Debt when due; or the default by any Seller or any of its
Subsidiaries in the performance of any term, provision or condition
contained in any agreement under which any Material Debt was created or is
governed, or any other event shall occur or condition exist, the effect of
which is to cause, or to permit the holder or holders of such Material Debt
to cause such Material Debt to become due prior to its stated maturity; or
Material Debt of any Seller or any of its Subsidiaries shall be declared to
be due and payable or required to be prepaid (other than by a regularly
scheduled payment or as a result of the sale of an asset securing such
Material Debt) prior to the stated maturity thereof.
(f) (i) Any Seller shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors;
or (ii) any proceeding shall be instituted by or against any Seller seeking
to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official
for it or any substantial part of its property, and, if against Seller, any
such proceeding or case shall continue undismissed for a period of sixty
(60) or more days, or (iii) any Seller shall take any corporate action to
authorize any of the actions set forth in the foregoing clauses (i) or (ii)
of this subsection (f).
(g) A Change of Control shall occur.
(h) A final judgment or judgments for the payment of money in excess
of $10,000,000 in the aggregate (exclusive of judgment amounts fully
covered by insurance where the insurer has admitted liability in respect of
such judgment) or in excess of $50,000,000 in the aggregate (regardless of
insurance coverage) shall be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction against any Seller or any of
its Subsidiaries and the same shall not be discharged (or provision shall
not be made for such discharge), or a stay of execution thereof shall not
be procured, within thirty (30) days from the date of entry thereof and the
Company or the relevant Subsidiary shall not, within said period of thirty
(30) days, or such longer period during which execution of the same shall
have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal
(i) The Subordinated Note shall be assigned, pledged or otherwise
transferred to any Person in violation of the last section thereof.
Section 5.2 Remedies.
Upon the occurrence and during the continuation of a Termination Event,
Buyer may take any of the following actions: (i) declare the Termination Date to
have occurred, whereupon the Termination Date shall forthwith occur, without
demand, protest or further notice of any kind, all of which are hereby expressly
waived by each Seller; provided, however, that upon the occurrence of a
Termination Event described in Section 5.1(f), or of an actual or deemed entry
of an order for relief with respect to any Seller under the Federal Bankruptcy
Code, the Termination Date shall automatically occur, without demand, protest or
any notice of any kind, all of which are hereby expressly waived by each Seller
and (ii) to the fullest extent permitted by applicable law, declare that the
Default Fee shall accrue with respect to any amounts then due and owing by each
Seller to any Transferee. The aforementioned rights and remedies shall be
without limitation and shall be in addition to all other rights and remedies of
each of the Transferees and its assigns otherwise available under any other
provision of this Agreement, by operation of law, at equity or otherwise, all of
which are hereby expressly preserved, including, without limitation, all rights
and remedies provided under the UCC, all of which rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Sellers. Without limiting any other rights that
any Transferee may have hereunder or under applicable law, each Seller hereby
agrees to indemnify (and pay upon demand to) each Transferee and its assigns,
officers, directors, agents and employees (each a "Seller Indemnified Party")
from and against any and all damages, losses, claims, Covered Taxes,
liabilities, costs, expenses and for all other amounts payable, including
reasonable attorneys' fees (which attorneys may be employees of a Transferee or
any such assign) and disbursements (all of the foregoing being collectively
referred to as "Seller
Indemnified Amounts") awarded against or incurred by any of them arising out of
any of the following:
(i) any representation or warranty made by such Seller (or any
officers of such Seller) under or in connection with any Purchase Report,
this Agreement, any other Transaction Document or any other information or
report delivered by or on behalf of such Seller pursuant hereto or thereto
that shall have been false or incorrect when made or deemed made, except to
the extent Buyer (as the ultimate Transferee) has received a Purchase Price
Credit in connection therewith;
(ii) the failure by such Seller, to comply with any applicable law,
rule or regulation with respect to any Receivable transferred by it or any
Contract related thereto, or the nonconformity of any such Receivable or
Contract included therein with any such applicable law, rule or regulation
or any failure of such Seller to keep or perform any of its obligations,
express or implied, with respect to any Contract;
(iii) any failure of such Seller to perform its duties, covenants or
other obligations in accordance with the provisions of this Agreement or
any other Transaction Document to which such Seller is a party;
(iv) any products liability, personal injury or damage, suit or other
similar claim arising out of or in connection with goods, insurance or
services that are the subject of any Contract or any Receivable transferred
by such Seller;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor or failure to pay due to financial inability) of
the Obligor to the payment of any Receivable transferred by such Seller
(including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or service related to such
Receivable or the furnishing or failure to furnish such merchandise or
services;
(vi) the commingling by such Seller of Collections of Receivables at
any time with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document to which such
Seller is a party, the transactions contemplated hereby, such Seller's use
of the proceeds of any Purchase from it hereunder, the ownership of the
Receivables or any other investigation, litigation or proceeding relating
to such Seller in which any Seller Indemnified Party becomes involved as a
result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable transferred by such Seller as a result of such
Obligor being immune from civil and commercial law and suit on the grounds
of sovereignty or otherwise from any legal action, suit or proceeding;
(ix) any failure to vest and maintain vested in Buyer, or to transfer
to Buyer, legal and equitable title to, and ownership of, the Receivables
and the associated Collections transferred by such Seller, and all of such
Seller's right, title and interest in the Related Security associated with
such Receivables, in each case, free and clear of any Adverse Claim other
than as created under the Loan Agreement;
(x) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Receivable transferred by such Seller, or the Related Security and
Collections with respect thereto, and the proceeds of any thereof, whether
at the time of any Purchase from such Seller hereunder or at any subsequent
time; and/or
(xi) any attempt by any Person to void any Purchase from such Seller
hereunder under statutory provisions or common law or equitable action;
excluding, however, (a) Seller Indemnified Amounts to the extent a final
judgment of a court of competent jurisdiction holds that such Seller Indemnified
Amounts resulted from gross negligence or willful misconduct on the part of the
Seller Indemnified Party seeking indemnification; (b) Seller Indemnified Amounts
to the extent the same includes losses in respect of Receivables that are
uncollectible on account of the insolvency, bankruptcy, financial inability to
pay or lack of creditworthiness of the related Obligor; and (c) Excluded Taxes.
Nothing in this Section 6.1 shall limit the liability of any Seller or limit the
recourse of any applicable Transferee (or its assigns) to such Seller for
amounts otherwise specifically provided to be paid by such Seller under the
terms of this Agreement.
Anything contained in this Section 6.1 to the contrary notwithstanding: (1)
the foregoing indemnification is not intended to, and shall not, constitute a
guarantee of the collectibility or payment of the Receivables conveyed
hereunder, and (2) nothing in this Section 6.1 shall require any Seller to
indemnify any Seller Indemnified Party for Receivables which are not collected,
not paid or are otherwise uncollected on account of the insolvency, bankruptcy,
lack of creditworthiness or financial inability to pay of the applicable
Obligor.
Section 6.2 Other Costs and Expenses. Subject to Section 4.1(d), each
Seller agrees to pay to its applicable Transferee, on demand, all reasonable
out-of-pocket costs and expenses in connection with (a) the preparation,
execution and delivery of this Agreement and the other documents to be delivered
hereunder, (b) the preparation, execution and delivery of any amendment hereto
or waiver hereof requested by such Seller, and (b) any and all costs and
expenses of such Transferee, if any, including reasonable counsel fees and
expenses, in connection with the enforcement of this Agreement and the other
documents delivered hereunder.
