EXHIBIT
10.40
Dated as of January 31, 2008
Among
ABITIBI-CONSOLIDATED U.S. FUNDING CORP.
as the Seller
and
EUREKA SECURITISATION, PLC
as the Investor
and
CITIBANK, N.A.
as a Bank
and
CITIBANK, N.A., LONDON BRANCH
as the Agent
and
THE ORIGINATORS NAMED HEREIN
and
ABITIBI CONSOLIDATED SALES CORPORATION
as Servicer
and
ABITIBI-CONSOLIDATED INC.
as Subservicer
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS |
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1 |
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Section 1.01 Certain Defined Terms |
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1 |
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Section 1.02 Other Terms |
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33 |
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ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES |
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34 |
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Section 2.01 Purchase Facility |
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34 |
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Section 2.02 Making Purchases |
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34 |
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Section 2.03 Receivable Interest Computation |
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36 |
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Section 2.04 Settlement Procedures |
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36 |
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Section 2.05 Fees |
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39 |
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Section 2.06 Payments and Computations, Etc. |
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39 |
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Section 2.07 Dividing or Combining Receivable Interests |
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40 |
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Section 2.08 Increased Costs |
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40 |
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Section 2.09 [Intentionally Omitted] |
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41 |
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Section 2.10 Taxes |
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41 |
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Section 2.11 Security Interest |
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43 |
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Section 2.12 Sharing of Payments |
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44 |
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Section 2.13 Intentionally Omitted |
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44 |
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Section 2.14 Purchase by Term-Out Banks |
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44 |
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Section 2.15 Interest on Cash Secured Advances |
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45 |
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Section 2.16 Repayment of Cash Secured Advances |
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45 |
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Section 2.17 Use of Proceeds; Security Interest in Collateral
Advance Account |
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45 |
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Section 2.18 Repurchase Option |
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46 |
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ARTICLE III CONDITIONS OF PURCHASES |
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46 |
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Section 3.01 [Intentionally Omitted] |
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46 |
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Section 3.02 Conditions Precedent to All Purchases and
Reinvestments |
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47 |
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Section 3.03 Conditions Precedent to the Effectiveness of
Amendment and Restatement |
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47 |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES |
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49 |
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Section 4.01 Representations and Warranties of the Seller |
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49 |
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Section 4.02 Representations and Warranties of the Servicer |
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53 |
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ARTICLE V COVENANTS |
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55 |
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Section 5.01 Covenants of the Seller |
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55 |
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Section 5.02 Covenant of the Seller and the Originators |
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62 |
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ARTICLE VI ADMINISTRATION AND COLLECTION OF POOL RECEIVABLES |
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63 |
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Section 6.01 Designation of Servicer |
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63 |
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Section 6.02 Duties of Servicer |
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63 |
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Section 6.03 Certain Rights of the Agent |
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65 |
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Section 6.04 Rights and Remedies |
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66 |
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Section 6.05 Further Actions Evidencing Purchases |
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67 |
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Section 6.06 Covenants of the Servicer and each Originator |
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67 |
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Section 6.07 Indemnities by the Servicer |
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67 |
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Section 6.08 Collateral Advance Account |
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69 |
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Section 6.09 Canadian Residents |
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70 |
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Section 6.10 Collateral Advance Account Agreement; Deposit
Account Agreements |
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71 |
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ARTICLE VII EVENTS OF TERMINATION |
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71 |
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Section 7.01 Events of Termination |
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71 |
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ARTICLE VIII THE AGENT |
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75 |
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Section 8.01 Authorization and Action |
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75 |
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Section 8.02 Agent’s Reliance, Etc. |
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75 |
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Section 8.03 CNAI and Affiliates |
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75 |
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Section 8.04 Bank’s Purchase Decision |
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76 |
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Section 8.05 Indemnification of Agent |
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76 |
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ARTICLE IX INDEMNIFICATION |
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76 |
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Section 9.01 Indemnities by the Seller |
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76 |
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ARTICLE X MISCELLANEOUS |
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79 |
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Section 10.01 Amendments, Etc. |
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79 |
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Section 10.02 Notices, Etc. |
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83 |
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Section 10.03 Assignability |
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83 |
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Section 10.04 Costs and Expenses |
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86 |
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Section 10.05 No Proceedings |
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87 |
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Section 10.06 Confidentiality |
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87 |
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Section 10.07 GOVERNING LAW |
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89 |
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Section 10.08 Execution in Counterparts |
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89 |
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Section 10.09 Survival of Termination |
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89 |
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Section 10.10 Consent to Jurisdiction |
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89 |
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Section 10.11 WAIVER OF JURY TRIAL |
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90 |
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Section 10.12 Judgment |
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90 |
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Section 10.13 Execution by ACI |
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91 |
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Section 10.14 Language |
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91 |
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Section 10.15 Tax Treatment |
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91 |
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Section 10.16 Acknowledgment |
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91 |
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SCHEDULES |
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SCHEDULE I |
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Deposit Accounts |
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SCHEDULE II |
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Credit and Collection Policy |
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SCHEDULE III |
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Addresses |
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SCHEDULE IV |
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UCC and PPSA Information |
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SCHEDULE V |
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Special Country Concentration Limits |
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ANNEXES |
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ANNEX A-1 |
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Form of Monthly Report |
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ANNEX A-2 |
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Form of Weekly Report |
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ANNEX B |
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Form of Deposit Account Agreement |
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ANNEX C |
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Form of Collateral Advance Account Agreement |
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ANNEX D |
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[Intentionally Omitted] |
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ANNEX E-1 |
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Form of Funds Transfer Letter |
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ANNEX E-2 |
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Form of Direction Letter |
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ANNEX F |
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Form of Undertaking (Originator) |
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ANNEX G |
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Form of Undertaking (Servicer) |
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ANNEX H |
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Insurance Policy |
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ANNEX I |
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Form of Notice of Continuance and Change of Address |
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ANNEX J |
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Form of Notice of Amalgamation |
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ANNEX K |
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Form of Assumption Agreement |
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ANNEX L |
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Form of Notice of Change of Address |
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ANNEX M |
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Forms of Bank Agreement Security Letters |
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ANNEX N |
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Form of Certificate Regarding Adverse Claims |
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Dated as of January 31, 2008
ABITIBI-CONSOLIDATED U.S. FUNDING CORP., a Delaware corporation (the “Seller”), EUREKA
SECURITISATION, PLC, an English corporation, as an Investor, CITIBANK, N.A., as a Bank, CITIBANK,
N.A., LONDON BRANCH, as operating agent (the “Agent”) for the Investors and the Banks (each as
defined herein), ABITIBI-CONSOLIDATED INC., a Canadian corporation
(“ACI”), ABITIBI CONSOLIDATED
SALES CORPORATION, a Delaware corporation (“ACSC”), as Originators (as defined herein), ACI, as
Subservicer (as defined herein), and ACSC, as Servicer (as defined herein), agree as follows:
PRELIMINARY STATEMENT. The Seller, Eureka, Citibank, the Agent, ACI and ACSC (as such terms
are herein defined) entered into that certain
Receivables Purchase Agreement dated as of October
27, 2005 (as amended prior to the date hereof, the
“Original RPA”). The Seller has
acquired, and may continue to acquire, Receivables from the Originators (as hereinafter defined),
either by purchase or (in the case of ACSC) by contribution to the capital of the Seller, as
determined from time to time by the Seller and the applicable Originator. The Seller has sold and
is prepared to continue to sell undivided fractional ownership interests (referred to herein as
“Receivable Interests”) in the Receivables. Eureka (as hereinafter defined) may, in its sole
discretion, purchase such Receivable Interests, and the Banks are prepared to purchase such
Receivable Interests, in each case on the terms set forth herein. The parties hereto wish to amend
and restate the Original RPA in its entirety. Accordingly, the parties agree that the Original RPA
is amended and restated to read in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
“ACCC” means Abitibi Consolidated Company of Canada.
“ACG” means
American Color Graphics, Inc.
“Adjusted Eurodollar Rate” means, for any Fixed Period, an interest rate per annum
equal to the rate per annum obtained by dividing (i) the Eurodollar Rate for such Fixed Period by
(ii) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Fixed Period.
“Adverse Claim” means a lien, security interest, mortgage, pledge, assignment, hypothec,
hypothecation, privilege, title retention or other charge or encumbrance, or any other type of
preferential arrangement (which, for the avoidance of doubt, does not include Taxes not yet due and
payable).
“Affected Person” has the meaning specified in Section 2.08(a).
“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by or is under common control with such Person or is a director or
officer of such Person.
“Affiliated Obligor” means any Obligor that is an Affiliate of another
Obligor.
“Agent’s Account” means the special account (account number 311-3744) of the
Investor maintained at the office of the Agent in London.
“Aggregate Loss and Dilution Reserve” means, on any date, an amount equal to the
product of (a) the Aggregate Loss and Dilution Reserve Percentage on such date multiplied by (b)
the Net Receivables Pool Balance on such date.
“Aggregate Loss and Dilution Reserve Percentage” means, as of any date, the greater of
(a) the sum of (i) the Dynamic Loss Reserve Percentage as of such date plus (ii) the Dynamic
Dilution Reserve Percentage as of such date and (b) the sum of (i) the Loss Reserve Floor
Percentage as of such date plus (ii) the Dilution Reserve Floor Percentage as of such date.
“Alternate Base Rate” means a fluctuating interest rate per annum as shall be in
effect from time to time, which rate shall be at all times equal to the highest of:
(a) the rate of interest announced publicly by Citibank in
New York,
New York, from time to time as Citibank’s base rate;
(b) 1/2 of one percent above the latest three-week moving average of
secondary market morning offering rates in the United States for three-month
certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if such day
is not a Business Day, on the next succeeding Business Day) for the three-week
period ending on the previous Friday by Citibank on the basis of such rates
reported by certificate of deposit dealers to and published by the Federal
Reserve
Bank of
New York or, if such publication shall be suspended or terminated, on
the
basis of quotations for such rates received by Citibank from three
New York
certificate of deposit dealers of recognized standing selected by Citibank, in
either
case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4
of one
percent, to the next higher 1/4 of one percent; and
(c) the Federal Funds Rate.
“Amalgamated Entity” has the meaning specified in the definition of
“Amalgamation” set forth below.
“Amalgamation” means the amalgamation of the Continued Entity with a newly incorporated
Nova Scotia limited liability company, as described in more detail in Annex J (the resulting
entity, the “Amalgamated Entity”).
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“Amalgamation Effective Date” has the meaning specified in Section 10.01(d).
“Amalgamation Opinion” has the meaning specified in Section 10.01(c)(B).
“Applicable Margin” has the meaning specified in the Fee Agreement.
“Approved Country” means the United States, Canada, and any other country outside
of the European Area other than those:
(i) whose government or central bank (x) shall have prohibited the sale of the
currency of such country in exchange for United States dollars or shall have admitted in
writing its inability to pay its debts as the same become due, (y) shall have declared a
moratorium on the payment of its debts or the debts of any national governmental authority
of such country, or (z) shall have ceased to be a member of the International Monetary Fund
or ceased to be eligible to use the resources of the International Monetary Fund; or
(ii) with respect to which the United States shall have imposed economic
sanctions.
“Asset Purchase Agreement” means (a) in the case of any Bank other than Citibank, the
asset purchase agreement entered into by such Bank concurrently with the Assignment and Acceptance
pursuant to which it became party to this Agreement and (b) in the case of Citibank, the secondary
market agreement, asset purchase agreement or other similar liquidity agreement entered into by
Citibank for the benefit of Eureka, to the extent relating to the sale or transfer of interests in
Receivable Interests.
“Assignee Rate” for any Fixed Period for any Receivable Interest means an interest rate
per annum equal to the Adjusted Eurodollar Rate for such Fixed Period plus the Applicable
Margin; provided, however, that in case of:
(i) any Fixed Period on or prior to the first day of which an Investor
or Bank shall have notified the Agent that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such Investor
or Bank to fund such Receivable Interest at the Assignee Rate set forth above (and
such Investor or Bank shall not have subsequently notified the Agent that such
circumstances no longer exist),
(ii) any Fixed Period of one to (and including) 29 days (it being
understood and agreed that this clause (ii) shall not be applicable to a Fixed
Period for which Yield is to be computed by reference to the Adjusted Eurodollar
Rate that is intended to have a one-month duration but due solely to LIBOR interest
period convention the duration thereof will be less than 30 days),
(iii) any Fixed Period as to which the Agent does not receive notice, by no
later than 12:00 noon (
New York City time) on the third Business Day preceding
the first day of such Fixed Period, that the related Receivable
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Interest will not be funded by Eureka through the issuance of Promissory Notes, or
(iv) any Fixed Period for a Receivable Interest the Capital of which
allocated to the Investors or the Banks is less than $500,000,
the “Assignee Rate” for such Fixed Period shall be an interest rate per annum equal to the
Alternate Base Rate in effect from time to time during such Fixed Period plus the Applicable
Margin; provided further that at any time when an Event of Termination shall exist, the
“Assignee Rate” for such Fixed Period shall be an interest rate per annum equal to the Alternate
Base Rate in effect from time to time during such Fixed Period plus the Applicable Margin plus
2.0%.
“Assignment and Acceptance” means an assignment and acceptance agreement entered into
by a Bank, an Eligible Assignee and the Agent, pursuant to which such Eligible Assignee may become
a party to this Agreement, in a form acceptable to the Agent and approved by the Seller (which
approval by the Seller shall not be unreasonably withheld or delayed and shall not be required if
an Event of Termination or an Incipient Event of Termination has occurred and is continuing).
“Assumption Agreement” means an Assumption Agreement made by the Amalgamated Entity in
favor of the Agent, the Investors, the Banks, the Seller and ACSC, substantially in the form of
Annex K hereto, as the same may be amended, modified or restated from time to time.
“Average Dilution Ratio” means, for any calendar month, the product of (i) the sum of
(A) the Dilution Ratio for such calendar month plus (B) 50% of the Dilution Ratio for the
immediately preceding calendar month multiplied by (ii) 0.6667.
“Bank Agreement” means the Credit Agreement dated as of October 3, 2005 among ACI and
Abitibi-Consolidated Company of Canada, as borrowers, Canadian Imperial Bank of Commerce and the
other financial institutions from time to time party thereto, as the same may be amended, restated
or supplemented from time to time.
“Bank Agreement Security Letters” means, collectively, a request letter from ACI to
Canadian Imperial Bank of Commerce and a confirmation letter between Canadian Imperial Bank of
Commerce and the Agent, in the forms attached hereto as Annex M.
“Bank Commitment” of any Bank means, (a) with respect to Citibank, $350,000,000 or
such amount as reduced or increased by any Assignment and Acceptance entered into between Citibank
and other Banks; or (b) with respect to a Bank that has entered into an Assignment and Acceptance,
the amount set forth therein as such Bank’s Bank Commitment, in each case as such amount may be
reduced or increased by an Assignment and Acceptance entered into between such Bank and an Eligible
Assignee, and as may be further reduced (or terminated) pursuant to the next sentence. Any
reduction (or termination) of the Purchase Limit pursuant to the terms of this Agreement shall
reduce ratably (or terminate) each Bank’s Bank Commitment.
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“Banks” means Citibank and each Eligible Assignee that shall become a party to this Agreement
pursuant to Section 10.03.
“Business Day” means any day on which (i) banks are not authorized or required to close in
London,
New York City or Montreal, and (ii) if this definition of
“Business Day” is utilized in
connection with the Eurodollar Rate, dealings are carried out in the London interbank market.
“Canadian Dollars” or “CAD” means dollars in the lawful currency of Canada.
“Canadian
Originator” means ACL.
“Capital” of any Receivable Interest means the original amount paid to the Seller for such
Receivable Interest at the time of its purchase by Eureka or a Bank pursuant to this Agreement, or
such amount divided or combined in accordance with Section 2.07, in each case reduced from time to
time by Collections distributed on account of such Capital pursuant to Section 2.04(e);
provided that if such Capital shall have been reduced by any distribution and thereafter
all or a portion of such distribution is rescinded or must otherwise be returned for any reason,
such Capital shall be increased by the amount of such rescinded or returned distribution, as though
it had not been made.
“Cash Collateral” has the meaning specified in Section 2.17(b).
“Cash Secured Advance” means, in respect of any Bank, without duplication, the
aggregate amount of the proceeds (a) (i) of the advance, if any, made by such Bank pursuant to
Section 2.01(d) and (ii) of such Bank’s ratable share of any applications of Collections of
Receivables during the Term Period for such Bank to reduce the “Capital” in respect of the
Receivable Interest hereunder and (b) on deposit at such time in the Collateral Advance Account
(including any such proceeds invested by the Agent at such time in Eligible Investments pursuant to
Section 6.08(c)), it being understood that the amount of such Bank’s Cash Secured Advance shall be
decreased by such Bank’s ratable share of the funds paid from time to time from the Collateral
Advance Account to the Seller to make a purchase of an interest in the Receivable Interest from
time to time during the Term Period for such Bank.
“Cash Secured Advance Commencement Date” means, with respect to any Bank, the same day
as the Term-Out Bank Purchase Date for such Bank, provided that the Cash Secured Advance
Commencement Date shall occur if, but only if, the Facility Termination Date shall not have
occurred on or prior to such date and no Event of Termination or Incipient Event of Termination
exists on such date.
“Change of Address” means the first change of address of the principal place of
business, chief executive office and location of receivables records of each of the Seller and ACSC
hereunder as described in the Notice of Change of Address.
“Change of Address Effective Date” has the meaning specified in Section 10.01(e).
“Citibank” means Citibank, N.A., a national banking association.
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“CLB” means Citibank, N.A., London Branch.
“CNAI”
means Citicorp North America, Inc., a Delaware corporation.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral Advance Account” has the meaning specified in Section 6.08(a).
“Collateral Advance Account Agreement” means an agreement among the Servicer, the
Seller, the Agent and the Collateral Advance Account Bank in substantially the form of Annex C.
“Collateral Advance Account Bank” has the meaning specified in Section 6.08(a).
“Collateral
Advance Account Direction” has the meaning specified in Section 6.08(b).
“Collection Delay Period” means 10 days or such other number of days as the
Agent may select upon three Business Days’ notice to the Seller.
“Collections” means, with respect to any Receivable, all cash collections and other cash
proceeds of such Receivable, including, without limitation, (i) all cash proceeds of Related
Security with respect to such Receivable, (ii) any Collection of such Receivable deemed to have
been received pursuant to Section 2.04 and (iii) any Insurance Proceeds received with respect to
such Receivable.
“Commitment Termination Date” means the earliest of (a) January 29, 2009,
unless, prior to such date (or the date so extended pursuant to this clause), upon the
Seller’s request, made not more than 45 days prior to the then Commitment Termination Date, one or
more Banks having Bank Commitments equal to 100% of the Purchase Limit shall in their sole
discretion consent, which consent shall be given not more than 30 days prior to the then Commitment
Termination Date, to the extension of the Commitment Termination Date to a date occurring not more
than 364 days after the then Commitment Termination Date;
provided, however, that any
failure of any Bank to respond to the Seller’s request for such extension shall be deemed a denial
of such request by such Bank, (b) the Facility Termination Date, (c) the date determined pursuant
to Section 7.01, and (d) the date the Purchase Limit reduces to zero pursuant to Section 2.01(b);
provided, however, that if, and only if, there shall have occurred a Cash Secured Advance
Commencement Date for any Bank, the Commitment Termination Date for such Bank shall mean the
earliest of July 29, 2009 and the dates referenced in the preceding clauses (b), (c) and (d).
“Concentration Limit” for any Obligor means at any time 4.00% (“Normal Concentration
Limit”), or, with respect to an Obligor which has a billing address in the United States or Canada,
such higher credit limit (“Special Concentration Limit”) for such Obligor which (i) prior to the
occurrence of any Insurance Policy Event, is designated by the Insurer under the Insurance Policy;
provided that if (x) the Receivables related to an Investment Grade Obligor are greater
than 10% of the Net Receivables Pool Balance or (y) the Receivables related to a Non-Investment
Grade Obligor are greater than 6% of the Net Receivables Pool Balance,
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then any Special Concentration Limit with respect to the related Obligor shall be subject to the
prior written consent of the Agent, and (ii) on and after the occurrence of any Insurance Policy
Event, corresponds to the Uninsured Special Concentration Limit for such Obligor; provided
further that, in the case of an Obligor with any Affiliated Obligor, the Concentration Limit
shall be calculated as if such Obligor and such Affiliated Obligor are one Obligor (except that Sun
Media Corporation shall not be so treated as one Obligor with Quebecor World Inc. and its other
Affiliated Obligors); and provided further that the Agent may, in its sole discretion and
at any time, on account of bona fide credit reasons, reduce or cancel any Special Concentration
Limit (including any Uninsured Special Concentration Limit) and reinstate the Normal Concentration
Limit upon notice to the Seller. For the purposes of the foregoing definition, prior to the
occurrence of any Insurance Policy Event, the Special Concentration Limits for (x) ACG shall be 6%,
and (y) Xxxxxx Inc. shall be 6%, subject in each case to Agent’s right to cancel such Special
Concentration Limits and reinstate the Normal Concentration Limit as set forth above.
“Continuance”
means ACI’s continuance of itself under the laws of Nova Scotia and the related
change of the address of its registered office, as described in more detail in Annex I
(such continued entity, the “Continued Entity”).
“Continuance Effective Date” has the meaning specified in Section 10.01(c).
“Continued Entity” has the meaning specified in the definition of “Continuance” set
forth above.
“Contract” means an agreement between an Originator and an Obligor (including, in the case of
any open account agreement, an invoice), pursuant to or under which such Obligor shall be
obligated to pay for merchandise, insurance or services from time to time.
“Control Event” means (i) a Servicer Default, (ii) an Event of Termination, (iii) a
Significant Incipient Event of Termination or (iv) an event that, but for notice or lapse of time
or both, would constitute a Servicer Default pursuant to clause (iv)(B) or (vi) of the definition
thereof.
“Country Concentration Limit” means at any time, for any Approved Country other than
the United States or Canada, 4.00% (or, if such Approved Country is not listed on the “Country
Schedule” to the Insurance Policy, 2.00%) of the Net Receivables Pool Balance (the “Normal
Country Concentration Limit”), or such other higher percentage (a “Special Country
Concentration Limit”) for such Approved Country as is designated on Schedule V hereto and,
after the date of this Agreement, is designated by the Agent in its sole discretion in a writing
delivered to the Seller; provided that the Agent may, in its sole discretion and at any
time, on account of bona fide credit reasons, reduce or cancel any Special Country Concentration
Limit and reinstate the Normal Country Concentration Limit with respect to the applicable Approved
Country upon notice to the Seller.
“CP Fixed Period Date” means, for any Receivable Interest, the date of purchase of
such Receivable Interest and thereafter the first day of each calendar month or any other day as
shall have been agreed to in writing by the Agent and the Seller prior to the first day of such
Fixed Period.
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“Credit and Collection Policy” means those receivables credit and collection policies
and practices of the Originators in effect on the date of this Agreement and described in Schedule
II hereto, as modified in compliance with this Agreement.
“Debt” means (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase
price of property or services, (iv) obligations as lessee under leases which shall have been or
should be, in accordance with generally accepted accounting principles, recorded as capital leases,
and (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through
(iv) above.
“Debt Rating” for any Person, means the public rating by S&P of such Person’s long term non
credit enhanced, senior unsecured debt, or the corporate family rating assigned to such Person by
Moody’s.
“Defaulted Receivable” means an Originator Receivable:
(i) as to which any payment, or part thereof, remains unpaid for more
than 90 days from the original due date for such payment;
(ii) as to which the Obligor thereof or any other Person obligated
thereon has taken any action, or suffered any event to occur, of the type described
in Section 7.01(g);
(iii) which, consistent with the Credit and Collection Policy, would be
written off the applicable Originator’s or the Seller’s books as uncollectible; or
(iv) for which the applicable Originator or the Seller has (or, consistent
with the Credit and Collection Policy, should have) established an Obligor specific
reserve for non payment.
“Deferred Purchase Price” has the meaning specified in the Originator Purchase
Agreement.
“Delinquency Ratio” means the ratio (expressed as a percentage) computed as of the
last day of each calendar month by dividing (i) the aggregate Outstanding Balance of all Originator
Receivables that were Delinquent Receivables on such day by (ii) the aggregate Outstanding Balance
of all Originator Receivables on such day. For the purpose of calculating the Delinquency Ratio as
of any date, Originator Receivables shall include all Repurchased Receivables which were Delinquent
Receivables as of such date.
“Delinquent Receivable” means an Originator Receivable that is not a Defaulted
Receivable and:
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(i) as to which any payment, or part thereof, remains unpaid for more than
30, but not more than 90, days from the original due date for such payment; or
(ii) which, consistent with the Credit and Collection Policy, would be
classified as delinquent by the applicable Originator or the Seller.
“Deposit Account” means an account maintained at a Deposit Bank into which (i) Collections in
the form of checks and other items are deposited that have been sent to one or more Lock-Boxes by
Obligors and/or (ii) Collections in the form of electronic funds transfers and other items are paid
directly by Obligors.
“Deposit Account Agreement” means an agreement, in substantially the form of Annex B.
“Deposit Bank” means any of the banks holding one or more Deposit Accounts.
“Diluted Receivable” means, without duplication, that portion (and only that portion)
of any Originator Receivable which is either (a) reduced or canceled as a result of (i) any
defective, rejected or returned merchandise or services, any cash discount, or any failure by the
applicable Originator to deliver any merchandise or provide any services or otherwise to perform
under the underlying Contract, (ii) any change in the terms of, or cancellation of, a Contract or
any cash discount, discount for quick payment or other adjustment by the applicable Originator
which reduces the amount payable by the Obligor on the related Originator Receivable (except any
such change or cancellation resulting from or relating to the financial inability to pay or
insolvency of the Obligor of such Originator Receivable) or (iii) any set off by an Obligor in
respect of any claim by such Obligor as to amounts owed by it on the related Originator Receivable
(whether such claim arises out of the same or a related transaction or an unrelated transaction),
(b) subject to any specific dispute, offset, counterclaim or defense whatsoever (except the
discharge in bankruptcy of the Obligor thereof) or (c) the outstanding balance of the related
invoice that was reversed due to unship-reship transactions; provided that Diluted
Receivables are calculated assuming that all chargebacks are resolved in the Obligor’s favor.
“Dilution Horizon Factor” means, as of any date, a ratio computed by dividing (i) the
sum of (A) the aggregate original Outstanding Balance of all Originator Receivables created by the
Originators during the most recently ended calendar month plus (B) 50% of the aggregate original
Outstanding Balance of all Originator Receivables created by the Originators during the second most
recently ended calendar month by (ii)(A) the Outstanding Balance of Originator Receivables (other
than Defaulted Receivables) as at the last day of the most recently ended calendar month minus (B)
the aggregate amount of Unapplied Cash/Credit Memos as at the last day of the most recently ended
calendar month.
“Dilution Ratio” means, as of any date, the ratio (expressed as a percentage) computed for the
most recently ended calendar month by dividing (i) the aggregate amount of Originator Receivables
which became Diluted Receivables during such calendar month (but excluding, solely for the purpose
of calculating the Dilution Reserve Floor Percentage and the
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Dynamic Dilution Reserve Percentage, any portion of such Diluted Receivables constituting amounts
relating to Off-Invoice Allowance Accruals) by (ii) the sum of (A) 50% of the aggregate Outstanding
Balance (in each case, at the time of creation) of all Originator Receivables created during the
calendar month preceding such calendar month plus (B) 50% of the aggregate Outstanding Balance (in
each case, at the time of creation) of all Originator Receivables created during the second
calendar month preceding such calendar month.
“Dilution Reserve Floor Percentage” means, as of any date, the product of (a) the
average of the Dilution Ratios for each of the twelve most recently ended calendar months and (b)
the Dilution Horizon Factor.
“Dilution Volatility Ratio” means, as of any date, a ratio (expressed as a percentage)
equal to the product of (a) the highest of the Average Dilution Ratios calculated for each of the
twelve most recently ended calendar months minus the average of the Dilution Ratios calculated for
each of the twelve most recently ended calendar months, and (b) a ratio calculated by dividing the
highest of the Average Dilution Ratios calculated for each of the twelve most recently ended
calendar months by the average of the Dilution Ratios calculated for each of the twelve most
recently ended calendar months.
“Direction Letter” means that certain letter executed and delivered by the Seller to the Agent
and dated the date hereof, in the form of Annex E-2 hereto.
“Dollar Equivalent” means, as of any date, the amount obtained by applying the rate
for converting currency into Dollars at the spot rate of exchange for that currency as reasonably
determined and advised by the Agent.
“Dollars” or “$” means dollars in the lawful currency of the United States.
“Dynamic Dilution Reserve Percentage” means, as of any date, the product of (a) the
sum of (i) the product of (x) 2.25, multiplied by (y) the average of the Dilution Ratios for each
of the twelve most recently ended calendar months, plus (ii) the Dilution Volatility Ratio as at
the last day of the most recently ended calendar month, multiplied by (b) the Dilution Horizon
Factor as of such date.
“Dynamic Loss Reserve Percentage” means, as of any date, the product of (i) the Stress
Factor as of such date multiplied by (ii) the Loss Horizon Factor as of such date multiplied by
(iii) the highest of the Three-Month Loss Ratios calculated for each of the twelve most recently
ended calendar months.
“Eligible Assignee” means (i) Citibank or any of its Affiliates, (ii) any Person
managed by Citibank, CNAI or any of their Affiliates, or (iii) any financial or other institution
acceptable to the Agent and approved by the Seller (which approval by the Seller shall not be
unreasonably withheld or delayed (it being understood that it would be reasonable for the Seller to
withhold its consent to any assignment if, as a result thereof, the Seller or its Affiliates would
be exposed to any greater liability of any type (including, without limitation, indemnification
costs and expenses) than would be the case if such assignment had not occurred) and shall not be
required if an Event of Termination or an Incipient Event of Termination has occurred and is
continuing).
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“Eligible Institution” means a depository institution organized under the laws of the
United States of America or any state thereof or the District of Columbia (or any domestic branch
of a foreign bank authorized under any such laws), (a) whose senior long-term unsecured debt
obligations are rated at least A- or better by S&P and A3 or better by Xxxxx’x, and (b) which is
subject to regulation regarding fiduciary funds on deposit substantially similar to 12 C.F.R.
Section 9.10(b), if applicable, and (c) which has a combined capital and surplus of at least
$100,000,000.