Section 6.3 Taxes. All payments by each Seller to or for the account of its
Transferee (or any of its assigns) hereunder or under any other Transaction
Document to which such Seller is a party shall be made free and clear of and
without deduction for any and all Covered Taxes. If any Seller shall be required
by law to deduct any Covered Taxes from or in respect of any sum payable
hereunder to its applicable Transferee (or any of its assigns), (a) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 6.3), such Transferee (or such assign, as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (b) such Seller shall make such deductions, (c) such Seller shall pay the
full amount deducted to the relevant authority in accordance with applicable law
and (d) such Seller shall furnish to such Transferee (and to the Administrative
Agent, as the Buyer's pledgee) the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of any Transferee (or its assigns)
in exercising any power, right or remedy under this Agreement shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies
herein provided shall be cumulative and nonexclusive of any rights or
remedies provided by law. Any waiver of this Agreement shall be effective
only in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing signed by Sellers and Buyer and, to
the extent required under the Loan Agreement, the Agents. Any material
amendment, supplement, modification of waiver may require the applicable
Conduit Lender's receipt of written notice from the rating agencies who
rate its Commercial Paper Notes that such change will not cause the rating
on the then outstanding Commercial Paper Notes to be downgraded or
withdrawn.
Section 7.2 Notices. All communications and notices provided for hereunder
shall be in writing (including bank wire, telecopy or electronic facsimile
transmission or similar writing) and shall be given to the other parties hereto
at their respective addresses or telecopy
numbers set forth on Schedule B hereto or at such other address or telecopy
number as such Person may hereafter specify for the purpose of notice to each of
the other parties hereto. Each such notice or other communication shall be
effective (a) if given by telecopy, upon the receipt thereof, (b) if given by
mail, five (5) Business Days after the time such communication is deposited in
the mail with first class postage prepaid or (c) if given by any other means,
when received at the address specified in this Section 7.2.
Section 7.3 Protection of Ownership Interests of Buyer.
(a) Each Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that Buyer (or its assigns) may
reasonably request, to perfect, protect or more fully evidence the interest of
Buyer and its assigns therein, or to enable Buyer (or its assigns) to exercise
and enforce all rights and remedies afforded to any Transferee hereunder. At any
time following the earlier to occur of a Termination Event or an Amortization
Event: Buyer (or its assigns) may, at the applicable Seller's sole cost and
expense, direct each Seller to notify the Obligors of Receivables transferred by
it of the ownership interests of Buyer under this Agreement and may also direct
that payments of all amounts due or that become due under any or all Receivables
transferred by it be made directly to Buyer or its designee.
(b) If any Seller fails to perform any of its obligations hereunder:
(i) Buyer (or its assigns) may (but shall not be required to)
perform, or cause performance of, such obligations, and Buyer's (or
such assigns') costs and expenses incurred in connection therewith
shall be payable by such Seller as provided in Section 6.2;
(ii) Each Seller irrevocably authorizes Buyer (and its assigns)
at any time and from time to time in the sole discretion of Buyer (or
its assigns), and appoints Buyer (and its assigns) as its
attorney(ies)-in-fact, to act on behalf of such Seller (A) to execute
(if necessary) on behalf of such Seller as debtor and to file (with
or, to the extent permitted by applicable law, without signatures)
financing statements necessary or desirable in Buyer's (or its
assigns') sole discretion to perfect and to maintain the perfection
and priority of the interest of Buyer in the Receivables transferred
by such Seller and the associated Related Security and Collections and
(B) to file a carbon, photographic or other reproduction of this
Agreement or any financing statement with respect to the Receivables
as a financing statement in such offices as Buyer (or its assigns) in
their sole discretion deem necessary or desirable to perfect and to
maintain the perfection and priority of Buyer's interests in such
Receivables.
The appointment under the foregoing clause (ii) is coupled with an interest
and is irrevocable.
Section 7.4 Confidentiality.
(a) Each Seller shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of the Fee
Letters (as defined in the Loan Agreement) and the other confidential
or proprietary information with respect to the Agents and Lenders and
their respective businesses obtained by it or them in connection with
the structuring, negotiating and execution of the transactions
contemplated herein, except that each Seller and its officers and
employees may disclose such information to such Seller's external
accountants, attorneys and other advisors and as required by any
applicable law, rule, direction, request or order of any judicial,
administrative or regulatory authority or proceeding (whether or not
having the force or effect of law). The restrictions in this Section
7.4(a) shall not apply to any information which is or becomes
generally available to the public other than as a result of disclosure
by a Seller.
(b) Each Seller hereby consents to the disclosure of any
nonpublic information with respect to it (i) to Buyer, the Agents or
Lenders by each other, (ii) to any prospective or actual assignee or
participant of any of the Persons described in clause (i), and (iii)
to any rating agency, Commercial Paper Note dealer or Support Provider
(as defined in the Loan Agreement) to any Lender or any entity
organized for the purpose of purchasing, or making loans secured by,
financial assets for which any of the Agents acts as the administrator
or agent or any of the Agents and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing,
provided each Person described in the foregoing clauses (ii) and (iii)
is informed of the confidential nature of such information and each
Person described in the foregoing clause (ii) agrees in writing to
maintain the confidential nature of such information. In addition, the
Lenders and Agents may disclose any such nonpublic information
pursuant to any law, rule, regulation, direction, request or order of
any judicial, administrative or regulatory authority or proceedings
(whether or not having the force or effect of law).
Section 7.5 Bankruptcy Petition. Each Seller and Buyer hereby covenant and
agree that, prior to the date that is one year and one day after the payment in
full of all outstanding senior indebtedness of any Conduit Lender (as defined in
the Loan Agreement), it will not institute against, or join any other Person in
instituting against, any Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
Section 7.6 Return of Funds Not Constituting Collections. If any funds
other than Collections are received in any Lock Box Account, such remittances
will be removed from such account and will be delivered through inter-company
transfers or otherwise to the owner thereof within three (3) Business Days
following determination that the same do not comprise Collections.
Section 7.7 CHOICE OF LAW
. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW) EXCEPT TO
THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION GOVERN THE PERFECTION, OR THE
EFFECT OF PERFECTION OR NONPERFECTION, OF THE OWNERSHIP OR SECURITY INTERESTS OF
BUYER.
Section 7.8 CONSENT TO JURISDICTION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PARTY PURSUANT TO
THIS AGREEMENT AND EACH OF THE PARTIES HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST ANY SELLER IN THE COURTS OF
ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER AGAINST BUYER (OR
ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT
OR ANY DOCUMENT EXECUTED BY SUCH SELLER PURSUANT TO THIS AGREEMENT SHALL BE
BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
Section 7.9 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PURSUANT TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the final
and complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter hereof superseding
all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of
Sellers, Buyer and their respective successors and permitted assigns (including
any trustee in bankruptcy). No Seller may assign any of its rights and
obligations hereunder or any interest herein without the prior written consent
of Buyer. Buyer may assign at any time its rights and obligations hereunder and
interests herein to any other Person without the consent of any Seller.
Without limiting the foregoing, each Seller acknowledges that Buyer, pursuant to
the Loan Agreement, may pledge to the Administrative Agent, for the benefit of
the Agents and the Lenders, its rights, remedies, powers and privileges
hereunder. Each Seller agrees that the Administrative Agent, as the pledgee of
Buyer, shall, subject to the terms of the Loan Agreement, have the right to
enforce this Agreement and to exercise directly all of Buyer's rights and
remedies under this Agreement (including, without limitation, the right to give
or withhold any consents or approvals of Buyer to be given or withheld
hereunder). This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall remain
in full force and effect until terminated in accordance with its terms;
provided, however, that the rights and remedies with respect to (i) any breach
of any representation and warranty made by any Seller pursuant to Article II;
(ii) the indemnification and payment provisions of Article VI; and (iii) Section
7.5 shall be continuing and shall survive any termination of this Agreement.
Section 7.11 Counterparts; Severability; Section References. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
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.
BOWATER INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
BOWATER AMERICA INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and
Treasurer
BOWATER FUNDING INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
Exhibit I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined). As used in the
Agreement and the Exhibits and Schedules thereto, capitalized terms have the
meanings set forth in this Exhibit I (such meanings to be equally applicable to
the singular and plural forms thereof). If a capitalized term is used in the
Agreement, or any Exhibit or Schedule thereto, and is not otherwise defined
therein or in this Exhibit I, such term shall have the meaning assigned thereto
in the Loan Agreement (hereinafter defined).
"Administrative Agent" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Adverse Claim" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, encumbrance or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, capitalized lease or other title retention agreement).
"Agents" has the meaning set forth in the Preliminary Statements to the
Agreement.
"Agreement" means the Amended and Restated Receivables Sale Agreement,
dated as of December 1, 2005, between Sellers and Buyer, as the same may be
amended, restated or otherwise modified.
"BAI" has the meaning set forth in the preamble to the Agreement.
"Bowater" has the meaning set forth in the preamble to the Agreement.
"Bowater Credit Agreement" means that certain Credit Agreement dated as of
May 22, 2002, between Bowater and various of its Subsidiaries, as borrowers, the
lenders from time to time party thereto, and JPMorgan Chase Bank, as
administrative agent, as amended, restated or otherwise modified or replaced
from time to time.
"Bowater Downgrade" means that Bowater's unsecured senior debt is rated
"BB" or less by S&P or "Ba2" or less by Moody's.
"Bowater Group" means, collectively, Bowater and each of its Subsidiaries
other than any Receivables Entity and any Subsidiary of any Receivables Entity.
"Buyer" has the meaning set forth in the preamble to the Agreement.
"Calculation Period" means each calendar month or portion thereof which
elapses during the term of the Agreement. The first Calculation Period commenced
on December 19, 2002 and the final Calculation Period shall terminate on the
Termination Date.
"Capital Lease Obligations" means, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP (including Statement of Financial Accounting Standards No. 13
of the Financial Accounting Standards Board), and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP (including such Statement No. 13).
"Change of Control" means (a) during any period of 25 consecutive calendar
months, a majority of the Board of Directors of Bowater shall no longer be
composed of individuals (i) who were members of said Board on the first day of
such period, (ii) whose election or nomination to said Board was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of said Board or (iii) whose election
or nomination to said Board was approved by individuals referred to in clauses
(i) and (ii) above constituting at the time of such election or nomination at
least a majority of said Board, or (b) Bowater ceases to own (directly or
indirectly) and control the right to vote 100% of the outstanding shares of
voting stock of (i) BAI or (ii) Buyer.
"Co-Agents" has the meaning set forth in the Preliminary Statements to the
Agreement.
"Collections" means, with respect to any Receivable, all cash collections
and other cash proceeds in respect of such Receivable, including, without
limitation, all yield, Finance Charges or other related amounts accruing in
respect thereof and all cash proceeds of Related Security with respect to such
Receivable.
"Consolidated Subsidiary" means, at any date as of which the same is to be
determined, any Subsidiary or other entity the accounts of which would be
consolidated with those of Bowater in its consolidated financial statements if
such statements were prepared as of such date in accordance with GAAP.
"Contract" means either (i) a written agreement between a Seller and an
Obligor, or (ii) an invoice issued by a Seller to an Obligor, in either of the
foregoing cases, pursuant to which such Obligor is obligated to pay for goods,
merchandise and/or services.
"Contributed Receivables" has the meaning set forth in Section 1.1(b) to
the Agreement.
"Covered Taxes" means all Taxes other than Excluded Taxes.
"Credit and Collection Policy" means the credit and collection policy
relating to Contracts and Receivables attached hereto as Exhibit VII, as may be
modified from time to time in accordance with this Agreement.
"Debt" means, with respect to any Person at any date, without duplication:
(i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of
such Person for the deferred purchase price of property or services (other than
property and services purchased,
and expense accruals and deferred compensation items arising, in the ordinary
course of business), (iii) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments (other than performance, surety
and appeal bonds arising in the ordinary course of business), (iv) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (v) all obligations of such Person under leases which have been or
should be, in accordance with GAAP, recorded as capital leases, to the extent
required to be so recorded, (vi) all reimbursement, payment or similar
obligations of such Person, contingent or otherwise, under acceptance, letter of
credit or similar facilities (other than letters of credit in support of trade
obligations or in connection with workers' compensation, unemployment insurance,
old-age pensions and other social security benefits in the ordinary course of
business), (vii) all net obligations of such Person in respect of interest rate
swap, cap, collar, swaption, option or similar agreements, (viii) all
obligations arising in connection with a sale or other transfer of any of such
Person's financial assets which are, or are intended to be, classified as loans
for federal tax purposes, (ix) all Debt referred to in clauses (i) through
(viii) above guaranteed directly or indirectly by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (A) to pay
or purchase such Debt or to advance or supply funds for the payment or purchase
of such Debt, (B) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Debt or to assure the holder of such Debt against loss
in respect of such Debt, (C) to supply funds to or in any other manner invest in
the debtor (including any agreement to pay for property or services irrespective
of whether such property is received or such services are rendered) or (D)
otherwise to assure a creditor against loss in respect of such Debt, and (x) all
Debt referred to in clauses (i) through (viii) above secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Adverse Claim, security interest or other charge or encumbrance
upon or in property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt.
"Default Fee" means a per annum rate of interest equal to the sum of (i)
the Base Rate, plus (ii) 2.00% per annum.
"Discount Factor" means a percentage calculated to provide Buyer with a
reasonable return on its investment in the Receivables after taking account of
(i) the time value of money based upon the anticipated dates of collection of
such Receivables and the weighted average cost to Buyer of obtaining Letters of
Credit issued pursuant to the Loan Agreement and financing its investment in
such Receivables during such period, (ii) the risk of nonpayment by the
Obligors, and (iii) contractual allowances granted to Obligors. Sellers and
Buyer may agree from time to time to change the Discount Factor based on changes
in one or more of the items affecting the calculation thereof, provided that any
change to the Discount Factor shall take effect as of the commencement of a
Calculation Period, shall apply only prospectively and shall not affect the
Purchase Price payment made prior to the Calculation Period during which Sellers
and Buyer agree to make such change.
"Dollars," "dollars" and "$" shall mean lawful money of the United States
of America.
"Excluded Taxes" means, in the case of Buyer (or any Seller Indemnified
Party), taxes imposed on its overall net income, and franchise taxes and branch
profit taxes based on net income, imposed on it by (i) the jurisdiction under
the laws of which Buyer (or such Seller Indemnified Party) is incorporated or
organized or (ii) the jurisdiction in which Buyer's (or such Seller Indemnified
Party's) principal executive office is located.
"Existing Agreement" has the meaning specified in the preamble to this
Agreement.
"Finance Charges" means, with respect to a Contract, any finance, interest,
late payment, returned check charges or similar charges owing by an Obligor
pursuant to such Contract.
"Financial Officer" means, as to any Seller, the Chief Financial Officer,
Treasurer or Controller of such Seller.
"GAAP" means accounting principles generally accepted in the United States
of America as recommended by the Financial Accounting Standards Board as in
effect as of December 19, 2002 applied consistently with the audited financial
statements of Bowater and its Consolidated Subsidiaries for the fiscal year
ended December 31, 2001.
"Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative authority or
functions of or pertaining to government including any authority or other
quasi-governmental entity established to perform any of such functions.
"Guarantee" means a guarantee, an endorsement, a contingent agreement to
purchase or to furnish funds for the payment or maintenance of, or otherwise to
be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including
causing a bank or other financial institution to issue a letter of credit or
other similar instrument for the benefit of another Person, but excluding
endorsements for collection or deposit in the ordinary course of business. The
terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative
meaning.