“Eligible Investments” means book entry securities entered on the books of the
registrar of such securities and held in the name or on behalf of the Agent, negotiable instruments
or securities represented by instruments in bearer or registered form (registered in the name of
the Agent or its nominee) which evidence:
(i) readily marketable direct obligations of the Government of the United
States or any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the United States;
(ii) insured demand deposits, time deposits or certificates of deposit of
any commercial bank that (A) is a member of the Federal Reserve System, (B) issues
(or the parent of which issues) commercial paper rated, at the time of the
investment or contractual commitment to invest therein, as described in clause (iv),
(C) is organized under the laws of the United States or any state thereof and (D)
has combined capital and surplus of at least $500,000,000;
(iii) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clauses (i) and (ii) above entered
into with any bank of the type described in clause (ii) above;
(iv) commercial paper (maturing no later than the Business Day prior to
the first Settlement Date (Yield and Fees) following the date of purchase) having,
at the time of the investment or contractual commitment to invest therein, the
highest short term rating from each of S&P and Xxxxx’x;
(v) investments in no load money market funds having a rating from each
rating agency rating such fund in its highest investment category (including such
funds for which the Agent or any of its Affiliates is investment manager or
advisor); and
(vi) any other investments agreed upon between the Seller and the Agent.
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“Eligible Obligor” means an Obligor which:
(i) has a billing address in an Approved Country; and
(ii) is not a Person with respect to which the United States, Canada or any other
Approved Country shall have imposed sanctions; and
(iii) is not in violation of any applicable law, rule or regulation relating to terrorism
or money-laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001 (the “Executive Order”), and the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56 and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada); and
(iv) is not a Person (A) that is listed in the annex to, or otherwise subject to the
provisions of, the Executive Order, (B) that is owned or controlled by, or acting for or on behalf
of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order, (C) with which an Affected Person or an Originator is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law, (D) that commits, threatens or
conspires to commit or supports “terrorism” as defined in the Executive Order, or (E) that is named
as a “specifically designated national and blocked person” on the most current list published by
the U.S. Treasury Department Office of Foreign Assets Control at its official website or any
replacement website or other replacement official publication of such list or any similar lists
published in any other Approved Country; and
(v) is not a Person (A) whose property or interest in property is otherwise blocked or
subject to blocking pursuant to Section 1 of the Executive Order or any other Anti-Terrorism Law,
or (B) that engages in any dealings or transactions prohibited by Section 2 of the Executive Order
or any other Anti-Terrorism Law, or is otherwise associated with any such Person in any manner
violative of such Section 2 or any other Anti-Terrorism Law.
“Eligible Receivable” means, at any time, a Receivable:
(i) (x) the related Obligor of which is (A) Xxxxxx Inc. or (B) ACG, or (y) which is,
prior to any Insurance Policy Event, fully insured (to the extent provided for therein) by the
Insurance Policy;
(ii) the Obligor of which is an Eligible Obligor, is not an Affiliate of any of an
Originator or the Seller, and is not a Canadian federal or provincial Crown corporation;
(iii) the Obligor of which is not a government or a governmental subdivision or agency;
provided, however, that if a Receivable satisfies all of the requirements of an Eligible
Receivable other than this clause
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(iii), such Receivable shall be an Eligible Receivable, but only to the extent that including such
Receivable as an Eligible Receivable will not cause the aggregate Outstanding Balance of all
Receivables included as Eligible Receivables, the Obligor of which is a government or a
governmental subdivision or agency, to exceed 1% of the aggregate Outstanding Balance of all
Eligible Receivables;
(iv) which is not a Defaulted Receivable;
(v) the Obligor of which is not the Obligor of any Defaulted Receivables which in the
aggregate constitute 10% or more of the aggregate Outstanding Balance of all Receivables of such
Obligor;
(vi) which has been billed and, according to the Contract related thereto, is required to
be paid in full within 60 days of the original billing date therefor or, prior to any Insurance
Policy Event, within 90 days of the original billing date therefor if the “maximum payment terms”
with respect to such Receivable set forth in the Insurance Policy permits such payment terms;
(vii) which is an obligation representing all or part of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940,
as amended, and the nature of which is such that its purchase with the proceeds of notes would
constitute a “current transaction” within the meaning of Section 3(a)(3) of the Securities
Act of 1933, as amended;
(viii) which (A) in the case of a Receivable originated by the U.S. Originator, is an
“account” or “payment intangible” within the meaning of Article 9 of the UCC of the
applicable jurisdictions governing the perfection of the interest created by a Receivable Interest
and (B) in the case of a Receivable originated by the Canadian Originator, is an “account” or
“intangible” within the meaning of the PPSA or a “claim” under the Civil Code of Quebec;
(ix) which (A) in the case of a Receivable originated by the U.S. Originator, is
denominated and payable only in Dollars in the United States,
(B) in the case of an International Receivable originated by the Canadian
Originator, is denominated and payable only in Dollars in the United States, and
(C) in the case of a Receivable other than an International Receivable originated
by the Canadian Originator, is denominated and payable only in Dollars or
Canadian Dollars in Canada;
(x) which arises under a Contract which, together with such Receivable, is in full force
and effect and constitutes the legal, valid and binding obligation of the Obligor of such
Receivable and is not subject to any Adverse Claim or any dispute, offset, counterclaim or defense
whatsoever (except the potential discharge in bankruptcy of such Obligor) and is not settled on a
net basis;
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(xi) which represents a bona fide obligation of the Obligor of such Receivable
to pay the stated amount;
(xii) as to which the applicable Originator has satisfied and fully performed
all obligations with respect to such Receivable required to be fulfilled by it other
than customary warranty obligations, and no further action is required to be performed
by any Person with respect thereto other than payment thereon by the applicable Obligor;
(xiii) which, together with the Contract related thereto, does not contravene in
any material respect any laws, rules or regulations applicable thereto (including,
without limitation, laws, rules and regulations relating to usury, consumer protection,
truth in lending, fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy) and with respect to which none of the
Seller, the applicable Originator or the Obligor is in violation of any such law, rule
or regulation in any material respect;
(xiv) which arises under a Contract which does not contain a legally enforceable
provision requiring the Obligor thereunder to consent to the transfer, sale or
assignment of the rights of the Seller or the applicable Originator thereunder (unless a
written consent of such Obligor has been obtained) or that otherwise purports to
restrict the ability of the Agent, the Investors or the Banks to exercise their rights
under this Agreement, including, without limitation, their right to review the related
invoice or the payment terms of such Contract;
(xv) which arose from the sale of goods or the rendering of services in
the ordinary course of the applicable Originator’s business;
(xvi) which has not been extended, rewritten or otherwise modified from the
original terms thereof (except as permitted by Section 6.02(c));
(xvii) the transfer, sale or assignment of which does not contravene
any applicable law, rule or regulation;
(xviii) which (A) satisfies all applicable requirements of the Credit and
Collection Policy and (B) complies with such other criteria and requirements (other than
those relating to the collectibility of such Receivable) as the Agent may from time to
time specify to the Seller on account of bona fide credit reasons upon 30 days’ notice;
and
(xvix) which, if the Obligor thereof has a billing address in Canada,
satisfies the requirements of Sections 4.01(s) and (t).
“E-Mail Seller Report” has the meaning specified in Section 6.02(g).
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.
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“ERISA Affiliate” means any corporation or trade or business that is a member of any group of
organizations (i) described in Section 414(b) or (c) of the Code of which ACI or any of its
Subsidiaries is a member and (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA
and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which ACI or any
of its Subsidiaries is a member.
“Eureka”
means Eureka Securitisation, plc, an English corporation, and any successor or
permitted assign under Section 10.03 of Eureka that is a receivables investment company which in
the ordinary course of its business issues commercial paper or other securities to fund its
acquisition and maintenance of receivables.
“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to time.
“Eurodollar Rate” means, for any Fixed Period, an interest rate per annum equal to the rate
per annum at which deposits in U.S. dollars are offered by the principal office of Citibank in
London, England to prime banks in the London interbank market at 11:00 A.M. (London Time) two
Business Days before the first day of such Fixed Period in an amount substantially equal to the
Capital associated with such Fixed Period on such first day and for a period equal to such Fixed
Period.
“Eurodollar Rate Reserve Percentage” of any Investor or Bank for any Fixed Period in
respect of which Yield is computed by reference to the Adjusted Eurodollar Rate means the reserve
percentage applicable two Business Days before the first day of such Fixed Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve System (or any successor)
(or if more than one such percentage shall be applicable, the daily average of such percentages for
those days in such Fixed Period during which any such percentage shall be so applicable) for
determining the maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for such Investor or Bank with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which the interest rate on
Eurocurrency Liabilities is determined) having a term equal to such Fixed Period.
“European Area” means the United Kingdom, Belgium, Ireland and Germany.
“Event
of Termination” has the meaning specified in Section 7.01.
“Excess Interest” means, in respect of Cash Secured Advances at any time, the excess of (i)
the aggregate unpaid accrued interest on the Cash Secured Advances at such time over (ii) the
aggregate interest and dividends received by the Agent in respect of the Cash Collateral and
available for withdrawal from the Collateral Advance Account at such time.
“Facility Termination Date” means the earliest of (a) January 27, 2011 or (b) the date
determined pursuant to Section 7.01 or (c) the date the Purchase Limit reduces to zero pursuant to
Section 2.01(b).
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“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.
“Fee Agreement” has the meaning specified in Section 2.05(b).
“Fees” has the meaning specified in Section 2.05(b).
“Finance Charge” means, with respect to any Receivable, any interest, finance charges or other
similar charges payable at any time by an Obligor in connection with such Receivable not having
been paid on the due date thereof.
“Fixed Period” means, with respect to any Receivable Interest:
(a) in the case of any Fixed Period in respect of which Yield is
computed by reference to the Investor Rate, each successive period commencing
on each CP Fixed Period Date for such Receivable Interest and ending on the
next
succeeding CP Fixed Period Date for such Receivable Interest; and
(b) in the case of any Fixed Period in respect of which Yield is
computed by reference to the Assignee Rate, each successive period of from one
to and including 29 days, or a period of one month, as the Seller shall select
and
the Agent may approve on notice by the Seller received by the Agent (including
notice by telephone, confirmed in writing) not later than 11:00 A.M. (
New York
City time) on (A) the day which occurs three Business Days before the first day
of
such Fixed Period (in the case of Fixed Periods in respect of which Yield is
computed by reference to the Adjusted Eurodollar Rate) or (B) the first day of
such Fixed Period (in the case of Fixed Periods in respect of which Yield is
computed by reference to the Alternate Base Rate), each such Fixed Period for
such Receivable Interest to commence on the last day of the immediately
preceding Fixed Period for such Receivable Interest (or, if there is no such
Fixed
Period, on the date of purchase of such Receivable Interest),
except
that if the
Agent shall not have received such notice, or the Agent and the Seller shall
not
have so mutually agreed, before 11:00 A.M. (
New York City time) on such day,
such Fixed Period shall be one day;
provided,
however, that:
(i) any Fixed Period in respect of which Yield is computed by reference
to the Assignee Rate (other than a Fixed Period of one day) which would otherwise
end on a day which is not a Business Day shall be extended to the next succeeding
Business Day (provided, however, if Yield in respect of such Fixed Period is
computed by reference to the Adjusted Eurodollar Rate, and such Fixed Period would
otherwise end on a day which is not a Business Day, and
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there is no subsequent Business Day in the same calendar month as such day,
such Fixed Period shall end on the next preceding Business Day);
(ii) in the case of any Fixed Period of one day, (A) if such Fixed Period
is the initial Fixed Period for a Receivable Interest, such Fixed Period shall be
the day of the purchase of such Receivable Interest; (B) any subsequently occurring
Fixed Period which is one day shall, if the immediately preceding Fixed Period is
more than one day, be the last day of such immediately preceding Fixed Period and,
if the immediately preceding Fixed Period is one day, be the day next following such
immediately preceding Fixed Period; and (C) if such Fixed Period occurs on a day
immediately preceding a day which is not a Business Day, such Fixed Period shall be
extended to the next succeeding Business Day; and
(iii) in the case of any Fixed Period for any Receivable Interest which
commences before the Termination Date for such Receivable Interest and would
otherwise end on a date occurring after such Termination Date, such Fixed Period
shall end on such Termination Date and the duration of each Fixed Period which
commences on or after the Termination Date for such Receivable Interest shall be of
such duration (including, without limitation, one day) as shall be selected by the
Agent or, in the absence of any such selection, each period of thirty days from the
last day of the immediately preceding Fixed Period.
“Foreign Currency Adjustment” means, as of any date of determination, an amount equal
to the product of (A) the Outstanding Balance of Receivables that are denominated in Canadian
Dollars as of such date multiplied by (B) the product of (i) the largest monthly decline (in
percentage terms) of the Canadian Dollar versus the Dollar during the most recent sixty months
multiplied by (ii) a stress factor of 1.25.
“Foreign Currency Long-Term Debt Rating” for any Approved Country means the rating by
S&P or Xxxxx’x of such Approved Country’s public, long-term foreign currency debt.
“Four Party Agreement” means that certain Second Amended and Restated Four Party
Agreement for Sold Accounts (General), dated as of the date hereof, among ACI, the Seller, the
Agent and the Insurer.
“Funds Transfer Letter” means that certain letter executed and delivered by the Seller
to the Agent and dated October 27, 2005, in the form of Annex E-l hereto, as the same may be
amended or restated in accordance with the terms thereof.
“GST” means all goods and services tax payable under Part IX of the Excise Tax Act (Canada),
all QST and all harmonized sales tax in the Provinces of Nova Scotia, Newfoundland and New
Brunswick payable under the Excise Tax Act (Canada), as such statutes may be amended, modified,
supplemented or replaced from time to time, including any successor statute.
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“Impermissible Qualification” means, relative to the opinion or report of any
independent auditors as to any financial statement, any qualification or exception to such opinion
or report which (i) is of a “going concern” or similar nature; (ii) relates to any limited scope of
examination of material matters relevant to such financial statement, if such limitation results
from the refusal or failure of the Parent or any of its Subsidiaries to grant access to necessary
information therefor; or (iii) relates to the treatment or classification of any item in such
financial statement and which, as a condition to its removal, would require an adjustment to such
item the effect of which would result in (x) a material adverse effect on the financial condition,
business, operations, assets or liabilities of the Parent and its Subsidiaries taken as a whole,
(y) a material adverse effect on the ability of the Servicer or the Seller to perform its
obligations under this Agreement or any other Transaction Document, or (z) a material impairment of
the rights or remedies of Agent, the Investors or the Banks under this Agreement or any other
Transaction Document.
“Incipient Event of Termination” means an event that but for notice or lapse of time
or both would constitute an Event of Termination.
“Indemnified Party” has the meaning specified in Section 9.01.
“Insurance Policy” means that certain Accounts Receivable Policy (Shipments) General Terms and
Conditions, plus the Coverage Certificate effective September 1, 2006 (together with all schedules
and endorsements and other documents issued by the Insurer in connection therewith), together with
any replacement Coverage Certificates, issued by the Insurer to ACI, a copy of which is annexed
hereto as Annex H.
“Insurance Policy Event” means the occurrence of any of the following: (i) the
Insurance Policy shall, for any reason, be terminated or otherwise no longer be in full force and
effect, (ii) an event of the type described in Section 7.01(g) shall occur with respect to either
entity comprising the Insurer, (iii) (A) either entity comprising the Insurer fails to make a
payment under the Insurance Policy, (B) either entity comprising the Insurer rejects or denies
claims submitted under the Insurance Policy or (C) there is a claim payment return pursuant to
Section 25 of the Insurance Policy in a cumulative aggregate amount with respect to (A), (B) and
(C) of this clause (iii) in excess of $1,000,000 (if any such claim is subsequently paid by the
Insurers then the cumulative aggregate amount referred to above shall be reduced by the amount of
any such payment), (iv) the terms of any Coverage Certificate issued in replacement of the Coverage
Certificate comprising part of the Insurance Policy on November 24, 2006 are deemed unfavorable to
the Agent, the Investors or the Banks by the Agent (in its reasonable discretion) when compared
with the Coverage Certificate current as of November 24, 2006, or (v) the aggregate claims made
under the Insurance Policy in any Policy Period (as defined in the Insurance Policy) with respect
to receivables that are not Originator Receivables and the Obligors of which are not located in
Canada shall exceed an amount equal to 7.50% of EDC’s Maximum Liability Amount (as defined in the
Coverage Certificate included in the Insurance Policy).
“Insurance Proceeds” means any amounts paid by the Insurer under the Insurance Policy
with respect to claims relating to Originator Receivables.
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“Insurer”
means, collectively, Export Development Canada and Compagnie Française
d’Assurance pour le Commerce Extérieur — Canada Branch.
“Intercompany Agreement (Undertaking Agreements)” means that certain Intercompany
Agreement (Undertaking Agreements) between ACSC and ACI dated as of December 21, 2007, as the
same may be amended, modified or restated from time to time pursuant to its terms.
“International Receivable” means a Receivable the Obligor of which has a billing
address in an Approved Country other than the United States or Canada.
“Investment Grade Obligor” means an Obligor having Debt Ratings equal to the Required
Ratings, provided that, if (a) either a Debt Rating from S&P or Xxxxx’x (but not both) is
not available, the Obligor will be an Investment Grade Obligor only if the available Debt Rating is
BBB- or above or Baa3 or above, as applicable, and (b) a Debt Rating is not available from S&P and
is also not available from Xxxxx’x, then the Obligor will not be an Investment Grade Obligor.
“Investor” means Eureka and all other owners by assignment or otherwise of a Receivable
Interest originally purchased by Eureka and, to the extent of the undivided interests so purchased,
shall include any participants.
“Investor Rate” for any Fixed Period for any Receivable Interest means the per annum rate
equivalent to the weighted average of the per annum rates paid or payable by Eureka from time to
time as interest on or otherwise (by means of interest rate xxxxxx or otherwise) in respect of
those Promissory Notes issued by Eureka that are allocated, in whole or in part, by the Agent (on
behalf of Eureka) to fund the purchase or maintenance of such Receivable Interest during such Fixed
Period as determined by the Agent (on behalf of Eureka) and reported to the Seller and, if the
Servicer is not the Seller, the Servicer, which rates shall reflect and give effect to the
commissions of placement agents and dealers in respect of such Promissory Notes, to the extent such
commissions are allocated, in whole or in part, to such Promissory Notes by the Agent (on behalf of
Eureka); provided, however, that (a) if any component of such rate is a discount rate, in
calculating the “Investor Rate” for such Fixed Period the Agent shall for such component use the
rate resulting from converting such discount rate to an interest bearing equivalent rate per annum;
(b) the Investor Rate with respect to Receivable Interests funded by Participants shall be the same
rate as in effect from time to time on Receivable Interests or portions thereof that are not funded
by a Participant; (c) if all of the Receivable Interests maintained by Eureka are funded by
Participants, then the Investor Rate shall be Eureka’s pool funding rate in effect from time to
time for its largest size pool of transactions which settles monthly; and (d) the per annum rate
determined pursuant hereto shall be increased by 2% at any time when an Event of Termination shall
exist.
“Liquidation Day” means, for any Receivable Interest, (i) each day during a Fixed Period for
such Receivable Interest on which the conditions set forth in Section 3.02 are not satisfied, and
(ii) each day which occurs on or after the Termination Date for such Receivable Interest.
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“Liquidation Fee” means, for (i) any Fixed Period for which Yield is computed by reference to
the Investor Rate and a reduction of Capital is made for any reason on any day or (ii) any Fixed
Period for which Yield is computed by reference to the Adjusted Eurodollar Rate and a reduction of
Capital is made for any reason on any day other than the last day of such Fixed Period, the amount,
if any, by which (A) the additional Yield (calculated without taking into account any Liquidation
Fee or any shortened duration of such Fixed Period pursuant to clause (iii) of the definition
thereof) which would have accrued from the date of such repayment to the last day of such Fixed
Period (or, in the case of clause (i) above, the maturity of the underlying commercial paper
tranches) on the reductions of Capital of the Receivable Interest relating to such Fixed Period had
such reductions remained as Capital, exceeds (B) the income, if any, received by the Investors or
the Banks which hold such Receivable Interest from the investment of the proceeds of such
reductions of Capital.
“Lock-Box” means a post office box administered by a Deposit Bank for the purpose of
receiving Collections.
“Loss Horizon Factor” means, as of any date, a ratio computed by dividing (a)(i) the
aggregate Outstanding Balance (in each case, at the time of creation) of all Originator Receivables
created by the Originators during the four most recently ended calendar months plus (ii)
50.0% of the aggregate Outstanding Balance (in each case, at the time of creation) of all
Originator Receivables created by the Originators during the fifth calendar month prior to the
determination date (including the most recently ended calendar month) by (b)(i) the Outstanding
Balance of Originator Receivables (other than Defaulted Receivables) as of the last day of the most
recently ended calendar month minus (ii) the aggregate Unapplied Cash/Credit Memos as at
the last day of the most recently ended calendar month.
“Loss Ratio” means, as of any date, a ratio computed by dividing (a) the sum of (i) the
aggregate Outstanding Balance of Originator Receivables that were more than 90 days past due but
equal to or less than 120 days past due at the end of the most recent calendar month plus
(ii) the aggregate Outstanding Balance of Originator Receivables that were less than or equal to 90
days past due and were written off by the applicable Originator or the Seller, or which should have
been written off by such Originator or the Seller in accordance with the Credit and Collection
Policy during the most recent calendar month (net of recoveries with respect to any Originator
Receivables previously written off when less than or equal to 90 days past due), by (b) the sum of
(i) 50% of the aggregate Outstanding Balance (in each case, at the time of creation) of all
Originator Receivables created by the Originators during the fifth calendar month prior to the
determination date (including the most recently ended calendar month) plus (ii) 50% of the
aggregate Outstanding Balance (in each case, at the time of creation) of all Originator Receivables
created by the Originators during the sixth calendar month prior to the determination date
(including the most recently ended calendar month). For the purpose of calculating the Loss Ratio
as of any date, Originator Receivables shall include all Repurchased Receivables which were more
than 90 days past due but equal to or less than 120 days past due as of such date.
“Loss Reserve Floor Percentage” means, (i) at any time when no Insurance Policy Event
has occurred, three times the Normal Concentration Limit and (ii) at any other time, five times the
Normal Concentration Limit.
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“Loss-to-Liquidation Ratio” means the ratio (expressed as a percentage) computed as of
the last day of each calendar month by dividing (i) the aggregate Outstanding Balance of all
Originator Receivables written off by the Originators or the Seller (net of recoveries), or which
should have been written off by the Originators or the Seller in accordance with the Credit and
Collection Policy, during the applicable calendar month ending on such last day by (ii) the
aggregate amount of Collections of Originator Receivables actually received during such calendar
month. For the purpose of calculating the Loss-to-Liquidation Ratio as of any date, Originator
Receivables shall include Repurchased Receivables as of such date.
“Majority Banks” shall mean at any time Banks having Bank Commitments that aggregate more than
50% of the Purchase Limit or, if the Bank Commitments have been terminated, Banks either holding
Receivable Interests (or interests therein) or obligated to purchase interests in Receivable
Interests pursuant to the Asset Purchase Agreement which aggregate more than 50% of all outstanding
Receivable Interests.
“Material Adverse Effect” means (A) a material adverse effect on (i) the financial
condition, business, operations, assets or liabilities of the Seller, individually, or of the
Parent and its Subsidiaries taken as a whole, (ii) the ability of an Originator, the Seller or the
Servicer to perform any of its respective obligations under any of the Transaction Documents to
which it is a party, (iii) the legality, validity or enforceability of the Transaction Documents
(including, without limitation, the validity, enforceability or priority of the ownership or
security interests granted thereunder) or (iv) the collectibility of the Receivables Pool or (B) a
material impairment of the rights or remedies of the Agent, the Investors or the Banks under any of
the Transaction Documents.
“Maximum Percentage Factor” means, at any time, 100% minus:
(a) during the calendar months of February through November:
(i) if Weekly Reports are being delivered pursuant to Section 6.02(g),
(x) the highest monthly decline (expressed in percentage terms) in the Outstanding
Balance of all Pool Receivables during the most recent 12 months (but excluding the
calendar months of December and January) divided by (y) 4; and
(ii) at any other time, the highest monthly decline (expressed in
percentage terms) in the Outstanding Balance of all Pool Receivables during the most
recent 12 months (but excluding the calendar months of December and January);
(b) during the calendar month of December:
(i) if Weekly Reports are being delivered pursuant to Section 6.02(g),
(x) the highest monthly decline (expressed in percentage terms) in the Outstanding
Balance of all Pool Receivables during the calendar month of December in each of the
previous two calendar years divided by (y) 4; and
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(ii) at any other time, the highest monthly decline (expressed in
percentage terms) in the Outstanding Balance of all Pool Receivables during the
calendar month of December in each of the previous two calendar years; and
(c) during the calendar month of January:
(i) if Weekly Reports are being delivered pursuant to Section 6.02(g),
(x) the highest monthly decline (expressed in percentage terms) in the Outstanding
Balance of all Pool Receivables during the calendar month of January in each of the
previous two calendar years divided by (y) 4; and
(ii) at any other time, the highest monthly decline (expressed in
percentage terms) in the Outstanding Balance of all Pool Receivables during the
calendar month of January in each of the previous two calendar years.
“Monthly
Report” means a report in substantially the form of Annex A-1 hereto and containing
such additional information as the Agent may reasonably request from time to time, furnished by the
Servicer pursuant to Section 6.02(g)(i).
“Moody’s” means Xxxxx’x Investors Service, Inc. and any successor thereto.
“Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37) of
ERISA to which contributions have been made by ACI or any of its Subsidiaries or any ERISA
Affiliate and which is covered by Title IV of ERISA, and as to which ACI or any of its Subsidiaries
could have any liability.
“Net Receivables Pool Balance” means at any time the Outstanding Balance of all Pool
Receivables reduced, without duplication, by the sum of (i) the Outstanding Balance of all Pool
Receivables that are not Eligible Receivables, (ii) the aggregate amount by which the Outstanding
Balance of Eligible Receivables of each Obligor then in the Receivables Pool exceeds (A) if the
Concentration Limit for such Obligor is expressed as a percentage, the product of (x) the
Concentration Limit for such Obligor multiplied by (y) the Net Receivables Pool Balance, and (B) if
the Concentration Limit for such Obligor is expressed as a dollar amount, such Concentration Limit,
(iii) the aggregate outstanding amount of deposits received by the Originators from any Obligors
with respect to Receivables then in the Receivables Pool, (iv) the aggregate amount of Unapplied
Cash/Credit Memos at such time, (v) the aggregate of all potential set off amounts representing
amounts owed by the Originators (or any Affiliate of an Originator) to any Obligor, (vi) the
aggregate amount of PST (in the case of Canadian Receivables), sales taxes (in the case of
Receivables other than Canadian Receivables) and other similar types of sales taxes (in each case,
to the extent included in the Outstanding Balance of Eligible Receivables then in the Receivables
Pool), (vii) the Foreign Currency Adjustment, (viii) prior to the occurrence of any Insurance
Policy Event, the aggregate amount by which the Outstanding Balance of Eligible Receivables of ACG
which is not insured by the Insurance Policy (either as a result of the coinsurance ratio or the
credit limit under the Insurance Policy) exceeds 3.75% of the Net Receivables Pool Balance, (ix)
prior to the occurrence of any Insurance Policy Event, the aggregate amount by which the
Outstanding Balance of Eligible Receivables of Xxxxxx Inc. which is not insured by the Insurance
Policy (either as a result of the
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coinsurance ratio or the credit limit under the Insurance Policy) exceeds 3.75% of the Net
Receivables Pool Balance, (x) an amount equal to the then aggregate outstanding balance of all
Off-Invoice Allowance Accruals, (xi) an amount equal to the then aggregate amount of early payment
discounts that are expected to be taken by Obligors with respect to the Outstanding Balance of all
Receivables, (xi) an amount equal to 49% of the Outstanding Balance of all Receivables arising out
of the Restated and Amended Purchase Agreement, dated as of January 1, 2005, among Xxxxxxx Malbaie
Inc., the
New York Times Company and ACI that are attributable to the “Malbaie tonnage” (as defined
therein), and (xii) the aggregate amount by which the Outstanding Balance of Eligible Receivables
of all Obligors with a billing address in an Approved Country other than Canada or the United
States then in the Receivables Pool exceeds (A) if the Country Concentration Limit for such
Approved Country is expressed as a percentage, the product of (x) the Country Concentration Limit
for such Approved Country multiplied by (y) the Net Receivables Pool Balance, and (B) if the
Country Concentration Limit for such Approved Country is expressed as a dollar amount, such Country
Concentration Limit. For the purpose of determining
“Net Receivables Pool Balance”, all
Collections, deemed Collections and other amounts in Canadian Dollars shall be expressed as the
Dollar Equivalent thereof.
“Non-Investment Grade Obligor” means an Obligor which is not an Investment Grade
Obligor.
“Normal Concentration Limit” has the meaning specified in the definition of
“Concentration Limit” set forth above.
“Normal Country Concentration Limit” has the meaning specified in the definition
of “Country Concentration Limit” set forth above.
“Notice of Amalgamation” has the meaning specified in Section 10.01(d).
“Notice of Change of Address” has the meaning specified in Section 10.01(e).
“Notice of Continuance and Change of Address” has the meaning specified in Section
10.01(c).
“Obligor” means a Person obligated to make payments pursuant to a Contract.
“Off-Invoice Allowance Accruals” means, at any time, with respect to a Receivable, a
rebate or competitive allowance that does not appear on the face of the related invoice.
“Original RPA” has the meaning specified in the Preliminary Statement.
“Original Originator Purchase Agreement” means that certain Purchase and Contribution
Agreement dated as of October 27, 2005, among the Originators, as sellers, the Seller, as
purchaser, and ACI, as Servicer, as amended prior to the date hereof.
“Originator” means each of the Canadian Originator and the U.S. Originator.
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“Originator Purchase Agreement” means the Amended and Restated Purchase and
Contribution Agreement dated as of the date of this Agreement among the Originators, as sellers,
the Seller, as purchaser, and ACI, as Servicer, as the same may be amended, modified or restated
from time to time.
“Originator Receivable” means the indebtedness of any Obligor (whether present or
future and whether a claim, book debt or a receivable) resulting from the provision or sale of
merchandise, insurance or services by any Originator under a Contract (whether constituting an
account, instrument, chattel paper or general intangible), and which, (i) includes the right to
payment of any Finance Charges and other obligations of such Obligor with respect thereto and, (ii)
in respect of such a claim, book debt or receivable indebtedness, the Obligor of which has a
billing address in Canada, includes GST; provided, however, that the term “Originator
Receivable” shall not include (x) any such indebtedness originated by ACSC, the Obligor of
which has a billing address that is not in Canada or the United States or any such indebtedness
originated by ACI, the Obligor of which has a billing address that is not in any Approved Country
or (y) any portion of any such indebtedness, the Obligor of which has a billing address in Canada,
that constitutes PST.
“Other Companies” means the Parent, the Originators and all of their Subsidiaries
except the Seller.
“Outstanding Balance” of any Receivable at any time means the then outstanding
principal balance thereof; provided, that to the extent that the amount of any Receivable
is, under the terms of the applicable Contract, expressed in Canadian Dollars, such amount for the
purposes of this definition shall be the Dollar Equivalent thereof at the relevant time. Sales or
use tax, PST and any other taxes (other than GST) and Finance Charges which may be billed in
connection with a Receivable are not included in the Outstanding Balance. For purposes of this
Agreement (but without affecting the rights of the Seller against the relevant Obligor), the
Outstanding Balance of a Receivable shall be reduced by the amount of any Insurance Proceeds
received by the Agent with respect thereto.
“Participant” has the meaning specified in Section 10.03(h).
“PBGC” means Pension Benefit Guaranty Corporation or any entity succeeding to any or all of
its functions under ERISA.
“Percentage” of any Bank means, (a) with respect to Citibank, the percentage set forth on the
signature page to this Agreement, or such amount as reduced or increased by any Assignment and
Acceptance entered into with an Eligible Assignee, or (b) with respect to a Bank that has entered
into an Assignment and Acceptance, the amount set forth therein as such Bank’s Percentage, or such
amount as reduced or increased by an Assignment and Acceptance entered into between such Bank and
an Eligible Assignee.
“Percentage Factor” means, at any time, a percentage equal to (i) the sum of the
outstanding Capital plus the Aggregate Loss and Dilution Reserve plus the Yield and
Fee Reserve plus the Premium Reserve divided by (ii) the Net Receivables Pool Balance. The
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Percentage Factor is to be computed daily to reflect changes in the Net Receivables Pool Balance
and Capital.
“Person” means an individual, partnership, corporation, limited liability company, joint stock
company, trust (including a business or statutory trust), unincorporated association, joint venture
or other entity, or a government or any political subdivision or agency thereof.
“Plan” means an employee benefit or other plan established or maintained by ACI or any of its
Subsidiaries or any ERISA Affiliate and that is covered by Title IV of ERISA, other than a
Multiemployer Plan, and as to which ACI or any of its Subsidiaries could have any liability.
“Policy Coverage Period” means any of the following three month periods: (i) June,
July and August, (ii) September, October and November, (iii) December, January and February and
(iv) March, April and May.
“Pool Receivable” means a Receivable in the Receivables Pool.
“PPSA” means, with respect to any jurisdiction in Canada, the personal property security or
similar legislation applicable in such jurisdiction, including with respect to the jurisdictions of
Canada other than Quebec, the Personal Property Security Act applicable in such jurisdictions, and,
with respect to Quebec, the Civil Code of Quebec, in each case as from time to time in effect.
“Premium Reserve” means on any date of determination occurring in any Policy Coverage
Period an amount equal to the premium due under the Insurance Policy with respect to such Policy
Coverage Period. By way of example, if the relevant date of determination is July 30, the amount of
the Premium Reserve as of such date shall be the amount of the premium due with respect to the
June, July and August Policy Coverage Period.
“Promissory Notes” means, collectively, (i) promissory notes issued by Eureka and (ii)
participations sold by Eureka pursuant to Section 10.03(h); provided that the term
“Promissory Notes” shall not include the interests sold by Eureka to a Bank or its designee
under the Asset Purchase Agreement.
“PST” means all taxes payable under the Retail Sales Tax Act (Ontario) or any similar statute
of another jurisdiction of Canada, other than GST.
“Purchase Limit” means $350,000,000, as such amount may be reduced pursuant to Section
2.01(b). References to the unused portion of the Purchase Limit shall mean, at any time, the
Purchase Limit, as then reduced pursuant to Section 2.01(b), minus the then outstanding Capital of
Receivable Interests under this Agreement.
“QST” means the tax payable under the Act Respecting the Quebec Sales Tax, R.S.Q. c.T-01, as
amended.
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“Receivable” means any Originator Receivable which has been acquired by the Seller from an
Originator by purchase or by capital contribution pursuant to the Originator Purchase Agreement.
“Receivable Interest” means, at any time, an undivided percentage ownership interest
in (i) all then outstanding Pool Receivables, (ii) all Related Security with respect to such Pool
Receivables, and (iii) all Collections with respect to, and other proceeds of, such Pool
Receivables. Such undivided percentage interest shall be computed as
where:
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the Capital of such Receivable Interest at the time of
computation. |
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AC
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the aggregate Capital of all Receivable Interests at the
time of computation. |
Each Receivable Interest shall be determined from time to time pursuant to the provisions of
Section 2.03.
“Receivables Pool” means at any time the aggregation of each then outstanding
Receivable.
“Register” has the meaning specified in Section 10.03(c).
“Related Security” means with respect to any Receivable:
(i) all security interests or liens or other Adverse Claims and property
subject thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise, together
with all financing statements or registration applications filed against an Obligor
describing any collateral securing such Receivable;
(ii) all guaranties, insurance (including the Insurance Policy) and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the Contract related to such
Receivable or otherwise; and
(iii) the Contract and all other books, records and other information
(including, without limitation, computer programs, tapes, discs, punch cards, data
processing software and related property and rights) relating to such Receivable and
the related Obligor.
“Replacement Bank Agreement” has the meaning specified in Section 10.01(b).
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“Reporting Date” means any date on which a Seller Report is delivered or required to be
delivered by the Servicer pursuant to Section 6.02(g).
“Repurchased Receivable” means any Defaulted Receivable or Delinquent Receivable
which has been repurchased pursuant to Section 2.18.
“Required Ratings” means, for any Person, Debt Ratings of either (i) BB+ or above by
S&P and Baa3 or above by Moody’s, or (ii) BBB- or
above by S&P and Ba1 or above by Moody’s.
“S&P” means Standard and Poor’s, a division of The McGraw Hill Companies, Inc. and any
successor thereto.
“SEC” means the Securities and Exchange Commission.
“Seller Report” means a Monthly Report or a Weekly Report.
“Servicer” means at any time the Person then authorized pursuant to Section 6.01 to administer
and collect Pool Receivables.
“Servicer Default” means the occurrence of any of the following:
(i) The Servicer or the Subservicer (A) shall fail to perform or observe
any term, covenant or agreement under this Agreement (other than as referred to in
clause (B) or (C) of this subsection (i)) and such failure shall remain unremedied
for three Business Days or (B) shall fail to make when due any payment or deposit to
be made by it under this Agreement or (C) shall fail to deliver any Seller Report
when required; or
(ii) Any representation or warranty made or deemed made by the Servicer
(or any of its officers) under or in connection with this Agreement or any other
Transaction Document or any information or report delivered by the Servicer or the
Subservicer pursuant to this Agreement or any other Transaction Document shall prove
to have been incorrect or untrue in any material respect when made or deemed made or
delivered; or
(iii) The Servicer or the Subservicer shall fail to pay any principal of or
premium or interest on any of its Debt which is outstanding under the Bank Agreement
or any other Debt which is outstanding in a principal amount of at least CAD
65,000,000 (or the Dollar Equivalent thereof) in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Debt; or
any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration of, the maturity
of such Debt; or any such Debt shall be declared to
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be due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior to
the stated maturity thereof; or
(iv) (A) The Servicer or the Subservicer 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 (B)
any proceeding shall be instituted by or against the Servicer or the Subservicer
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors or arrangement of debt, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 60 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property) shall occur;
or (C) any receiver, trustee, custodian or similar official shall be appointed for
the Servicer or the Subservicer under any private right; or (D) the Servicer or the
Subservicer shall take any corporate action to authorize any of the actions set
forth above in this clause (iv); or
(v) There shall have occurred any event which may materially adversely
affect the ability of the Servicer or the Subservicer to collect Pool Receivables or
otherwise perform its obligations under this Agreement and the other Transaction
Documents; or
(vi) One or more judgments for the payment of money in an aggregate amount
in excess of CAD 65,000,000 (or the Dollar Equivalent thereof) (except to the extent
covered by insurance as to which the insurer has acknowledged such coverage in
writing) shall be rendered against the Servicer or the Subservicer or a combination
thereof, and the same shall remain undischarged for a period of 60 consecutive days
during which execution shall not be effectively stayed, or any action shall be taken
by a judgment creditor to attach or levy upon any assets of the Servicer or the
Subservicer to enforce any such judgment.
“Servicer Fee” has the meaning specified in Section 2.05(a).
“Servicer Fee Reserve Percentage” means, on any date, a percentage equal to the
product of (a) 0.50% and (b)(i) the Three-Month Turnover Rate for the most recently ended calendar
month divided by (ii) 360.
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“Settlement Date (Capital)” means the Business Day immediately following the due date
of each Seller Report; provided that if the Termination Date for all Receivable Interests
shall have occurred, the “Settlement Dates (Capital)” shall be the date(s) selected by the Agent
or, in the absence of any such selection, the “Settlement Date (Capital)” shall be each Business
Day.
“Settlement Date (Yield and Fees)” for any Receivable Interest means the third
Business Day of each calendar month (commencing with the calendar month immediately following the
calendar month in which such Receivable Interest was purchased); provided, however, that at
any time that the Servicer is required to deliver a Weekly Report in accordance with Section
6.02(g)(ii), the “Settlement Date (Yield and Fees)” shall be the second Settlement Date (Capital)
of each calendar month (commencing with the calendar month immediately following the calendar month
in which such Receivable Interest was purchased); provided, however, that if the
Termination Date for all Receivable Interests shall have occurred, the “Settlement Date (Yield and
Fees)” for all Receivable Interests shall be the date(s) selected by the Agent, or in the absence
of any such selection, the “Settlement Date (Yield and Fees)” for all Receivable Interests shall be
the third Business Day of each calendar month.
“Significant Incipient Event of Termination” means an event that, but for notice or
lapse of time or both, would constitute an Event of Termination pursuant to clause (g)(ii) or
(n) of Section 7.01.
“SCC” means an Approved Country which has both (i) a Foreign Currency Long-Term Debt Rating of
at least BB+ by S&P and (ii) a Foreign Currency Long-Term Debt Rating of at least Bal by Moody’s.
“Special Concentration Limit” has the meaning specified in the definition of
“Concentration Limit” set forth above.
“Special Country Concentration Limit” has the meaning specified in the definition of
“Country Concentration Limit” set forth above.
“Stress Factor” means (i) at any time when no Insurance Policy Event has occurred, 1.5
and (ii) at any other time, 2.25.
“Subservicer” has the meaning specified in Section 6.01.
“Subsidiary” means any corporation or other entity of which securities having ordinary voting
power to elect a majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Parent, the Seller or an Originator, as the
case may be, or one or more Subsidiaries, or by the Parent, the Seller or any Originator, as the
case may be, and one or more Subsidiaries.
“Tangible Net Worth” means at any time the excess of (i) the sum of (a) the product of
(x) 100% minus the Discount (as such term is defined in the Originator Purchase Agreement)
multiplied by (y) the Outstanding Balance of all Receivables other than Defaulted Receivables plus
(b) cash and cash equivalents of the Seller, minus (ii) the sum of (a) Capital
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plus (b) the Deferred Purchase Price. To the extent any amounts referenced in the preceding
sentence are not denominated in Dollars, the Dollar Equivalent thereof shall be utilized.
“Term Period” means, for any Bank, the period commencing on the Cash Secured Advance
Commencement Date, if any, for such Bank and ending on the first day on which the Termination Date
for all Receivable Interests held by such Bank has occurred.
“Term-Out Bank” means any Bank for which the Term Period has commenced.
“Term-Out Bank Purchase Date” means, for any Term-Out Bank, the Commitment Termination Date for such Bank determined pursuant to clause (a) of the definition
thereof, without giving effect to the final proviso at the end of the definition of Commitment
Termination Date.
“Termination Date” for any Receivable Interest means (i) in the case of a Receivable
Interest owned by an Investor, the earlier of (a) the Business Day which the Seller or the Agent so
designates by notice to the other at least one Business Day in advance for such Receivable Interest
and (b) the Facility Termination Date and (ii) in the case of a Receivable Interest owned by a
Bank, the earlier of (a) the Business Day which the Seller so designates by notice to the Agent at
least one Business Day in advance for such Receivable Interest and (b) the Commitment Termination
Date.
“Three-Month Loss Ratio” means, for any calendar month, the average of the Loss Ratios
for such calendar month and the two immediately preceding calendar months.
“Three-Month Turnover Rate” means, for any calendar month, the average of the Turnover
Rate for such calendar month and the two immediately preceding calendar months.
“Total Reserves” means at any time the sum of (i) the Aggregate Loss and Dilution Reserve
and (ii) the Yield and Fee Reserve.
“Transaction Document” means any of this Agreement, the Originator Purchase Agreement,
the Undertaking (Originator), the Undertaking (Servicer), the Insurance Policy, the Four Party
Agreement, the Collateral Advance Account Agreement, the Deposit Account Agreements, the Fee
Agreement, the Intercompany Agreement (Undertaking Agreements), all amendments to any of the
foregoing and all other agreements and documents delivered and/or related hereto or thereto.
“Turnover Rate” means, on any date, an amount equal to
where:
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OBOR
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=
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the Outstanding Balance of all Pool Receivables |
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CO
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=
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Collections received during such calendar month |
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CDP
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=
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the Collection Delay Period. |
“UCC” means the Uniform Commercial Code as from time to time in effect in the specified
jurisdiction.
“Unapplied Cash/Credit Memos” means, as at any time, the sum of (i) the aggregate
amount of Collections (expressed as the Dollar Equivalent, if any such amount is in Canadian
Dollars) on hand at such time for payment on account of any Eligible Receivables, the Obligor of
which has not been identified and (ii) the aggregate Outstanding Balance of all Receivables in
respect of which any credit memo issued by the applicable Originator or the Seller is outstanding
at such time to the extent deemed Collections have not been paid pursuant to Section 2.04(f).
“Undertaking (Originator)” means the Undertaking Agreement (Originator) dated as of
October 27, 2005 made by ACI in favor of the Seller and relating to obligations of the U.S.
Originator, substantially in the form of Annex F hereto, as the same may be amended, modified or
restated from time to time.
“Undertaking (Servicer)” means the Undertaking Agreement (Servicer) dated as of
October 27, 2005 made by ACI in favor of the Agent, the Investors and the Banks and relating to
obligations of the Servicer, substantially in the form of Annex G hereto, as the same may be
amended, modified or restated from time to time.
“Uninsured Special Concentration Limit” for any Obligor means at any time on or after
the occurrence of any Insurance Policy Event:
(i) if such Obligor is The Tribune Publishing Company or The New
York Times Company, 75.0% of the higher of (x) the Dynamic Loss Reserve
Percentage and (y) the Loss Reserve Floor Percentage at such time; and
(ii) with respect to any other Obligor:
(x) if and so long as such Obligor has Debt Ratings of at least
AA- by S&P and Aa3 by Moody’s, 100.0% of the higher of (x) the Dynamic Loss
Reserve Percentage and (y) the Loss Reserve Floor Percentage at such time;
or
(y) if and so long as such Obligor has Debt Ratings of at least
BBB- by S&P and Baa3 by Moody’s and the preceding clause (x) is not
applicable, 50.0% of the higher of (x) the Dynamic Loss Reserve Percentage
and (y) the Loss Reserve Floor Percentage at such time;
provided that, in the event that none of clause (i), clause (ii)(x) or clause (ii)(y)
above is applicable to a particular Obligor, the Concentration Limit for such Obligor shall be the
Normal Concentration Limit.
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“U.S. Originator” means ACSC.
“Weekly Report” means a report in substantially the form of Annex A-2 hereto and
containing such additional information as any Agent may reasonably request from time to time,
furnished by the Servicer pursuant to Section 6.02(g)(ii).
“Yield” means for each Receivable Interest for each Fixed Period:
(i) for each day during such Fixed Period to the extent such Receivable
Interest will be funded on such day by Eureka through the issuance of Promissory
Notes,
(ii) for each day during such Fixed Period to the extent such Receivable
Interest will not be funded on such day by Eureka through the issuance of Promissory
Notes,
where:
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AR
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=
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the Assignee Rate for such Receivable Interest for
such Fixed Period; |
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C
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=
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the Capital of such Receivable Interest during such
Fixed Period; |
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IR
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=
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the Investor Rate for such Receivable Interest for
such Fixed Period; |
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ED
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=
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the actual number of days elapsed during such Fixed
Period; |
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LF
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the Liquidation Fee, if any, for such Receivable
Interest for such Fixed Period; |
provided that no provision of this Agreement shall require the payment or permit the
collection of Yield in excess of the maximum permitted by applicable law; and provided
further that Yield for any Receivable Interest shall not be considered paid by any distribution
to the extent that at any time all or a portion of such distribution is rescinded or must otherwise
be returned for any reason.
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“Yield and Fee Reserve” means, for any Receivable Interest on any date, an amount
equal to
(C x YFRP) + AUYF + (SFRP x OBOR)
where:
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C
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the Capital of such Receivable Interest at the
close of business of the Servicer on such date. |
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YFRP
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=
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the Yield and Fee Reserve Percentage on such date. |
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AUYF
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=
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accrued and unpaid Yield, Servicer Fee and Fees on
such date, in each case for such Receivable
Interest. |
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SFRP
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=
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the Servicer Fee Reserve Percentage. |
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OBOR
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=
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the aggregate Outstanding Balance of all Pool
Receivables on such date. |
“Yield and Fee Reserve Percentage” means, on any date, a percentage equal to
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1.5 x (AER + AM + PF) x TR
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360 |
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where:
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AER
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the one-month Adjusted Eurodollar Rate in effect on
such date. |
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AM
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=
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the applicable spread or margin over the Adjusted
Eurodollar Rate used in the calculation of the
Assignee Rate in effect on such date. |
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PF
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=
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the Program Fee Rate (as defined in the Fee
Agreement), in effect on such date. |
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TR
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=
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the Three-Month Turnover Rate for the most recently
ended calendar month. |
Section 1.02 Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with Canadian generally accepted accounting principles All terms
used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
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ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
Section 2.01 Purchase Facility. (a) On the terms and conditions hereinafter set
forth, Eureka may, in its sole discretion, and the Banks shall, ratably in accordance with their
respective Bank Commitments, purchase Receivable Interests from the Seller from time to time during
the period from the date hereof to the Facility Termination Date (in the case of Eureka) and to the
Commitment Termination Date (in the case of the Banks). Under no circumstances shall Eureka make
any such purchase, or the Banks be obligated to make any such purchase, if after giving effect to
such purchase the aggregate outstanding Capital of Receivable Interests would exceed the Purchase
Limit.
(b) The Seller may at any time, upon at least five Business Days’ notice to the Agent, terminate the facility provided for in this Agreement in whole or, from time to time, reduce in part the unused portion of the Purchase Limit; provided that each partial
reduction shall be in the amount of at least $1,000,000 or an integral multiple thereof.
(c) Until the Agent gives the Seller the notice provided in Section 3.02(d)(iii),
the Agent, on behalf of the Investors which own Receivable Interests, may have the Collections
attributable to such Receivable Interests automatically reinvested pursuant to Section 2.04 in
additional undivided percentage interests in the Pool Receivables by making an appropriate
readjustment of such Receivable Interests. The Agent, on behalf of the Banks which own
Receivable Interests, shall have the Collections attributable to such Receivable Interests
automatically reinvested pursuant to Section 2.04 in additional undivided percentage interests
in the Pool Receivables by making an appropriate readjustment of such Receivable Interests.
(d) At least three Business Days prior to the Cash Secured Advance
Commencement Date for any Bank, the Seller shall notify such Bank if the Seller wishes such
Bank to make the advances described in this Section. Following such notice, on the Cash
Secured Advance Commencement Date for such Bank, such Bank shall, and agrees to, make an
advance to the Seller in Dollars in an amount equal to the excess of (i) such Bank’s Bank
Commitment over (ii) the outstanding Capital of all Receivable Interests owned by such Bank
(after giving effect to any purchase made by such Bank on or prior to such Cash Secured
Advance Commencement Date pursuant to this Agreement or pursuant to the Asset Purchase
Agreement to which it is a party) on the Term-Out Bank Purchase Date for such Bank, and such
Bank shall make such advance by causing an amount equal to such advance to be deposited in
same day funds into the Collateral Advance Account.
Section 2.02 Making Purchases. (a) Each purchase by Eureka or the Banks shall be
made on at least one Business Day’s notice from the Seller to the Agent (which, for any period
during which Weekly Reports are required to be delivered pursuant to Section 6.02(g)(ii), shall be
provided by delivery of a completed Weekly Report containing information covering the most recently
ended reporting period for which such information is required pursuant to Section 6.02(g)(ii));
provided that no more than one purchase shall be made in any one calendar week. Each such
notice of a purchase shall specify (i) the amount requested to be paid to the Seller (such amount
being referred to herein as the initial “Capital” of the Receivable Interest
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then being purchased), (ii) the date of such purchase (which shall be a Business Day), and (iii) if
the Assignee Rate based on the Adjusted Eurodollar Rate is to apply to such Receivable Interest,
the duration of the initial Fixed Period for such Receivable Interest. The Agent shall promptly
thereafter notify the Seller whether Eureka has determined to make a purchase and, if so, whether
all of the terms specified by the Seller are acceptable to Eureka.
If Eureka has determined not to make a proposed purchase, the Agent shall promptly send notice
of the proposed purchase to all of the Banks concurrently by telecopier, telex or cable specifying
the date of such purchase, each Bank’s Percentage multiplied by the aggregate amount of Capital of
Receivable Interest being purchased, whether the Yield for the Fixed Period for such Receivable
Interest is calculated based on the Adjusted Eurodollar Rate (which may be selected only if such
notice is given at least three Business Days prior to the purchase date) or the Alternate Base
Rate, and the duration of the Fixed Period for such Receivable Interest (which shall be one day if
the Seller has not selected another period); provided, however, that during the Term Period
for any Bank, such Bank shall, on the date of such purchase, instruct the Agent to make available
to the Seller at the account set forth in the Funds Transfer Letter such Bank’s ratable share of
the amount of Capital of the interest in the Receivable Interest being acquired by such Bank out of
the funds available therefor in the Collateral Advance Account.
(b) On the date of each such purchase of a Receivable Interest, Eureka or the
Banks, as the case may be, shall, upon satisfaction of the applicable conditions set forth in
Article III, make available to the Seller in same day funds an amount equal to the initial
Capital of such Receivable Interest, at the account set forth in the Funds Transfer Letter (or, with
respect to the purchase of Receivable Interests made on the date hereof, at the accounts set forth in
the Direction Letter); provided, however, if such purchase is being made by the Banks
following the designation by the Agent of a Termination Date for a Receivable Interest owned by an Investor
pursuant to clause (i)(a) of the definition of Termination Date and any Capital of such
Receivable Interest is outstanding on such date of purchase, the Seller hereby directs the
Banks to pay the proceeds of such purchase (to the extent of the outstanding Capital and accrued
Yield on such Receivable Interest of the Investor) to the Agent’s Account, for application to the
reduction of the outstanding Capital and accrued Yield on such Receivable Interest of the
Investor; provided, further, however, that during the Term Period for any Bank, after
receipt by the Agent of the instruction from such Bank referred to in the proviso to the last sentence of
Section 2.02(a) and upon fulfillment of the applicable conditions set forth in
Article III, the Agent shall make available to the Seller at the account set forth in the Funds Transfer Letter
such Bank’s ratable share of such purchase, solely out of the funds available therefor in the
Collateral Advance Account, and upon such deposit such Bank will be deemed to have paid to the Seller
such Bank’s ratable share of such Bank’s amount of the Capital of the interest in the
Receivable Interest being acquired for all purposes of this Agreement.
(c) Effective on the date of each purchase pursuant to this Section 2.02 and
each reinvestment pursuant to Section 2.04, the Seller hereby sells and assigns to the Agent,
for the benefit of the parties making such purchase, an undivided percentage ownership interest,
to the extent of the Receivable Interest then being purchased, in each Pool Receivable then
existing and in the Related Security and Collections with respect thereto.
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(d) Notwithstanding the foregoing, (i) Eureka shall not make purchases under this
Section 2.02 during the Term Period for any Bank in an amount which would exceed the Purchase Limit
minus the aggregate Bank Commitments of the Term-Out Banks, and (ii) a Bank shall not be obligated
to make purchases under this Section 2.02 at any time in an amount which would exceed such Bank’s
Bank Commitment less such Bank’s ratable share of the aggregate outstanding Capital held by Eureka
(whether or not any portion thereof has been assigned under the Asset Purchase Agreement), after
giving effect to any reductions of the Capital held by Eureka to be made on the date of such
purchase (whether from the distribution of Collections or from the proceeds of purchases by the
Banks). Each Bank’s obligation shall be several, such that the failure of any Bank to make
available to the Seller any funds in connection with any purchase shall not relieve any other Bank
of its obligation, if any, hereunder to make funds available on the date of such purchase, but no
Bank shall be responsible for the failure of any other Bank to make funds available in connection
with any purchase.
Section 2.03 Receivable Interest Computation. Each Receivable Interest shall be
initially computed on its date of purchase. Thereafter until the Termination Date for such
Receivable Interest, such Receivable Interest shall be automatically recomputed (or deemed to be
recomputed) on each day on which there is an increase or decrease in the amount of Capital of such
Receivable Interest or any other Receivable Interest. Any Receivable Interest, as computed (or
deemed recomputed) as of the day immediately preceding the Termination Date for such Receivable
Interest, shall thereafter remain constant. Each Receivable Interest shall become zero when Capital
thereof and Yield thereon shall have been paid in full, and all Fees and other amounts owed by the
Seller hereunder to the Investor, the Banks or the Agent are paid and the Servicer shall have
received the accrued Servicer Fee thereon.
Section 2.04 Settlement Procedures. (a) Collection of the Pool Receivables shall be
administered by a Servicer, in accordance with the terms of Article VI of this Agreement. The
Seller shall provide to the Servicer (if other than the Seller) on a timely basis all information
needed for such administration, including notice of the occurrence of any Liquidation Day and
current computations of each Receivable Interest.
(b) The Servicer shall, on each day on which Collections of Pool Receivables are
received by it:
(i) with respect to each Receivable Interest, set aside and hold in
trust (but not physically segregate) for the Investors or the Banks that hold such
Receivable Interest, out of the percentage of such Collections represented by such
Receivable Interest, an amount equal to the Yield, Fees and Servicer Fee (and,
during the Term Period, an amount equal to the Excess Interest in respect of all
Cash Secured Advances) accrued through such day for such Receivable Interest and not
previously set aside;
(ii) with respect to each Receivable Interest, if such day is not a
Liquidation Day for such Receivable Interest, reinvest with the Seller on behalf of
the Investors or the Banks that hold such Receivable Interest the percentage of such
Collections represented by such Receivable Interest;
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(iii) if such day is a Liquidation Day for (x) any one or more (but not
all) Receivable Interests, set aside and hold in trust (and, at the request of the
Agent, segregate) for the Investors or the Banks that hold such Receivable
Interests, the percentage of such Collections represented by such Receivable
Interests, or (y) all of the Receivable Interests, set aside and hold in trust (and,
at the request of the Agent, segregate) all of the remaining Collections received by
the Servicer on such date (but not in excess of the Capital of such Receivable
Interests and any other amounts payable by the Seller hereunder); provided
that if amounts are set aside and held in trust on any Liquidation Day occurring
prior to the Termination Date for the applicable Receivable Interest, and thereafter
prior to the next occurring Settlement Date (Capital) the conditions set forth in
Section 3.02 are satisfied or waived by the Agent, such previously set aside amounts
shall, to the extent representing a return of Capital, be reinvested in accordance
with the preceding subsection (ii) on the day of such subsequent satisfaction or
waiver of conditions; and
(iv) during such times as amounts are required to be reinvested in
accordance with the foregoing subsection (ii) or the proviso to subsection (iii),
release to the Seller for its own account any Collections in excess both of such
amounts and of the amounts that are required to be set aside pursuant to subsection
(i) above.
(c) [Intentionally Omitted].
(d) The Servicer shall deposit into the Agent’s Account, (i) on the Settlement
Date (Yield and Fees) for each Receivable Interest, Collections held for the Investors or the
Banks with respect to Yield, Fees, Excess Interest and other amounts (other than Capital) that
relate to such Receivable Interest pursuant to Section 2.04(b), (ii) on each Settlement Date
(Capital) following delivery of a Seller Report which shows that (x) the outstanding Capital
plus Total Reserves exceeded (y) the product of the Maximum Percentage Factor multiplied by the
Net Receivables Pool Balance (as of the related Reporting Date), all other Collections held
for the Investors or the Banks pursuant to clause (iii) of Section 2.04(b); provided,
however, that the aggregate amount deposited in the Agent’s Account pursuant to this clause (ii) with respect to
any Seller Report shall not exceed an amount such that, after giving effect to the application
of such amount to the reduction of Capital with respect to the Receivable Interests shown in that
Seller Report, the sum of outstanding Capital plus the Total Reserves is equal to the product
of the Maximum Percentage Factor multiplied by the Net Receivables Pool Balance, and (iii) on
each Settlement Date (Capital) on which Collections are held for the Investors or the Banks
pursuant to clause (iii) of Section 2.04(b), after giving effect to any deposits to be made on
such date pursuant to the preceding clause (ii) of this Section 2.04(d), all such remaining
Collections.
(e) Upon receipt of funds deposited into the Agent’s Account, the Agent shall
distribute them as follows:
(i) if such distribution occurs on a day that is not a Liquidation Day,
first to the Investors, the Banks and, during any Term-Out Period, the Term-Out
Banks that hold the relevant Receivable Interest and to the Agent in
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ratable payment in full of all accrued Yield and Fees and remaining unpaid accrued
interest in respect of all Cash Secured Advances (pursuant to the last sentence of
Section 2.15) and then to the Servicer in payment in full of all accrued Servicer
Fee; and
(ii) if such distribution occurs on a Liquidation Day, first to the
Investors or the Banks and/or Term-Out Banks that hold the relevant Receivable
Interest and to the Agent in ratable payment in full of all accrued Yield and Fees
and interest in respect of all Cash Secured Advances, second to such Investors or
Banks in reduction to zero of all Capital, third to the Term-Out Banks in reduction
to zero of the principal amount of all Cash Secured Advances remaining after
application of the Cash Collateral in accordance with Section 2.17(d), fourth to the
Investors, Banks, Term-out Banks or the Agent in payment of any other amounts owed
by the Seller hereunder or under any other Transaction Document, and fifth to the
Servicer in payment in full of all accrued Servicer Fee.
After the payment in full of Capital, Yield, Fees and the Servicer Fee with respect to all
Receivable Interests, and any other amounts payable by the Seller to the Investors, the Banks or
the Agent hereunder or under any other Transaction Document, including, without limitation, any
reimbursement obligations of the Seller with respect to any indemnity provided by the Agent under
any Deposit Account Agreement or the Collateral Advance Account Agreement, all additional
Collections with respect to the Receivable Interests shall be paid to the Seller for its own
account.