"Indebtedness" means, for any Person: (a) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of property or services, other than trade accounts
payable (other than for borrowed money) arising, and accrued expenses incurred,
in the ordinary course of business, so long as such trade accounts payable are
payable within 90 days of the date the respective goods are delivered or the
respective services are rendered; (c) Indebtedness of others secured by a
Adverse Claim on the property of such Person, whether or not the respective
Indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) Capital Lease Obligations of such Person; (f)
Indebtedness of others Guaranteed by such Person; and (g) any obligations of
such Person in respect of transactions commonly referred to in commercial
settings as an "accounts receivable securitization."
"Initial Contributed Receivables" has the meaning set forth in Section
1.1(a) to the Agreement.
"Initial Cutoff Date" means December 18, 2002.
"Interest Rate Protection Agreement" shall have the meaning given to such
term in the Bowater Credit Agreement.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"LC Commission" means, for any Letter of Credit on its date of issuance and
on each date, if any, on which its expiry date is extended, the product of (a)
the LC Premium, multiplied by (b) the face amount of such Letter of Credit,
multiplied by (c) the actual number of days until such Letter of Credit's expiry
date (or, in the case of an extension, the actual number of days from but
excluding the initial expiry date to and including the extended expiry date),
divided by 360 days.
"LC Issuer" means SunTrust Bank or Wachovia Bank, National Association, in
its capacity as the issuer of a Letter of Credit.
"LC Premium" means, for any Letter of Credit on its date of issuance and on
each date, if any, on which its expiry date is extended, the excess, if any, of
the rate at which the LC Fee (under and as defined in the Co-Agents' Fee Letter)
is then being computed over the rate at which the Usage Fee (under and as
defined in the Co-Agents' Fee Letter) is being computed.
"Letter of Credit" means a stand-by letter of credit issued by an LC Issuer
in United States dollars upon application of Buyer at the request of a Seller,
as extended from time to time in accordance with this Agreement and the Loan
Agreement.
"Letter of Credit Request" means a request in the form of Exhibit VIII
hereto, with appropriate insertions thereto, duly executed by a Seller.
"Lenders" has the meaning set forth in the Preliminary Statements to the
Agreement.
"Loan Agreement" has the meaning set forth in the Preliminary Statements to
the Agreement.
"Material Debt" means Debt of any Seller and/or one or more of its
Subsidiaries (other than Buyer), arising in one or more related or unrelated
transactions, in an aggregate principal or face amount exceeding $50,000,000.
For purposes of determining Material Debt, the "principal amount" of the
obligations of any Person in respect of any Interest Rate Protection Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
requirements) that such Person would be required to pay if such Interest Rate
Protection Agreement were terminated at such time.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Worth" means as of the last Business Day of each Calculation Period
preceding any date of determination, the excess, if any, of (a) the aggregate
Outstanding Balance of the Receivables at such time, over (b) the sum of (i) the
aggregate outstanding principal balance of the Loans under the Loan Agreement at
such time, plus (ii) the aggregate outstanding principal balance of the
Subordinated Loans (including any Subordinated Loan proposed to be made on the
date of determination).
"Organizational Documents" means, for any Person, the
documents for its formation and organization, which, for example, (a) for a
corporation are its corporate charter and bylaws, (b) for a partnership are its
certificate of partnership (if applicable) and partnership agreement, (c) for a
limited liability company are its certificate of formation or organization and
its operating agreement, regulations or the like and (d) for a trust is the
trust agreement, declaration of trust, indenture or bylaws under which it is
created.
"Original Balance" means, with respect to any Receivable, the Outstanding
Balance of such Receivable on the date it was created.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.
"Purchase" means each purchase by a Transferee from a Seller pursuant to
Section 1.2 of the Agreement of Receivables and the Related Security and
Collections related thereto.
"Purchase Date" means December 19, 2002 and each such subsequent Business
Day on or before the Termination Date.
"Purchase Price" means, with respect to each Purchase by a Transferee from
a Seller, the aggregate price to be paid by such Transferee to such Seller for
such Purchase in accordance with Section 1.3 of the Agreement for the
Receivables transferred by such Seller and
the associated Collections and Related Security, which price shall equal on any
date (i) the product of (x) the Outstanding Balance of such Receivables being
sold on such date, multiplied by (y) one minus the Discount Factor in effect on
such date, minus (ii) any Purchase Price Credits to be credited in accordance
with Section 1.4 of the Agreement against the Purchase Price otherwise payable.
"Purchase Price Credit" has the meaning set forth in Section 1.4 of the
Agreement.
"Purchase Price Loan" has the meaning set forth in Section 1.2(c).
"Purchase Price Loan Note" has the meaning set forth in
Section 1.2(c).
"Purchase Report" has the meaning set forth in Section 1.2(c) of the
Agreement.
"QSPE" means each subsidiary of Bowater organized for a limited purpose
with traditional "bankruptcy-remote" features such as an independent director or
member, provided that:
(a) either no portion of the Indebtedness or any other obligations
(contingent or otherwise) of such Subsidiary (i) is Guaranteed by any member of
the Bowater Group, (ii) is recourse to or obligates any member of the Bowater
Group in any way other than pursuant to Standard Securitization Undertakings or
(iii) subjects any property of any member of the Bowater Group, directly or
indirectly, contingently or otherwise, to the satisfaction thereof (other than,
in the case of this clause (iii), pursuant to Standard Securitization
Undertakings),
(b) with which no member of the Bowater Group has any material contract,
agreement, arrangement or understanding other than on terms no less favorable to
any member of the Bowater Group than those that might be obtained at the time
from Persons that are not Affiliates of any member of the Bowater Group, and
(c) to which no member of the Bowater Group has any obligation to maintain
or preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results.
"Receivable" means all indebtedness and other obligations owed to a Seller
(at the times it arises, including, without limitation, before giving effect to
any transfer or conveyance under the Agreement and whether evidenced by chattel
paper or any instrument) arising in connection with the sale of goods or the
rendering of services by such Seller (other than as to any sales of goods (a) to
any Affiliate of such Seller, or (b) which are incidental to the sale of any
operational unit of such Seller), and further includes the applicable Obligor's
obligation to pay any Finance Charges, freight charges and other obligations of
such Obligor with respect thereto. Indebtedness and other rights and obligations
arising from any one transaction, including, without limitation, indebtedness
and other rights and obligations represented by an individual invoice, shall
constitute a Receivable separate from a Receivable
consisting of the indebtedness and other rights and obligations arising from any
other transaction; provided, that any indebtedness, rights or obligations
referred to in the immediately preceding sentence shall be a Receivable
regardless or whether the account debtor or applicable Seller treats such
indebtedness, rights or obligations as a separate payment obligation.
"Receivables Entity" means (a) the Buyer and (b) any other direct or
indirect Subsidiary of Bowater (or another Person in which any member of the
Bowater Group may make an Investment) to which any member of the Bowater Group
sells, conveys or otherwise transfers (whether directly or indirectly) accounts
receivable and Related Security and/or one or more financial instruments arising
from the sale (whether through the sale of stock, membership interests or
assets) of accounts receivable and Related Security, which engages in no
material activities other than in connection with the financing of such assets
and which is designated by Bowater (as provided below) as a Receivables Entity,
(i) no portion of the Indebtedness or any other obligations (contingent or
otherwise) of which (A) is Guaranteed by any member of the Bowater Group, (B) is
recourse to or obligates any member of the Bowater Group in any way other than
pursuant to Standard Securitization Undertakings or (C) subjects any property of
any member of the Bowater Group, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than such accounts receivable and
Related Security sold, conveyed or otherwise transferred into the applicable
securitization permitted by Bowater's agreements governing Indebtedness and
other than pursuant to Standard Securitization Undertakings, (ii) with which no
member of the Bowater Group has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to any member of the Bowater
Group than those that might be obtained at the time from Persons that are not
Affiliates of any member of the Bowater Group, other than fees payable in the
ordinary course of business in connection with servicing receivables, and (iii)
to which no member of the Bowater Group has any obligation to maintain or
preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results. Any such designation by Bowater shall be
evidenced to the Administrative Agent by filing with the Administrative Agent an
officer's certificate of Bowater certifying, to the best of such officer's
knowledge and belief after consulting with counsel, that such designation
complied with the foregoing conditions.