(f) For the purposes of this Section 2.04:
(i) if on any day any Pool Receivable becomes (in whole or in part) a
Diluted Receivable, the Seller shall be deemed to have received on such day a
Collection of such Pool Receivable in the amount of such Diluted Receivable;
(ii) if on any day any of the representations or warranties contained in
Section 4.01(h) is no longer true with respect to any Pool Receivable, the Seller
shall be deemed to have received on such day a Collection of such Pool Receivable in
full;
(iii) except as provided in subsection (i) or (ii) of this Section 2.04(f),
or as otherwise required by applicable law or the relevant Contract, all Collections
received from an Obligor of any Receivables shall be applied to the Receivables of
such Obligor in the order of the age of such Receivables, starting with the oldest
such Receivable, unless such Obligor designates its payment for application to
specific Receivables;
(iv) if and to the extent the Agent, the Investors or the Banks shall be
required for any reason to pay over to an Obligor any amount received on its behalf
hereunder, such amount shall be deemed not to have been so received but rather to
have been retained by the Seller and, accordingly, the Agent, the
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Investors or the Banks, as the case may be, shall have a claim against the Seller
for such amount, payable when and to the extent that any distribution from or on
behalf of such Obligor is made in respect thereof.
(g) Within one Business Day after the end of each Fixed Period in respect of which Yield
is computed by reference to the Investor Rate, the Agent shall furnish the Seller with an invoice
setting forth the amount of the accrued and unpaid Yield and Fees for such Fixed Period with
respect to the Receivable Interests held by the Investors and the Banks.
(h) All amounts payable by the Seller or the Servicer under this Agreement to the Agent
for its own account or for the account of the Investor or the Banks shall be paid in Dollars. The
purchase price for Receivable Interests and all other amounts payable by the Investor or the Banks
under this Agreement shall be payable in Dollars.
Section 2.05 Fees. (a) Each Investor and Bank shall pay to the Servicer and the
Subservicer an aggregate fee (the “Servicer Fee”) in respect of each Receivable Interest owned by
it in an amount equal to 1/2 of 1% per annum of the Receivable Interest (expressed as a percentage)
of such Investor or Bank multiplied by the average daily aggregate Outstanding Balance of all
Receivables, from the date of purchase of such Receivable Interest until the later of the
Termination Date for such Receivable Interest or the date on which the Capital of such Receivable
Interest is reduced to zero, payable on each Settlement Date (Yield and Fees) for such Receivable
Interest. So long as ACSC is the Servicer and ACI is the Subservicer, the Servicer hereby directs
the Investors and the Banks to pay 80% of the Servicer Fee to the Subservicer and 20% of the
Servicer Fee to the Servicer. Upon three Business Days’ notice to the Agent, the Servicer (if not
the Originator, the Seller or its designee or an Affiliate of the Seller) may elect to be paid, as
such fee, another percentage per annum on the average daily aggregate Outstanding Balance of
Receivables, but in no event in excess of 110% of the actual and reasonable costs and expenses of
the Servicer in administering and collecting the Receivables in the Receivables Pool. The Servicer
Fee shall be payable only from Collections pursuant to, and subject to the priority of payment set
forth in, Section 2.04. So long as ACSC is acting as the Servicer hereunder and ACI is acting as
the Subservicer, amounts paid as the Servicer Fee pursuant to this Section 2.05(a) shall reduce, on
a dollar for dollar basis, the obligation of the Seller to pay the “Servicer Fee” pursuant to
Section 6.03 of the Originator Purchase Agreement, provided that such obligation of the
Seller shall in no event be reduced below zero.
(b) The Seller shall pay to the Agent certain fees (collectively, the “Fees”) in the
amounts and on the dates set forth in that certain fee agreement dated as of October 27, 2005
between the Seller and the Agent, as the same may be amended or restated from time to time (the
“Fee Agreement”).
Section 2.06 Payments and Computations, Etc. (a) All amounts to be paid or
deposited by the Seller or the Servicer hereunder shall be paid or deposited no later than 11:00
A.M. (New York City time) on the day when due in same day funds to the Agent’s Account.
(b) All computations of Yield, fees, and other amounts hereunder (including, without
limitation, interest on Cash Secured Advances during the Term Period) shall be made on
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the basis of a year of 360 days for the actual number of days (including the first but excluding
the last day) elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day
other than a Business Day, such payment or deposit shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of such payment or deposit.
Section 2.07 Dividing or Combining Receivable Interests. Either the Seller or the
Agent may, upon notice to the other party received at least three Business Days prior to the last
day of any Fixed Period in the case of the Seller giving notice, or up to the last day of such
Fixed Period in the case of the Agent giving notice, either (i) divide any Receivable Interest into
two or more Receivable Interests having aggregate Capital equal to the Capital of such divided
Receivable Interest, or (ii) combine any two or more Receivable Interests originating on such last
day or having Fixed Periods ending on such last day into a single Receivable Interest having
Capital equal to the aggregate of the Capital of such Receivable Interests; provided, however,
that no Receivable Interest owned by Eureka may be combined with a Receivable Interest owned by
any Bank.
Section 2.08 Increased Costs. (a) Without duplication with respect to any amounts
payable pursuant to Section 2.10 and excluding amounts specifically excluded from the definition of
“Taxes” as set forth in Section 2.10 and, without duplication of any amounts otherwise payable as
interest hereunder, if, after the date hereof, the Agent, any Investor, any Bank, or any bank or
other financial institution providing liquidity and/or credit support to any Investor in connection
with such Investor’s commercial paper program, or any of their respective Affiliates (each, an
“Affected Person”) determines that compliance with any law or regulation or any guideline or
request from any central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of the capital required or expected to be maintained by
such Affected Person and such Affected Person determines that the amount of such capital is
increased by or based upon the existence of any commitment to make purchases of or otherwise to
maintain the investment in Pool Receivables or interests therein related to this Agreement or to
the funding thereof and other commitments of the same type, then, upon demand by such Affected
Person (with a copy to the Agent), the Seller shall immediately pay to the Agent for the account of
such Affected Person (as a third-party beneficiary), from time to time as specified by such
Affected Person, additional amounts sufficient to compensate such Affected Person in the light of
such circumstances, to the extent that such Affected Person reasonably determines such increase in
capital to be allocable to the existence of any of such commitments; provided, however,
that no Eligible Assignee or Participant shall be entitled to receive any greater payment under
this Section 2.08(a) than such Affected Person would have been entitled to receive with respect to
the rights assigned, participated or otherwise transferred unless the circumstances giving rise to
such greater payment occurred after the date of such assignment, participation or transfer. A
certificate as to such amounts submitted to the Seller and the Agent by such Affected Person shall
be conclusive and binding for all purposes, absent manifest error.
(b) Without duplication with respect to any amounts payable pursuant to Section 2.10 and
excluding amounts specifically excluded from the definition of “Taxes” as set forth in Section 2.10
and, without duplication of any amounts otherwise payable as interest hereunder, if, after the date
hereof, due to either (i) the introduction of or any change (other than
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any change by way of imposition or increase of reserve requirements which are included in the
calculation of the Eurodollar Rates Reserve Percentage) in or in the interpretation of any law or
regulation or (ii) compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be any increase in the
cost to any Investor or Bank of agreeing to purchase or purchasing, or maintaining the ownership of
Receivable Interests in respect of which Yield is computed by reference to the Adjusted Eurodollar
Rate, then, upon demand by such Investor or Bank (with a copy to the Agent), the Seller shall
immediately pay to the Agent, for the account of such Investor or Bank (as a third party
beneficiary), from time to time as specified by such Investor or Bank, additional amounts
sufficient to compensate such Investor or Bank for such increased costs; provided, however,
that no Eligible Assignee or Participant shall be entitled to receive any greater payment under
this Section 2.08(b) than such Investor or Bank would have been entitled to receive with respect to
the rights assigned, participated or otherwise transferred unless the circumstances giving rise to
such greater payment occurred after the date of such assignment, participation or transfer. A
certificate as to such amounts submitted to the Seller and the Agent by such Investor or Bank shall
be conclusive and binding for all purposes, absent manifest error.
(c) Failure or delay on the part of any Affected Person, any Investor or any Bank, as
the case may be, to demand compensation pursuant to this Section 2.08 shall not constitute a waiver
of such Person’s right to demand such compensation; provided, that the Seller shall not be
required to compensate an Affected Person, an Investor or a Bank (as the case may be) pursuant to
this Section 2.08 for any increased costs incurred more than 180 days prior to the date that such
Person notifies the Seller of the applicable law, regulation, guideline or request giving rise to
such increased costs and of such Person’s intention to claim compensation therefor; provided,
further that, if the applicable law, regulation, guideline or request giving rise to such
increased costs is retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
Section 2.09 [Intentionally Omitted].
Section 2.10 Taxes. (a) Except as otherwise required by law, any and all payments
and deposits required to be made hereunder or under any other Transaction Document by the Servicer
or the Seller shall be made free and clear of and without deduction or withholding for or on
account of any and all present or future income, stamp or, without limitation, other taxes, levies,
imposts, deductions, duties, fees, charges or withholdings, and all liabilities with respect
thereto, excluding (A) net income taxes and franchise taxes (imposed in lieu of net income
taxes) and backup withholding taxes that are imposed on an Affected Person by the United States, a
state thereof or a foreign jurisdiction under the laws of which such Affected Person is organized
or any political subdivision thereof and net income taxes and capital taxes imposed by Canada or
any political subdivision thereof other than Canadian withholding taxes and other than Canadian
taxes based on or measured by income or capital in connection with the Receivables or the
transactions contemplated by the Transaction Documents resulting from the Seller or any Affected
Person (but only directly and exclusively as a result of any breach by the Seller or the Servicer
(or any delegatee thereof, including the Subservicer) of their respective obligations under the
Transaction Documents) having a permanent establishment in Canada solely as a result of such
transactions, (B) any branch profits taxes imposed by the United States or any similar tax imposed
by any other jurisdiction described in clause (A) above,
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(C) any withholding taxes imposed on amounts payable to an Affected Person at the time such
Affected Person becomes an Affected Person hereunder by virtue of an assignment, except to the
extent that such Affected Person’s assignor (if any) was entitled at the time of assignment, to
receive additional amounts from the Servicer or the Seller with respect to such Taxes pursuant to
this Section 2.10(a), or (D) any taxes that are imposed as a result of any event occurring after
the Affected Person becomes an Affected Person hereunder by virtue of an assignment other than a
change in law or regulation or the introduction of any law or regulation or a change in
interpretation or administration of any law (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the
Seller or the Servicer or any Obligor shall be required by law to deduct any Taxes from or in
respect of any sum payable or deposited hereunder to (or for the benefit of) any Affected Person,
(i) the Seller, or the Servicer, as the case may be, shall make an additional payment to such
Affected Person, in an amount sufficient so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.10), such Affected Person
receives an amount equal to the sum it would have received had no such deductions been made, (ii)
the Seller or the Servicer, as the case may be, shall make such deductions and (iii) the Seller or
the Servicer, as the case may be, shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. Within 30 days after the date of
any payment of Taxes, the Seller or the Servicer, as the case may be, will furnish to the Agent, at
its address referred to in Section 10.02, the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, the Seller agrees to pay any present or future stamp or other
documentary taxes or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or under any other Transaction Document or from the
execution, delivery or registration of, or otherwise with respect to, this Agreement or any
other
Transaction Document (hereinafter referred to as “Other Taxes”).
(c) The Seller and Servicer will indemnify each Affected Person for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 2.10) paid by such Affected
Person or deducted or withheld from any Collections (including any Taxes or amounts on
account of Taxes deducted by any Obligor) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall be made within thirty days from
the date the Affected Person makes written demand therefor (and a copy of such demand shall be
delivered to the Agent). A certificate as to the amount of such indemnification submitted to
the
Seller and the Agent by such Affected Person, setting forth, in reasonable detail, the basis
for and
the calculation thereof, shall be conclusive and binding for all purposes absent manifest
error.
(d) Each Affected Person that is not (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in or under the
laws of
the United States (or any jurisdiction thereof), or (iii) any estate or trust that is subject
to federal
income taxation regardless of the source of its income shall, on or prior to the date hereof
(or, in
the case of any Person who becomes an Affected Person after the date hereof, on or prior to
the
date on which it so becomes an Affected Person), deliver to the Seller two copies of either
Internal Revenue Service Form W-8BEN or Form W-8ECI and any other certificate or statement
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of exemption required by Treasury Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or any
subsequent version thereof or successors thereto, properly completed and duly executed by such
Affected Person as will permit, insofar as the laws of the United States are applicable, such
payments to be made by the Servicer or Seller without withholding or at a reduced rate. Each such
Affected Person shall from time to time thereafter, upon written request from the Seller, deliver
to the Seller any new certificates, documents or other evidence as described in the preceding
sentence as will permit, insofar as the laws of the United States are applicable, payments under
this Agreement to be made without withholding or at a reduced rate (but only so long as such
Affected Person is legally able to do so).
(e) The Seller and the Servicer shall not be required to pay any amounts to
any Affected Person in respect of Taxes and Other Taxes pursuant to paragraphs (a), (b) and
(c)
above to the extent the obligation to pay such amounts is attributable to the failure by such
Affected Person to comply with the provisions of paragraph (d) above; provided,
however, that
should an Affected Person become subject to Taxes because of its failure to deliver a form
required hereunder, the Seller and the Servicer shall take such steps as such Affected Person
shall reasonably request to assist such Affected Person to recover such Taxes, at the sole
cost and
expense of such Affected Person.
(f) The Seller and Eureka agree that it is each such party’s intent that any
interest income paid to Eureka pursuant to this Agreement and the other Transaction Documents
shall be “portfolio interest” and, therefore, exempt from U.S. federal withholding tax, under
section 881(c) of the Code and the regulations promulgated thereunder.
(g) If an Affected Person receives a refund in respect of any Taxes or Other
Taxes as to which it has been indemnified by the Seller and Servicer or with respect to which
the
Seller and Servicer have paid additional amounts pursuant to this Section 2.10, it shall
within 30
days from the date of such receipt pay over the amount of such refund to the Seller and
Servicer,
net of all reasonable out-of-pocket expenses of such Affected Person and without interest
(other
than interest paid by the relevant taxation authority with respect to such refund); provided
that
the Seller and Servicer, upon the request of such Affected Person, agrees to repay the amount
paid over to the Seller and Servicer (plus penalties, interest or other reasonable charges) to
such
Affected Person in the event such Affected Person is required to repay such refund to such
taxation authority.
Section 2.11 Security Interest. As collateral security for the performance by the
Seller of all the terms, covenants and agreements on the part of the Seller (whether as Seller or
otherwise) to be performed under this Agreement or any document delivered in connection with this
Agreement in accordance with the terms thereof, including the punctual payment when due of all
obligations of the Seller hereunder or thereunder, whether for indemnification payments, principal
and interest on the Cash Secured Advances, Yield, Capital, fees, expenses or otherwise, the Seller
hereby assigns to the Agent for its benefit and the ratable benefit of the Investors and the Banks,
and hereby grants to the Agent for its benefit and the ratable benefit of the Investors and the
Banks, a security interest in, all of the Seller’s right, title and interest in and to (A) the
Originator Purchase Agreement and the Undertaking (Originator), including, without limitation, (i)
all rights of the Seller to receive moneys due or to become due under or pursuant to the Originator
Purchase Agreement or the Undertaking (Originator), (ii) all security interests and
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property subject thereto from time to time purporting to secure payment of monies due or to become
due under or pursuant to the Originator Purchase Agreement or the Undertaking (Originator), (iii)
all rights of the Seller to receive proceeds of any insurance (including, without limitation, the
right to receive Insurance Proceeds), indemnity, warranty or guaranty with respect to the
Originator Purchase Agreement or the Undertaking (Originator), (iv) claims of the Seller for
damages arising out of or for breach of or default under the Originator Purchase Agreement or the
Undertaking (Originator), and (v) the right of the Seller to compel performance and otherwise
exercise all remedies thereunder, (B) all Receivables, whether now owned and existing or hereafter
acquired or arising, the Related Security with respect thereto and the Collections and all other
assets, including, without limitation, accounts, chattel paper, goods, instruments and general
intangibles (as those terms are defined in the UCC), including undivided interests in any of the
foregoing, (C) the Lock-Boxes and Deposit Accounts, and any funds on deposit in any such account,
and (D) to the extent not included in the foregoing, all proceeds of any and all of the foregoing.
Section 2.12 Sharing of Payments. If any Investor or any Bank (for purposes of this
Section only, referred to as a “Recipient”) shall obtain payment (whether voluntary, involuntary,
through the exercise of any right of setoff, or otherwise) on account of the Capital of, or Yield
on, any Receivable Interest or portion thereof owned by it in excess of its ratable share of
payments made on account of the Capital of, or Yield on, all of the Receivable Interests owned by
the Investors and the Banks (other than as a result of a payment of Liquidation Fee or different
methods for calculating Yield), such Recipient shall forthwith purchase from the Investors or the
Banks which received less than their ratable share participations in the Receivable Interests owned
by such Persons as shall be necessary to cause such Recipient to share the excess payment ratably
with each such other Person; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such Recipient, such purchase from each such other Person
shall be rescinded and each such other Person shall repay to the Recipient the purchase price paid
by such Recipient for such participation to the extent of such recovery, together with an amount
equal to such other Person’s ratable share (according to the proportion of (a) the amount of such
other Person’s required payment to (b) the total amount so recovered from the Recipient) of any
interest or other amount paid or payable by the Recipient in respect of the total amount so
recovered.
Section 2.13 Intentionally Omitted.
Section 2.14 Purchase by Term-Out Banks. At least three Business Days prior to the
Cash Secured Advance Commencement Date for any Bank, the Seller shall notify the Agent if the
Seller wishes the purchase described in this Section 2.14 to occur. Following such notice, on the
Cash Secured Advance Commencement Date for such Bank, such Bank shall, and agrees to, purchase from
the Investor such Bank’s ratable share of all Receivable Interests then owned by the Investor for a
purchase price equal to the sum of such Bank’s ratable share of the Capital of such Receivable
Interests plus accrued and unpaid Yield and Fees thereon. Such purchase price shall be payable in
immediately available funds on the Cash Secured Advance Commencement Date for such Bank. The
Investor shall notify the Agent and the Seller of any such purchase. No further documentation of
such purchase shall be required for the effectiveness thereof, provided that if requested
by any purchasing Bank, the Investor (or its
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administrative agent) will execute and deliver an assignment to such Bank in such form as may be
mutually agreed between the Investor and such Bank.
Section 2.15 Interest on Cash Secured Advances. The Seller shall pay interest to
each Term-Out Bank on the unpaid principal amount of such Bank’s Cash Secured Advance from the date
of such Cash Secured Advance until such principal amount shall be repaid in full, at a rate per
annum equal at all times during each Fixed Period to the Assignee Rate for such Fixed Period,
payable in arrears on each Settlement Date (Yield and Fees). On each Settlement Date (Yield and
Fees) after the Cash Secured Advance Commencement Date for any Bank, the Agent shall pay to such
Bank, on behalf of the Seller, pursuant to a Collateral Advance Account Direction from the relevant
Bank, such Bank’s ratable portion (based on the outstanding principal amounts of each Bank’s Cash
Secured Advances) of the cash funds that constitute that interest on, and those dividends from, the
Cash Collateral which shall then be available to be withdrawn from the Collateral Advance Account,
for application to the payment of unpaid accrued interest on the Cash Secured Advances. Any
remaining unpaid accrued interest on the Cash Secured Advances shall be paid from the Collections
of the Pool Receivables pursuant to Section 2.04 and Section 2.17(d).
Section 2.16 Repayment of Cash Secured Advances. The Seller shall repay to each
Term-Out Bank the aggregate outstanding principal amount of such Bank’s Cash Secured Advance on the
Commitment Termination Date; provided, however, that recourse for such repayment shall be
from, and shall be limited to, the Cash Collateral and the Collections of the Pool Receivables in
accordance with Section 2.04.
Section 2.17 Use of Proceeds; Security Interest in Collateral Advance Account. (a)
The Seller hereby agrees that it shall use the proceeds of the Cash Secured Advances solely to fund
and maintain the Collateral Advance Account for the purpose of funding purchases of Receivable
Interests from time to time during the Term Period.
(b) The Seller hereby grants to the Agent, for the ratable benefit of the Term-
Out Banks, a security interest in the following, whether now owned and existing or hereafter
acquired or arising (collectively, the “Cash Collateral”):
(i) the Collateral Advance Account, all funds from time to time credited
to the Collateral Advance Account, all financial assets (including, without
limitation, Eligible Investments) from time to time acquired with any such funds or
otherwise credited to the Collateral Advance Account, all interest, dividends, cash,
instruments and other investment property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such funds or
such financial assets, and
(ii) all proceeds of, collateral for, and supporting obligations relating
to any and all of the Cash Collateral.
(c) The grant of a security interest by the Seller to the Agent for the ratable
benefit of the Term-Out Banks pursuant to subsection (b) above secures the payment of the
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Seller’s obligation to repay the Cash Secured Advances, and to pay interest thereon, pursuant to
Section 2.15 and Section 2.16, respectively.
(d) On the Commitment Termination Date for any Bank as to which the Term Period has
occurred, the Agent shall (i) convert the Cash Collateral that does not constitute cash into cash
proceeds and (ii) pay to each Term-Out Bank, on behalf of the Seller, such Bank’s ratable portion
of the Cash Collateral (it being understood that all the Cash Collateral shall then constitute cash
or cash proceeds), according to the respective outstanding principal amounts of their respective
Cash Secured Advances, for application, first, to the repayment of the outstanding principal
amounts of the Cash Secured Advances and, second, to the payment of unpaid accrued interest on the
Cash Secured Advances (to the extent such funds are available therefor). Any remaining outstanding
principal amount of, and/or unpaid accrued interest on, the Cash Secured Advances shall be paid
from the Collections of the Pool Receivables pursuant to Section 2.04.
Section 2.18 Repurchase Option. So long as no Event of Termination or Incipient
Event of Termination would occur or be continuing after giving effect thereto, the Seller shall
have the right (but not any obligation) to repurchase that portion of each Receivable Interest sold
pursuant hereto representing one or more specified Pool Receivables which are Defaulted Receivables
or Delinquent Receivables, or otherwise identified by the Seller (including such Pool Receivables
as are identified for repurchase by the Seller in order to conform with, or not to breach, any
provision of or order under, the Foreign Extraterritorial Measures Act (Canada) or regulations
thereunder), upon not less than three Business Days’ prior written notice to the Agent. Such notice
shall specify the date that the Seller desires that such repurchase occur (such date, the
“Repurchase Date”) and shall identify the Receivables to be included in such repurchase. On the
Repurchase Date, the Seller shall transfer to the Agent’s Account in immediately available funds an
amount equal to the lesser of (i) the Outstanding Balance of the Receivables included in such
repurchase and (ii) the excess, if any, of the outstanding Capital plus Total Reserves over the
product of the Net Receivables Pool Balance (excluding the Receivables included in such repurchase)
and the Maximum Percentage Factor, and upon receipt thereof, the Agent, the Investors and the Banks
shall be deemed to assign and release, without recourse, representation or warranty, their right,
title and interest in and to the Receivables included in such repurchase. In connection with any
such repurchase, the Agent shall execute and deliver, at the Seller’s request and expense, any
assignment or release that the Seller may reasonably request to evidence the repurchase of the
applicable Receivables. At such time, if any, that the aggregate Outstanding Balance of all
Receivables repurchased pursuant to this Section exceeds 2% of the aggregate Outstanding Balance of
all Pool Receivables, the Seller will (or will cause the Servicer or the applicable Originator to)
instruct all Obligors of Receivables that are repurchased pursuant hereto to remit all of their
payments in respect of such Receivables to accounts or post offices boxes other than the Deposit
Accounts or the Lock-Boxes.
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ARTICLE III
CONDITIONS OF PURCHASES
Section 3.01 [Intentionally Omitted].
Section 3.02 Conditions Precedent to All Purchases and Reinvestments. Each purchase
(including the initial purchase) and each reinvestment shall be subject to the conditions precedent
that (a) in the case of each purchase, the Servicer shall have delivered to the Agent at least one
Business Day prior to such purchase, in form and substance satisfactory to the Agent, a completed
Seller Report containing information covering the most recently ended reporting period for which
information is required pursuant to Section 6.02(g) and demonstrating that after giving effect to
such purchase no Event of Termination or Incipient Event of Termination under Section 7.01(i) would
occur, (b) in the case of each reinvestment, the Servicer shall have delivered to the Agent on or
prior to the date of such reinvestment, in form and substance satisfactory to the Agent, a
completed Seller Report containing information covering the most recently ended reporting period
for which information is required pursuant to Section 6.02(g), (c) as of the date of such purchase
or reinvestment, an Investor or Bank or the Agent shall not have determined, acting reasonably, and
notified the Seller and the Agent that it has or is deemed to have a permanent establishment within
Canada solely as a result of the transactions contemplated hereby or as a result of any breach by
the Seller or the Servicer of any of their obligations under this Agreement, (d) on the date of
such purchase or reinvestment the following statements shall be true, except that the statement in
clause (iii) below is required to be true only if such purchase or reinvestment is by an Investor
(and acceptance of the proceeds of such purchase or reinvestment shall be deemed a representation
and warranty by the Seller and the Servicer (each as to itself) that such statements are then
true):
(i) The representations and warranties contained in the second sentence
of Section 4.01(e) and Section 4.02(e)(ii) are correct on and as of the date of any
such purchase as though made on and as of such date and all other representations
and warranties contained in Sections 4.01 and 4.02 are correct on and as of the date
of such purchase or reinvestment as though made on and as of such date (except
insofar as such representations and warranties relate expressly to an earlier date
certain, in which case such representations and warranties shall be correct as of
such earlier date),
(ii) No event has occurred and is continuing, or would result from such
purchase or reinvestment, that constitutes an Event of Termination or an Incipient
Event of Termination, and
(iii) The Agent shall not have given the Seller at least one Business
Day’s notice that the Investors have terminated the reinvestment of Collections
in Receivable Interests, and
(iv) The Originators shall have sold or contributed to the Seller, pursuant to
the Originator Purchase Agreement, all Originator Receivables arising on or prior to
such date, and
(e) the Agent shall have received such other approvals, opinions or documents as it may
reasonably request.
Section 3.03 Conditions Precedent to the Effectiveness of Amendment and
Restatement. The effectiveness of this amendment and restatement of the Original RPA is
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subject to the conditions precedent that the Agent shall have received on or before the date hereof
the following, each (unless otherwise indicated) dated such date, in form and substance
satisfactory to the Agent:
(a) Certified copies of the resolutions of the Board of Directors of the Seller,
ACI and ACSC approving this Agreement, the amendment and restatement effected by the
Originator Purchase Agreement and the other documents to be delivered by such Person
hereunder and thereunder and certified copies of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this Agreement and the
Originator Purchase Agreement.
(b) A certificate of the Secretary or Assistant Secretary of each of the Seller,
ACI and ACSC certifying the names and true signatures of the officers of the Seller and the
Originators authorized to sign this Agreement, the Originator Purchase Agreement and the other
documents to be delivered by it hereunder and thereunder.
(c) Acknowledgment copies or time stamped receipt copies (or other
satisfactory evidence of filing) of proper financing statement amendments, duly filed on or
before the date hereof under the UCC and PPSA of all jurisdictions that the Agent may deem
necessary or desirable in order to add the International Receivables and effect such other
revisions as the Agent may deem necessary or desirable to reflect the amendments to the
Original RPA, the Original Originator Purchase Agreement and the other Transaction
Documents contemplated by this Agreement and the Originator Purchase Agreement.
(d) Acknowledgment copies or time stamped receipt copies (or other
satisfactory evidence of filing), or copies accompanied by filing authorizations signed by the
applicable secured party, of proper financing statement amendments and terminations, if any,
necessary to release all security interests and other rights of any Person in (i) the
Receivables,
Contracts or Related Security previously granted by the Seller or any Originator and (ii) the
collateral security referred to in Section 2.11 previously granted by the Seller.
(e) Completed requests for information and search reports, dated on or before
the date hereof, listing all effective financing statements and other registrations filed in
the
jurisdictions referred to in subsection (c) above and in any other jurisdictions reasonably
requested by the Agent that name the Seller or any Originator as debtor, together with copies
of
such financing statements and other registrations (none of which shall cover any Receivables,
Contracts, Related Security or the collateral security referred to in Section 2.11).
(f) An executed copy of the Deposit Account Agreement relating to the
Deposit Account maintained with Citibank, N.A., as depositary bank, and described in more
detail in Schedule I hereto.
(g) Favorable opinions (or letters of confirmation and reliance, to the extent
satisfactory to the Agent) of (i) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP, U.S. counsel
for
ACI, the Seller and the Originators and (ii) Stikeman Elliott LLP, Canadian counsel for ACI
and
the Canadian Originator, in each case in form and substance satisfactory to the Agent.
(h) An executed copy of the Originator Purchase Agreement.
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(i) A copy of the by-laws of the Seller and each Originator, certified by the Secretary
or Assistant Secretary of the Seller or such Originator, as the case may be (or, to the extent
previously delivered, such officer may certify that the by-laws of such Person remain unchanged).
(j) A copy of the certificate or articles of incorporation of the Seller and each
Originator, certified as of a recent date by the Secretary of State or other appropriate official
of the state of its organization (or, to the extent previously delivered, the Secretary or
Assistant Secretary of such Person may certify that the articles of incorporation or the
certificate of formation of such Person remain unchanged), and a certificate as to the good
standing of the Seller and each Originator from such Secretary of State or other official, dated as
of a recent date.
(k) A pro forma Weekly Report for the period ending January 25, 2008 and a pro forma
Monthly Report for the period ending December 31, 2007, each certified by an authorized financial
officer of the Servicer with responsibility for such Seller Report and reflecting the inclusion of
the International Receivables.
(1) An executed copy of the Four Party Agreement.
(m) An executed copy of each of (i) an amendment and reaffirmation of the Undertaking
(Originator) and (ii) an amendment and reaffirmation of the Undertaking (Servicer).
(n) Representative samples of invoices with respect to the International
Receivables.
(o) Executed copies of the documents comprising the Bank Agreement Security
Letters.
(p) An executed copy of a certificate of the chief financial officer of ACI
regarding Adverse Claims in the form attached hereto as
Annex N.
(q) Evidence that the Seller has paid all reasonable fees, costs, expenses and other
amounts owed by the Seller to the Investors, the Banks and the Agent as of the date hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Seller. The Seller hereby
represents and warrants as follows:
(a) The Seller is a corporation duly incorporated, validly existing and in good standing
under the laws of the jurisdiction set forth in Schedule IV hereto (as such Schedule IV is modified
in accordance herewith), and is duly qualified to do business, and is in good standing, in every
jurisdiction where the nature of its business requires it to be so qualified, unless the failure to
so qualify would not have a Material Adverse Effect.
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(b) The execution, delivery and performance by the Seller of the Transaction
Documents and the other documents to be delivered by it hereunder, including the Seller’s use
of
the proceeds of purchases and reinvestments, (i) are within the Seller’s corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) do not contravene (1) the
Seller’s charter or by-laws, (2) any law, rule or regulation applicable to the Seller, (3) any
contractual restriction binding on or affecting the Seller or its property or (4) any order, writ,
judgment, award, injunction or decree binding on or affecting the Seller or its property, and (iv)
do not result in or require the creation of any lien, security interest or other Adverse Claim,
charge or encumbrance upon or with respect to any of its properties (except for the interest
created pursuant to this Agreement). Each of the Transaction Documents to which the Seller is a
party has been duly executed and delivered by the Seller.
(c) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due execution,
delivery
and performance by the Seller of the Transaction Documents or any other document to be
delivered thereunder, except for the filing of UCC financing statements which are referred to
therein.
(d) Each of the Transaction Documents to which the Seller is a party
constitutes the legal, valid and binding obligation of the Seller enforceable against the
Seller in
accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and general equitable principles
(whether
considered in a proceeding at law or in equity).
(e) Since September 30, 2007 there has been no material adverse change in
the business, operations or financial condition of the Seller.
(f) There is no pending or, to the Seller’s knowledge, threatened action,
investigation or proceeding affecting the Seller before any court, governmental agency or
arbitrator which may have a Material Adverse Effect.
(g) No proceeds of any purchase or reinvestment will be used to acquire any equity
security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of
1934.
(h) Immediately prior to the purchase by the Investor or the Banks, as the case may be,
the Seller is the legal and beneficial owner of the Pool Receivables and Related Security free and
clear of any Adverse Claim; upon each purchase or reinvestment, the Investors or the Banks, as the
case may be, shall acquire a valid and perfected first priority undivided percentage ownership
interest to the extent of the pertinent Receivable Interest in each Pool Receivable then existing
or thereafter arising and in the Related Security and Collections with respect thereto. No
effective financing statement or other instrument similar in effect covering any Contract or any
Pool Receivable or the Related Security or Collections with respect thereto is on file in any
recording office, except those filed in favor of the Agent relating to this Agreement and those
filed by the Seller pursuant to the Originator Purchase Agreement. Each Receivable characterized in
any Seller Report or other written statement made by or on behalf of the Seller as an Eligible
Receivable or as included in the Net Receivables Pool Balance is, as of the date of
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such Seller Report or other statement, an Eligible Receivable or properly included in the Net
Receivables Pool Balance.
(i) Each Seller Report (if prepared by the Seller or one of its Affiliates, or to the
extent that information contained therein is supplied by the Seller or an Affiliate), including the
calculations therein, and all information, exhibits, financial statements, documents, books,
records or reports furnished or to be furnished at any time by or on behalf of the Seller to the
Agent, the Investors or the Banks in connection with this Agreement is or will be accurate in all
material respects as of its date or (except as otherwise disclosed to the Agent, Investors or the
Banks, as the case may be, at such time) as of the date so furnished, and no such document contains
or will contain any untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements contained therein, in the light of the circumstances
under which they were made, not misleading.
(j) The principal place of business and chief executive office of the Seller and the
office where the Seller keeps its records concerning the Pool Receivables are located at the
address or addresses referred to in Section 5.01(b). The Seller is located in the jurisdiction of
organization set forth in Schedule IV hereto (as modified in accordance herewith) for purposes of
Section 9-307 of the UCC as in effect in the State of New York; and the office in the jurisdiction
of organization of the Seller in which a UCC financing statement is required to be filed in order
to perfect the security interest granted by the Seller hereunder is set forth in Schedule IV hereto
(as modified in accordance herewith).
(k) The names and addresses of all the Deposit Banks, together with the post office
boxes and account numbers of the Lock-Boxes and Deposit Accounts of the Seller at such Deposit
Banks, are as specified in Schedule I hereto, as such Schedule I may be amended from time to time
pursuant to Section 5.01(g). The Lock-Boxes and Deposit Accounts are the only post office boxes and
accounts into which Collections of Receivables are deposited or remitted. The Seller has delivered
to the Agent a fully executed Deposit Account Agreement with respect to each Deposit Account and
any associated Lock-Boxes.
(l) Each purchase of a Receivable Interest and each reinvestment of Collections in Pool
Receivables will constitute (i) a “current transaction” within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended, and (ii) a purchase or other acquisition of
notes, drafts, acceptances, open accounts receivable or other obligations representing part or all
of the sales price of merchandise, insurance or services within the meaning of Section 3(c)(5) of
the Investment Company Act of 1940, as amended.
(m) The Seller is not known by and does not use any tradename or doing-business-as
name.
(n) The Seller was incorporated on October 20, 2005, and the Seller (i) did not engage
in any business activities prior to October 27, 2005 and (ii) has not engaged in business
activities inconsistent with the terms of all the transactions contemplated by the Original
Originator Purchase Agreement or the Original RPA prior to the date of this Agreement. The Seller
has no Subsidiaries.
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(o) (i) The fair value of the property of the Seller is greater than the total amount of
liabilities, including contingent liabilities, of the Seller, (ii) the present fair salable value
of the assets of the Seller is not less than the amount that will be required to pay all probable
liabilities of the Seller on its debts as they become absolute and matured, (iii) the Seller does
not intend to, and does not believe that it will, incur debts or liabilities beyond the Seller’s
abilities to pay such debts and liabilities as they mature and (iv) the Seller is not engaged in a
business or a transaction, and is not about to engage in a business or a transaction, for which the
Seller’s property would constitute unreasonably small capital.
(p) With respect to each Pool Receivable, the Seller (i) shall have received such Pool
Receivable as a contribution to the capital of the Seller by the U.S. Originator or (ii) shall have
purchased such Pool Receivable from an Originator in exchange for payment (made by the Seller to
such Originator in accordance with the provisions of the Originator Purchase Agreement) of cash or
the Deferred Purchase Price, or a combination thereof, in an amount which constitutes fair
consideration and reasonably equivalent value. Each such sale referred to in clause (ii) of the
preceding sentence shall not have been made for or on account of an antecedent debt owed by any
Originator to the Seller and no such sale is or may be voidable or subject to avoidance under any
section of the Federal Bankruptcy Code or any other state, Canadian or provincial law.
(q) The Seller has (i) timely filed all federal tax returns required to be filed, (ii)
timely filed all other material state and local tax returns and (iii) paid or made adequate
provision for the payment of all taxes, assessments and other governmental charges (other than any
tax, assessment or governmental charge which is being contested in good faith and by proper
proceedings, and with respect to which the obligation to pay such amount is adequately reserved
against in accordance with Canadian generally accepted accounting principles).
(r) No transaction contemplated by this Agreement or any of the other Transaction
Documents with respect to the Seller requires compliance with any bulk sales act or similar law
(other than the Bulk Sales Act (Newfoundland and Labrador)).
(s) No Receivable originated by the Canadian Originator, the Obligor of which has a
billing address in Canada, was issued for an amount in excess of the fair market value of the
merchandise, insurance or services provided by the Canadian Originator to which the Receivable
relates.
(t) No Contract or any other books, records or other information relating to any
Receivable originated by the Canadian Originator, the Obligor of which has a billing address in
Canada, contain any “personal information” as defined in, or any other information
regulated under (i) the Personal Information Protection and Electronic Documents Act (Canada), or
(ii) any other similar statutes of Canada or any province in force from time to time which
restrict, control, regulate or otherwise govern the collection, holding, use or communication of
information.
(u) The Seller has marked its master data processing records evidencing Pool
Receivables, including master data processing records evidencing Pool Receivables arising out
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of the sale of lumber, with a legend evidencing that Receivable Interests related to such
Pool Receivables have been sold in accordance with this Agreement.
Section 4.02 Representations and Warranties of the Servicer. The Servicer
hereby represents and warrants as follows:
(a) The Servicer is a corporation duly incorporated, validly existing and in
good standing under the laws of Delaware, and is duly qualified to do business, and is in good
standing, in every jurisdiction where the nature of its business requires it to be so
qualified,
unless the failure to so qualify would not have a Material Adverse Effect.
(b) The execution, delivery and performance by the Servicer of this
Agreement, the other Transaction Documents to which it is a party and any other documents to
be delivered by it hereunder or thereunder (i) are within the Servicer’s corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) do not contravene (1) the
Servicer’s charter or by-laws, (2) any law, rule or regulation applicable to the Servicer, (3) any
material contractual restriction binding on or affecting the Servicer or its property or (4) any
order, writ, judgment, award, injunction or decree binding on or affecting the Servicer or its
property, and (iv) do not result in or require the creation of any lien, security interest or other
Adverse Claim, charge or encumbrance upon or with respect to any of its properties. This Agreement
has been duly executed and delivered by the Servicer.
(c) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due execution,
delivery
and performance by the Servicer of this Agreement or any other document to be delivered by it
hereunder.
(d) This Agreement constitutes the legal, valid and binding obligation of the
Servicer enforceable against the Servicer in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors
generally and general equitable principles (whether considered in a proceeding at law or in
equity).
(e)
(i) The consolidated balance sheet of ACI as at
September 30, 2007, and
the related consolidated statements of income and cash flow of ACI for the fiscal quarter then
ended, copies of which have been furnished to the Agent, fairly present the financial
condition of
ACI as at such date and the results of the operations of ACI for the period ended on such
date, all
in accordance with Canadian generally accepted accounting principles consistently applied, and
(ii) since September 30, 2007 there has been no material adverse change in the business
operation or financial condition of ACI and its Subsidiaries taken as a whole.
(f) There is no pending or, to the Servicer’s knowledge, threatened action,
investigation or proceeding affecting the Servicer or any of its Subsidiaries before any
court,
governmental agency or arbitrator which may have a Material Adverse Effect.
(g) Each Receivable characterized in any Seller Report as an Eligible
Receivable or as included in the Net Receivables Pool Balance is, as of the date of such
Seller
Report, an Eligible Receivable or properly included in the Net Receivables Pool Balance.
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(h) Each Seller Report (if prepared by the Servicer or one of its Affiliates, or to the
extent that information contained therein is supplied by the Servicer or an Affiliate), including
the calculations therein, and all information, exhibits, financial statements, documents, books,
records or reports furnished or to be furnished at any time by the Servicer to the Agent, the
Investors or the Banks in connection with this Agreement is or will be accurate in all material
respects as of its date or (except as otherwise disclosed to the Agent, Investors or the Banks, as
the case may be, at such time) as of the date so furnished, and no such document contains or will
contain any untrue statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained therein, in the light of the circumstances
under which they were made, not misleading.
(i) The Servicer has (i) timely filed all federal tax returns required to be filed,
(ii) timely filed all material state and local tax returns and (iii) paid or made adequate
provision for the payment of all taxes, assessments and other governmental charges (other than any
tax, assessment or governmental charge which is being contested in good faith and by proper
proceedings, and with respect to which the obligation to pay such amount is adequately reserved
against in accordance with Canadian generally accepted accounting principles).
(j) For purposes of Section 9-307 of the UCC as in effect in the State of New York, the
U.S. Originator is located in the jurisdiction of organization set forth in Schedule IV hereto, and
the Canadian Originator is located in the jurisdiction of its chief executive and registered office
set forth in Schedule IV hereto (in each case as such Schedule IV is modified in accordance
herewith). The office in the jurisdiction of organization (or other applicable jurisdictions, in
the case of the Canadian Originator) of each Originator in which a financing statement or other
applicable registrations under the PPSA are required to be filed in order to perfect the security
or ownership interest granted by such Originator under the Originator Purchase Agreement is set
forth in Schedule IV hereto (as modified in accordance herewith). The principal place of business
and chief executive office of the U.S. Originator, the principal place of business and chief
executive and registered office of the Canadian Originator and the office where each Originator
keeps its records concerning the Originator Receivables are located (and have been located for the
five years prior to the date of this Agreement) at the address or addresses set forth in Schedule
IV hereto (as modified in accordance herewith). Neither Originator has changed its name during the
five years prior to the date of this Agreement, except as set forth in Schedule IV hereto, as
modified in accordance herewith.
(k) The Insurance Policy has been validly issued by the Insurer to ACI and is, on the
date hereof, in full force and effect. The copy of the Insurance Policy attached hereto as Annex H
is true, correct and complete as of the date hereof. All statements made by ACI in the application
for the Insurance Policy were true, correct and complete in all material respects when made. As of
the date hereof, all the premiums due on December 10, 2007 under the Insurance Policy for the
policy period ended August 31, 2007 have been paid. ACI has performed all of its duties under the
Insurance Policy and has timely filed all claims payable thereunder in such form as is required by
the Insurer. The Insurance Policy has not been amended, supplemented or otherwise modified except
as permitted by Section 6.02(a), and ACI has not waived any of its rights thereunder. The Insurer
has been directed to pay all Insurance Proceeds directly into a Deposit Account that is subject to
a Deposit Account Agreement or as otherwise directed by the Agent.
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(l) The Servicer has marked the Seller’s master data processing records evidencing the
Pool Receivables, including master data processing records evidencing Pool Receivables arising out
of the sale of lumber, with a legend, acceptable to the Agent, evidencing that Receivable Interests
therein have been sold.
ARTICLE V
COVENANTS
Section 5.01 Covenants of the Seller. Until the latest of the Facility
Termination Date or the date on which no Capital of or Yield on any Receivable Interest shall be
outstanding or the date all other amounts owed by the Seller hereunder to the Investors, the Banks
or the Agent are paid in full:
(a) Compliance with Laws, Etc. The Seller will comply in all material
respects with all applicable laws, rules, regulations and orders and preserve and maintain its
corporate existence, rights, franchises, qualifications, and privileges except to the extent
that the
failure so to comply with such laws, rules and regulations or the failure so to preserve and
maintain such rights, franchises, qualifications, and privileges would not have a Material
Adverse Effect.
(b) Offices, Records, Name and Organization. Subject to Section 10.01(e),
the Seller will keep its principal place of business and chief executive office and the office
where
it keeps its records concerning the Pool Receivables at the address of the Seller set forth on
Schedule III hereto or, upon 30 days’ prior written notice, together with an updated Schedule
III,
to the Agent, at any other locations within the United States. The Seller will not change its
name
or its state of organization, unless (i) the Seller shall have provided the Agent with at
least
30 days’ prior written notice thereof, together with an updated Schedule IV, and (ii) no later than
the effective date of such change, all actions, documents and agreements reasonably requested by
the Agent to protect and perfect the Agent’s interest in the Receivables, the Related Security and
the other assets of the Seller in which a security interest is granted hereunder have been taken
and completed. Upon confirmation by the Agent to the Seller of the Agent’s receipt of any such
notice (together with an updated Schedule IV) and the completion or receipt of the actions,
agreements and documents referred to in clause (ii) of the preceding sentence, Schedule IV hereto
shall, without further action by any party, be deemed to be amended and replaced by the updated
Schedule IV accompanying such notice. The Seller also will maintain and implement administrative
and operating procedures (including, without limitation, an ability to recreate records evidencing
Pool Receivables and related Contracts in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables (including, without limitation, records
adequate to permit the daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).
(c) Performance and Compliance with Contracts and Credit and Collection
Policy. The Seller will, at its expense, timely and fully perform and comply with all
material
provisions, covenants and other promises required to be observed by it under the Contracts
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related to the Pool Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy in regard to each Pool Receivable and the related Contract.
(d) Sales, Liens, Etc. Except for the ownership and security interests created
hereunder in favor of the Agent, the Seller will not sell, assign (by operation of law or
otherwise)
or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect
to,
the Seller’s undivided interest in any Pool Receivable, Related Security, related Contract or
Collections, or upon or with respect to any account to which any Collections of any Pool
Receivable are sent, or assign any right to receive income in respect thereof.
(e) Extension or Amendment of Receivables. Except as provided in Section
6.02(c), the Seller will not (and will not permit the Servicer or any Originator to) extend,
amend
or otherwise modify the terms of any Pool Receivable, or amend, modify or waive any term or
condition of any Contract related thereto.
(f) Change in Business or Credit and Collection Policy. The Seller will not
make any change in the character of its business or in the Credit and Collection Policy that
would, in either case, have a Material Adverse Effect.
(g) Change in Payment Instructions to Obligors. The Seller will not add or
terminate any bank, post office box or bank account as a Deposit Bank, Lock-Box or Deposit
Account from those listed in Schedule I hereto, or make any change in its instructions to
Obligors regarding payments to be made to the Seller or payments to be made to any Lock-Box
or Deposit Account, unless the Agent shall have received prior notice of such addition,
termination or change (including an updated Schedule I) and a fully executed Deposit Account
Agreement with each new Deposit Bank or with respect to each new Lock-Box or Deposit
Account. Upon confirmation by the Agent to the Seller of the Agent’s receipt of any such
notice
and the related documents, Schedule I hereto shall, without further action by any party, be
deemed to be amended and replaced by the updated Schedule I accompanying such notice.
(h) Deposits to Lock-Boxes and Deposit Accounts. The Seller will (or will cause
the Servicer or the Originators to) instruct all Obligors to remit all their payments in respect of
Receivables to Lock-Boxes or Deposit Accounts (provided that Obligors with respect to International
Receivables and Receivables originated by the U.S. Originator shall be instructed to remit such
payments to Lock-Boxes or Deposit Accounts located in the United States). If the Seller or Servicer
shall receive any Collections directly, it shall immediately (and in any event within two Business
Days) deposit the same to a Lock-Box or a Deposit Account (provided that Collections related to an
International Receivable or a Receivable originated by the U.S. Originator shall be deposited to a
Lock-Box or a Deposit Account in the United States) and until it does so, shall hold the same in
trust for the Agent. The Seller will not deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Lock-Box or Deposit Account, cash or cash proceeds other than
Collections of Receivables, provided, that if any PST are deposited or credited to any
Lock-Box or Deposit Account, the Seller will (or will cause the Servicer or the Originators to),
within two Business Days of such deposit or credit, separate such deposits and credits from the
Collections held in any applicable Lock-Box or Deposit Account and withdraw such deposited or
credited amount from such Lock-Box or Deposit Account.
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(i) Marking of Records. At its expense, the Seller will xxxx its master data
processing records evidencing Pool Receivables with a legend evidencing that Receivable Interests
related to such Pool Receivables have been sold in accordance with this Agreement.
(j) Further Assurances. (i) The Seller agrees from time to time, at its expense,
promptly to execute and deliver all further instruments and documents, and to take all further
actions, that may be necessary or desirable, or that the Agent may reasonably request, to perfect,
protect or more fully evidence the Receivable Interests purchased under this Agreement, or to
enable the Investors, the Banks or the Agent to exercise and enforce their respective rights and
remedies under this Agreement.
(ii) The Seller authorizes the Agent to file financing or continuation
statements, and amendments thereto and assignments thereof, relating to the collateral described in
Section 2.11, which financing statements may describe the collateral covered thereby as “all assets
of the Seller,” “all personal property of the Seller” or words of similar effect.
(k) Reporting Requirements. The Seller will provide to the Agent (in multiple
copies, if requested by the Agent) the following:
(i) as soon as available and in any event within 60 days after the end
of each quarter of each fiscal year of each of the Parent and ACI (including the
fourth quarter), a consolidated balance sheet of each of the Parent and ACI as of
the end of such quarter and consolidated statements of income and cash flow of each
of the Parent and ACI for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, in each case certified by the chief
financial officer of the Parent or ACI, as the case may be; provided that to
the extent a consolidated balance sheet and consolidated statements of income and
cash flow are not prepared in respect of ACI, the delivery of a consolidated balance
sheet and consolidated statements of income and cash flow of the Parent as
prescribed above shall satisfy the reporting requirements set forth in this Section
5.01(k)(i);
(ii) as soon as available and in any event within 90 days after the end
of each fiscal year of the Parent, a copy of the consolidated annual report for such
year for the Parent, containing consolidated financial statements accompanied by an
audit report of independent certified public accountants of recognized national
standing with no Impermissible Qualifications;
(iii) as soon as available and in any event within 90 days after the end of
each fiscal year of the Seller, a balance sheet of the Seller as of the end of such
fiscal year and a statement of income and cash flow of the Seller for the period
commencing at the end of the previous fiscal year and ending with the end of such
fiscal year, certified by the chief financial officer of the Seller;
(iv) as soon as possible and in any event within five days after the
occurrence of each Event of Termination or Incipient Event of Termination, a
statement of the chief financial officer of the Seller setting forth details of such
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Event of Termination or Incipient Event of Termination and the action that the Seller has taken and
proposes to take with respect thereto;
(v) promptly after the sending or filing thereof, copies of all reports that any
Originator sends to any of its security holders, and copies of all reports and registration
statements that any Originator or any of its Subsidiaries files with the SEC or any other U.S.,
Canadian or other national or provincial securities exchange;
(vi) with respect to the Seller or any ERISA Affiliate, as soon as possible, and in any
event within 10 days after the Seller or ACI knows or has reason to believe that any of the events
or conditions specified below has occurred or exists, notice of such event or condition (and
provide a copy of any report or notice required to be filed with or given to PBGC):
(A) any reportable event, as defined in Section 4043(b)
of ERISA and the regulations issued thereunder, unless the 30 day
notice requirement in respect thereof has been waived by the
PBGC;
(B) a notice of intent to terminate any Plan or any action
taken to terminate any Plan, provided notice of intent to terminate
is required pursuant to Section 4041(a)(2) of ERISA;
(C) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt of a notice from
a Multiemployer Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan;
(D) the complete or partial withdrawal from a
Multiemployer Plan that results in liability under Section 4201 or
4204 of ERISA or the receipt of notice from a Multiemployer Plan
that it is in reorganization or insolvency or that it intends to
terminate or has terminated;
(E) the institution of a proceeding by a fiduciary of any
Multiemployer Plan to enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days; and
(F) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax exempt status of the trust of
which such Plan is a part if security has not been provided in
accordance with the provisions of these Sections;
(vii) subject to Section 10.01(f), at least 30 days prior to any change in the name, chief
executive or registered office or jurisdiction of
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organization of any Originator or the Seller, a notice setting forth the new name,
chief executive or registered office or jurisdiction of organization and the
effective date thereof;
(viii) promptly after the Seller obtains knowledge thereof, notice of any
“Event of Termination” or “Facility Termination Date” under the Originator Purchase
Agreement and notice of any Insurance Policy Event;
(ix) so long as any Capital shall be outstanding, as soon as possible and
in any event no later than the day of occurrence thereof, notice that any Originator
has stopped selling or contributing to the Seller, pursuant to the Originator
Purchase Agreement, all newly arising Originator Receivables;
(x) at the time of the delivery of the financial statements provided for
in clauses (i) and (ii) of this paragraph, a certificate of the president, the chief
financial officer or the treasurer of the Seller to the effect that, to the best of
such officer’s knowledge, no Event of Termination has occurred and is continuing or,
if any Event of Termination has occurred and is continuing, specifying the nature
and extent thereof;
(xi) promptly after receipt thereof, copies of all notices received by the
Seller from any Originator under the Originator Purchase Agreement;
(xii) promptly following receipt thereof, copies of all schedules,
endorsements and notices received from the Insurer with respect to the Insurance
Policy (including any notice that any additional premium is due in accordance with
Section 4 of the “Declarations and Payment of Premium” endorsement to the Insurance
Policy);
(xiii) immediately upon obtaining knowledge thereof, and in any event on the
day such event occurs, notice that all indebtedness under the Bank Agreement has
become due and payable (whether by declaration or automatically);
(xiv) concurrently with the sending thereof to the Insurer, any notice by
ACI terminating the Insurance Policy; and
(xv) such other information respecting the Receivables or the condition or
operations, financial or otherwise, of the Seller as the Agent may from time to time
reasonably request.
Reports and financial statements required to be delivered pursuant to clauses (i), (ii) and (v) of
this Section 5.01(k) shall be deemed to have been delivered on the date on which the Parent posts
such reports, or reports containing such financial statements, on the Parent’s website on the
Internet at xxx.xxxxxxxxxxxxxx.xxx or when such reports, or reports containing such financial
statements, are posted on the SEC’s website at xxx.xxx.xxx; provided that the Seller shall
deliver paper copies of the reports and financial statements referred to in clauses (i), (ii) and
(v) of this Section 5.01(k) to the Agent or any Investor or Bank who requests the Seller to deliver
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such paper copies until written notice to cease delivering paper copies is given by the Agent or
such Investor or Bank, as applicable.
(1) Separateness. (i) The Seller shall at all times maintain at least one
independent director (x) who is not currently and has not been during the five years preceding the
date of this Agreement an officer, director or employee of an Affiliate of the Seller or any Other
Company, (y) is not a current or former officer or employee of the Seller and (z) is not a
stockholder of any Other Company or any of their respective Affiliates.
(ii) The Seller shall not direct or participate in the management of any of the Other
Companies’ operations.
(iii) The Seller shall conduct its business from an office separate from that of the Other
Companies (but which may be located in the same facility as one or more of the Other Companies).
The Seller shall have stationery and other business forms and a mailing address and a telephone
number separate from that of the Other Companies.
(iv) The Seller shall at all times be adequately capitalized in light of its contemplated
business.
(v) The Seller shall at all times provide for its own operating expenses and liabilities
from its own funds.
(vi) The Seller shall maintain its assets and transactions separately from those of the
Other Companies and reflect such assets and transactions in financial statements separate and
distinct from those of the Other Companies and evidence such assets and transactions by appropriate
entries in books and records separate and distinct from those of the Other Companies. The Seller
shall hold itself out to the public under the Seller’s own name as a legal entity separate and
distinct from the Other Companies. The Seller shall not hold itself out as having agreed to pay, or
as being liable, primarily or secondarily, for, any obligations of the Other Companies.
(vii) The Seller shall not maintain any joint account with any Other
Company or become liable as a guarantor or otherwise with respect to any Debt or contractual
obligation of any Other Company.
(viii) The Seller shall not make any payment or distribution of assets with respect to any
obligation of any Other Company or grant an Adverse Claim on any of its assets to secure any
obligation of any Other Company.
(ix) The Seller shall not make loans, advances or otherwise extend credit to any of
the Other Companies.
(x) The Seller shall hold regular duly noticed meetings of its Board of Directors and
make and retain minutes of such meetings.
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(xi) The Seller shall have bills of sale (or similar instruments of assignment) and,
if appropriate, UCC-1 or PPSA financing statements or other appropriate registrations, with
respect to all assets purchased from any of the Other Companies.
(xii) The Seller shall not engage in any transaction with any of the
Other Companies, except as permitted by this Agreement and as contemplated by the Originator
Purchase Agreement.
(xiii) The Seller shall comply with (and cause to be true and correct)
each of the facts and assumptions contained in paragraphs I. A. 1-2 on pages 5-11 of the true sale
and substantive non-consolidation opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP delivered
pursuant to Section 3.01(g) of the Original RPA.
(m) Originator Purchase Agreement. The Seller will not amend, waive or modify any
provision of the Originator Purchase Agreement or waive the occurrence of any “Event of
Termination” under the Originator Purchase Agreement, without in each case the prior written
consent of the Agent; provided, however, that the Seller may amend the percentage
set forth in the definition of “Discount” in the Originator Purchase Agreement in accordance with
the provisions of the Originator Purchase Agreement without the consent of the Agent;
provided, further, that the Seller shall promptly notify the Agent of any such
amendment. The Seller will perform all of its obligations under the Originator Purchase Agreement
in all material respects and will enforce the Originator Purchase Agreement in accordance with its
terms in all material respects.
(n) Nature of Business. The Seller will not engage in any business other than
the purchase or acquisition of Receivables, Related Security and Collections from the Originators
and the transactions contemplated by this Agreement. The Seller will not create or form any
Subsidiary.
(o) Mergers, Etc. The Seller will not merge with or into or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series
of transactions), all or substantially all of its assets (whether now owned or hereafter acquired)
to, or acquire all or substantially all of the assets or capital stock or other ownership interest
of, or enter into any joint venture or partnership agreement with, any Person, other than as
contemplated by this Agreement and the Originator Purchase Agreement.
(p)
Distributions, Etc. The Seller will not declare or make any dividend payment
or other distribution of assets, properties, cash, rights, obligations or securities on account of
any shares of any class of capital stock of the Seller, or return any capital to its shareholders
as such, or purchase, retire, defease, redeem or otherwise acquire for value or make any payment in
respect of any shares of any class of capital stock of the Seller or any warrants, rights or
options to acquire any such shares, now or hereafter outstanding; provided,
however, that the Seller may declare and pay cash dividends on its capital stock to
its shareholders so long as (i) no Event of Termination shall then exist or would occur as a result
thereof, (ii) such dividends are in compliance with all applicable law including the corporate law
of the state of Seller’s incorporation, and (iii) such dividends have been approved by all
necessary and appropriate corporate action of the Seller.
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(q) Debt. The Seller will not incur any Debt, other than any Debt incurred
pursuant to this Agreement and the Deferred Purchase Price payable to the Originators.
(r) Certificate of Incorporation. The Seller will not amend or delete Articles
THIRD, FIFTH, SEVENTH, TENTH, ELEVENTH or TWELFTH of its certificate of incorporation.
(s) Tangible Net Worth. The Seller will have, as of the due date of each Monthly
Report, a Tangible Net Worth equal to at least 8.0% of the Outstanding Balance of the Receivables
at such time.
(t) Insurance. The Seller will not take or omit to take, any action which gives
rise to an exclusion from coverage under the Insurance Policy.
Section 5.02 Covenant of the Seller and the Originators. Until the latest of the
Facility Termination Date or the date on which no Capital of or Yield on any Receivable Interest
shall be outstanding or the date all other amounts owed by the Seller hereunder to the Investors,
the Banks or the Agent are paid in full, each of the Seller and each Originator will, at their
respective expense, from time to time during regular business hours as requested by the Agent,
permit the Agent or its agents or representatives (including independent public accountants, which
may be the Seller’s or such Originator’s independent public accountants), (i) to conduct periodic
audits of the Receivables, the Related Security and the related books and records and collections
systems of the Seller or such Originator, as the case may be, (ii) to examine and make copies of
and abstracts from all books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of the Seller or any Originator, as the case may
be, relating to Pool Receivables and the Related Security, including, without limitation, the
Contracts, and (iii) to visit the offices and properties of the Seller or any Originator, as the
case may be, for the purpose of examining such materials described in clause (ii) above, and to
discuss matters relating to Pool Receivables and the Related Security or the Seller’s or any
Originator’s performance under the Transaction Documents or under the Contracts with any of the
officers or employees of the Seller or any Originator, as the case may be, having knowledge of such
matters. In addition, in relation to each audit of the type described in clause (i) above, the
Agent may, at the Seller’s expense, appoint independent public accountants (which may be
accountants other than the Seller’s regular independent public accountants) or consultants, or
utilize the Agent’s representatives or auditors, to prepare and deliver to the Agent a written
report with respect to the Receivables and the Credit and Collection Policy (including, in each
case, the systems, procedures and records relating thereto) on a scope and in a form reasonably
requested by the Agent. The expense of one audit in each calendar year of the type described in
clause (i) above, together with the associated written reports of the independent public accountant
or consultant described in the preceding sentence, shall be borne by the Seller; provided,
however, that after the occurrence and during the continuance of an Event of Termination or
an Incipient Event of Termination or following an audit report indicating an audit deficiency that
remains uncorrected, the expense of any additional audits and visits as the Agent shall deem
reasonably necessary under the circumstances shall be borne by the Seller.