"Related Security" means, with respect to any Receivable, (a) all right,
title and interest, but none of the obligations, of the applicable Seller, in
the goods (including returned goods), if any, relating to the sale which gave
rise to such Receivable, (b) all right, title and interest, but none of the
obligations, of such Seller, in, to and under other Adverse Claims and property
subject to Adverse Claims from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, (c) all UCC financing statements or similar instruments covering any
collateral securing payment of such Receivable, (d) all guaranties, indemnities,
insurance and other agreements (including the related Receivable File) or
arrangement and other collateral of whatever character from time to time
supporting or securing payment of such Receivable, whether pursuant to the
Contract relating to such Receivable or otherwise relating to such Receivable,
(e) all right, title and interest, if any, of such Seller in any related money
held in any LockBox or LockBox Account, and (f) all other instruments and all
rights under the documents in the Receivables File relating to such Receivables
and all rights (but not obligations) relating to such Receivables.
"Reporting Date" means the second Business Day preceding each Distribution
Date (as defined in the Loan Agreement).
"Required Capital Amount" means (a) as of any date of determination while
the Loan Agreement remains in effect, an amount equal to the greater of (i) the
product of (A) 1.5 times the product of the Default Ratio (as defined in the
Loan Agreement) times the Loss Horizon Ratio (as defined in the Loan Agreement)
times (B) the Outstanding Balance of all Receivables as of such date, each as
determined from the most recent Monthly Report delivered to Administrative
Agent, and (ii) the amount necessary to ensure that Buyer remains Solvent, and
(b) at all other times, the amount determined pursuant to the preceding clause
(a)(ii).
"S&P" means Standard & Poor's Ratings Group, a division of The XxXxxx-Xxxx
Companies, Inc.
"Seller" has the meaning set forth in the preamble to the Agreement.
"Seller Indemnified Amounts" has the meaning set forth in Section 6.1.
"Seller Indemnified Party" has the meaning set forth in Section 6.1.
"Seller Material Adverse Effect" means a material adverse effect on (i) on
the business, property, condition (financial or otherwise) or results of
operations or prospects of Sellers and their Subsidiaries taken as a whole, (ii)
the ability of any Seller to perform its obligations under the Agreement or any
other Transaction Document to which it is a party, (iii) the legality, validity
or enforceability of the Agreement or any other Transaction Document, (iv) the
interest of any Transferee or of the Administrative Agent (on behalf of the
Agents and the Lenders) in the Receivables generally or in any significant
portion of the Receivables, the Related Security or Collections with respect
thereto, or (v) the collectibility of the Receivables generally or of any
material portion of the Receivables.
"Senior Executive" means, as to any Seller, the Chief Executive Officer,
Chief Financial Officer, President, Treasurer, Assistant Treasurer, Controller,
Secretary, Assistant Secretary, Executive Vice President, Senior Vice President
or Director of Corporate Finance of such Seller.
"Settlement Date" means, with respect to each Calculation Period, the
second Business Day after the Reporting Date following the end of such
Calculation Period.
"Solvent" means with respect to any Person that as of the date
of determination both (A)(i) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within
the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Standard Securitization Undertakings" means, collectively, (i) customary
arms-length servicing obligations (together with any related performance
guarantees), (ii) obligations (together with any related performance guarantees)
to refund the purchase price or grant purchase price credits for dilutive events
or misrepresentation (in each case unrelated to the collectibility of
receivables or creditworthiness of the associated account debtors), (iii)
representations, warranties, covenants and indemnities (together with any
related performance guarantees) of a type that are reasonably customary in
accounts receivable securitizations (or, in the case of a QSPE, the transactions
of the type for which such Person was organized) and (iv) in the case of a QSPE,
a guarantee by members of the Bowater Group of any make-whole premium (but not
any principal or interest) on Indebtedness of the QSPE.
"Subordinated Loan" has the meaning set forth in Section 1.2(c).
"Subordinated Note" has the meaning set forth in Section 1.2(c).
"Subsidiary" means, for any Person, any corporation, partnership or other
entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person;
provided, however, that the term "Subsidiary" shall not include any QSPE.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities (including but
not limited to interest and penalties) with respect to the foregoing, imposed by
any Governmental Authority.
"Termination Date" means the earliest to occur of (i) the Commitment
Termination Date under and as defined in the Loan Agreement, (ii) the Business
Day immediately prior to the occurrence of a Termination Event set forth in
Section 5.1(f), (iii) the Business Day specified in a written notice from Buyer
to Sellers following the occurrence of any other Termination Event, (v) the date
which is ten (10) Business Days after Buyer's receipt of written notice from any
Seller that it wishes to terminate the facility evidenced by this Agreement, and
(v) the first date on which the condition precedent in Section 3.2(b) is not
satisfied.
"Termination Event" has the meaning set forth in Section 5.1 of the
Agreement.
"Transaction Documents" means, collectively, this Agreement, each LockBox
Account Agreement, the Subordinated Note, each Purchase Price Loan Note, and all
other instruments, documents and agreements executed and delivered in connection
herewith.
"Transferee" has the meaning set forth in the preliminary statements to the
Agreement.
"Unmatured Termination Event" means an event which, with the passage of
time or the giving of notice, or both, would constitute a Termination Event.
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of New
York, and not specifically defined herein, are used herein as defined in such
Article 9.
Exhibit II
JURISDICTIONS OF ORGANIZATION; CHIEF EXECUTIVE OFFICES; PRINCIPAL PLACES
OF BUSINESS; LOCATIONS OF RECORDS; ORGANIZATIONAL
IDENTIFICATION NUMBERS; OTHER NAMES
Organizational
Jurisdiction of Chief Executive Office/ Identification
Entity Organization Principal Place of Business Locations of Records Number Other Names
---------------------------------------- -------------------- -------------------------------- -------------------------------------
Xxxxx, XX 00000
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
00 Xxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
44
Exhibit III
LOCKBOXES AND LOCKBOX ACCOUNTS
Bank of America
Bowater Funding Inc.
Account Number 3750202618
XX Xxx 000000
Xxxxxxx, XX 00000
XX Xxx 000000
Xx. Xxxxx, XX 00000
XX Xxx 000000
Xx. Xxxxx, XX 00000
Wachovia Bank
Bowater Funding Inc.
Account Number 0000000000
XX Xxx 00000
Xxxxxxxxx, XX 00000
Bowater Funding Inc.
Account Number 0000000
0 Xxxxxxxxxxx, Xxxxxx XX0X 0XX
JPMorgan Chase Manhattan Bank
Bowater Funding Inc.
ABA 000000000
Account Number 9102524478 (electronic lockbox)
Exhibit IV
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished pursuant to that certain Amended
and Restated Receivables Sale Agreement dated as of December 1, 2005, among
Bowater Incorporated (together with its successors, "Bowater"), Bowater America
Inc., and Bowater Funding Inc. (as amended, restated or otherwise modified from
time to time, the "Agreement"). Capitalized terms used and not otherwise defined
herein are used with the meanings attributed thereto in the Agreement.
THE UNDERSIGNED FINANCIAL OFFICER HEREBY CERTIFIES THAT:
1........I am the duly elected ______________ of Bowater.
2........I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of Bowater and its Subsidiaries during the
accounting period covered by the attached financial statements.
3........The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Termination Event or an Unmatured Termination Event, as each such term is
defined under the Agreement, during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate[, except as set forth below].
[4.......Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Bowater has taken, is taking, or
proposes to take with respect to each such condition or event:
_______________________________].
The foregoing certifications, together with the financial statements
delivered with this Certificate, are made and delivered this ____ day of
______________, 200_.
BOWATER INCORPORATED
By:_______________________
Name:
Title:
Exhibit V-1
[FORM OF] PURCHASE PRICE LOAN NOTE
PURCHASE PRICE LOAN NOTE December 1, 2005
1 Note. FOR VALUE RECEIVED, the undersigned, Bowater America Inc., a
Delaware corporation ("Transferee"), hereby unconditionally promises to pay to
the order of Bowater Incorporated, a Delaware corporation ("Seller"), in lawful
money of the United States of America and in immediately available funds, upon
demand, the aggregate unpaid principal sum outstanding of all Purchase Price
Loans made from time to time by Seller to Transferee pursuant to and in
accordance with the terms of that certain Amended and Restated Receivables Sale
Agreement dated as of December 1, 2005 among Seller, Transferee and certain of
their affiliates (as amended, restated, supplemented or otherwise modified from
time to time, the "Sale Agreement"). Reference to Sections 1.2(c) and 1.3(b) of
the Sale Agreement is hereby made for a statement of the terms and conditions
under which the loans evidenced hereby have been and will be made. Capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to
such terms in the Sale Agreement. This Purchase Price Loan Note amends and
restates in its entirety that certain Purchase Price Loan Note dated December
19, 2002 made by Transferee in favor of Seller.
2 Interest. Transferee further promises to pay interest on the
outstanding unpaid principal amount hereof from the date of the initial Purchase
Price Loan hereunder until payment in full hereof at a rate per annum equal to
the Prime Rate (as hereinafter defined); provided, however, that if Transferee
shall default in the payment of any principal hereof, Transferee promises to
pay, on demand, interest at the rate equal to the Prime Rate plus 2.00% per
annum on any such unpaid amounts, from the date such payment is due to the date
of actual payment. Interest shall be payable on the first Business Day of each
month in arrears; provided, however, that Transferee may elect on the date any
interest payment is due hereunder to defer such payment and upon such election
the amount of interest due but unpaid on such date shall constitute principal
under this Purchase Price Loan Note. The outstanding principal of any loan made
under this Purchase Price Loan Note may be repaid or prepaid at any time without
premium or penalty. As used herein, "Prime Rate" means a rate per annum equal to
the prime rate published from time to time in The Wall Street Journal, changing
when and as such published rate changes and shall be computed for actual days
elapsed on the basis of a year consisting of 360 days.
3. Principal. Seller is authorized and directed by Transferee to
enter on the grid attached hereto, or, at its option, in its books and records,
the date and amount of each Purchase Price Loan and the amount of each payment
of principal made by Transferee, and absent manifest error, such entries shall
constitute prima facie evidence of the accuracy of the information so entered;
provided that neither the failure of Seller to make any such entry or any error
therein shall expand, limit or affect the obligations of Transferee hereunder.
4 GOVERNING LAW. THIS PURCHASE PRICE LOAN NOTE SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW). WHEREVER POSSIBLE EACH PROVISION OF THIS PURCHASE PRICE LOAN
NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS PURCHASE PRICE LOAN NOTE SHALL BE
PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
PURCHASE PRICE LOAN NOTE.
5........Waivers. All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor.
BOWATER AMERICA INC.
By:_____________________________
Name:
Title:
SCHEDULE
TO
PURCHASE PRICE LOAN NOTE
PURCHASE PRICE LOANS AND PAYMENTS OF PRINCIPAL
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AMOUNT OF AMOUNT OF UNPAID
SUBORDINATED PRINICIPAL PRINCIPAL NOTATION MADE
DATE LOAN PAID BALANCE BY (INITIALS)
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Exhibit V-2
[FORM OF] SUBORDINATED NOTE
SUBORDINATED NOTE
December 1, 2005
1 Note. FOR VALUE RECEIVED, the undersigned, Bowater Funding Inc., a
Delaware corporation ("Buyer"), hereby unconditionally promises to pay to the
order of Bowater America Inc., a Delaware corporation ("BAI"), in lawful money
of the United States of America and in immediately available funds, on or before
the date following the Termination Date which is one year and one day after the
date on which (i) the Outstanding Balance of all Receivables sold by BAI under
that certain Amended and Restated Receivables Sale Agreement dated as of
December 1, 2005 between BAI and certain of its affiliates and Buyer (as
amended, restated, supplemented or otherwise modified from time to time, the
"Sale Agreement") has been reduced to zero and (ii) BAI has paid to Buyer all
indemnities, adjustments and other amounts which may be owed thereunder in
connection with the Purchases thereunder (the "Collection Date"), the aggregate
unpaid principal sum outstanding of all Subordinated Loans made from time to
time by BAI to Buyer pursuant to and in accordance with the terms of the Sale
Agreement. Reference to Sections 1.2(c) and 1.3(b) of the Sale Agreement is
hereby made for a statement of the terms and conditions under which the loans
evidenced hereby have been and will be made. Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Sale Agreement. This Subordinated Note amends and restates in its entirety that
certain Subordinated Note dated December 19, 2002 made by Buyer in favor of BAI.
2 Interest. Buyer further promises to pay interest on the outstanding
unpaid principal amount hereof from the date of the initial Subordinated Loan
hereunder until payment in full hereof at a rate per annum equal to the Prime
Rate (as hereinafter defined); provided, however, that if Buyer shall default in
the payment of any principal hereof, Buyer promises to pay, on demand, interest
at the rate equal to the Prime Rate plus 2.00% per annum on any such unpaid
amounts, from the date such payment is due to the date of actual payment.
Interest shall be payable on the first Business Day of each month in arrears;
provided, however, that Buyer may elect on the date any interest payment is due
hereunder to defer such payment and upon such election the amount of interest
due but unpaid on such date shall constitute principal under this Subordinated
Note. The outstanding principal of any loan made under this Subordinated Note
shall be due and payable on the Collection Date and may be repaid or prepaid at
any time without premium or penalty. As used herein, "Prime Rate" means a rate
per annum equal to the prime rate published from time to time in The Wall Street
Journal, changing when and as such published rate changes and shall be computed
for actual days elapsed on the basis of a year consisting of 360 days.
3 Principal. BAI is authorized and directed by Buyer to enter on the grid
attached hereto, or, at its option, in its books and records, the date and
amount of each
Subordinated Loan and the amount of each payment of principal made by Buyer, and
absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the information so entered; provided that neither the failure of BAI
to make any such entry or any error therein shall expand, limit or affect the
obligations of Buyer hereunder.
4 Subordination. BAI shall have the right to receive, and Buyer shall make,
any and all payments and prepayments relating to the loans made under this
Subordinated Note, provided that, after giving effect to any such payment or
prepayment, the aggregate Outstanding Balance of Receivables owned by Buyer at
such time exceeds any and all then outstanding "Obligations" under and as
defined in that certain Loan Agreement dated as of December 1, 2005 by and among
Buyer, Bowater Incorporated, as initial Servicer, various lenders and co-agents,
and SunTrust Capital Markets, Inc., a Tennessee corporation, as "Administrative
Agent" (as amended, restated, supplemented or otherwise modified from time to
time, the "Loan Agreement"). BAI hereby agrees that at any time during which the
conditions set forth in the proviso of the immediately preceding sentence shall
not be satisfied, BAI shall be subordinate in right of payment to the prior
payment of all Obligations under and as defined under the Loan Agreement. The
subordination provisions contained herein are for the direct benefit of, and may
be enforced by, Administrative Agent, on behalf of the Secured Parties under and
as defined in the Loan Agreement (Administrative Agent and the Secured Parties
being hereinafter collectively referred to as the "Senior Claimants"). Until the
date on which the "Obligations" under and as defined in the Loan Agreement (all
such Obligations, collectively, the "Senior Claim") have been indefeasibly paid
and satisfied in full, BAI shall not institute against Buyer any proceeding of
the type described in Section 5.1(f) of the Sale Agreement unless and until the
Collection Date has occurred. Should any payment, distribution or security or
proceeds thereof be received by BAI in violation of this Section 4, BAI agrees
that such payment shall be segregated, received and held in trust for the
benefit of, and deemed to be the property of, and shall be immediately paid over
and delivered to Administrative Agent for the benefit of the Senior Claimants.