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ARTICLE VI
ADMINISTRATION AND COLLECTION
OF POOL RECEIVABLES
Section 6.01 Designation of Servicer. The servicing, administration and collection
of the Pool Receivables shall be conducted by the Servicer so designated hereunder from time to
time. Until the Agent gives notice to the Seller of the designation of a new Servicer in accordance
with the provisions of the next sentence, ACSC is hereby designated as, and hereby agrees to
perform the duties and obligations of, the Servicer pursuant to the terms hereof. The Agent may, at
any time after the occurrence and during the continuance of a Servicer Default, designate as
Servicer any Person (including itself) to succeed ACSC or any successor Servicer, if such Person
shall consent and agree to the terms hereof. The Servicer may, with the prior consent of the Agent,
subcontract with any other Person for the servicing, administration or collection of the Pool
Receivables. Any such subcontract shall not affect the Servicer’s liability for performance of its
duties and obligations pursuant to the terms hereof, and any such subcontract shall automatically
terminate upon designation of a successor Servicer. The Servicer hereby appoints ACI as subservicer
(ACI, in such capacity, the “Subservicer”) to perform the servicing, administration and
collections functions of the Servicer hereunder and with respect to the other Transaction
Documents; provided that the foregoing designation of ACI as subservicer does not (i)
extend to the amendment or modification of a Receivable in accordance with Section 6.02(c) or (ii)
contravene or otherwise exceed or violate Section 6.09. In no instance will the servicing and
subservicing hereunder be inconsistent with, or in violation of, the terms and conditions of the
Insurance Policy (and ACI shall continue its servicing and administration of the Insurance Policy).
The Agent hereby consents to the designation of ACI as subservicer hereunder.
Section 6.02 Duties of Servicer. (a) The Servicer shall take or cause to be taken
all such actions as may be necessary or advisable to collect each Pool Receivable from time to
time, all in accordance with applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy. The Seller and the Agent hereby
appoint the Servicer, from time to time designated pursuant to Section 6.01, as agent for
themselves and for the Investors and the Banks to enforce their respective rights and interests in
the Pool Receivables, the Related Security and the Collections with respect thereto. In performing
its duties as Servicer, the Servicer shall exercise the same care and apply the same policies as it
would exercise and apply if it owned such Receivables and shall act in the best interests of the
Seller, the Investors and the Banks. The Servicer’s and the Subservicer’s duties hereunder shall
include paying, on behalf of the Originators, all premiums due under the Insurance Policy when the
same are due (and the Servicer and the Subservicer shall provide the Agent with evidence of such
payment by no later than the Business Day following the date such payment is due) and performing
all obligations of ACI under the Insurance Policy in accordance with the terms of the Insurance
Policy. Without limiting the foregoing, the Servicer or the Subservicer will (i)(x) immediately,
upon obtaining knowledge of the relevant Obligor’s insolvency and (y) in all other cases, no later
than four months after the relevant Receivable becomes due, file a claim under the Insurance Policy
in such form as is required by the Insurer and with properly completed supporting documentation;
(ii) not take any action to amend, supplement or otherwise modify the Insurance Policy (including,
without limitation, consenting
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to any changes to the Insurance Policy proposed by the Insurer as part of the annual renewal
process) or waive any of its rights thereunder, without the Agent’s prior written consent in each
case (other than any replacement of a Coverage Certificate that would not result in an Insurance
Policy Event); (iii) not change the directions given to the Insurer to pay all Insurance Proceeds
directly into the Agent’s Account; (iv) service the Receivables as required by the Insurer pursuant
to the Insurance Policy; (v) deliver to the Insurer in a timely fashion any document or report
required by the Insurer; and (vi) not take, or omit to take, any action which gives rise to an
exclusion from coverage under the Insurance Policy. The Servicer and the Subservicer will ensure
that all records relating to the Receivables are consistent with the requirements of the Insurance
Policy and that such records are in such form as will not result in rejection of otherwise proper
claims under the Insurance Policy. In the event the Servicer or the Subservicer fails to file a
claim with respect to any Receivable, the Agent may (but shall not be required to) file such claim
under the Insurance Policy.
(b) The Servicer (including the Subservicer) shall administer the Collections
in accordance with the procedures described in Section 2.04.
(c) If no Event of Termination or Incipient Event of Termination shall have
occurred and be continuing, an Originator (other than ACI), while it is the Servicer (subject
to
the provisions of Section 6.09), may, in accordance with the Credit and Collection Policy,
extend
the maturity or adjust the Outstanding Balance of any Receivable as the Originator deems
appropriate to maximize Collections thereof, or otherwise amend or modify other terms of any
Receivable, provided that (i) any necessary approval of the Insurer shall have been
obtained, and
(ii) the classification of any such Receivable as a Delinquent Receivable or Defaulted
Receivable
shall not be affected by any such extension.
(d) The Servicer shall hold in trust for the Seller and each Investor and Bank,
in accordance with their respective interests, all documents, instruments and records
(including,
without limitation, computer tapes or disks) which evidence or relate to Pool Receivables. The
Servicer shall xxxx the Seller’s master data processing records evidencing the Pool
Receivables
with a legend, acceptable to the Agent, evidencing that Receivable Interests therein have been
sold.
(e) The Servicer shall, as soon as practicable (and in any event within two
Business Days) following receipt, turn over to the Person entitled thereto any cash
collections or
other cash proceeds received with respect to Receivables not constituting Pool Receivables.
(f) The Servicer shall, from time to time at the request of the Agent, furnish to
the Agent (promptly after any such request) a calculation of the amounts set aside for the
Investors and the Banks pursuant to Section 2.04.
(g) (i) Prior to 10:00 A.M. (New York City Time) on the 17th calendar day of
each month (or, if such day is not a Business Day, the next succeeding Business Day), the
Servicer shall prepare and forward to the Agent a Monthly Report relating to the Receivable
Interests outstanding on the last day of the immediately preceding month; provided
that at any
time that the Servicer is required to deliver a Weekly Report in accordance with Section
6.02(g)(ii) below, the Monthly Report shall be delivered prior to 10:00 A.M. (New York City
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Time) on the day that the third Weekly Report for any calendar month is due, unless the due
date of such third Weekly Report is the 15th or 16th calendar day of such
month, in which case the Monthly Report shall be delivered prior to 10:00 A.M. (New York City Time)
on the day that the fourth Weekly Report for such calendar month is due.
(ii) At any time when the Debt Ratings of ACI are not equal to the Required Ratings,
prior to 10:00 A.M. (New York City Time) on the second Business Day of each calendar week, the
Servicer shall prepare and forward to the Agent a Weekly Report which shall contain information
related to the Receivables Pool as of the close of business on the last Business Day of the
preceding calendar week.
(iii) Prior to 10:00 A.M. (New York City Time) on the 17th
calendar
day of each month (or, if such day is not a Business Day, the next succeeding Business Day), the
Servicer shall prepare and forward to the Agent a report with respect to all claims submitted by
ACI or any of its Subsidiaries under the Insurance Policy during the immediately preceding month
(such report to include, without limitation, (A) information with respect to any claims paid or
rejected by the Insurer, (B) a breakdown as to claims made with respect to Originator Receivables
and receivables that are not Originator Receivables, and (C) a breakdown of claims made by country
of location of Obligor), such report to be in form and substance satisfactory to the Agent;
provided that at any time that the Servicer is required to deliver a Weekly Report in
accordance with Section 6.02(g)(ii) above, the foregoing report shall be delivered prior to 10:00
A.M. (New York City Time) on the day that the third Weekly Report for any calendar month is due,
unless the due date of such third Weekly Report is the 15th or 16th
calendar day of such month, in which case the foregoing report shall be delivered prior to 10:00
A.M. (New York City Time) on the day that the fourth Weekly Report for such calendar month is due.
The Servicer shall transmit Seller Reports to the Agent concurrently by facsimile and by
electronic mail (each, an “E-Mail Seller Report”). Each E-Mail Seller Report shall be (A) formatted
as the Agent may designate from time to time and (B) sent to the Agent at an electronic mail
address designated by the Agent.
(h) [Intentionally Omitted].
(i) The Servicer shall file all tax returns required by law to be filed by it with
respect to the Receivables and shall (or shall cause the applicable Originator to) promptly pay,
remit or account for, as applicable, all sales taxes (including, without limitation, PST, QST and
GST) paid or owing in connection with any Receivables, except any such 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 applicable generally accepted accounting principles shall have
been set aside on its books.
Section 6.03 Certain Rights of the Agent. (a) At any time following the occurrence
of a Control Event, the Agent will be authorized to date, and to deliver to the Deposit Banks, the
Notices of Effectiveness attached to the Deposit Account Agreements. Pursuant to Section 2.11
hereof, the Seller granted a security interest in the Lock-Boxes and Deposit Accounts to which the
Obligors of Pool Receivables shall make payments to the Agent and, pursuant to the Deposit Account
Agreements, will provide the Agent with “control” (as such
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term is defined in Article 9 of the UCC) thereof. After a Control Event, the Agent may notify
the Obligors of Pool Receivables, at any time and at the Seller’s expense, of the ownership of
Receivable Interests under this Agreement.
(b) At any time following the designation of a Servicer other than an
Originator pursuant to Section 6.01 or following a Control Event:
(i) The Agent may direct the Obligors of Pool Receivables that all payments thereunder
be made directly to the Agent or its designee.
(ii) At the Agent’s request and at the Seller’s expense, the Seller shall notify each
Obligor of Pool Receivables of the ownership of Receivable Interests under this Agreement and
direct that payments be made directly to the Agent or its designee.
(iii) At the Agent’s request and at the Seller’s expense, the Seller and the Servicer
shall (A) assemble all of the documents, instruments and other records (including, without
limitation, computer tapes and disks) that evidence or relate to the Pool Receivables and the
related Contracts and Related Security, or that are otherwise necessary or desirable to collect the
Pool Receivables (including, without limitation, the Insurance Policy), and shall make the same
available to the Agent at a place selected by the Agent or its designee, and (B) segregate all
cash, checks and other instruments received by it from time to time constituting Collections of
Pool Receivables in a manner acceptable to the Agent and, promptly upon receipt, remit all such
cash, checks and instruments, duly indorsed or with duly executed instruments of transfer, to the
Agent or its designee.
(iv) The Seller authorizes the Agent to take any and all steps in the
Seller’s name and on behalf of the Seller that are necessary or desirable, in the determination of
the Agent, to collect amounts due under the Pool Receivables, including, without limitation,
endorsing the Seller’s name on checks and other instruments representing Collections of Pool
Receivables and enforcing the Pool Receivables and the Related Security and related Contracts and
the Insurance Policy.
Section 6.04 Rights and Remedies. (a) If the Servicer fails to perform any of its
obligations under this Agreement, the Agent may (but shall not be required to) itself perform, or
cause performance of, such obligation; and the Agent’s costs and expenses incurred in connection
therewith shall be payable by the Servicer.
(b) The Seller and each of the Originators shall perform their respective obligations
under the Contracts related to the Pool Receivables to the same extent as if Receivable Interests
had not been sold and the exercise by the Agent on behalf of the Investors and the Banks of their
rights under this Agreement shall not release the Servicer or the Seller from any of their duties
or obligations with respect to any Pool Receivables or related Contracts or the Insurance Policy.
Neither the Agent, the Investors nor the Banks shall have any obligation or liability with respect
to any Pool Receivables or related Contracts, nor shall any of them be obligated to perform the
obligations of the Seller thereunder.
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(c) In the event of any conflict between the provisions of Article VI of this Agreement
and Article VI of the Originator Purchase Agreement, the provisions of Article VI of this Agreement
shall control.
Section 6.05 Further Actions Evidencing Purchases. Each Originator agrees from time
to time, at its expense, to promptly execute and deliver all further instruments and documents, and
to take all further actions, that may be necessary or desirable, or that the Agent may reasonably
request, to perfect, protect or more fully evidence the Receivable Interests purchased hereunder,
or to enable the Investors, the Banks or the Agent to exercise and enforce their respective rights
and remedies hereunder. Without limiting the foregoing, each Originator will (i) upon the request
of the Agent, execute and file such financing or continuation statements, or amendments thereto,
and such other instruments and documents, that may be reasonably necessary or desirable, or that
the Agent may reasonably request, to perfect, protect or evidence such Receivable Interests and
(ii) xxxx its master data processing records evidencing the Pool Receivables with a legend,
acceptable to the Agent, evidencing that Receivable Interests therein have been sold. Each
Originator authorizes the Seller or the Agent to file financing statements or other applicable
registrations under the PPSA with respect to the Originator Purchase Agreement as permitted by the
UCC and the PPSA.
Section 6.06 Covenants of the Servicer and each Originator. (a) Audits. In
the event the Servicer is not an Originator, the Servicer will, from time to time during regular
business hours as requested by the Agent, permit the Agent, or its agents or representatives
(including independent public accountants, which may be the Servicer’s independent public
accountants), (i) to conduct periodic audits of the Receivables, the Related Security and the
related books and records and collections systems of the Servicer, (ii) to examine and make copies
of and abstracts from all books, records and documents (including, without limitation, computer
tapes and disks) in the possession or under the control of the Servicer relating to Pool
Receivables and the Related Security, including, without limitation, the Contracts, and (iii) to
visit the offices and properties of the Servicer for the purpose of examining such materials
described in clause (ii) above, and to discuss matters relating to Pool Receivables and the Related
Security or the Servicer’s performance hereunder with any of the officers or employees of the
Servicer having knowledge of such matters. In the event the Servicer is an Originator, the Agent’s
audit rights shall be as set forth in Section 5.02.
(b) Change in Credit and Collection Policy. Neither the Servicer nor any
Originator will make any change in the Credit and Collection Policy that would materially adversely
affect the collectibility of any Pool Receivable or the ability of any Originator (if it is acting
as Servicer) to perform its obligations under this Agreement. In the event that the Servicer or any
Originator makes any change to the Credit and Collection Policy, it shall, contemporaneously with
such change, provide the Agent with an updated Credit and Collection Policy and a summary of all
material changes.
Section 6.07 Indemnities by the Servicer. Without limiting any other rights that
the Agent, any Investor, any Bank, any of their respective Affiliates or members or any of their
respective officers, directors, employees or advisors (each, a “Special Indemnified Party”)
may have hereunder or under applicable law, and in consideration of its appointment as Servicer,
the Servicer hereby agrees to indemnify each Special Indemnified Party from and against any and all
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claims, losses and liabilities (including reasonable attorneys’ fees) (all of the foregoing being
collectively referred to as “Special Indemnified Amounts”) arising out of or resulting from
any of the following (excluding, however, (a) Special Indemnified Amounts to the extent found in a
final non-appealable judgment of a court of competent jurisdiction to have resulted from gross
negligence or willful misconduct on the part of such Special Indemnified Party, (b) recourse for
Receivables which are not collected, not paid or uncollectible on account of the insolvency,
bankruptcy or financial inability to pay of the applicable Obligor or (c) any income taxes or any
other tax or fee measured by income incurred by such Special Indemnified Party arising out of or as
a result of this Agreement or the ownership of Receivable Interests or in respect of any Receivable
or any Contract, other than (i) Taxes (to the extent provided in Section 2.10) and (ii) Canadian
taxes strictly on income or capital in connection with the Receivables or the transactions
contemplated by this Agreement and the other Transaction Documents and resulting from the Seller,
any Investor or any Bank having a permanent establishment in Canada solely as a result of the
transactions contemplated hereby (but only directly and exclusively as a result of any breach by
the Seller or the Servicer (or any delegatee thereof) of its obligations hereunder or under any
other Transaction Document):
(i) any representation made or deemed made by the Servicer pursuant to
Section 4.02(g) hereof which shall have been incorrect in any respect when made or
any other representation or warranty or statement made or deemed made by the
Servicer under or in connection with this Agreement which shall have been incorrect
in any material respect when made;
(ii) the failure by the Servicer to comply with any applicable law, rule
or regulation with respect to any Pool Receivable or Contract; or the failure of any
Pool Receivable or Contract to conform to any such applicable law, rule or
regulation;
(iii) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC or PPSA of any
applicable jurisdiction or other applicable laws with respect to any Receivables in,
or purporting to be in, the Receivables Pool, the Contracts and the Related Security
and Collections in respect thereof, whether at the time of any purchase or
reinvestment or at any subsequent time;
(iv) any failure of the Servicer to perform its duties or obligations in
accordance with the provisions of this Agreement, including, without limitation, any
failure of the Servicer to file claims under the Insurance Policy in a timely
fashion and with properly completed supporting documentation, any action or omission
by the Servicer which gives rise to an exclusion from coverage under the Insurance
Policy, any failure by the Servicer to service the Receivables in the manner
required by the Insurer or any failure by the Servicer to deliver to the Insurer any
document or report required by the Insurer to be delivered in a timely manner;
(v) the commingling of Collections of Pool Receivables at any time by the
Servicer with other funds;
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(vi) any action or omission by the Servicer reducing or impairing the
rights of the Investors or the Banks with respect to any Pool Receivable or the
value of any Pool Receivable except in accordance with the Credit and
Collection Policy and Section 6.02(c);
(vii) [intentionally omitted];
(viii) any claim brought by any Person other than a Special Indemnified
Party arising from any activity by the Servicer or its Affiliates in servicing,
administering or collecting any Receivable;
(ix) the occurrence of any purchase or reinvestment under this Agreement on
any date on which (after giving effect to such purchase or reinvestment) the
Percentage Factor is greater than the Maximum Percentage Factor; or
(x) after the date hereof, any Investor or Bank shall be subject to
Canadian taxes on income or capital in connection with the Receivables or the
transactions contemplated by this Agreement and the other Transaction Documents and
resulting from the Seller, such Investor or such Bank having a permanent
establishment in Canada solely as a result of the transactions contemplated hereby
(but only directly and exclusively as a result of any breach by the Seller or the
Servicer (or any delegatee thereof) of its obligations hereunder or under any other
Transaction Document).
Section 6.08
Collateral Advance Account. (a) Prior to the occurrence of the first
Cash Secured Advance Commencement Date hereunder, the Servicer, for the benefit of the Banks, shall
establish and maintain or cause to be established and maintained in the name of the Seller with
Citibank an account (such account being the “
Collateral Advance Account” and Citibank in
such capacity, being the “
Collateral Advance Account Bank”), such account bearing a
designation clearly indicating that the funds deposited therein are held for the benefit of the
Banks and entitled “Citibank, N.A., London Branch, as Agent — Collateral Advance Account for the
Abitibi
Receivables Purchase Agreement” and, in connection therewith, the Servicer, the Seller, the
Agent and the Collateral Advance Account Bank shall enter into the Collateral Advance Account
Agreement. The Collateral Advance Account shall be under the sole dominion and control of the Agent
for the benefit of the Banks which have made Cash Secured Advances, and neither the Seller, the
Servicer, nor any Person claiming by, through or under the Seller or the Servicer, shall have any
right, title or interest in, or any right to withdraw any amount from, the Collateral Advance
Account. Except as expressly provided in this Agreement, Citibank agrees that it, in its capacity
as Collateral Advance Account Bank, shall have no right of set off or banker’s lien against, and no
right to otherwise deduct from, any funds held in the Collateral Advance Account for any amount
owed to it by any Bank, the Investor, any Agent, the Seller or any Originator. The tax
identification no. associated with the Collateral Advance Account shall be that of the Seller.
(b) The Agent will comply with (i) all written instructions directing disposition of the
funds in the Collateral Advance Account, (ii) all notifications and entitlement
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orders that the Agent receives directing it to transfer or redeem any financial asset in the
Collateral Advance Account, and (iii) all other directions concerning the Collateral Advance
Account, including, without limitation, directions to distribute to any Bank proceeds of any such
transfer or redemption or interest or dividends on property in the Collateral Advance Account (any
such instruction, notification or direction referred to in clause (i), (ii) or (iii) above being a
“Collateral Advance Account Direction”), in the case of each of clauses (i), (ii) and (iii)
above originated by the relevant Bank (except as otherwise specified in subsection (c) of this
Section 6.08).
(c) Funds on deposit in the Collateral Advance Account shall, at the written
direction of the Seller, be invested by the Agent in Eligible Investments as instructed by the
Seller in writing (which may be a standing instruction). All such Eligible Investments shall
be
held in the Collateral Advance Account by the Agent for the ratable benefit of the Banks which
have made Cash Secured Advances. Such funds shall be invested in Eligible Investments that
will mature so that funds will be available in amounts sufficient for the Agent to make each
distribution as and when required under the terms of this Agreement. All interest and other
investment earnings (net of losses and investment expenses) received on funds on deposit in
the
Collateral Advance Account, to the extent such investment income is not needed to pay the
Agent for the ratable benefit of the Term-Out Banks under the terms of this Agreement, shall
be
added to the Collateral Advance Account.
(d) If, at any time after the Servicer has established the Collateral Advance
Account, the institution with which the Collateral Advance Account is maintained ceases to be
an Eligible Institution, the Seller, upon obtaining actual knowledge thereof, shall, within
five
Business Days from obtaining such knowledge or, if earlier, from notice to such effect by the
Agent, (i) establish a new Collateral Advance Account meeting the conditions specified above
with an Eligible Institution, and (ii) transfer any cash and/or any financial assets held in
the old
Collateral Advance Account to such new Collateral Advance Account, respectively. From the
date such new Collateral Advance Account is established, it shall be the “Collateral Advance
Account” hereunder and for all purposes hereof.
Section 6.09 Canadian Residents. (a) Notwithstanding anything contained herein or
anything contained in any other Transaction Document, the Servicer, as Servicer (and each Person to
whom the Servicer delegates any of its responsibilities (including, without limitation, the
Subservicer), shall not while acting in Canada, and shall not (and has no authority to) delegate to
any Person acting in Canada the authority to, or permit any such Person to, enter into contracts or
other agreements in the name of or on behalf of the Seller, the Agent, the Investor or any Bank;
and the Servicer, as Servicer (or any such delegate), is not permitted to (nor has authority to)
establish an office or other place of business of the Seller, the Agent, the Investor or any Bank
in Canada. To the extent any responsibilities of any Person acting in Canada (including for greater
certainty a Servicer employee or servant or ACI as subservicer) to whom the Servicer has delegated
responsibilities in respect of the Pool Receivables, the Related Security or the Collections
hereunder or under any other Transaction Document involve or require such Person to enter a
contract or other agreement in the name of or on behalf of the Seller, the Agent, the Investor or
the Banks, such servicing responsibility shall be fulfilled solely by, or upon specific approval
of, the Servicer, and such Person is authorized to take such action or give such approval, but only
from a place of business outside Canada, and such Person may
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not delegate such responsibility except upon consent or the direction of the Agent (and then only
subject to these same restrictions).
(b) Notwithstanding anything contained herein or anything contained in any other Transaction
Document, the Seller (and each Person to whom the Seller delegates any of its responsibilities
(including, without limitation, the Subservicer)) shall not, while acting in Canada, and shall not
(and has no authority to) delegate to any Person acting in Canada the authority to, or permit any
such Person to, enter into contracts or other agreements in the name of or on behalf of the Seller.
The Seller is not permitted to (nor has authority to) establish an office or other place of
business in Canada.
Section 6.10
Collateral Advance Account Agreement; Deposit Account Agreements.
Without limiting Section 6.07, the Servicer hereby agrees that it will reimburse the Agent on
demand for any payments or obligations that the Agent may incur pursuant to any indemnity provided
by the Agent under the Collateral Advance Account Agreement or any Deposit Account Agreement,
including, without limitation, the Blocked Accounts Agreement dated October 27, 2005 among ACI,
ACSC, the Agent, Royal Bank of Canada and the Seller, as such Deposit Account Agreements may be
amended, restated, supplemented or otherwise modified from time to time.
ARTICLE VII
EVENTS OF TERMINATION
Section 7.01 Events of Termination. If any of the following events (“Events
of Termination”) shall occur and be continuing:
(a) Any Servicer Default; or
(b) The Seller shall fail to make any payment required under Section 2.04(f);
or
(c) Any representation or warranty (unless (x) such representation or warranty
relates solely to one or more specific Receivables incorrectly characterized as Eligible
Receivables and either (i) immediately following the removal of such Receivables from the Net
Receivables Pool Balance the Percentage Factor is not greater than the Maximum Percentage
Factor or (ii) the Seller shall have made any required deemed Collection payment pursuant to
Section 2.04(f) with respect to such Receivables or (y) in the case of the representations and
warranties contained in Sections 4.01 (a), (j) (the first sentence only) or (q), the breach of
such
representation or warranty is capable of being cured and is in fact cured (without any adverse
impact on the Agent, the Investors or the Banks or the collectibility of the Pool Receivables)
within five Business Days after the first date on which the Seller obtains knowledge or
receives
written notice of such breach from the Agent) made or deemed made by ACI, any Originator or
the Seller (or any of their respective officers) under or in connection with this Agreement or
any
other Transaction Document or any information or report delivered by ACI, any Originator or
the Seller pursuant to this Agreement or any other Transaction Document shall prove to have
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been incorrect or untrue in any material respect as of the date when made or deemed made or
delivered; or
(d) The Seller or any Originator shall fail to perform or observe (i) any term,
covenant or agreement contained in this Agreement (other than as referred to in Section
7.01(b)
or clauses (ii) and (iii) of this Section 7.01(d)) or any other Transaction Document on its
part to
be performed or observed and any such failure shall remain unremedied for 10 days after
written
notice thereof shall have been given to the Seller by the Agent, (ii) any covenant applicable
to it
contained in Sections 5.01(d), 5.01(g), 5.01(h), 5.01(m) (first sentence only), 5.01(n),
5.01(o),
5.01(p), 5.01(q) or 5.01(r) or (iii) any covenant or agreement contained in Section 5.02 on
its part
to be performed or observed and any such failure referred to in this clause (iii) shall remain
unremedied for three Business Days; or
(e) The Parent, any Originator or Seller shall fail to pay any principal of or
premium or interest on any of its Debt (which, in the case of the Parent or any Originator,
either
arises under the Bank Agreement or is outstanding in a principal amount of at least
CAD 65,000,000 (or the Dollar Equivalent thereof) in the aggregate) when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise),
and such failure shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall occur or condition shall
exist under any agreement or instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt;
or any other event shall occur or condition shall exist under any agreement or instrument relating
to such Debt, and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Debt to cause, with the giving of notice if required, such
Debt to become due prior to its stated maturity or to become subject to a mandatory offer to
purchase by the obligor thereunder; or
(f) Any purchase or any reinvestment pursuant to this Agreement shall for
any reason (other than pursuant to the terms hereof) cease to create, or any Receivable
Interest
shall for any reason cease to be, a valid and perfected first priority undivided percentage
ownership interest to the extent of the pertinent Receivable Interest in each applicable Pool
Receivable and the Related Security and Collections with respect thereto; or the security
interest
created pursuant to Section 2.11 or Section 2.17(b) shall for any reason cease to be a valid
and
perfected first priority security interest in the collateral security referred to in that
section; or
(g) (i) The Parent, any Originator or the 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 Parent, any Originator or the Seller seeking to adjudicate it a bankrupt or
insolvent,
or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency or
reorganization
or relief of debtors or arrangement of debt, or seeking the entry of an order for reliefer the
appointment of a receiver, trustee, custodian or other similar official for it or for any
substantial
part of its property and, in the case of any such proceeding instituted against it (but not
instituted
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by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any
of the actions sought in such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other similar official for,
it or for any substantial part of its property) shall occur; or (iii) any receiver, trustee,
custodian or similar official shall be appointed for the Parent, any Originator or the Seller under
any private right; or (iv) the Parent, any Originator or the Seller shall take any corporate action
to authorize any of the actions set forth above in this subsection (g); or
(h) As of the last day of any calendar month, either (i) the average of the Delinquency
Ratios for such calendar month and the two immediately preceding calendar months shall exceed 4.0%
or (ii) the average of the Loss Ratios for such calendar month and the two immediately preceding
calendar months shall exceed 2.0% or (iii) the average of the Dilution Ratios for such calendar
month and the two immediately preceding calendar months shall exceed 9.0% or (iv) the average of
the Loss-to-Liquidation Ratios for such calendar month and the two immediately preceding calendar
months shall exceed 1.0%; or
(i) The Percentage Factor on any Reporting Date shall be greater than the Maximum
Percentage Factor unless the Seller reduces the outstanding Capital on the Business Day immediately
following the date the relevant Seller Report is due, bringing the recalculated Percentage Factor
to less than or equal to the Maximum Percentage Factor; or the Percentage Factor on the day on
which any Insurance Policy Event occurs (based on the data in the most recent Seller Report but
utilizing the Stress Factor and Loss Reserve Floor Percentage required following an Insurance
Policy Event) shall be greater than the Maximum Percentage Factor unless the Seller reduces the
outstanding Capital within three Business Days following the day after the occurrence of such
Insurance Policy Event, bringing the recalculated Percentage Factor to less than or equal to the
Maximum Percentage Factor; or
(j) There shall have occurred any material adverse change (as determined by the Agent) in
the collectibility of the Receivables Pool or the ability of ACI, any Originator, the Seller or
the Servicer to collect Pool Receivables or otherwise perform its obligations under this
Agreement and the other Transaction Documents; or
(k) An “Event of Termination” or “Facility Termination Date” shall occur under the
Originator Purchase Agreement, or the Originator Purchase Agreement shall cease to be in full force
and effect; or
(1) All of the outstanding capital stock of the Seller shall cease to be owned,
directly or indirectly, by ACSC, or all of the outstanding capital stock of ACSC or ACI shall cease
to be owned, directly or indirectly, by the Parent; or
(m) One or more judgments for the payment of money (except to the extent covered by
insurance as to which the insurer has acknowledged such coverage in writing) shall be rendered
against the Seller, and the same shall remain undischarged for a period of 60 consecutive days
during which execution shall not be effectively stayed, or any action shall be taken by a judgment
creditor to attach or levy upon any assets of the Seller to enforce any such judgment; or
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(n) One or more judgments for the payment of money in an aggregate amount in excess of
CAD 65,000,000 (or the Dollar equivalent thereof) (except to the extent covered by insurance as to
which the insurer has acknowledged such coverage in writing) shall be rendered against the Parent
or any Originator or the Seller or any combination thereof, and the same shall remain undischarged
for a period of 60 consecutive days during which execution shall not be effectively stayed, or any
action shall be taken by a judgment creditor to attach or levy upon any assets of the Parent or any
Originator or the Seller to enforce any such judgment; or
(o) The PBGC or the Internal Revenue Service shall, or shall indicate its intention to,
file notice of a lien pursuant to Section 4068 of ERISA or Section 6320 of the Code with regard to
any of the assets of the Parent, the Seller or the Originators and such lien has not been
discharged within 30 days of receipt of notice thereof and the amount of such lien is greater than
$1,000,000; or
(p) (i) ACI shall fail to make any payment required by the Undertaking (Originator) or
the Undertaking (Servicer) or (ii) ACI shall fail to perform or observe any other term, covenant or
agreement contained in the Undertaking (Originator) or the Undertaking (Servicer) and any such
failure shall remain unremedied for 10 days after written notice thereof shall have been given to
the Seller by the Agent, or (iii) any of the Undertaking (Originator) or the Undertaking (Servicer)
shall cease to be in full force and effect; or
(q) The Insurer shall refuse to pay any claim under the Insurance Policy specific
to the Receivables solely as a result of an action by an Originator constituting “Corruption”,
as such term is defined in Section 8(7) of the Insurance Policy; or
(r) The Insurer shall terminate, or send ACI any notice of termination of, the Insurance
Policy pursuant to Section 37(2) or 37(3) of the Insurance Policy;
then, and in any such event, any or all of the following actions may be taken by notice to the
Seller: (x) the Investor or the Agent may declare the Facility Termination Date to have occurred
(in which case the Facility Termination Date shall be deemed to have occurred), (y) the Agent may
declare the Commitment Termination Date to have occurred (in which case the Commitment Termination
Date shall be deemed to have occurred), and (z) without limiting any right under this Agreement to
replace the Servicer, if such Event of Termination is a Servicer Default, the Agent may designate
another Person to succeed ACSC as the Servicer; provided, that, automatically upon the
occurrence of any event (without any requirement for the passage of time or the giving of notice)
described in paragraph (g) of this Section 7.01, the Facility Termination Date and the Commitment
Termination Date shall occur. Upon any such declaration or designation or upon such automatic
termination, the Investors, the Banks and the Agent shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies provided after
default under the UCC, the PPSA and under other applicable law, which rights and remedies shall be
cumulative.