5 Bankruptcy; Insolvency. Upon the occurrence of any proceeding of the type
described in Section 5.1(f) of the Sale Agreement involving Buyer as debtor,
then and in any such event the Senior Claimants shall receive payment in full of
all amounts due or to become due on or in respect of the Aggregate Invested
Amount and the Senior Claim (including, without limitation, any interest thereon
accruing after the commencement of any such proceeding, whether or not any or
all of such interest is an allowable claim in any such proceeding) before BAI is
entitled to receive payment on account of this Subordinated Note, and to that
end, any payment or distribution of assets of Buyer of any kind or character,
whether in cash, securities or other property, in any applicable insolvency
proceeding, which would otherwise be payable to or deliverable upon or with
respect to any or all indebtedness under this Subordinated Note, is hereby
assigned to and shall be paid or delivered by the Person making such payment or
delivery (whether a trustee in bankruptcy, a receiver, custodian or liquidating
trustee or otherwise) directly to Administrative Agent for application to, or as
collateral for the payment of, the Senior Claim until such Senior Claim shall
have been paid in full and satisfied.
6 Amendments. This Subordinated Note shall not be amended or modified
except in accordance with Section 7.1 of the Sale Agreement. The terms of this
Subordinated Note may not be amended or otherwise modified without the prior
written consent of each of the Agents (under and as defined in the Loan
Agreement).
7 GOVERNING LAW. THIS SUBORDINATED NOTE SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE SHALL BE INTERPRETED
IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY
PROVISION OF THIS SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID UNDER
APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH
PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION
OR THE REMAINING PROVISIONS OF THIS SUBORDINATED NOTE.
8 Waivers. All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
BAI additionally expressly waives all notice of the acceptance by any Senior
Claimant of the subordination and other provisions of this Subordinated Note and
expressly waives reliance by any Senior Claimant upon the subordination and
other provisions herein provided.
9 Assignment, Pledge and Transfer. This Subordinated Note may not assigned,
pledged or otherwise transferred to any Person other than its delivery to the
Administrative Agent, and any attempted assignment, pledge or transfer in
violation hereof shall be void ab initio.
BOWATER FUNDING INC.
By:_____________________________
Name:
Title:
SCHEDULE
TO
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
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AMOUNT OF AMOUNT OF UNPAID
SUBORDINATED PRINCIPAL PRINCIPAL NOTATION MADE
DATE LOAN PAID BALANCE BY(INITIALS)
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Exhibit VI
[FORM OF] PURCHASE REPORT
For the Calculation Period beginning [date] and ending [date]
-----
TO: ______________________, AS TRANSFEREE, AND THE ADMINISTRATIVE
AGENT
--------------------------------------------------------- -------------------------- ----------------------- ---------
--------------------------------------------------------- -------------------------- ----------------------- ---------
Aggregate Outstanding Balance of all Receivables
created during the period: $_____________ A
--------------------------------------------------------- -------------------------- ----------------------- ---------
--------------------------------------------------------- -------------------------- ----------------------- ---------
Less (if applicable): Aggregate Outstanding Balance of all Receivables
contributed during the period:
$____________) (B)
--------------------------------------------------------- -------------------------- ----------------------- ---------
Equals: Aggregate Outstanding Balance of all
Receivables sold during the period (A - B ):
$___________ =C
--------------------------------------------------------- -------------------------- ----------------------- ---------
Less: Purchase Price discount during the Period:
($____________) (D)
--------------------------------------------------------- -------------------------- ----------------------- ---------
Equals: Gross Purchase Price Payable during the period
(A - D) $____________ =E
--------------------------------------------------------- -------------------------- ----------------------- ---------
Less: Total Purchase Price Credits arising during the
Period: ($____________) (F)
--------------------------------------------------------- -------------------------- ----------------------- ---------
Equals: Net Purchase Price payable during the Period
(E - F): $____________ =G
--------------------------------------------------------- -------------------------- ----------------------- ---------
--------------------------------------------------------- -------------------------- ----------------------- ---------
Cash Purchase Price Paid to Seller: $_____________ H
--------------------------------------------------------- -------------------------- ----------------------- ---------
Exhibit VII
CREDIT AND COLLECTION POLICY
CREDIT MANUAL
BOWATER INCORPORATED
PAPER PRODUCTS
MISSION:
The mission of the credit department is to assist in the selling of the
company's products to all qualified customers while protecting the company's
investment in accounts receivable.
CREDIT PHILOSOPHY:
The company manufactures pulp, and paper products for a wide variety of end
users. Each class of users has different degrees of risk. The company is willing
to take a larger degree of risk in order to make our products available to a
wider audience.
CREDIT DEPARTMENT GOALS:
The credit department sets goals each year. The goals will be based on the
department's accomplishment of the prior year's goals, current market
conditions, corporate goals, and the company's credit philosophy.
CREDIT STAFF AND RESPONSIBILITIES:
The Credit Department reports to the Director of Financial Planning and
Analysis, who reports to the VP Administration and Planning. There are 6 staff
positions within the Credit Department.
a. Director of Credit - Has over-all responsibility for the Credit Department
b. Two credit managers - Have responsibility for credit and collection for
assigned products and geographic areas c. Accounts Receivable manger - Has
responsibility for the integrity of corporate AR d. Two Credit Analyst - Assist
AR manager and credit managers
CREDIT MANAGEMENT POLICIES:
Each new potential customer is reviewed by the appropriate credit manager and if
warranted ask to complete and sign a credit application. A credit investigation
to determine the creditworthiness of each new potential customer is performed by
obtaining bank and trade reports or by pulling a credit report from a credit
reporting agency or from an industry credit group. Financial statements are
required at the discretion of the assigned credit manager. Credit lines are
assigned at the discretion of the assigned credit manager. If no credit limit is
assigned, all orders for the account are credit approved before production.
Terms other than the industry or country "normal" require approval by the next
level of management.
Customer will receive products as long as their account is current and within
the approved line of credit. If a customer's account is not current or within
the approved line of credit, each new order for the customer is reviewed by the
assigned credit manager and must be manually approved before production. All
efforts are made to proactively qualify orders for production.
COLLECTION MANAGEMENT POLICIES:
The Credit Department will collect all outstanding AR in a timely manner.
Customer will be contacted by:
a. CSR or sales person responsible for account b. Directly by credit manager or
other assigned credit personnel
Aging reports are produced weekly or on demand to assist CSR/sales and credit
manager ascertain which accounts need collection effort. If a customer is unable
or unwilling to pay their outstanding balance, the Credit Manager will consider
placing the account with an authorized collection agency or collection attorney.
Items are not written off to bad debt until all efforts to collect are exhausted
..
INFORMATION MANAGEMENT POLICIES:
The AR/credit system is CODA. CODA provides on line real time customer
information. Weekly, monthly and on-demand aging reports are available to assist
the credit mangers in account evaluations. Reports are provided to higher
management as required. Each credit manager is a member of NACM and attends
industry credit meeting. Each Credit Manager is responsible for his/her self
education in credit management skills.