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ARTICLE VIII
THE AGENT
Section 8.01 Authorization and Action. Each Investor and each Bank hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Transaction Documents as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. The Agent reserves the
right, in its sole discretion (subject to Section 10.01), to agree to any amendment, modification
or waiver of the provisions of this Agreement or any instrument or document delivered pursuant
hereto, and also to exercise any rights and remedies available under this Agreement and the other
Transaction Documents or pursuant to applicable law. As to any matters not expressly provided for
by this Agreement or the other Transaction Documents (including, without limitation, enforcement of
this Agreement or the other Transaction Documents), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of the Majority Banks
and such instructions shall be binding upon all Banks; provided, however, that the Agent
shall not be required to take any action which exposes the Agent to personal liability or which is
contrary to this Agreement, the other Transaction Documents or applicable law.
Section 8.02 Agent’s Reliance, Etc. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to be taken by it or
them as Agent under or in connection with this Agreement (including, without limitation, the
Agent’s servicing, administering or collecting Pool Receivables as Servicer) or any other
Transaction Document, except for its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, the Agent: (a) may consult with legal counsel (including
counsel for the Parent, the Seller, the Originators and the Servicer), independent certified public
accountants and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants
or experts; (b) makes no warranty or representation to any Investor or Bank (whether written or
oral) and shall not be responsible to any Investor or Bank for any statements, warranties or
representations (whether written or oral) made in or in connection with this Agreement or any other
Transaction Document; (c) shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of this Agreement relating to the
Parent, Seller, any Originator or the Servicer or to inspect the property (including the books and
records) of the Parent, the Seller, any Originator or the Servicer; (d) shall not be responsible to
any Investor or Bank for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document furnished pursuant
hereto; and (e) shall incur no liability under or in respect of this Agreement or any other
Transaction Document by acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by telecopier or telex) believed by it to
be genuine and signed or sent by the proper party or parties.
Section 8.03 CNAI and Affiliates. The obligation of Citibank to purchase
Receivable Interests under this Agreement may be satisfied by CNAI or any of its Affiliates.
With respect to any Receivable Interest or interest therein owned by it, CNAI shall have the
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same rights and powers under this Agreement as any Bank and may exercise the same as though its
Affiliate CLB were not the Agent. CNAI and any of its Affiliates may generally engage in any kind
of business with the Parent, the Seller, the Servicer or any Obligor, any of their respective
Affiliates and any Person who may do business with or own securities of the Parent, the Seller, the
Servicer, any Originator, or any Obligor or any of their respective Affiliates, all as if CLB were
not the Agent and without any duty to account therefor to the Investors or the Banks.
Section 8.04 Bank’s Purchase Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent, any of its Affiliates or any other Bank and
based on such documents and information as it has deemed appropriate, made its own evaluation and
decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Agent, any of its Affiliates or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under this Agreement.
Section 8.05 Indemnification of Agent. Each Bank agrees to indemnify the Agent (to
the extent not reimbursed by the Seller or the Servicer), ratably according to the amount of its
Bank Commitment (or, if the Bank Commitments have been terminated, then ratably according to the
respective amounts of Capital of the Receivable Interests (or interests therein) owned by it or
which it may be required to purchase under the Asset Purchase Agreement), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this Agreement or the other
Transaction Documents or any action taken or omitted by the Agent under this Agreement or the other
Transaction Documents, provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent’s gross negligence or willful misconduct.
ARTICLE IX
INDEMNIFICATION
Section 9.01 Indemnities by the Seller. Without limiting any other rights that the
Agent, the Investors, the Banks, any of their respective Affiliates or members or any of their
respective officers, directors, employees or advisors (each, an “Indemnified Party”) may have
hereunder or under applicable law, the Seller hereby agrees to indemnify each Indemnified Party
from and against any and all claims, losses and liabilities (including reasonable attorneys’ fees)
(all of the foregoing being collectively referred to as “Indemnified Amounts”) arising out of or
resulting from this Agreement or the other Transaction Documents or the use of proceeds of
purchases or reinvestments or the ownership of Receivable Interests or in respect of any Receivable
or any Contract, excluding, however, (a) Indemnified Amounts to the extent found in a final non
appealable judgment of a court of competent jurisdiction to have resulted from gross negligence or
willful misconduct on the part of such Indemnified Party, (b) recourse (except as otherwise
specifically provided in this Agreement) for Receivables which are not collected, not paid or
uncollectible on account of the insolvency, bankruptcy or financial inability to pay of the
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applicable Obligor or (c) any income taxes or any other tax or fee measured by income incurred by
such Indemnified Party arising out of or as a result of this Agreement or the ownership of
Receivable Interests or in respect of any Receivable or any Contract, other than (i) Taxes (to the
extent provided in Section 2.10) and (ii) Canadian taxes strictly on income or capital in
connection with the Receivables or the transactions contemplated by this Agreement and the other
Transaction Documents and resulting from the Seller, any Investor or any Bank having a permanent
establishment in Canada solely as a result of the transactions contemplated hereby (but only
directly and exclusively as a result of any breach by the Seller or the Servicer (or any delegatee
thereof) of its obligations hereunder or under any other Transaction Document). Without limiting or
being limited by the foregoing, the Seller shall pay on demand to each Indemnified Party any and
all amounts necessary to indemnify such Indemnified Party from and against any and all Indemnified
Amounts relating to or resulting from any of the following:
(i) the characterization in any Seller Report or other written statement
made by or on behalf of the Seller of any Receivable as an Eligible Receivable or as
included in the Net Receivables Pool Balance which, as of the date of such Seller
Report or other statement, is not an Eligible Receivable or should not be included
in the Net Receivables Pool Balance;
(ii) any representation or warranty or statement made or deemed made by
the Seller (or any of its officers) under or in connection with this Agreement or
any of the other Transaction Documents which shall have been incorrect in any
material respect as of the date when made;
(iii) the failure by the Seller to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract or the
transfer of such Pool Receivable hereunder; or the failure of any Pool Receivable or
the related Contract to conform to any such applicable law, rule or regulation; or
the failure by the Seller to pay, remit or account for any taxes related to or
included in a Receivable when due;
(iv) the failure to vest in the Investors or the Banks, as the case may
be, (a) a perfected undivided percentage ownership interest, to the extent of each
Receivable Interest, in the Receivables in, or purporting to be in, the Receivables
Pool and the Related Security and Collections in respect thereof, or (b) a perfected
security interest as provided in Section 2.11, in each case free and clear of any
Adverse Claim;
(v) the failure to have filed or sent, or any delay in filing or sending,
financing statements, notices or other similar instruments or documents under the
UCC or the PPSA of any applicable jurisdiction or other applicable laws with respect
to any Receivables in, or purporting to be in, the Receivables Pool and the Related
Security and Collections in respect thereof, whether at the time of any purchase or
reinvestment or at any subsequent time; or the failure to have properly notified any
Obligor of the transfer, sale or assignment of any Receivable pursuant to the
Transaction Documents, to the extent such notice is required to perfect the same
under Quebec law; for purposes of this clause (v),
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“perfect” under Quebec law, means to render opposable, publish and allow the setting up of the
purchaser’s interest in, and right to collect payment under, the assets which are the subject of
such transfer, sale and assignment, and to make opposable, publish and allow the setting up of such
transfer, sale and assignment as against Obligors and other third parties, including any trustee in
bankruptcy;
(vi) any dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor) of the Obligor to the payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense based on such Receivable or the related
Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale of the merchandise or
services related to such Receivable or the furnishing or failure to furnish such merchandise or
services or relating to collection activities with respect to such Receivable (if such collection
activities were performed by the Seller or any of its Affiliates acting as Servicer);
(vii) any failure of the Seller to perform its duties or obligations in accordance with
the provisions hereof or to perform its duties or obligations under the Contracts, including,
without limitation, any act or omissions by the Seller which gives rise to an exclusion from
coverage under the Insurance Policy;
(viii) any products liability or other claim arising out of or in connection with
merchandise, insurance or services which are the subject of any Contract;
(ix) the commingling of Collections of Pool Receivables at any time with other funds;
(x) any investigation, litigation or proceeding related to this Agreement or the use of
proceeds of purchases or reinvestments or the ownership of Receivable Interests or in respect of
any Receivable or Related Security or Contract (including, without limitation, in connection with
the preparation of a defense or appearing as a third party witness in connection therewith and
regardless of whether such investigation, litigation or proceeding is brought by the Seller, an
Indemnified Party or any other Person or an Indemnified Party is otherwise a party thereto);
(xi) any failure of the Seller to comply with its covenants contained in this
Agreement or any other Transaction Document;
(xii) any claim brought by any Person other than an Indemnified Party arising from any
activity by the Seller or any Affiliate of the Seller in servicing, administering or collecting any
Receivable;
(xiii) any claim arising out of any failure by the Seller to obtain a consent (if required)
from the relevant Obligor to the transfer, sale or assignment of any Receivable pursuant to the
Transaction Documents; or
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(xiv) after the date hereof, any Investor or Bank shall be subject to
Canadian taxes on income or capital in connection with the Receivables or the
transactions contemplated by this Agreement and the other Transaction Documents and
resulting from the Seller, such Investor or such Bank having a permanent
establishment in Canada solely as a result of the transactions contemplated hereby
(but only directly and exclusively as a result of any breach by the Seller or the
Servicer (or any delegatee thereof) of its obligations hereunder or under any other
Transaction Document).
ARTICLE X
MISCELLANEOUS
Section 10.01
Amendments, Etc. (a) Amendments Generally. No amendment or
waiver of any provision of this Agreement or consent to any departure by the Seller, any Originator
or the Servicer therefrom shall be effective unless in a writing signed by the Agent, as agent for
the Investors and the Banks (and, in the case of any amendment, also signed by the Seller and the
Originators; provided, however, that the signatures of the Seller and the Originators shall
not be required for the effectiveness of any amendment which modifies the representations,
warranties, covenants or responsibilities of the Servicer at any time when the Servicer is not ACI,
the Originator or an Affiliate of the Originator or a successor Servicer is designated by the Agent
pursuant to Section 6.01), and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided, however, that
no amendment, waiver or consent shall, unless in writing and signed by the Servicer in addition to
the Agent, affect the rights or duties of the Servicer under this Agreement. Notwithstanding any
other provision of this Section 10.01 (a), (i) Schedules I and IV hereto may be amended in
accordance with the procedures set forth in Sections 5.01(g) and 5.01(b), respectively, and (ii)
the amendments described in clauses (c)-(e) of this Section 10.01 shall become effective upon the
satisfaction of the applicable conditions precedent set forth in this Section 10.01. No failure on
the part of the Investors, the Banks or the Agent to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise of any other right.
(b) Replacement Bank Agreement. In the event that any financing is provided to
ACI or any of its subsidiaries, pursuant to which the Parent is a borrower or guarantor or the
lenders otherwise rely upon the credit or the financial position of the Parent, including by
incorporation of representations and warranties, covenants or events of default relating to the
Parent (such financing, the “Replacement Bank Agreement”), the Seller, the Servicer, the
Agent, the Investors, the Banks and the Originators agree to enter into good faith negotiations for
a period of 30 days after the effectiveness of such Replacement Bank Agreement, or such longer
period as may be agreed to, in writing, by the Agent and the Originators, in order to amend the
Events of Termination set forth in Sections 7.01(e), (g), (n) and (o) of this Agreement and any
other provisions of this Agreement and the Originator Purchase Agreement as reasonably agreed to
between the Agent and the Originators, so as to reflect, as applicable, the terms and conditions of
analogous clauses in the Replacement Bank Agreement to the reasonable satisfaction of the
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Agent and the Originators. This Section 10.01(b) shall not limit any rights of the Seller under
Section 2.01(b).
(c) Continuance Amendments. Effective as of the effective date (the
“Continuance Effective Date”) of the Continuance as set forth in the Notice of Continuance
and Change of Address to be delivered by the Seller to the Agent in the form attached hereto as
Annex I (the “Notice of Continuance and Change of Address”), which Notice of Continuance
and Change of Address shall be delivered to the Agent by no later than five (5) calendar days prior
to the Continuance Effective Date, and subject to the satisfaction of the conditions precedent set
forth in this Section 10.01(c):
(i) The introductory paragraph to this Agreement is amended by deleting the
phrase “ABITIBI-CONSOLIDATED INC., a Canadian corporation” and replacing it with the name
and description of the Continued Entity, as indicated in the Notice of Continuance and
Change of Address.
(ii) Schedule IV to this Agreement is deleted in its entirety and replaced with
Schedule IV attached to the Notice of Continuance and Change of Address.
(iii) Each reference to “Abitibi-Consolidated Inc.,” “ACI”, the “Canadian
Originator” and the “Subservicer” (to the extent ACI continues to be so designated and
to act in such capacity) in this Agreement and each Transaction Document shall mean and
be a reference to the Continued Entity, as indicated in the Notice of Continuance and
Change of Address.
The amendments described in this Section 10.01(c) shall become effective on the Continuance
Effective Date, subject to the receipt by the Agent (subject to the terms of clause (B) below) of
each of the following, each in form and substance satisfactory to the Agent:
(A) acknowledgment copies or time stamped receipt copies (or other
satisfactory evidence of filing) of proper financing statements, financing change
statements and financing statement amendments, duly filed against ACI and the
Continued Entity, as applicable, on or before the Continuance Effective Date under the
UCC and PPSA of all jurisdictions that the Agent may deem necessary or desirable in
order to continue perfection of the ownership and security interests contemplated by
this
Agreement and the other Transaction Documents;
(B) favourable opinions of (x) Stikeman Elliott LLP, Canadian counsel
for the Continued Entity and (y) Xxxxxxx XxXxxxxx LLP, Nova Scotia counsel for the
Continued Entity, each of which opinions may be combined with and incorporated in the
relevant opinion to be delivered pursuant to Section 10.01(d)(C) (the
“Amalgamation
Opinion”) provided that the Amalgamation Opinion is delivered to the Agent within
thirty (30) days of the Continuance Effective Date; for greater certainty, the delivery
of
the opinions required pursuant to this clause (B) shall not delay the coming into
effect of
the amendments described in this Section 10.01(c);
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(C) a copy of the constating documents of the Continued Entity, giving
effect to the Continuance, certified by the Secretary or Assistant Secretary of the
Continued Entity;
(D) a copy of the organizational documents of the Continued Entity,
giving effect to the Continuance, certified by or on behalf of the Registrar of Joint
Stock
Companies of Nova Scotia, dated as of a recent date; and
(E) a certificate as to the good standing or qualification to do business,
as applicable, of the Continued Entity from an appropriate official of each of Nova
Scotia
and Quebec, dated as of a recent date.
(d) Amalgamation Amendments. Effective as of the effective date (the
“Amalgamation Effective Date”) of the Amalgamation as set forth in the Notice of
Amalgamation to be delivered by the Seller to the Agent in the form
attached hereto as Annex J (the “Notice of Amalgamation”), which Notice of Amalgamation shall be delivered to the Agent by
no later than five (5) calendar days prior to the Amalgamation Effective Date, and subject to the
satisfaction of the conditions precedent set forth in this Section 10.01(d):
(i) The introductory paragraph to this Agreement is amended by deleting the name
and description of the Continued Entity and replacing it with the name and description of
the Amalgamated Entity, as indicated in the Notice of Amalgamation.
(ii) Schedule III to this Agreement is deleted in its entirety and replaced
with Schedule III attached to the Notice of Amalgamation.
(iii) Schedule IV to this Agreement is deleted in its entirety and replaced
with Schedule IV attached to the Notice of Amalgamation.
(iv) Each reference to the Continued Entity, “Abitibi-Consolidated Inc.,” “ACI”,
the “Canadian Originator” and the “Subservicer” (to the extent ACI continues to be so
designated and to act in such capacity) in this Agreement and each Transaction Document
shall mean and be a reference to the Amalgamated Entity, as indicated in the Notice of
Amalgamation.
The amendments described in this Section 10.01(d) shall become effective on the Amalgamation
Effective Date, subject to the receipt by the Agent of each of the following, each in form and
substance satisfactory to the Agent:
(A) an executed copy of the Assumption Agreement, in the form
attached hereto as Annex K;
(B) acknowledgment copies or time stamped receipt copies (or other
satisfactory evidence of filing) of proper financing statements, financing change
statements and financing statement amendments, duly filed against the Continued Entity
and the Amalgamated Entity, as applicable, on or before the Amalgamation Effective
Date under the UCC and PPSA of all jurisdictions that the Agent may deem necessary or
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desirable in order to continue perfection of the ownership and security interests
contemplated by this Agreement and the other Transaction Documents;
(C) favourable opinions of (x) Stikeman Elliott LLP, Canadian counsel
for the Amalgamated Entity and (y) Xxxxxxx XxXxxxxx LLP, Nova Scotia counsel for the
Amalgamated Entity;
(D) a copy of the constating documents of the Amalgamated Entity,
giving effect to the Amalgamation, certified by the Secretary or Assistant Secretary of
the
Amalgamated Entity;
(E) a copy of the organizational documents of the Amalgamated
Entity, giving effect to the Amalgamation, certified by or on behalf of the Registrar
of
Joint Stock Companies of Nova Scotia, dated as of a recent date;
(F) a certificate as to the good standing or qualification to do business,
as applicable, of the Amalgamated Entity from an appropriate official of each of Nova
Scotia and Quebec, dated as of a recent date;
(G)
completed requests for information and search reports, dated on or before the Amalgamation Effective Date, listing all effective financing statements and
other registrations filed in the jurisdictions referred to in subsection (b) above and
in any
other jurisdictions reasonably requested by the Agent that name 3224112 Nova Scotia
Limited as debtor, together with copies of such financing statements and other
registrations; and
(H) acknowledgment copies of proper financing statements and registrations, if
any, necessary to release all security interests and other rights of any Person in the
Receivables, Contracts, Related Security or the collateral security referred to in Section
2.11.
(e) Change of Address Amendments. Effective as of the effective date (the
“Change of Address Effective Date”) of the Change of Address as set forth in the Notice of
Change of Address to be delivered by the Seller to the Agent in the form attached hereto as Annex L
(the “Notice of Change of Address”), which Notice of Change of Address shall be delivered to the
Agent by no later than five (5) Business Days prior to the Change of Address Effective Date, and
subject to the satisfaction of the conditions precedent set forth below, Schedules III and IV to
this Agreement are deleted in their entirety and replaced with Schedules III and IV attached to the
Notice of Change of Address, respectively.
The amendments described in this Section 10.01(e) shall become effective on the Change of
Address Effective Date, subject to the receipt by the Agent, on or prior to the Change of Address
Effective Date, of acknowledgment copies or time stamped receipt copies (or other satisfactory
evidence of filing) of proper financing statements and financing statement amendments, duly filed
against ACSC and the Seller on or before the Change of Address Effective Date under the UCC of all
jurisdictions that the Agent may deem necessary or
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desirable in order to continue perfection of the ownership and security interests contemplated by
this Agreement and the other Transaction Documents.
(f) Waivers. The Agent, as agent for the Investors and the Banks, hereby waives
the requirement to provide thirty (30) days’ written notice set forth in Section 5.01(k)(vii),
solely to the extent relating to the Continuance, the Amalgamation and the Change of Address;
provided that the Seller timely complies with the requirements to provide such notice in
each case pursuant to its agreements set forth in clauses (c), (d) and (e) of this Section 10.01,
as applicable.
Section 10.02 Notices, Etc. All notices and other communications hereunder shall,
unless otherwise stated herein, be in writing (which shall include facsimile communication) and
faxed or delivered, to each party hereto, at its address set forth on Schedule III hereto or at
such other address as shall be designated by such party in a written notice to the other parties
hereto. Notices and communications by facsimile shall be effective when sent (and shall be followed
by hard copy sent by regular mail), and notices and communications sent by other means shall be
effective when received.
Section 10.03 Assignability. (a) This Agreement and the Investors’ rights and
obligations herein (including ownership of each Receivable Interest) shall be assignable by the
Investors and their successors and assigns (including, without limitation, pursuant to the Asset
Purchase Agreement). Each assignor of a Receivable Interest or any interest therein shall notify
the Agent and the Seller of any such assignment. Each assignor of a Receivable Interest or any
interest therein may, in connection with any such assignment, disclose to the assignee or potential
assignee any information relating to the Seller, the Parent or any Originator, including the
Receivables, furnished to such assignor by or on behalf of the Seller or by the Agent;
provided that, prior to any such disclosure, the assignee or potential assignee agrees in
writing to preserve the confidentiality of any such information which is confidential in accordance
with the provisions of Section 10.06 hereof.
(b) Each Bank may assign to any Eligible Assignee or to any other Bank all or a portion
of its rights and obligations under this Agreement (including, without limitation, all or a portion
of its Bank Commitment and any Receivable Interests or interests therein owned by it);
provided, however, that
(i) each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement,
(ii) the amount being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance Agreement with respect
to such assignment) shall in no event be less than the lesser of (x) $10,000,000 and
(y) all of the assigning Bank’s Bank Commitment,
(iii) the parties to each such assignment shall execute and deliver to
the Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance Agreement, together with a processing and recordation fee of $2,500,
and
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(iv) concurrently with such assignment, such assignor Bank shall assign to
such assignee Bank or other Eligible Assignee an equal percentage of its rights and
obligations under the Asset Purchase Agreement (or, if such assignor Bank is
Citibank, it shall arrange for such assignee Bank or other Eligible Assignee to
become a party to the Asset Purchase Agreement for a maximum Capital amount equal to
the assignee’s Bank Commitment).
Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance Agreement, (x) the assignee thereunder shall be a party
to this Agreement and, to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance Agreement, have the rights and obligations of a Bank
hereunder and (y) the assigning Bank shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance Agreement, relinquish such
rights and be released from such obligations under this Agreement (and, in the case of an
Assignment and Acceptance Agreement covering all or the remaining portion of an assigning Bank’s
rights and obligations under this Agreement, such Bank shall cease to be a party hereto).
(c) The Agent shall maintain at its address referred to in Section 10.02 of this
Agreement a copy of each Assignment and Acceptance Agreement delivered to and accepted by
it and a register for the recordation of (i) the names and addresses of the Investors and the
Banks,
(ii) the Bank Commitment of, and aggregate outstanding Capital of Receivable Interests or
interests therein owned by, each Bank from time to time and (iii) the aggregate outstanding
Capital of Receivable Interests owned by each Investor (the “Register”). The entries in the
Register shall be conclusive and binding for all purposes regarding the ownership of the
Receivable Interests, absent manifest error, and the Seller, the Originators, the Agent, the
Investors and the Banks shall treat each person whose name is recorded in the Register as the
owner of a Receivable Interests and as a Bank or an Investor, as applicable, under this
Agreement for all purposes of this Agreement. The Register as the owner of a Receivable
Interests and shall be available for inspection by the Seller, any Investor or any Bank at any
reasonable time and from time to time upon reasonable prior notice. The parties hereto intend
that the Register will satisfy the requirement that indebtedness for U.S. federal income tax
purposes represented by the Receivable Interests be in “registered form” as such term is used
for
purposes of portfolio interest under sections 881(c) and 163(f) of the Code and the
regulations
promulgated thereunder. Upon its receipt of an Assignment and Acceptance Agreement
executed by an assigning Bank and an Eligible Assignee, the Agent shall, if such Assignment
and Acceptance Agreement has been completed, (i) accept such Assignment and Acceptance
Agreement, (ii) record the information contained therein in the Register and (iii) give prompt
notice thereof to the Seller.
(d) Notwithstanding any other provision of this Section 10.03, any Bank may
at any time pledge or grant a security interest in all or any portion of its rights
(including, without
limitation, rights to payment of Capital and Yield) under this Agreement or under the Asset
Purchase Agreement to secure obligations of such Bank to a Federal Reserve Bank, without
notice to or consent of the Seller or the Agent; provided that no such pledge or grant
of a security
interest shall release a Bank from any of its obligations hereunder or under the Asset
Purchase
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Agreement, as the case may be, or substitute any such pledgee or grantee for such Bank as a
party hereto or to the Asset Purchase Agreement, as the case may be.
(e) Each Bank may sell participations, to one or more banks or other entities,
in or to all or a portion of its rights and obligations under this Agreement (including,
without
limitation, all or a portion of its Bank Commitment and the Receivable Interests or interests
therein owned by it); provided, however, that
(i) such Bank’s obligations under this Agreement (including, without
limitation, its Bank Commitment to the Seller hereunder) shall remain unchanged,
(ii) such Bank shall remain solely responsible to the other parties
to this Agreement for the performance of such obligations and
(iii) concurrently with such participation, the selling Bank shall sell to
such bank or other entity a participation in an equal percentage of its rights and
obligations under the Asset Purchase Agreement.
The Agent, the other Banks, the Seller and the Servicer shall have the right to continue to deal
solely and directly with such Bank in connection with such Bank’s rights and obligations under this
Agreement.
(f) This Agreement and the rights and obligations of the Agent herein shall be
assignable by the Agent and its successors and assigns; provided, however, that the
Agent agrees
that it will not assign such rights and obligations to any Person other than an Affiliate of
Citibank
unless:
(i) in the reasonable judgment of the Agent, the Agent determines that
continued service by it (or its Affiliate) as Agent hereunder would be inconsistent
with, or otherwise materially disadvantageous under, applicable legal, tax or
regulatory restrictions; or
(ii) an Event of Termination or Incipient Event of Termination shall have
occurred and be continuing; or
(iii) the Seller shall have consented to such assignment (such consent not
to be unreasonably withheld or delayed).
(g) The Seller may not assign its rights or obligations hereunder or any
interest herein without the prior written consent of the Agent.
(h) Eureka may sell participations to one or Eligible Assignees (each, a “Participant”)
in all or a portion of its rights and obligations hereunder (including the outstanding Receivable
Interests) without the consent of the Seller (except as otherwise provided in the definition of
Eligible Assignee); provided that following the sale of a participation under this
Agreement (i) the obligations of Eureka shall remain unchanged, (ii) Eureka shall remain solely
responsible to the other parties hereto for the performance of such obligations and (iii) the
Seller,
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the Agent, and the Banks shall continue to deal solely and directly with Eureka in connection with
Eureka’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which
Eureka sells such a participation shall provide that the Participant shall not have any right to
direct the enforcement of this Agreement or the other Transaction Documents or to approve any
amendment, modification or waiver of any provision of this Agreement or the other Transaction
Documents; provided that such agreement or instrument may provide that Eureka will not,
without the consent of the Participant, agree to any amendment, modification or waiver that (i)
reduces the amount of Capital or Yield that is payable on account of any Receivable Interest or
delays any scheduled date for payment thereof or (ii) reduces any fees payable by the Seller to the
Agent (to the extent relating to payments to the Participant) or delays any scheduled date for
payment of such fees. The Seller acknowledges and agrees that Eureka’s source of funds may derive
in part from its Participants. Accordingly, references in Sections 2.08, 2.10, 6.07, 9.01
and 10.04 and the other terms and provisions of this Agreement and the other Transaction
Documents to determinations, reserve and capital adequacy requirements, expenses, increased costs,
reduced receipts and the like as they pertain to Eureka shall be deemed also to include those of
its Participants; provided that the Seller shall not be required to pay higher costs,
expenses and indemnification amounts pursuant to this sentence than would be required to be paid by
the Seller in the absence of the sale of any participation by Eureka to a Participant as
contemplated by this Section 10.03(h). Eureka or the Agent may, in connection with any such
participation, disclose to Participants and potential Participants any information relating to the
Seller or the Originator, including the Receivables, furnished to Eureka or the Agent by or on
behalf of the Seller; provided that, prior to any such disclosure, such Participant or
potential Participant agrees in writing to preserve the confidentiality of any such information
which is confidential in accordance with the provisions of Section 10.06 hereof. Any interest sold
by Eureka to a Bank or its designee under the Asset Purchase Agreement shall not be considered a
participation for the purpose of this Section 10.03(h) (and the Bank or its designee shall not be
considered a Participant as a result thereof).
Section 10.04
Costs and Expenses. (a) In addition to the rights of indemnification
granted under Section 9.01 hereof, the Seller agrees to pay on demand all reasonable costs and
expenses in connection with the preparation, execution, delivery and administration (including
periodic auditing and the other activities contemplated in Section 5.02) of this Agreement, any
Asset Purchase Agreement and the other documents and agreements to be delivered hereunder,
including, without limitation, the reasonable fees and reasonable out-of-pocket expenses of counsel
for the Agent, CNAI, Eureka, Citibank and their respective Affiliates with respect thereto and with
respect to advising the Agent, CNAI, Eureka, Citibank and their respective Affiliates as to their
rights and remedies under this Agreement, and all costs and expenses, if any (including reasonable
counsel fees and expenses), of the Agent, CNAI, the Investors, the Banks and their respective
Affiliates, in connection with the enforcement of this Agreement and the other documents and
agreements to be delivered hereunder.