Exhibit VIII
FORM OF LETTER OF CREDIT REQUEST
[Date]
To: [Bowater America Inc./Bowater Funding Inc.]
00 Xxxx Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Re: LETTER OF CREDIT REQUEST
Ladies and Gentlemen:
Reference is hereby made to the Amended and Restated
Receivables Sale Agreement, dated as of December 1, 2005, among Bowater
Incorporated and Bowater America Inc., as sellers, and Bowater Funding Inc., as
buyer (as amended, supplemented, restated or otherwise modified from time to
time, the "Agreement"). Capitalized terms used and not otherwise defined herein
are used with the meanings attributed to them in the Agreement.
As payment for that portion of the Purchase Price of the
Receivables to be sold to you on [date] by [Bowater Incorporated/Bowater America
Inc.] pursuant to the Agreement that is calculated from the information below
and in accordance with the Agreement, you are hereby requested to arrange for
and obtain the issuance of a standby letter of credit with the following terms
for your account:
1. Name and address of beneficiary: _______________________
2. To be delivered by [overnight carrier/teletransmission/mail/other
(specify)]
3. Currency and amount: US$_____________
4. Advising bank name and address, if applicable: _________________
5. Expiration date (not to exceed one year from the date of issuance or
extension): __________________
6. Credit to be available for payment against beneficiary's draft(s)
drawn at sight accompanied by the following documents (check one):
/ / Statement purportedly signed by the beneficiary which reads
as follows: ________________.
Other Documents: ______________________________
/ / Special Conditions (including, if you have a preference,
selection of UCP or ISP98): ------------------------------
/ / Issue substantially in form of attached specimen.
7. [We hereby offer you a commission for this letter of credit, payable
upon its issuance and delivery, of $___________.]
8. [If the beneficiary specified above is a financial institution that is
to issue its own undertaking based on this requested letter of credit:
Request beneficiary to issue and deliver its (specify type of
undertaking) ___________ in favor of ________________ for an amount
not exceeding the amount specified above, effective immediately
relative to (specify contract number or other pertinent reference)
____________ to expire on _________________. ]
9. The requested letter of credit should state that it is being issued
upon application of Bowater Funding Inc. at the request of [insert
name of applicable Bowater affiliate].
Sincerely,
[BOWATER INCORPORATED/BOWATER AMERICA INC.], AS SELLER
By: __________________________________
Name:
Title:
Schedule A
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO EFFECTIVENESS OF THE AMENDMENT AND RESTATEMENT
1. Executed copies of the Amended and Restated Receivables Sale Agreement,
duly executed by the parties thereto.
2. A certificate of each Seller's [Assistant] Secretary certifying:
(a) A copy of the Resolutions of the Board of Directors of such Seller,
authorizing such Seller's execution, delivery and performance of the Amended and
Restated Receivables Sale Agreement and the other documents to be delivered by
it thereunder;
(b) A copy of the Organizational Documents of such Seller (also certified,
to the extent that such documents are filed with any governmental authority, by
the Secretary of State of the jurisdiction of organization of Seller on or
within thirty (30) days prior to closing);
(c) Good Standing Certificates for such Seller issued by the Secretary of
State of its state of organization and each other jurisdiction where it has
material operations; and
(d) The names and signatures of the officers authorized on such Seller's
behalf to execute the Amended and Restated Receivables Sale Agreement and any
other documents to be delivered by it hereunder.
3. One or more favorable opinions of internal and outside legal counsel for
each Seller reasonably acceptable to Buyer (and the Administrative Agent) as to
the following (it being understood that at a minimum, all UCC opinions and
enforceability opinions are to come from outside counsel, as well as
non-contravention of the Bowater Credit Agreement and other material financing
agreements or indentures identified in an officer's certificate as being
material to Bowater and its Subsidiaries taken as a whole):
(a) Such Seller is a corporation, duly organized, validly existing, and in
good standing under the laws of the State of ______________.
(b) Such Seller has all requisite authority to conduct its business in each
jurisdiction where failure to be so qualified would have a material adverse
effect on such Seller's business.
(c) The execution and delivery by such Seller of the Amended and Restated
Receivables Sale Agreement and each other Transaction Document to which it is a
party and its performance of its obligations thereunder have been duly
authorized by all necessary organizational action and proceedings on the part of
such Seller and will not:
(i) require any action by or in respect of, or filing with, any
governmental body, agency or official (other than the filing of UCC financing
statements);
(ii) contravene, or constitute a default under, any provision of applicable
law or regulation or of its Organizational Documents or of any agreement,
judgment, injunction, order, decree or other instrument binding upon such
Seller; or
(iii) result in the creation or imposition of any Adverse Claim on assets
of such Seller (except as contemplated by the Amended and Restated Receivables
Sale Agreement).
(d) The Amended and Restated Receivables Sale Agreement and each other
Transaction Document to which it is a party has been duly executed and delivered
by such Seller and constitutes the legally valid, and binding obligation of such
Seller enforceable in accordance with its terms, except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.
(e) In the event that the Amended and Restated Receivables Sale Agreement
is held to create a transfer for security purposes rather than a true sale or
other outright assignment, the provisions of the Amended and Restated
Receivables Sale Agreement are effective to create valid security interests in
favor of the applicable Transferee, in all of such Seller's right, title and
interest, in and to the Receivables and Related Security described therein which
constitute "accounts," "chattel paper" or "general intangibles" (each as defined
in the UCC) (collectively, the "Opinion Collateral"), as security for the
payment of a loan deemed to have been made by such Transferee to such Seller in
an amount equal to the aggregate Purchase Prices (as defined therein) of the
Receivables (as defined therein) sold by such Seller, together with all other
obligations of such Seller thereunder.
(f) Each of the UCC-1 Financing Statements naming such Seller as debtor,
any Transferee, as secured party, and/or the Administrative Agent, as assignee
of secured party to be filed in the [describe filing offices], is in appropriate
form for filing therein. Upon filing of such UCC-1 Financing Statements in such
filing offices and payment of the required filing fees, the security interest in
favor of such Transferee in the Opinion Collateral transferred by such Seller
will be perfected and assigned of record to the Administrative Agent.
(g) Based solely on our review of the [describe UCC Search Reports], and
assuming (i) the filing of the Financing Statements and payment of the required
filing fees in accordance with paragraph (f) and (ii) the absence of any
intervening filings between the date and time of the Search Reports and the date
and time of the filing of the Financing Statements, the security interest of
Buyer in the Opinion Collateral is prior to any security interest granted in the
Opinion Collateral by such Seller, the priority of which is determined solely by
the filing of a financing statement in the [describe filing offices].
(h) To the best of the opinion giver's knowledge, there is no action, suit
or other proceeding against any Seller or any Affiliate of any Seller, which
would materially adversely affect the business or financial condition of any
Seller and its Affiliates taken as a whole or which would materially adversely
affect the ability of any Seller to perform its obligations under the Amended
and Restated Receivables Sale Agreement.
4. A "true sale" opinion and "substantive consolidation" opinion(s)
of outside counsel for the Sellers with respect to the transactions contemplated
by the Amended and Restated Receivables Sale Agreement.
5. A Certificate of a Financial Officer of Bowater certifying that, as of
the Closing Date, no Termination Event or Unmatured Termination Event exists and
is continuing.
6. Amended and Restated Performance Undertaking executed by Bowater
in favor of the Buyer.
7.Amended and Restated Loan Agreement and each of the closing
documents described therein.
Schedule B
NOTICE ADDRESSES
Sellers:
c/o Bowater Incorporated
00 Xxxx Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Buyer:
Bowater Funding Inc.
00 Xxxx Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