(b) In addition, the Seller shall pay, to the extent not included in the calculation of
Yield, (i) any and all commissions of placement agents and dealers in respect of Promissory Notes
issued to fund the purchase or maintenance of any Receivable Interest, and (ii) any and all costs
and expenses of any issuing and paying agent or other Person responsible for the administration of
Eureka’s Promissory Notes program in connection with the preparation,
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completion, issuance, delivery or payment of Promissory Notes issued to fund the purchase or
maintenance of any Receivable Interest.
(c) Further, the Seller agrees to pay any and all breakage and other expenses of the
Agent, the Investor and the Banks (including, without limitation, reasonable attorneys’ fees and
disbursements and the cost including accrued interest, of terminating or transferring any
agreements such as interest rate swaps, over-the-counter forward agreements and future contracts
engaged by the Investor, the Banks or the Agent) in connection with any reduction of the Capital
relating to the funding or maintenance of any Receivable Interest (or portion thereof), but without
duplication of any such breakage and other expenses that were included in any Liquidation Fee paid
with respect thereto.
Section 10.05 No Proceedings. Each of the Seller, the Agent, the Servicer, each
Originator, ACI, each Investor, each Bank, each assignee of a Receivable Interest or any interest
therein and each entity which enters into a commitment to purchase Receivable Interests or
interests therein hereby agrees that it will not institute against, or join any other Person in
instituting against, Eureka any proceeding of the type referred to in Section 7.01 (g) so long as
any commercial paper or other senior indebtedness issued by Eureka shall be outstanding or there
shall not have elapsed one year plus one day since the last day on which any such commercial paper
or other senior indebtedness shall have been outstanding.
Section 10.06
Confidentiality. (a) The Seller, each Originator and the Servicer each
agrees to maintain the confidentiality of this Agreement, the Originator Purchase Agreement and the
Fee Agreement and the respective terms thereof in communications with third parties and otherwise;
provided that this Agreement or the terms hereof may be disclosed (i) to third parties to
the extent such disclosure is made pursuant to a written agreement of confidentiality in form and
substance reasonably satisfactory to the Agent, (ii) to their respective Affiliates, directors,
officers, employees, agents, auditors and advisors, including, without limitation, attorneys,
accountants and consultants on a strictly “need to know” basis if they agree to hold it
confidential, (iii) to third parties, solely with respect to (x) the Program Limit, the Commitment
Termination Date, the Facility Termination Date, the aggregate Outstanding Balance of Receivables,
a summary of the Events of Termination, the definition of “Receivable” and the related definition
of “Originator Receivable” set forth in the Originator Purchase Agreement and (y) other terms of
the Agreement, to the extent that the Agent has provided its prior written consent to such
disclosure, (iv) to the extent required by applicable law, regulation, subpoena, court order or
other legal process, including, without limitation, under applicable securities regulations or by
securities regulators, or by any court, regulatory body or agency having jurisdiction over such
party, (v) in connection with any action or proceeding related to, or the exercise of any remedies
under, this Agreement and the other Transaction Documents, or (vi) as may be determined by such
party or its auditors, acting reasonably, to be necessary in connection with financial reporting
under generally accepted accounting principals or to rating agencies in respect of such party; and
provided, further, that such party shall have no obligation of confidentiality in respect
of any information which may be generally available to the public or becomes available to the
public through no fault of such party.
(b) Each Investor, each Bank and the Agent agrees to keep confidential and not disclose
to any third parties any information, including, but not limited to, any Contracts, the
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identity of the Obligors, any customer lists and aging, the Parent’s or its Affiliates’ accounts
receivable policy, credit policy, technical information, operating procedures, financial
information, research data, documents, formulas, compilations, reports, studies, test results,
software (including source code and object code), database compilations and the format, structure
and configuration of any databases (whether or not such information is marked “confidential,”
“privileged” or otherwise identified as confidential) (collectively, the “Confidential
Information”) provided to it pursuant to the terms of this Agreement, the Transaction Documents
or otherwise with respect to the Parent, the Seller, the Originators, the Obligors, the Contracts
or the Receivables Pool (including the Seller Reports) in connection with the transactions
contemplated by this Agreement and the other Transaction Documents; provided, that such
Confidential Information may be disclosed (i) to such party’s Affiliates, directors, officers,
employees, agents, auditors and advisors, including, without limitation, attorneys, accountants and
consultants (such Affiliates, directors, officers, employees, agents, auditors and advisors are
collectively referred to herein as the “Representatives”) and to such party’s assignees and
participants and potential assignees and participants and their respective counsel, (ii) to the
rating agencies, (iii) to any actual or potential subordinated investor in any Investor or any
provider of liquidity for any Investor, (iv) to credit enhancers and dealers and investors in
respect of promissory notes of each Investor in accordance with the customary practices of such
Investor for disclosures to credit enhancers, dealers or investors, as the case may be, it being
understood that any such disclosure to dealers or investors will not identify the Parent, the
Seller, the Originators or any of their affiliates by name, (v) to the extent required by
applicable law, regulation, subpoena, court order or other legal process and (vi) to the extent
requested by any governmental or regulatory authority having jurisdiction over such party;
provided, further, that (A) any such disclosure pursuant to clause (i), (ii), (iii) or (iv)
shall be disclosed to such party on a strictly “need to know” basis and (B) in the case of any such
disclosure pursuant to clause (i), the party receiving such Confidential Information shall agree to
hold such information confidential in accordance with terms consistent with this Section 10.06 or
shall be legally obligated, or otherwise obligated by virtue of such party’s relationship with an
Investor, a Bank or the Agent, to preserve the confidentiality thereof (and any Person making a
disclosure pursuant to the foregoing will be responsible for any failure of any of its own
Representatives to comply with the provisions of this Section 10.06); and provided, further
that such party shall have no obligation of confidentiality in respect of any information (X) which
may be generally available to the public or becomes available to the public through no fault of
such party, (Y) that was or becomes, without a breach of this Section 10.06 by such party,
available to such party on a non-confidential basis from a source that is not known to such party
to be subject to a confidentiality agreement with the Parent, or (Z) that is approved for release
or other use by written authorization of an authorized representative of the Parent or the
applicable Affiliate of the Parent. In the event that an Investor, Bank or the Agent or any of
their Representatives are requested pursuant to, or required by, applicable law, regulation or
legal process to disclose any of the Confidential Information, such party shall (except in the case
of an examination by any regulatory authority), if permitted by applicable law, (x) promptly notify
the Parent, the Seller, the applicable Originator or the Servicer, as the case may be, so that such
Person may seek a protective order, injunctive relief or other appropriate remedy and (y) use its
reasonable efforts to request that the Person or entity propounding any subpoena or demand give the
Parent, the Seller, the applicable Originator or the Servicer, as the case may be, a reasonable
amount of time to object to the disclosure or production of the Confidential Information.
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(c) Upon the written request of the Parent, the Seller, an Originator or the
Servicer, at any time following the later of the Facility Termination Date and the date on
which
no Capital or Yield on any Receivable Interest shall be outstanding and all other amounts owed
by the Seller hereunder are paid in full, any party hereto that has received Confidential
Information will either (i) promptly deliver to the Person requesting such Confidential
Information, and at the requesting party’s own expense, all copies of the Confidential
Information in its or its Representatives’ possession or (ii) if so requested, promptly
destroy all
copies of the Confidential Information in its or its Representatives’ possession and confirm
in
writing such destruction to the Person requesting such destruction. Notwithstanding the
foregoing, the party to which any such request is made may retain Confidential Information in
accordance with its document retention procedures, provided that such party’s obligations with
respect to such Confidential Information shall continue in accordance with the terms of this
Section 10.06.
(d) Notwithstanding any other provision herein or in any other Transaction
Document, each Investor, each Bank and the Agent hereby confirms that the Seller, each
Originator and the Servicer (and each employee, representative or other agent of each such
party)
may disclose to any and all Persons, without limitation of any kind, the U.S. tax treatment
and
U.S. tax structure of the transaction contemplated by this Agreement and the other Transaction
Documents.
Section 10.07 GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES
THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION, EXCEPT TO THE
EXTENT THAT, PURSUANT TO THE UCC OF THE STATE OF NEW YORK, THE PERFECTION AND THE EFFECT OF
PERFECTION OR NON-PERFECTION OF THE INTERESTS OF THE INVESTORS AND THE BANKS IN THE RECEIVABLES AND
THE ORIGINATOR PURCHASE AGREEMENT ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
Section 10.08 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same agreement.
Section 10.09 Survival of Termination. The provisions of Sections 2.08, 2.10,
6.07, 9.01, 10.04, 10.05 and 10.06 shall survive any termination of this Agreement.
Section 10.10
Consent to Jurisdiction. (a) Each party hereto hereby irrevocably
submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in New
York City in any action or proceeding arising out of or relating to this Agreement or the other
Transaction Documents, and each party hereto hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. The parties hereto hereby irrevocably
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waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to
the maintenance of such action or proceeding. The parties hereto agree that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.
(b) Each of the Seller and the U.S. Originator consents to the service of any
and all process in any such action or proceeding by the mailing of copies of such process to
it at
its address specified in Section 10.02. Each of ACI and the Canadian Originator consents to
the
service of any and all process in any such action or proceeding by the mailing of copies of
such
process to the attention of the U.S. Originator at its address specified in Section 10.02, or
in any
other manner permitted by applicable law. Nothing in this Section 10.10 shall affect the right
of
the Investors, any Bank or the Agent to serve legal process in any other manner permitted by
law.
(c) To the extent that ACI or the Canadian Originator has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, ACI or the Canadian Originator, as
applicable,
hereby irrevocably waives such immunity in respect of its obligations under this Agreement.
Section
10.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY APPLICABLE LAW, 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 OR ANY DOCUMENT EXECUTED OR DELIVERED PURSUANT HERETO.
Section 10.12
Judgment. (a) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder in Dollars into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall
be that at which in accordance with normal banking procedures the Agent or its assigns could
purchase Dollars with such other currency at New York, New York on the Business Day preceding that
on which final judgment is given.
(b) The obligations of the Seller, the Servicer and each Originator (each, a “Payor”) in
respect of any sum due from such Payor to the Investor, the Banks or the Agent (each, a
“Recipient”) hereunder shall, notwithstanding any judgment in a currency other than Dollars, be
discharged only to the extent that on the Business Day following such Recipient’s receipt of any
sum adjudged to be so due in such other currency, such Recipient may, in accordance with normal
banking procedures purchase (and remit in New York) Dollars with such other currency; if the
Dollars so purchased and remitted are less than the sum originally due to such Recipient in
Dollars, the relevant Payor agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify the relevant Recipient against such loss, and if the Dollars so purchased exceed the
sum originally due to the relevant Recipient in Dollars, the relevant Recipient agrees to remit to
the relevant Payor such excess.
-90-
Section 10.13
Execution by ACI. This Agreement shall be considered to be executed and
delivered by ACI at White Plains, New York and once an authorized director or officer of ACI
resident in the United States of America has executed the same.
Section 10.14 Language. This Agreement and all related documents have been written in
the English language at the express request of the parties. Le
présent contrat ainsi que tous les
documents s’y rattachant ont été rédigés en
anglais à la demande expresse des parties.
Section 10.15 Tax Treatment. It is the intent of the Seller, the Investor and each
Bank, and all other parties to this Agreement that, for U.S. federal, state and local income and
franchise tax (in the nature of income tax) purposes only, each Receivable Interest will be treated
as indebtedness secured by the Seller’s assets. The Seller, by entering into this Agreement, and
the Investor and each Bank, and all other parties to this Agreement, by purchasing a Receivable
Interest, agree to treat the Receivable Interests for U.S. federal, state and local income and
franchise tax (in the nature of income tax) purposes as indebtedness. The provisions of this
Agreement and all related Transaction Documents shall be construed to further these intentions of
the parties.
Section 10.16 Acknowledgment. Each of the parties hereto acknowledges that the
amendment and restatement of the Original RPA on the terms and conditions set forth herein shall
not in any way affect any sales, transfers, assignments or security interest grants effected
pursuant to the Original RPA or any representations, warranties or covenants made by the Seller or
the Servicer with respect to such sales, transfers, assignments or security interest grants, any
indemnities made by the Seller or by the Servicer, or any rights or remedies of the Agent, the
Investors or the Banks with respect thereto. Each of the relevant parties hereto confirms all
sales, transfers, assignments and security interests effected pursuant to the Original RPA.
-91-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
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SELLER: ABITIBI-CONSOLIDATED U. S. FUNDING CORP.
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By: |
/s/ Xxxxx X. Xxxxxx
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Title: President |
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Name: Xxxxx X. Xxxxxx |
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By: |
/s/ Xxxxx X. Xxxxxx
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Title: VP |
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Name: Xxxxx Xxxxxx |
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INVESTOR: EUREKA SECURITISATION, PLC
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By: |
Citibank, N. A., London Branch, as Attorney-in-Fact
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By: |
/s/ Xxxxx Xxxxxxxxxx
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Title: Vice President |
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Name: Xxxxx Xxxxxxxxxx |
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AGENT: CITIBANK, N. A., London Branch,
as Agent
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By: |
/s/ Xxxxx Xxxxxxxxxx
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Title: Vice President |
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Name: Xxxxx Xxxxxxxxxx |
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BANK: CITIBANK, N. A.
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By: |
/s/ Xxxxx Xxxxxxxxxx
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Title: Xxxxx Xxxxxxxxxx |
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Name: Vice President |
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SERVICER: ABITIBI CONSOLIDATED SALES
CORPORATION
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By: |
/s/ Xxxxx X. Xxxxxx
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Title: Vice President |
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Name: Xxxxx X. Xxxxxx |
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By: |
/s/ Xxxxx X. Xxxxxx
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Title: Vice President |
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Name: Xxxxx Xxxxxx |
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SUBSERVICER: ABITIBI-CONSOLIDATED INC.
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By: |
/s/
[UNREADABLE]
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Title: |
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Name: |
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By: |
/s/ [UNREADABLE]
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Title: |
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Name: |
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ORIGINATORS: ABITIBI-CONSOLIDATED INC.
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By: |
/s/ [UNREADABLE]
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Title: |
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Name: |
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By: |
/s/ [UNREADABLE]
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Title: |
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Name: |
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ABITIBI CONSOLIDATED SALES CORPORATION
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By: |
/s/ Xxxxx X. Xxxxxx
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Title: VP |
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Name: Xxxxx X. Xxxxxx |
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By: |
/s/ Xxxxx X. Xxxxxx
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Title: VP |
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Name: Xxxxx Xxxxxx |
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SCHEDULE I
Deposit Accounts
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Complete Name of |
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Complete Name of |
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Name and Address of |
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Deposit Account |
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Deposit |
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Originator |
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Lock-box Owner |
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Deposit Bank* |
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Lock-Box Nos. |
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Location |
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Owner |
Account Bank |
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Abitibi-Consolidated
Inc.
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Abitibi-Consolidated
Inc.
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Royal Bank of Canada 0 Xxxxx
Xxxxx Xxxxx
Xxxxxxxx
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X00000X
V05410C and M05333C
V05410U and
M05333U
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Toronto
Vancouver Montreal
Vancouver Montreal
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Abitibi-Consolidated Inc.
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Royal Bank of Canada
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1
1
4 |
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Abitibi
Consolidated Sales
Corporation
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Abitibi-Consolidated
U. S. Funding
Corp.
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LaSalle Bank
National
Association 000
Xxxxx XxXxxxx
Xxxxxx Xxxxxxx XX 00000
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1228
1070
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Chicago
Chicago
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Abitibi-Consolidated
U. S. Funding Corp. |
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LaSalle Bank
National
Association
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5
5 |
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Abitibi-Consolidated
Inc.
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N/A
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Citibank, N. A. 000
Xxxxxxxxx Xxxxxx,
0xx Xxxxx Xxx Xxxx
XX 00000
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N/A
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N/A
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Abitibi-Consolidated
U. S. Funding
Corp.
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Citibank, N. A. |
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4 |
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* |
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And, if different, name and address of processor of lock-box. |
S- 1
SCHEDULE III
Addresses
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Seller:
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Abitibi-Consolidated U. S. Funding Corp. |
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0 Xxxxxxx Xxxxx, XXXXXX Room White Plains, N. Y.
10604-3400 Attention: Xxxxx Xxxxxx Facsimile No.: 000-000-0000 |
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Investor:
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Eureka Securitisation, plc |
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Citigroup Centre 33 Canada Square, 0xx Xxxxx Xxxxxx Xxxxx Xxxxxx X00 0XX Xxxxxxx
Attention: Xxxxx Xxxxxxxxxx Facsimile: 00-000-000-0000 |
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With a copy to: |
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000 Xxxxxxxxxx Xxxxxx Xxxxxxxx, X. Y. 10528 |
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Attention: Global Securitization Facsimile No.: 000 000-0000 |
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Agent:
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Citibank, N. A., London Branch |
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Citigroup Centre 33 Canada Square, 0xx Xxxxx Xxxxxx Xxxxx Xxxxxx X00 0XX Xxxxxxx |
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Attention: Xxxxx Xxxxxxxxxx Facsimile: 00-000-000-0000 |
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With a copy to: |
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000 Xxxxxxxxxx Xxxxxx Xxxxxxxx, X. Y. 10528 |
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Attention: Global Securitization Facsimile No.: 000 000-0000 |
S- 2
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Bank:
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Citibank, N. A. |
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000 Xxxxxxxxxx Xxxxxx Xxxxxxxx, X. Y. 10528 |
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Attention: Global Securitization Facsimile No.: 000 000-0000 |
S- 3
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Parent:
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ABITIBI-CONSOLIDATED INC |
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0000 XXXXXXXX XXXXXX XXXXX 000 |
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XXXXXXXX XX X0X 542 CANADA |
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ATTENTION: TREASURY DEPARTMENT Facsimile No.: 514-3942267 |
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With a copy to (in the
event of claims or disputes
only):
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ABITIBI-CONSOLIDATED INC
0000 XXXXXXXX XXXXXX
XXXXX 000 |
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XXXXXXXX XX X0X 542 |
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CANADA |
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ATTENTION: LEGAL DEPARTMENT |
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Facsimile No.: 000-000-0000 |
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Servicer:
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Abitibi Consolidated Sales Corporation |
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0 Xxxxxxx Xxxxx |
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Xxxxx Xxxxxx, X. Y. 10604-3400 Attention: Xxxxx Xxxxxx |
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Facsimile No.: 000-000-0000 |
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With Copy To: |
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Attention: Montréal Legal Department |
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Facsimile No.: 000-000-0000 |
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Canadian Originator:
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ABITIBI-CONSOLIDATED INC |
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0000 XXXXXXXX XXXXXX XXXXX 000 |
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XXXXXXXX XX X0X 542 CANADA |
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ATTENTION: TREASURY DEPARTMENT Facsimile No.: 000-000 0000 |
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U. S. Originator:
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Abitibi Consolidated Sales Corporation |
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0 Xxxxxxx Xxxxx |
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Xxxxx Xxxxxx, X. Y. 10604-3400 Attention: Xxxxx Xxxxxx |
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Facsimile No.: 000-000-0000 |
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With Copy To: |
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Attention: Montreal Legal Department |
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Facsimile No.: 000-000-0000 |
S- 4
SCHEDULE IV
UCC and PPSA Information
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Seller: |
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Name:
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Abitibi-Consolidated U.S. Funding Corp. |
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Current Address:
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0 Xxxxxxx Xxxxx, XXXXXX Room |
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White Plains, N.Y. 10604-3400 |
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Prior Address:
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None |
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Jurisdiction of Organization:
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Delaware |
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UCC Filing Office:
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Delaware Secretary of State |
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Prior Name:
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None |
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U.S. Originator: |
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Name:
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Abitibi Consolidated Sales Corporation |
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Current Address:
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0 Xxxxxxx Xxxxx |
(and location of chief
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Xxxxx Xxxxxx, XX 00000-0000 |
executive office and |
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Receivables records) |
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Prior Address:
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None |
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Jurisdiction of Organization:
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Delaware |
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UCC Filing Office:
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Delaware Secretary of State |
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Prior Name:
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Abitibi-Price Sales Corporation |
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Canadian Originator:
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Name: |
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Abitibi-Consolidated Inc. |
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Chief Executive and
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0000 Xxxxxxxx Xxxxxx, Xxxxx 000 |
Registered Office |
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and locations of |
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Receivables records:
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Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0 |
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Jurisdiction of Organization:
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Canada |
S-5
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PPSA Filing Offices:
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British Columbia |
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Ontario |
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Quebec |
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Alberta |
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Prior Name:
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None |
S-6
SCHEDULE V
Special Country Concentration Limits
The Special Country Concentration Limits for SCCs shall be equal to the lower of (a) the
percentage based on the Foreign Currency Long-Term Debt Ratings of the applicable SCC set forth in
the table below and (b) the credit limit approved for the applicable SCC pursuant to the Insurance
Policy. If S&P and Moody’s ratings fall within different categories, then the lower Foreign
Currency Long-Term Debt Rating will apply.
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Special Country |
Foreign Currency Long-Term Debt |
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Concentration Limit |
Ratings at least: |
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Percentage: |
AA- by S&P and Aa3 by Moody’s |
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12.00 |
% |
BB+- by
S&P and Ba1 by Moody’s |
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8.00 |
% |
S-7
ANNEX E-1
[Form of Funds Transfer Letter]
ABITIBI-CONSOLIDATED U.S. FUNDING CORP.
October 27, 2005
Citibank, N.A., London Branch
as Agent
Citigroup Centre
33 Canada Square, 0xx Xxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Xxxxxxx
Re: Funds Transfers
Ladies and Gentlemen:
This letter is the Funds Transfer Letter referred to in Section 2.02(b) of the
Receivables
Purchase Agreement, dated as of
October 27, 2005, as modified, amended or restated from time to
time (the “
RPA”; terms used in the RPA, unless otherwise defined herein, having the meaning set
forth therein) among the undersigned, Eureka Securitisation, plc, Citibank, N.A., you, as Agent for
the Investors and the Banks and the Originators.
You are hereby directed to use the proceeds of the initial purchase of
$281,480,958.86 of Receivable Interests under the RPA occurring on the date hereof to make the
following payments (and to deposit the same to the respective accounts referred to below):
(1) pay US$675,000.00 to Citibank, N.A. representing the up-front structuring fee payable in
accordance with the Fee Letter dated October 27, 2005;
(2) pay US$275,000.00 to Xxxx Xxxxxxx LLP representing legal fees incurred by the Program
Agent payable in accordance with Xxxx Xxxxxxx’x invoice dated October 26, 2005;
(3) pay US$35,782.41 to Protiviti representing audit fees incurred payable in accordance with
Protiviti’s invoice dated October 14, 2005;
(4) pay US$275,000,000 to Canadian Imperial Bank of Commerce (“CIBC”), representing the price
to be paid to CIBC under the Assignment and Assumption Agreement dated October 27, 2005; and
(5) pay the balance to the account of the Seller referred to below.
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Remittance Information: |
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Citibank, N.A. |
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Bank Name:
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Citibank N.A. |
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ABA Number:
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000-000-000 |
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Account Name:
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CNA CAP Funding Account |
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Account Number:
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00000000 |
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Ref:
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Abitibi Upfront Fee |
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Xxxx Xxxxxxx LLP: |
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Bank Name:
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Citibank, N.A. |
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ABA Number:
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000-000-000 |
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Account Name:
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Xxxx Xxxxxxx LLP |
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Account Number:
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00000000 |
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Invoice Number:
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467461 |
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Swiftcode:
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XXXXXX00 |
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Ref:
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Citigroup / Abitibi Transaction |
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Protiviti: |
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Bank Name:
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Bank of America |
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ABA Number:
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000-000-000 |
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Account Number:
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12331-03129 |
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Invoice Number:
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019976 |
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Ref:
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Citicorp / Abitibi Transaction |
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Canadian Imperial Bank of Commerce: |
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Bank Name:
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Bank of America NT & SA, NYC |
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ABA Number:
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000000000 |
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Account Number:
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000-00-00000 |
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For further credit to
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CIBC, Main Branch |
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Transit Number:
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00002, Toronto |
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For further credit to MACRO Trust — General Account |
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Account Number:
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05-68716 |
2
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Seller: |
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Bank Name:
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LaSalle National Bank |
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ABA Number:
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071 000 505 |
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Account Name:
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Abitibi-Consolidated U.S. Funding Corp. Collection
Account for the benefit of Citibank, N.A., London Branch,
as Agent |
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Account Number:
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5800031568 |
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Ref:
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Citicorp / Abitibi Transaction |
You are hereby directed to deposit all funds representing amounts paid for Receivable
Interests purchased after the date hereof to the account described on Exhibit A attached
hereto.
[Remainder of page intentionally left blank]
3
The provisions of this Letter may not be changed or amended orally, but only by a writing in
substantially the form of this letter signed by the undersigned and acknowledged by you.
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Very truly yours,
ABITIBI-CONSOLIDATED U.S. FUNDING CORP.
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By: |
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Title: |
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Name: |
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By: |
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Title: |
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Name: |
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Receipt acknowledged:
CITIBANK, N.A., LONDON BRANCH
as Agent
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By: |
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Title: Vice President
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Name: |
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EXHIBIT A
to Funds Transfer Letter
All funds representing amounts paid for Receivable Interests purchased after October 27, 2005 are
to be remitted to the following account:
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Bank Name:
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LaSalle National Bank |
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ABA Number:
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071 000 505 |
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Account Name:
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Abitibi-Consolidated U.S. Funding Corp. Collection
Account for the benefit of Citibank, N.A., London Branch, as Agent |
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Account Number:
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5800031568 |
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Ref:
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Citicorp / Abitibi Transaction |
5
ANNEX E-2
[Form of Direction Letter]
ABITIBI-CONSOLIDATED U.S. FUNDING CORP.
January 31, 2008
Citibank, N.A., London Branch
as Agent
Citigroup Centre
33 Canada Square, 0xx Xxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Xxxxxxx
Re: Closing Date Funds Transfers
Ladies and Gentlemen:
This letter is the Direction Letter referred to in Section 2.02(b) of the Amended and Restated
Receivables Purchase Agreement, dated as of January 31, 2008, as modified, amended or restated from
time to time (the “
RPA”; terms used in the RPA, unless otherwise defined herein, having the meaning
set forth therein) among the undersigned, Eureka Securitisation, plc, Citibank, N.A., you, as Agent
for the Investors and the Banks, and the Originators.
You are hereby directed to use the proceeds of the purchase of US$84,344,861.28 of Receivable
Interests under the RPA occurring on the date hereof to make the following payments (and to deposit
the same to the respective accounts referred to below):
(1) pay US$600,000.00 to Citibank, N.A. representing the up-front
arrangement and structuring fee payable in accordance with that certain letter agreement between
the Seller and the Agent regarding fees dated January 31, 2008;
(2) pay US$99,244.76 to Xxxx Xxxxxxx LLP (“Xxxx Xxxxxxx”) representing legal fees incurred by
the Program Agent payable in accordance with Xxxx Xxxxxxx’x invoice dated January 29, 2008;
(3) pay US$58,106.18 to Blake, Xxxxxxx & Xxxxxxx LLP (“Blakes”) representing legal fees
incurred by the Program Agent payable in accordance with Blakes’ invoice dated January 29,
2008 and prior unpaid invoices; and
(4) pay US$83,587,510.34 to ABN Amro Bank N.V. (“ABN Amro”), representing the price to be paid
to ABN Amro under the letter agreement between ACSC and ABN Amro dated January 31, 2008 regarding
“Termination of the Purchase Agreement and
Assignment of the Eligible Receivables and the Related Security”, as directed by ACI and ACSC in
their capacities as sellers under the Originator Purchase Agreement.
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Remittance Information: |
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Citibank, N.A. |
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Bank Name:
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Citibank N.A. |
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ABA Number:
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021 -000-089 |
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Account Name:
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CNA CAP Funding Account |
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Account Number:
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00000000 |
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Ref:
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Abitibi Upfront Fee |
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Xxxx Xxxxxxx LLP: |
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Bank:
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Citibank, N.A. |
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000 0xx Xxxxxx, 0xx Xxxxx |
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Xxx Xxxx, XX 00000 |
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Attn: Xxxxxxx Xxxxxx |
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ABA Number:
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021 -000-089 |
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Account Name:
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Xxxx Xxxxxxx LLP |
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Account Number:
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00000000 |
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Invoice Number:
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547376 |
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Swiftcode:
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XXXXXX00
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Ref:
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Citigroup / Abitibi Transaction |
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Blakes: |
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Bank of America NT & SA |
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000 Xxxx 00xx Xxxxxx |
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Xxx Xxxx, XX 00000 |
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Swiftcode: XXXXXX0X |
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ABA No. 000000000 |
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For Further Credit to: |
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Canadian Imperial Bank of Commerce
Xxxx Xxxxxx, Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0 |
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Swiftcode: XXXXXXXX |
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Transit No. 00002 |
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Final Beneficiary: Xxxxx Xxxxxxx & Xxxxxxx LLP |
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Account No. 000021602012 |
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Reference: Invoice No. 1334416 |
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2
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ABN Amro: |
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Bank Name:
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ABN Amro Bank N.V. |
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ABA Number:
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026 009 580 |
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Account of:
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ABN Amro |
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Account Number:
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673001195941 |
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Ref:
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Abitibi-Consolidated Inc. |
The Seller hereby agrees and acknowledges that the aggregate amount of the payments set forth
in items (l)-(4) above represents the full amount of the US$84,344,861.28 purchase of Receivable
Interests under the RPA occurring on the date hereof.
[Remainder of page intentionally left blank]
3
The provisions of this Letter may not be changed or amended orally, but only by a writing in
substantially the form of this letter signed by the undersigned and acknowledged by you.
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Very truly yours,
ABITIBI-CONSOLIDATED U.S. FUNDING CORP.
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By: |
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Title: |
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Name: |
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By: |
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Title: |
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Name: |
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Agreed and acknowledged by ACI and ACSC, in
their capacities as sellers under the Originator
Purchase Agreement:
ABITIBI-CONSOLIDATED INC.
ABITIBI CONSOLIDATED SALES CORPORATION
Receipt acknowledged:
CITIBANK, N.A., LONDON BRANCH
as Agent
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By: |
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Title: Vice President
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Name: |
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ANNEX F
Form of Undertaking (Originator)
F-1
ANNEX G
Form of Undertaking (Servicer)
G-1
ANNEX H
Insurance Policy
H-1
ANNEX I
Form of Notice of Continuance and Change of Address
I-1
ANNEX J
Form of Notice of Amalgamation
J-1
ANNEX K
Form of Assumption Agreement
K-1
ANNEX L
Form of Notice of Change of Address
L-1
ANNEX M
Forms of Bank Agreement Security Letters
M-1
ANNEX N
Form of Certificate Regarding Adverse Claims
N-1